Capricor Therapeutics (CAPR) Q2-2018

16:47 EDT 10 Aug 2018 | Biotech Watcher

On Thursday, August 9, 2018, Capricor Therapeutics released its results for Q2-2018 and held a conference call. We also recently met with CFO AJ Bergmann as well as the Scientific staff at Capricor’s headquarters and laboratories near Cedar-Sinai Hospital.


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. The doses consist of cardiosphere-derived regenerative cells (CDCs), which appear to have superior properties for reducing inflammation and inducing healing.

Capricor is also advancing exosomes, the paracrine factors, that are secreted by CDCs. Exosomes are nano-sized vesicles or packets that contain microRNAs and other proteins. They are primitive cell-to-cell messengers, directing neighboring cells into coordinated action. The company aspires to bring their exosomes to the clinic in early- or mid-2019.

If you wish to review recent updates, you may skim the materials below.


Capricor recently launched its Phase 2b trialfor treating Duchenne muscular dystrophy (DMD) patients, which is potentially a registration trial. Capricor received an RMAT designation for treating DMD with its cell therapy. Considering this designation, the management will meet with the FDA to clarify the regulatory path to approval.

The initial sites have opened and Capricor hopes to recruit from a total of 10 to 15 sites. The trial is recruiting patients with later-stage disease: many will be confined to wheelchairs, all will have difficulty with ambulation. This is part of Capricor’s differentiation within the DMD treatment space.

Gene Therapy vs. CAP-1002

In June 2018, Sarpeta Therapeutics (SRPT) reported wonderful results on the first three patients dosed with its special micro-Dystrophin gene therapy. There was unprecedented increases in a meaningful biomarker.

We give the the usual warnings about: 1) it’s only on 3 patients; 2) needing validation on clinical outcomes; 3) needing validation on just about every other metric; 4) confirming durability; and 5) confirming efficacy on severe patients. We’ve also been a tad nervous with using AAV as a vector especially in DMD, but we’re thinking that Sarpeta solved those issues.

Nevertheless, the early data was impressive and we’re also excited. Let’s assume that the Sarpeta’s gene therapy is effective. Where does that leave Capricor’s CAP-1002?

1. CAP-1002 is aimed at later-stage, non-ambulatory disease, and the current gene therapy trials aren’t. Furthermore gene therapies could theoretically have a harder time with this population. We will find out. For now, the target segments are different.

2. Gene therapies may be great, but we don’t think it will be a complete cure. There’s a long way to go with repairing the damage. Don’t get us wrong, gene therapies may soon be a wonderful essential for most DMD patients. It just won’t be like using an antibiotic to successfully wipe away mild pneumonia.

3. The mechanisms are different, which is a good thing. CAP-1002 has been shown to improve the output and histology of the damaged DMD heart. It also significantly quells inflammation. While Sarepta’s therapy has been designed to help, this is a central organ for DMD survival and quality of life. It still needs to be validated. Furthermore, with any overall improvements puts a substantial increased load on the heart. CAP-1002 can be a necessary complement to enact the required improvement in coronary functioning.

If there’s any significant increment to add, even though it’s just an increment, then CAP-1002 becomes a vital combination partner. We think if CAP-1002 works, it will contribute more than just “an increment”.

Exosomes Update

The exosomes are the subject of a collaboration with the U.S. Army Institute of Surgical Research (USAIR). USAIR is aiming for clinical solutions to treat severely traumatized soldiers. The exosomes can be lyophilized into a freeze-dried powder and stored at room temperature. This provides additional advantages over a cell-based therapy: convenience and cost.

On the conference call, CEO Linda Marban said that the company was still exploring multiple vehicles for storing exosomes, but that the final exosome product(s) will indeed be cheaper than cell therapy products. 

The exosome “formula” is still being optimized. While the Capricor’s exosomes are distinctly different from the “generic exosomes” that are gathered by other scientists and companies, Capricor is exploring the formula. Can the exosome product be improved by changing the levels of specific microRNAs?

Financial Summary

Basic Facts for Quarter Ending June 30, 2018
(In Thousands unless otherwise noted)

Collaboration Income
Total Income
R&D Expense
G&A Expenses
Total Operating Expenses
Operating Income (Loss)
Net Income (Loss)
Comprehensive Income (Loss)
Inc. gains/losses on securities
Basic & diluted profit (loss) per share
Avg. Shares Outstanding
Recent Price (per share)
Market Capitalization
Cash & Short-term Investments
Marketable Securities


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.
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 proposes redosing intervals every 3 months. The primary endpoint is based on the middle PUL (Performanceof the UpperLimb) scores at 12 months.

The animal models did not display a meaningful immune response to the allogeneic cells. It will be crucial for the “booster shots” to show safety and prolonged efficacy.

The ongoing trial, HOPE-2, is a randomized, double-blind, placebo-controlled trial and may support FDA registration. The 84 DMD patients will include ambulatory and non-ambulatory patients. The redosing interval will be 3-months.The mid-PUL test at baseline vs. 12 months is the primary efficacy endpoint.

Capricor received an RMAT designation as well as Orphan and Rare Pediatric Disease designations 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.
Phase 2b – HOPE-2 Trial - Finish Enrollment
Receive 150M cells of CAP-1002 or Placebo at every 3 months for 1 year
FDA Meeting over 6-Month HOPE-2 TrialResults
Top-line 12-Month Results -HOPE-2 Trial in DMD Patients
Submit BLA to the FDA (if HOPE-2 Trialresults are “really good”)
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). In both trials, CAP-1002 is infused through the coronary arteries.

With good results, Capricor may advance these indications through in-house programs.
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.
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
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 (e.g. immunogenicity).

Capricor and affiliated 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. CAP-2003 is an especially promising (future) candidate for retreatment dosing in future trials.
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
Launch Phase 1 Trial
Inflammatory Disease TBA
   IND Submission
U.S. Army Institute of Surgical Research (USAISR)
The military surgical research team is studying CAP-2003 and deploying it with severely injured soldiers. It will be a formulation that is stable at room temperature, which suggests that the lyophilized (freeze-dried) preparation is (almost) ready to be delivered. The military does not require FDA oversight and may deploy this in the near future.

Capricor may then receive solid data that extends well beyond the usual reach for a Phase 1 trial.
Ongoing Research & Clinical Application


Our Thoughts

Until late 2019, there won’t be results arriving from relevant clinical trials. In the meantime, we should see CAP-2003, Capricor’s exosome technology, enter the clinic. Capricor will also meet with the FDA to clarify the regulatory pathway for an RMAT designated product.   

Capricor has an ongoing, potential registration trial in late-stage DMD. This is cutting-edge science combined with new regulatory pathways. It’s the first time for using a systemic-infusion under a redosing model. With success, Capricor will single-handedly restore attention to the regenerative medicine space for directly treating a hard core disease. If it fails, then the fallout from the binary event is obvious.

The company continues to create and maintain meaningful collaborations. The USAISR agreement is just the latest. We haven't seen another biotech be so efficient. The management gets well-deserved kudos for being so efficient with conserving equity. We expect Capricor to someday raise additional capital through leveraging equity, but that's normal. This company has been unusually capable at finding alternate, non-dilutive sources. 

A Capricor investor must exercise patience. There may not be movement in CAPR stock for several months.

What news will happen first?

There will be provocative trial results - perhaps beginning with early safety trials involving exosomes in late 2019. Or perhaps the USAISR may make meaningful progress or even surprise us with a clinical deployment of the exosomes. We may begin to hear progress with the exosomes program or with collaborations by early 2019, but that’s not a definitive.

For now, it seems like waiting game. This may be a good thing; it may ensure vigilance over the operational execution of the HOPE-2 trial. Tiny Capricor has a full plate of tasks to complete, including the advancement of a new program to the clinic: exosomes. While Capricor sorely needs success with CAP-1002, its longer-term future is tied to the exosomes program.
(At the time this was written, one or more BioWatch staff owned a long position in CAPR)

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Original Article: Capricor Therapeutics (CAPR) Q2-2018


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