Initiation Research Report: Capricor Therapeutics

By Himanshu Somani Himanshu Jun 30, 2025

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Industry: Healthcare

Sub-Industry: Biotechnology

Market cap: $509mn

Price: $11.15

Recommendation: Strong Buy

Price Target: $22

Date: June 30, 2025

Summary & Recent updates

Deramiocel BLA was submitted last year without Phase 3 data under an accelerated approval path with the prior FDA regime. The recent dismissal of Dr Nicole Verdun, head of therapeutics and the appointment of new CBER Director Dr Vinay Prasad who has been publicly vocal about stringent regulatory norms has caused the stock price to be volatile.

Furthermore, FDA’s planned Adcom meeting was cancelled which otherwise would have invited scrutiny and would have led to more informed decision making. Such behavior shows that the FDA is probably inclined towards a CRL and would ask for more data. Recently, FDA conducted a CMC inspection of Capricor’s manufacturing facilities given it is one of its kind. It issued a Form 483 which might imply delay in approval and require the management to address those concerns.

Phase 3 data for first 12 months of the trial would come in Q4 this year, which might delay that PDUFA by another 3-6 months. Any CRL might push the approval to mid-2026. A bull case scenario is immediate approval in Aug’25. A bear case scenario is that the FDA waits for more Phase 3 data expected next year and only gives approval thereafter.

Key factors to support the recommendation

• Strong clinical data with statistically significant Phase 2 results; Phase 3 trial (HOPE-3) underway, giving a clear path toward approval.
• First-in-class, mutation-agnostic therapy for cardiomyopathy in DMD, addressing a major unmet need with FDA orphan drug designation
• Commercial partnership with Nippon Shinyaku and long patent life

Key risks against the recommendation

• Regulatory risk from FDA as they may issue a CRL delaying approval to mid-2026 or beyond, especially after the Form 483 and given stricter oversight at CBER.
• Despite a relatively safe profile of Deramiocel, new concerns related to safety or efficacy may arise in Phase 3 trials or post approval. The results from a small sample size of Phase 2 (n=20) may not hold in Phase 3 (n=105).
• Commercial execution risk with Nippon managing the process along with their DMD drug while Capricor managing the manufacturing and logistics.

About the Business

Capricor Therapeutics (ticker: CAPR) is a clinical-stage biotechnology company focused on cell and exosome-based therapeutics for Duchenne muscular dystrophy (DMD). Capricor’s lead cell therapy program is Deramiocel which is under regulatory review for DMD-Cardiomyopathy. Additionally, it has patented a stealthX platform which is in pre-clinical stage.

Capricor is based in San Diego, California. It had about 160 employees as of Dec 31, 2024. A quarter of them were holding advanced degrees.

About DMD

DMD is a severe, X-linked genetic disorder characterized by progressive muscle degeneration affecting the skeletal, respiratory, and cardiac muscles. It is caused by the absence of functional dystrophin, a key structural protein in muscle cells. Over time, deterioration of the heart muscle leads to cardiomyopathy and heart failure, which is the leading cause of death in DMD. Currently, there is no cure for DMD (in general) but treatments focus on managing symptoms and improving quality of life. Patients suffering from DMD typically lose their ability to walk in their teenage years and generally die of cardiac or respiratory complications by age 30. It affects about 1 in 3,600-6,000 male births across the world.

The tech behind the treatment

In DMD, a mutation in one exon (a part of the gene) disrupts the entire gene causing the body to not produce any functional dystrophin protein. Capricor manufactures a drug called Deramiocel using heart cells causing an immune response to produce more dystrophin.

About Deramiocel:

Deramiocel is an allogeneic cardiac-derived cell therapy for DMD Cardiomyopathy. Deramiocel is comprised of cardiosphere-derived cells (CDCs) which are stromal cells isolated from donated cells of human hearts.

It has been granted FDA priority review with PDUFA date as Aug 31, 2025. It has received other designations like orphan drug and a few other rare drugs related designations in US & Europe.

Clinical Trials: One infusion is given every 3 months to randomized group for the first year. After 12 months, all participants began receiving the drug quarterly.

Phase 2 clinical trial had ~20 patients taking placebo and the drug. Its primary endpoint was PUL 1.2 & PUL 2.0, a form of upper limb performance in terms of motor functions. It hit statistically significant levels in PUL 1.2, however, the 2.0 was just below the statistical significance levels of 5% at the end of 12 months. The results from OLE demonstrated statistical significant results. The rate of functional decline was 47% nearly reducing the disease progression by half after 3 years and further improved the results after 4 years. For such a rare disease, this shows promise in long term treatment.

In Phase 3, 100+ patients are under trial. The enrollment started last year and the results from the first 12 months should come in Q4’25. And more comprehensive results in 2026. If FDA decides, it can approve the drug on an accelerated process based on evidence of surrogate biomarkers like dystrophin production. For a rare and such life threatening disease like DMD, one year can mean a huge difference.

Drug Manufacturing process

A live heart can produce 2k doses of Deramiocel and can treat 400-500 patients in a year. Currently, they have their own patented manufacturing process based in San Diego & Los Angeles. Even during the commercialization stage, the complexity & IP for this drug means that they are most likely to manufacture it in-house.

CDCs have anti-inflammatory, anti-fibrotic, and regenerative properties and can be used for other diseases as well and is under research by Capricor for other diseases and by a few other hospitals and researchers too. This should add to the firm value over time.

Other drugs and assets:

Capricor is also focusing on other neuromuscular diseases like Becker Muscular Disorder (BMD) for which Deramiocel has been given orphan drug status.

Capricor is also developing an exosomes platform for drug delivery. The StealthX platform consists of engineered exosomes for vaccine and therapeutic development. It is still in pre-clinical stage and has received funding from government institutions like NIAID. It is a marquee innovation with applications in gene silencing, vaccines and therapeutic delivery. It’s a long road here, but their focus on cutting edge innovation is commendable.

Competition

While the DMD cardiomyopathy treatment is first of its kind, players like Sarepta Therapeutics & Nippon Shinyaku have approved drugs related to exon skipping being used in mutation specific DMD where a particular gene mutation is detected. However, Deramiocel is mutation agnostic and as it uses CDCs. Moreover, the quarterly dosing schedule offers greater convenience, which may support higher market adoption once approved.

Commercialization strategy

Capricor has a deep partnership with Nippon Shinyaku. It entered into exclusive commercialization and distribution in the US in 2022, then in Japan in 2023 and in Europe in 2024. It is currently the largest shareholder with a 15% stake and has given millions in milestone payments. Nippon has experience commercializing its DMD (mutation specific) drug Viltolarsen which generated $150mn of annual revenues in 2024 with 80% coming from US. The specific gene mutation affected ~10% of DMD patients. If Deramiocel is approved, annual revenues could be significant and may be even lead to a status of blockbuster drug.

It is important to note that Nippon’s drug Viltepso (viltolarsen) had received approval based on Phase 2 data while the Phase 3 trial didn’t meet its primary endpoint.

Management

The company was founded by Dr Eduardo Marban who was the chief of cardiology at JHU, where he first published the core cell therapy using CDCs. It was later led by his wife and co-founder Dr Linda Marban who has been instrumental in the success over the years.

Valuation

Patient assumptions: 1/3600 prevalence of DMD in US, 25% of them being diagnosed with severe DMD and 50% of them getting treatment. The annual patient size may be around 2k-3k. Per dose pricing is $200k with patients typically receiving four doses a year.

Management mentioned that revenue sharing with Nippon is in double digits. Assume the revenue sharing materializes to 20%, and peak revenues is 5x-7x current annual revenues of Viltolarsen (Nippon’s DMD mutation specific drug affecting 10% population), then Capricor’s annual revenues could touch $200mn and above. Assuming a mean P/S of 10x, it implies a valuation of $2bn. Overtime as patients of DMD live longer, the revenues should increase faster than normal.

Assuming a probability of 50% approval, and discount rate of 12%, the average price target comes out to $22.

Disclosures I, Himanshu Somani, disclose that the views are my own & I did not get any compensation from anyone to publish this. I disclose I have personally invested in this security and that bias may have influenced the report.

All statements in this report have been obtained from recognized services and issuer reports or sources which I believe to be correct. However, I cannot guarantee their accuracy.

My opinions may change on a future date with new data or developments and I hold no accountability to publish a report as it changes.

This analysis is to be used for personal use and for informational purposes only. It doesn’t constitute any offer or solicitation to buy these securities. I am not associated with any regulated entity of the SEC or any other regulatory bodies.

Investments are subject to various risks including market, currency, operational etc. Please independently evaluate the research and consult advisors as necessary.

If there are any financial or commercial or legal or any other losses due to this report, I take no responsibility of any kind.

Sources:

1. https://www.capricor.com/investors/news-events/press-releases/detail/305/capricor-therapeutics-announces-fda-acceptance-and-priority
2. https://www.sec.gov/Archives/edgar/data/1133869/000155837025003707/capr-20241231x10k.htm
3. https://clinicaltrials.gov/study/NCT04428476
4. https://clinicaltrials.gov/study/NCT05126758
5. https://www.capricor.com/investors/news-events/press-releases/detail/289/capricor-therapeutics-signs-binding-term-sheet-with-nippon
6. https://www.capricor.com/investors/news-events/press-releases/detail/245/capricor-therapeutics-and-nippon-shinyaku-enter-partnership
7. https://www.capricor.com/investors/news-events/press-releases/detail/22/capricor-therapeutics-and-nippon-shinyaku-enter-partnership
8. https://www.nasdaq.com/press-release/capricor-therapeutics-announces-orphan-drug-designation-becker-muscular-dystrophy-and
9. https://www.nspharma.com/ns-pharma-shares-preliminary-results-of-viltolarsen-ns-065-ncnp-01-phase-3-clinical-trial-racer53-study/
10. https://www.nspharma.com/wp-content/uploads/2024/08/Viltepso_Approval_Press_Release.pdf