A new solution for doctors and painkillers

The degradation of addiction is only matched by the willing acceptance by the community of drugs of addiction the worst offenders being opioids which are regularly prescribed for chronic pain and which often lead on to death.

The crisis in pain management has seen a constant retreat into drugs which are now being blamed for thousands of cases of addiction and more than 90 deaths a day due to prescription medication.

Yet chronic pain is a serious problem with more than one quarter of the US population on some form of constant pain management. Millions more are given opioids after surgery or injury.

There is a real need for these drugs.

The short term use of opioids rarely leads to addiction when managed under medical supervision. However, as anyone who has taken opioids will tell you, the euphoria inducing effects are impossible to replicate in any other way. When used regularly increasing doses are required to achieve the same effect leading on to dependence, unsafe use and an escalation into heroin or cocaine.

All of this process can happen under medical supervision. It is the medical profession that needs the tools to control pain without causing a descent into addiction.

The answer has been to develop drugs which are less addictive and which block pain without the euphoria inducing effects of opioids which become addictive.

The science is complicated so I will simply quote from one of the companies developing the new drugs, Cara Therapeutics (CARA on Nasdaq (VIEW LINK) Stamford Connecticut IPO Jan 14 market cap $420 million).

The drugs being developed require a different mechanism to activate pain relief than traditional opioids which bind to the receptor cells inside the Central Nervous System. The drugs being developed by Cara bind to Kappa opioid receptors outside the Central Nervous System.

The lead candidate is a drug known as C845 which is currently in phase 3 (final) clinical testing for post-operative pain. It is in Phase 2 testing for chronic pain.

Cara is also in trials to develop cannabinoid receptors outside the Central Nervous System. The psycho effects of cannabis occur inside the CNS.

Other drugs being developed are linked to synthetic forms of naturally occurring compounds by unlisted companies and universities.

As is normal with pre-stage drug developers in clinical trials the risks are high. For the record, CARA trades at 8 times its book value, will probably lose at least $1.80 a share for the next two years, and has short sellers sitting on its stock representing at least eight days of current volume. (Watch the shorts cover when C845 gets through stage 3).

There is no shortage of coverage. Raymond James reckons the stock is worth $26, Scotia Bank has a target of $31, the same as Wainwright. The consensus target is $25.15. Current price is around $13.

The company is presenting at the Stifel conference in New York on Nov 14, Jefferies in London on Nov 16 and Piper Jaffray in New York on Nov 28. There is an edited version of the prior Nov 2 earnings conference call online on finance.yahoo.