Shares of biopharmaceutical company Cara Therapeutics (NASDAQ:CARA) soared by 14.5%, reaching $5.61 during afternoon trading, as the company revealed a significant corporate restructuring.
The rise in stock price follows the company's announcement that its board has approved a 1-for-3 reverse stock split, which will take effect on April 15, 2025.
The reverse stock split is part of Cara Therapeutics' broader strategy to position itself for future growth.
As part of the restructuring, the company also disclosed that it had entered into a merger agreement with privately held Tvardi Therapeutics in December 2024.
This merger will result in a rebranding of the company under the new name, Tvardi Therapeutics, with the ticker symbol "TVRD" set to replace CARA.
The merger is expected to close soon, after which the combined company's total outstanding shares will be approximately 9.4 million.
However, despite the recent surge, Cara's stock had dropped by 14.2% year-to-date as of the most recent market close.