CAPR - Capricor: Q4 2023 Interim Analysis For DMD Treatment Makes This A Must Watch

2023-08-16 09:31:41 ET

Summary

• There is an ongoing phase 3 study, known as HOPE-3, deploying the use of CAP-1002 for the treatment of patients with Duchenne Muscular Dystrophy; Interim analysis expected Q4 of 2023.
• A Type-B FDA meeting was held between the company and the FDA; Minutes from this FDA meeting are going to be released when available.
• The global Duchenne Muscular Dystrophy Drugs market size is expected to reach $10.92 billion by 2028.
• In a two-year open-label extension study, whereby DMD patients were given CAP-1002, it was shown that they had achieved skeletal and cardiac functional improvements.

Capricor Therapeutics (CAPR) has made significant progress in advancing the use of its cell therapy, known as CAP-1002, which is being developed for the treatment of patients with Duchenne Muscular Dystrophy [DMD]. It is already in the process of running a phase 3 study using this cell therapy for this patient population and intends to report interim results from it in Q4 of 2023. Not only that, but once available, the biotech intends to release minutes from an FDA meeting it had with respect to ongoing discussion about a potential Biologics Licensing Application [BLA] to the FDA for CAP-1002. I believe that this biotech has great potential as a high risk/high reward play with the upcoming data readout before the end of this year. It remains to be seen if Capricor is ultimately successful in being able to use CAP-1002 for the treatment of patients with DMD, but a few months ago it released two-year open label data suggesting that this cell therapy was able to improve skeletal muscle function and cardiac function.

Two Upcoming Catalysts Could Completely Change Scope of Biotech

As I noted above, Capricor Therapeutics is advancing the use of its cell therapy known as CAP-1002 for the treatment of patients with Duchenne Muscular Dystrophy. Duchenne Muscular Dystrophy [DMD] is a genetic disorder, whereby muscle degeneration and weakness occur because of a mutation of a protein known as dystrophin. Dystrophin is an important protein which keeps muscle cells intact together. However, in patients with DMD there isn't enough dystrophin in skeletal and cardiac muscle cells, thus causing damage to occur. This disease primarily affects boys and it is said to occur in about 1 out of every 3,600 male infants. There are several types of symptoms that these patients with DMD experience, which are as follows:

• Trouble getting up
• Issues with being able to run
• Constantly falling down while trying to walk
• Having a waddling gait [Duck-like walk: heavy upper body movement]
• Learning disabilities
• Big calves

The global Duchenne Muscular Dystrophy Drugs market size is expected to reach $10.92 billion by 2028 . This is a large market opportunity for sure, but there are some competitors in this space. The most notable competitor that Capricor Therapeutics may have to deal with is likely going to be Sarepta Therapeutics (SRPT). That's because it recently received Accelerated FDA approval of its gene therapy Elevidys, which was approved to treat ambulatory DMD patients ages 4 to 5 and with a confirmed mutation in the DMD gene. Not only that, but it is also possible that it could expand the label to remove the age restriction. It hopes to accomplish through an ongoing phase 3 confirmatory study, where the last patient is expected to be recruited before the end of 2023. If all goes well with data from this late-stage confirmatory study, then it's possible that the label could be expanded to include additional kids with DMD in the 1st half of 2024. Sarepta has already received FDA approval for several other DMD drugs over the years, besides this gene therapy treatment. These other drugs are as follows: Eteplirsen, Casimersen and golodirsen. All three of these DMD drug were able to help Sarepta secure net product revenue of $239 million in Q2 of 2023 . The point here is that Capricor will not only need to achieve the primary endpoint for its phase 3 HOPE-3 study, but it may also need to show that its treatment would be a better option for patients.

The phase 3 HOPE-3 study is a randomized, double-blind, placebo-controlled trial, which is using CAP-1002 for the treatment of patients with DMD. One thing to note is that this trial is recruiting both ambulatory and non-ambulatory DMD patients. It is expected to recruit up to 68 patients in the United States. As of August 7th 2023, a total of 48 patients have been randomized across 17 active sites. The primary endpoint is going to be the "change in full upper limb function" at month 12. This will be measured by a mean change from baseline in full Performance of the Upper Limb Test, version 2 [PUL 2.0]. Items across the test will be measured using a 3-point scale as follows:

• "0" signifying that the person is "unable to perform the item"
• "1" signifying that the person is "impaired or performs with compensation"
• "2" signifying that the person "performs task without compensation"

Investors won't have to wait that long to see whether or not this primary endpoint is ultimately met. That's because Capricor Therapeutics intends to report the outcome from an interim analysis from the phase 3 HOPE-3 study in Q4 of 2023. Not only that, but it held a Type-B clinical meeting in Q3 of 2023. Such a meeting was done for Capricor to outline a proposed path towards submission of a Biologics Licensing Application [BLA] to the FDA based on the ongoing HOPE-3 clinical trial. It intends to release the outcome from this particular meeting once final minutes become available. It remains to be seen if this late-stage trial will end up being successful, but there was highly positive results released from the two-year HOPE-2-OLE [Open-label Extension] study, whereby treatment with CAP-1002 was able to achieve an improvement in cardiac function for several patients . Not only that, but after a two-year period in this OLE study, patients continued to show statistically significant benefit [p=0.021] in the Performance of the Upper Limb [PUL v2.0] scale when compared to the original rate of decline of the placebo group from HOPE-2 after one year.

Financials

According to the 10-Q SEC Filing , Capricor Therapeutics had cash, cash equivalents and marketable securities of $37.8 million as of June 30, 2023. The reason for the cash on hand is because this biotech was able to raise approximately $2.1 million in net proceeds through the issuance of common stock at an average price of approximately $4.87 per share under its At-the-market [ATM] offering program. Based on its cash on hand, it believes that it has enough to fund its operations through Q3 of 2024. With roughly only about 1-years' worth of cash, it is highly likely that it will need to enact a raise again. I believe that it could likely do so if it is able to achieve positive results from the phase 3 HOPE-3 study. An interim analysis from this late-stage study is expected to be done in Q4 of 2023. If the results cause the stock price to trade higher, then I believe it will enact a cash raise almost immediately.

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 with respect the upcoming release of interim results from the phase 3 HOPE-3 study, whereby CAP-1002 is being used to treat patients with DMD. An interim analysis from this late-stage study is expected to be released in Q4 of 2023. There is no guarantee that this interim analysis will end up being positive. A second risk to consider would be in regards to the release of minutes from the Type-B meeting held between Capricor and the FDA. Such meeting minutes have not yet been released according to the company, thus there is no assurance that a BLA submission pathway was assured. A third and final risk to consider would be with respect to the financial position that this biotech is in. That's because it states that it only has enough cash to fund its operations through Q3 of 2024. As I stated above, this is not a huge cash runway, thus I believe that the company may need to find a way to raise additional cash soon. Again, I believe that should it achieve positive data from the phase 3 HOPE-3 study, then I believe it may possibly raise cash immediately the same day.

Conclusion

The final conclusion is that Capricor Therapeutics has made great progress in advancing the use of CAP-1002 for the treatment of patients with Duchenne Muscular Dystrophy [DMD]. It is already gearing up to report an interim analysis in Q4 of 2023 and to also provide investors with an update with respect to the Type-B FDA meeting that was held between it and the FDA. Prior data released from a two-year Open Label Extension [OLE] study showed that treatment with CAP-1002 was able to improve cardiac and skeletal function in patients with DMD. Besides this particular program, the biotech is in preclinical work with respect to its proprietary StealthX exosome platform, which has the potential for a broad range of new therapeutic applications in the field of vaccinology. In addition, the potential for this technology to be used as a targeted delivery tool for oligonucleotide, protein and small molecule therapeutics. What's particularly intriguing is preclinical data on the potential of advancing a dual-antigen vaccine with efficacy against SARS-CoV-2 and the influenza virus. With a few catalysts approaching in Q4 of 2023, plus the ability to tap into the large DMD market, I believe that investors might be able to capitalize on any potential gains made here.

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