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Capricor's Q3-2017 Report - Before versus Today - Meaningful Difference in Outlook

06:22 EST 9 Nov 2017 | Biotech Watcher

On Wednesday, November 8, 2017, Capricor Therapeutics (CAPR) reported its Q3-2017 results and held a conference call.

Introduction

Capricor Therapeutics (CAPR) is a small Beverly Hills biopharmaceutical developing innovative treatments to treat heart disease. Capricor’s lead product is CAP-1002, an adult stem cell therapy for the treatment of heart disease. The cardiac stem cells are harvested from donor heart tissue and then cultured into enough doses to theoretically treat several hundred patients. To be specific, the doses consist of cardiosphere-derived regenerative cells, which appear to have superior properties for inducing healing.

CAP-1002 was administered in a single-dose fashion with positive results in two recent trials. The relevant trial for today involves a proof-of-concept study on treating Duchenne muscular dystrophy patients. Capricor management is hoping to launch a potential registration trial soon. In this trial, CAP-1002 will be delivered in a “redosing” format.

From the same source, Capricor has captured exosomesthat are secreted by cardiosphere-derived regenerative cells. It represents an acelluar approach to regenerative medicine provides many important advantages over prior approaches. Capricor intends to enter its exosomes-based therapy, CAP-2003, into the clinic in 2018.

Background Readings

If you haven’t been closely following the Capricor story, you may wish to skim these articles:

Capricor’s Valuation Surge (September 19, 2017)
The DMD Market(September 8, 2016)

Financial Summary

Basic Facts for Quarter & Year Ending September 30, 2017
(In Thousands unless otherwise noted)

Q3-2017
Q2-2017
Q3-2016
  Collaboration Income
$      -
$      684
$         684
  Grants
282
313
63
Total Income
313
881
747
  R&D Expense
1,862
3,128
4,727
  G&A Expenses
1,089
1,247
1,260
Total Operating Expenses
2,951
4,375
5,987
Operating Income (Loss)
(2,638)
(3,379)
(5,240)
Net Income (Loss)
(2,735)
(3,472)
(5,333)
Comprehensive Income (Loss)
Inc. gains/losses on securities
1
(3,475)
(3,855)
Basic & diluted loss per share
(0.12)
(0.16)
(0.21)
Avg. Shares Outstanding
23,378
22,135
18,287
Recent Price (per share)
     $     2.32
(11/8/17)
     $     1.07
(8/10/17)
     $     2.79
(11/10/16)
Market Capitalization
$   58M
  $   24M
$   50M
Cash & Equivalents
$    13,895
$     8,261
$    18,021
Marketable Securities
Update with 10-Q
3,999
2,500


























Duchenne Program Updates

The FDA has granted an orphan designation as well as a Rare Pediatric Disease designation. By the end of the year, we expect Capricor to receive feedback on an application for the FDA’s Regenerative Medicine Advanced Therapy (RMAT) Designation. This enables Capricor to accrue all sorts of financial and regulatory incentives.

On the conference call, CEO Linda Marban confirmed a submission of an IND with the FDA for a Phase 2b trial called “HOPE-2”. She is hoping that the FDA will green light a potential registration from positive results, especially when if the primary endpoint shows statistical superiority (involving the PUL test).

Later this week, investigators will have a poster presentation (Action Duchenne International Conference) to provide immunogenicity data that supports repeat dosing.

Special Presentation & Conference Call

At 4:30pm (EST), November 15, 2017, Capricor will sponsor a conference call and presentation concerning the 12-month results for the HOPE-Duchenne trial. The HOPE trial provided the early proof of concept for advancing the DMD program so quickly. We expect the 12-month results to show that the treatment benefits were dissipated, thus supporting a redosing strategy rather than a single-dose protocol.

New Independent Investigator Studies

Two studies are being headed by Eduardo Marban of Cedars-Sinai Hospital in West Los Angeles. Dr. Marban is also the co-Founder of Capricor. These are single-site, proof-of-concept trials that assess the efficacy of CAP-1002 in treating different heart diseases.

Heart Failure with Preserved Ejection Fraction
Pulmonary Hypertension

If the results are good, then Capricor may further develop one or both indications.

Milestones

CAP-1002 –Duchenne Muscular Dystrophy & Adult Heart Diseases
Cardiac tissue is extracted from cadavers and then explants are extracted and cultured in the lab. The aggregated cells are cardiospheres. These cardiospheres are efficiently multiplied and implanted into the patients. These implanted cells are called “cardiosphere-derived cells” or CDCs. 
For this indication, CAP-1002 received Orphan Drug status from the FDA. Intended to complement other DMD treatments in development. 13 boys randomized to CAP-1002 infusion and 12 boys randomized to ‘usual care’.  It involved a single dose of CAP-1002 and promising trends were viewed.  We expect the CAP-1002 patients to regress to baseline at the 12-month evaluation, thus supporting the strong need for a redosing strategy for the next trial.
Top-Line 12-month Results
Annual Meeting of the American Heart Association - Anaheim, CA
Nov. 15, 2017
Duchenne Muscular Dystrophy – HOPE-2 Trial - Repeat Dosing & Chronic Administration - Skeletal Muscle Function
Capricor is expanding from the heart to skeletal muscle recovery in DMD patients. This will require systemic infusion, and thus a greater dose. The recent interim study results showed that a single dose to the heart results provides measurable advantages at 3 months, and that it largely dissipates at 6 months.  The company will thus propose redosing intervals at 3 months.

The animal models did not display a meaningful immune response to the allogeneic cells. It will be interesting to see whether “booster shots” will prolong or increase the regenerative benefits.  

The next trial, HOPE-2, will be a randomized, double-blind, placebo-controlled trial intended to support FDA registration. The redosing interval will be 3-months. Furthermore, Capricor is submitting for an RMAT designation from the FDA.

Success with DMD suggests CAP-1002’s applicability to related indications, e.g. other muscular dystrophies, cystic fibrosis, and limb-girdle disorders.
  Launch Phase 2b – HOPE-2 Trial in DMD Patients
  Receive CAP-1002 or Placebo at every 3 months for 1 year
Q1-2018
  Final Results -  HOPE-2 Trial in DMD Patients
Q3-2019
  Submit BLA to the FDA
Q4-2019
134-patient trial with a randomized, double-blind, placebo-controlled design. CAP-1002 is an allogeneic approach to providing regenerative cells. The primary endpoints include: safety metrics and efficacy (relative scar reduction at 6-months and 12-months post-infusion).

Capricor announcedthe one-year results of the Phase I portion of the trial in November 2014. The ejection fraction improved by 5.2% and the scar reduction was 20.7%.  Capricor will deliver 6-month results for its ALLSTAR trial during Q1-2017.

In May 2017, Capricor announcedthe 6-month results of the Phase II portion of the trial. No advantages were reported for scar reduction and ejection fraction.

Janssen declined the option to partner. This was no surprise.

Capricor is currently seeking other partners to advance the adult heart failure indication, especially in Asia.
  Asian Partnership Discussions
Ongoing
  Formulate Redosing Strategy for Adult Heart Failure Program
Ongoing
Independent Investigator Trials – Adult Heart Diseases
Capricor’s co-Founder, Eduardo Marban, is the lead investigator in these trials. He is the Cardiology Chief at Cedars-Sinai Medical Center in West Los Angeles. The studies advance the clinical development of CAP-1002 in different cardiovascular diseases: heart failure with preserved ejection fraction and pulmonary arterial hypertension (PAH).
Top-line Results – Phase 2a Regress-HFPEF Trial – 40 Pts with Heart Failure with Preserved Ejection Fraction – Randomized, double-blind, placebo-controlled study. The endpoints focus on functional measures as well as MRI-assessed fibrosis.
Q4-2019
Top-line Results – Phase 1a / 1b ALPHA trial – 26 PAH patients
ALlogeneic Cardiosphere-derived Stem Cells (CDCs) for Pulmonary Hypertension therApy
The open-label, single-arm dose escalation phase 1a part has 6 patients
Double-blind, placebo controlled Phase 1b part has 20 patients
1H-2020
CAP-2003 (Exosomes) – Organ Diseases
Exosomes serve as a primitive, robust way for intercellular communication.  It is a lipid bilayer that is secreted by cells and in Capricor’s case, it contains some microRNA growth factors that transmit regenerative instructions to cells.  The goal is to recreate the rejuvenation and tissue repair of present stem-cell therapies without its associated hazards, potential immunogenicity, and regulatory hurdles.

Capricor scientists have established that the exosomes are the regenerative source within CAP-2003. Exosomes elicit a weaker immune response than CAP-2003 and have a lower cost of goods coupled with a greater ease of manufacturing. If CAP-2003 had been more advanced into clinical studies, then it would have been a strong candidate for retreatment dosing in the upcoming Phase IIb trial for treating DMD.

Further preclinical work has enabled Capricor to isolate and extract a more powerful “regenerative soup of exosomes”.
Hypoplastic Left Heart Syndrome
This indication is covered by an NIH grant of up to $4.2M. HLHS occurs in about 1,000 patients in the United States. It is a serious, pediatric orphan disease. In Phase I and II trials, Japanese investigators reportedsuccessusingcardiosphere-derived cells(CDCs) in HLHS patients. This acts as a good proof of concept as Capricor advances treatment with CDC-derived exosomes.
  IND Submission
2018
  Launch Phase 1 Trial
2018
Inflammatory Disease TBA
   IND Submission
TBA
  Launch Phase 1 Trial
TBA























































































Our Thoughts

On June 26, 2017, CAPR closed at $0.68 per share. On November 8, 2017, CAPR closed at $2.32 per share with a $58M market cap. While this is still a low valuation, it is still much better than before. What’s the difference between before versus today?

A couple years ago, Capricor was focused on adult indications in which CAP-1002 was deployed in a single-dose fashion.

Today, CAP-1002 is being advanced into a redosing strategy into a rare pediatric disease: Duchenne muscular dystrophy (DMD).

Only a few months ago, Capricor suffered through negative results from its lead indication. Its pharma collaborator declined to extend the partnership. The cash reserves were relatively low and to outsiders, it looked like Capricor’s clinical portfolio would consist of a single trial.

Today, Capricor is helping an “independent investigator” with two ongoing trials, and is about to launch a (hopefully) registration trial in DMD. It should then be awarded an RMAT (regenerative medicine advanced therapy) designation which justifies flexibility in the trial design and clinical endpoints.

Furthermore, the company was able to garner an orphan designation for CAP-1002 as well as a “rare pediatric disease” designation. If CAP-1002 is approved for DMD, then Capricor receives a priority review voucher…and this can be auctioned for a lot of cash.

Lastly, the company intends to introduce a new therapy, exosomes, into the clinic in 2018.

(At the time this was written, one or more BioWatch staff owned a long position in CAPR)

This blog post is fromThe Biotech Watcher
And about us, see http://alanhobbes.blogspot.com/2014/12/welcome-to-my-personal-thoughts-about.html

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