Capricor: Rolling BLA Submission Of CAP-1002 To Get DMD Treatment Program Going (CAPR)

Capricor Therapeutics, Inc. (NASDAQ:CAPR) has a significant catalyst that is rapidly approaching, which could change the scope of this biotech. This would be regarding the release of top-line data from Cohort A of the phase 3 HOPE-3 trial, which is using CAP-1002 for the treatment of patients with Duchenne Muscular Dystrophy [DMD]. This isn’t the only milestone for investors to look forward to, there are other opportunities expected throughout 2024.

The first of which would be that the company intends to release additional results from the phase 2 HOPE-2 OLE study, which is using this drug for the treatment of this patient population. Such results will be released at the upcoming Parent Project Muscular Dystrophy [PPMD] 30th Annual Conference, which is being held between June 27th to June 29th of 2024. This other data will hopefully lend additional credibility regarding the clinical data that has been released thus far. Lastly, there is another catalyst for consideration here, which, I believe, could also drive a further increase in shareholder value. This would be regarding the rolling Biologics License Application [BLA] submission of CAP-1002 for the treatment of patients with DMD in Q3 of 2024.

This is possible thanks to a successful FDA Type B meeting that could help to expedite such an approval pathway for the United States. Since the last time I spoke about this biotech, in a Seeking Alpha article entitled “Capricor: Q4 of 2023 Interim Analysis for DMD Treatment Makes This A Must Watch.” In this article, I noted about the upcoming futility analysis that was to come about. I’m happy to state that the interim futility analysis came out positively, in that the Data Safety Monitoring Board [DSMB] recommended that the ongoing phase 3 HOPE-3 trial continues as planned. With successful progress since the last time I spoke about this biotech in terms of CAP-1002 for DMD, plus several catalysts expected in 2024 for investors to look forward to, I believe that investors could benefit with any potential gains made.

CAP-1002 For The Treatment Of Patients With Duchenne Muscular Dystrophy

The main clinical program that Capricor Therapeutics is advancing is the use of CAP-1002 for the treatment of patients with Duchenne Muscular Dystrophy. As I noted above, since the last time I spoke about this biotech, it had been able to accomplish several important factors regarding advancing this drug for possible U.S. approval for the treatment of this patient population. Most notably, it achieved a positive interim futility analysis, which was conducted by the Data Safety Monitoring Board [DSMB].

This specific body noted that the ongoing phase 3 HOPE-3 trial could continue as planned without any modification. Before going over this late-stage study, plus the catalysts to come about from it, it is first important to go over what Duchenne Muscular Dystrophy is and what the possible market opportunity for it could be. Duchenne Muscular Dystrophy [DMD] is a type of disorder characterized as a progressive muscle weakness wasting disorder, which is caused by the lack of a protein known as dystrophin. Without this protein, the muscle fibers cannot connect properly and allow for movement for the patient. Some symptoms that these patients with DMD experience are as follows:

• Constantly falling
• Trouble lifting oneself from a lying/sitting position
• Large calf muscles
• Waddling gait
• Muscle pain that won’t go away
• Learning disabilities.

The global Duchenne Muscular Dystrophy treatment market size is expected to reach $8.19 billion by 2029. This is a huge market opportunity, however, an important item to note is that there are already several gene therapy competitors in place that Capricor’s CAP-1002 will have to go up against. Based on market and research reports, the company believes that the global DMD market could reach $27 million by 2030. Either way, there is plenty of room for a cell therapy player like this to take some market share. Of course, that is only if CAP-1002 is eventually approved for U.S. marketing for this specific muscle-wasting disease patient population.

In order for Capricor to receive FDA approval of CAP-1002 for the treatment of patients with DMD, it has to successfully complete Cohort A of the phase 3 HOPE-3 study. This trial is expected to enroll up to 60 patients who are to be randomized 1:1 to receive either of the following doses:

• 150 million cardiosphere-derived cells of CAP-1002 given via intravenous infusion once every 3 months
• Placebo given via intravenous infusion once every 3 months.

The primary endpoint of this phase 3 study will be mean change from baseline of CAP1002 versus placebo regarding Upper Limb test, version 2 [PUL 2.0] total score over a 12-month period. With this drug also helping patients in terms of heart muscle structure, a secondary endpoint being deployed in this trial is change in cardiac muscle function and structure by assessment of left ventricular ejection fraction over a 12-month period. Plus, other secondary endpoint assessments like quality of life [QoL]. I already stated above about the successful interim futility analysis of the phase 3 HOPE-3 study.

However, there was another positive development, which is that Capricor had announced a positive Type B meeting with the FDA. What does this mean? This means that the FDA has agreed to a pre-BLA meeting with the company after reviewing data from the HOPE-2, HOPE-2 open-label extension [OLE] and some data from the HOPE-3 trials. The result is that it is on track to be able to file a rolling BLA of CAP-1002 for the treatment of these patients with DMD in Q3 of 2024.

There are two sets of results that will be released in 2024, which might allow for the stock price of the company to trade higher. The first catalyst of which is that additional data from the phase 2 HOPE-2 OLE study using CAP-1002 for the treatment of patients with DMD, will be presented at the upcoming Parent Project Muscular Dystrophy [PPMD] 30th Annual Conference, which is being held between June 27th to June 29th of 2024.

I believe that the data should be good when it is released at this medical conference. What makes me say this? Well, that’s because earlier this year the biotech released 3-year data from this very same phase 2 HOPE-2 OLE study, showing that this treatment was able to both help slow a decline in PUL 2.0 and in terms of cardiac function over a 3-year period. How was the decline in skeletal muscle [upper limb function] slowed? Consider that patients who took CAP-1002 had only seen a decline of -4.1 points over a 3-year time point from baseline, whereas those given the placebo comparator instead saw a -7.8 decline. As you can see, the PUL 2.0 decline was slower for patients given treatment, with a statistically significant p-value of p<0.001.

The ability for CAP-1002 to work is thanks to its proprietary StealthX platform technology, which uses exosomes to deliver cargo to a targeted disease. In the case of these DMD patients, microRNAs to alter gene expression and in turn reduce inflammation associated with this disorder. This not only reduces current inflammation but allows these patients’ bodies to repair themselves in terms of muscle structure.

Potential Competitors For The Treatment Of Patients With Duchenne Muscular Dystrophy

The thing is that even if CAP-1002 is eventually approved for the treatment of patients with DMD, it will have to go up against several competitors. One such competitor could be Sarepta Therapeutics (SRPT). That’s because it received FDA Accelerated Approval of its gene therapy Elevidys back in June 2023. However, to obtain full FDA approval, it fell short of a main goal in its study. The current progress is that an FDA decision on whether to grant Full-approval of Elevidys is expected on or before June 21st of 2024. However, this company does already have other FDA approved DMD-targeted therapies being marketed like: Golodirsen, Eteplirsen and casimersen. What other therapies are available for these patients are corticosteroids as well.

However, Capricor has a chance to become the best-in-class cell therapy for these DMD patients. That’s because its drug CAP-1002 has several functions that help to treat these patients. It offers immunomodulatory, antifibrotic and anti-inflammatory. Besides only slowing disease progression of skeletal muscles, it also slows decline in muscle cardiac function as well.

In terms of competition, the goal is for it to have reimbursement price be similar or slightly higher to that of approved exon skipping therapies like the ones I noted above. What Capricor has going for itself is that it has 3-year data showing that these patients not only saw a slowing decline of skeletal muscle/cardiac function, but did so with a good safety profile.

Expansion Opportunities Of Exosome Pipeline

The thing is that Capricor has a few expansion opportunities that it could advance to help boost shareholder value. The first of which is that the goal of the initial DMD approval of CAP-1002 is to target late-stage disease patients. The late-stage DMD patient population in the United States is between 7,500 to 10,000. However, there is another batch of younger patients in this same territory to be targeted, which is another batch of between 7,500 to 10,000 patients.

With this cell therapy targeting a muscle-wasting disorder, there is another indication that could also be looked at as an expansion opportunity. This would be a disorder known as Becker Muscular Dystrophy [BMD], which is characterized as having dystrophin gene mutation occurring with progressive muscle loss. If CAP-1002 could be expanded successfully to treat this disorder, then that would entail going after 5,000 BMD patients in the United States. In the 7 major markets, the Becker Muscular Dystrophy market is expected to reach $1.28 billion by 2034.

The next expansion opportunity would be the advancement of a multivalent Exosome Based-Vaccine to target SARS-CoV-2. This program is specifically going to be explored in a phase 1 study being conducted by the NIAID, part of the National Institutes of Health [NIH]. The good thing about this program is that it was selected to be part of Project NextGen, which is intended to advance innovative vaccines quickly for infectious diseases.

This study, pending approval for funding, should begin by late 2024. If the phase 1 study goes well according to NIAID funding requirements, then it will pick up the tab for phase 2 funding as well.

Financials

According to the 10-Q SEC Filing, Capricor Therapeutics had cash, cash equivalents and marketable securities of $39.9 million as of March 31, 2024. The reason for the cash on hand is that it was able to receive a payment of $10 million under a U.S. Distribution and Commercialization Agreement with Nippon Shinyaku in Q1 of 2024. This was an agreement for both the United States and Japan. In terms of the United States, it can receive up to $90 million in additional milestone payments up to and including BLA approval of CAP-1002 and then $605 million in sales-based milestones. Regarding Japan, it could receive up to $89 million in additional development and sales-based milestones.

It was also able to raise approximately $2.3 million in net proceeds through the issuance of common stock under an ATM agreement at $5.33 per share. It believes that it has enough cash on hand for a cash runway to fund its operations into Q1 of 2025, but this excludes any potential milestone payments under the Nippon Shinyaku agreement. Just in case it does need to raise additional cash, it has filed with the SEC an S-3 Registration Form. The reason for this form is that when it is necessary to do so, it could sell up to an aggregate of $150 million in common stock, preferred stock, debt securities, warrants and units. Its cash burn is approximately $15.2 million per quarter.

Risks To Business

There are several risks that investors should be aware of before investing in Capricor Therapeutics. The first risk to consider would be regarding the BLA filing of CAP-1002 for the treatment of patients with DMD, which could be possibly by Q3 of 2024. It is the expectation that the company should be able to file such a BLA at that expected time. However, the risk here is that there is no assurance that the regulatory application will be accepted by the agency. Even if the BLA is accepted for rolling BLA submission review, plus eventual application submission, there is no guarantee that CAP-1002 will be approved for U.S. marketing of this indication.

A second risk to consider would be in terms of the upcoming data from the CAP-1002 program, which is targeting patients with DMD. One of which is the presentation of the phase 2 open-label HOPE-2 study at the Parent Project Muscular Dystrophy [PPMD] 30th Annual Conference, which is being held between June 27th to June 29th of 2024. The second of which would be the release of top-line data from Cohort A of the phase 3 HOPE-3 study. While data thus far has shown that this cell therapy is capable of slowing decline of skeletal muscle progression and cardiac muscle disease progression, there is no assurance that data from either of these releases will turn out to be positive. Nor, that the stock market will react accordingly upon release of either of these events.

A third risk to consider would be regarding the ongoing NIAID program, which is being used to advance the use of StealthX exosome-based multivalent vaccine [StealthX vaccine] for SARS-CoV-2. The goal is to receive initial funding to soon have a phase 1 study for this program, which is expected to happen in late 2024. There is no assurance that funding will be given to fund this program or that an early-stage study will be initiated on the expected timeline.

Another risk to consider here would be in terms of a phase 2 study eventually being initiated. What makes me say that? Well, that’s because in order for such a mid-stage study to eventually be initiated, it has to be shown that this StealthX vaccine has produced safety/efficacy to the satisfaction of the NIAID. If not, then this agency could choose to terminate this program entirely.

The fourth and final risk to consider would be in terms of the financial position that Capricor Therapeutics, Inc. is in. That’s because Capricor believes that it has enough cash to fund its operations into Q1 of 2025. There are milestone payments in place, but these will come in slowly. However, it is my belief that it will need to raise additional cash in the coming months.

As I noted above in the “Financials” section, it has filed an S-3 SEC filing to raise up to a possible $150 million. It is likely going to use this soon enough, as the cash runway is starting to diminish. I believe it could choose to do so if it releases positive results in the coming months, either from the upcoming presentation at the upcoming Parent Project Muscular Dystrophy [PPMD] 30th Annual Conference or with the release of topline data from Cohort A of the phase 3 HOPE-3 study.

Conclusion

Capricor Therapeutics is nearing the finish line with the use of CAP-1002 for the treatment of patients with Duchenne Muscular Dystrophy. Two key events to watch for would the rolling BLA submission of CAP-1002 for the treatment of this patient population and then topline data from the ongoing phase 3 HOPE-3 trial.

Both of these events are going to make or break the long-term investment thesis of this company. Should both of these events turn out to be positive, then the long-term Capricor Therapeutics, Inc. prospects get that much better.

The only item that will remain after that is whether CAP-1002 is capable of competing against other regulatory approved therapies. The goal is to expand the use of the StealthX technology exosome platform to target earlier lines of DMD patients, patients with BMD and then the targeting of SARS-CoV-2 as well.