Cara Therapeutics announces merger with Tvardi Therapeutics

Cara Therapeutics, Inc. (NASDAQ:CARA), a biopharmaceutical company with a market capitalization of $25.48 million, announced today that it has entered into a definitive merger agreement with Tvardi Therapeutics, Inc., a clinical-stage company focused on developing oral, small molecule therapies for fibrosis-driven diseases. The merger, which was first announced on December 17, 2024, will result in Tvardi becoming a wholly-owned subsidiary of Cara. According to InvestingPro data, Cara’s stock has shown remarkable momentum with a 69.82% gain over the past six months, despite facing significant operational challenges.

The merger aims to leverage Tvardi’s novel therapeutic approach targeting STAT3, a key regulator of fibrotic diseases, to address significant unmet medical needs. Cara’s decision to merge with Tvardi reflects a strategic move to expand its pipeline with potential treatments for conditions with high demand for innovative therapies. This strategic pivot comes as InvestingPro analysis reveals the company has been rapidly burning through cash, with revenue declining by 65.96% in the last twelve months. For detailed insights into Cara’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

As part of the merger agreement, Cara’s board of directors will undergo changes. Upon completion of the merger, the combined company’s board will consist of seven directors, five of whom will be designated by Tvardi, including Sujal Shah, Michael Wyzga, Wallace Hall, Shaheen Wirk, and Imran Alibhai. Cara will designate one member, Susan Shiff, and one seat will remain vacant, to be filled by Tvardi prior to the merger’s closing or by the combined company afterward.

The merger has prompted legal action from certain Cara stockholders, who have filed complaints alleging that the proxy statement/prospectus contained materially false and misleading statements. Cara denies any wrongdoing and has not admitted any legal necessity for additional disclosures. However, to avoid litigation and potential disruption to the merger, Cara has provided supplemental disclosures.

Cara stockholders are urged to review these supplemental disclosures in conjunction with the previously filed proxy statement/prospectus. These materials contain important information regarding the merger and should be read carefully before any voting or investment decisions are made.

The merger is subject to customary closing conditions, including approval by Cara’s stockholders. Cara expects the merger to be completed promptly following stockholder approval, subject to the satisfaction of these conditions.

This news is based on a press release statement and reflects the latest developments regarding the merger between Cara Therapeutics and Tvardi Therapeutics. Stockholders and investors are advised to follow official announcements for further updates on the merger’s progress. With a strong current ratio of 11.03, indicating solid short-term liquidity, Cara appears positioned to navigate this transition period. InvestingPro subscribers can access 12 additional key insights and extensive financial metrics to better evaluate this merger’s potential impact on their investment decisions.

In other recent news, Cara Therapeutics has announced a 1-for-12 reverse stock split of its common stock, which took effect at the close of business on December 30, 2024. This action was taken to help the company comply with Nasdaq’s minimum bid price requirement for continued listing. As a result, the number of issued and outstanding shares has been reduced from approximately 54.9 million to about 4.6 million. Additionally, the company has decreased the total number of authorized shares from 200 million to approximately 16.67 million. Stockholders will not receive fractional shares; instead, they will receive a cash payment for any fractional share entitlements. Cara Therapeutics has also proposed a merger with Tvardi Therapeutics, which is expected to help the company meet Nasdaq’s stockholders’ equity requirement. This merger is still pending and subject to customary closing conditions, including regulatory approvals and stockholder approval. The company has received an extension from Nasdaq until May 19, 2025, to meet the equity requirement.

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