On Monday, Piper Sandler initiated coverage on Capricor Therapeutics (NASDAQ:CAPR) stock with an Overweight rating and a price target of $35.00. The firm's decision is based on the potential of Capricor's lead product candidate, deramiocel (CAP-1002), which is being developed to treat cardiomyopathy in boys with Duchenne Muscular Dystrophy (DMD).
The Phase II HOPE-2 trial, which included 20 participants, demonstrated that deramiocel significantly slowed the decline of left ventricular ejection fraction (LVEF), a measure of heart function, by 107% compared to placebo at 12 months, with a p-value of 0.002.
Further positive results were presented at the World Muscle Society, where HOPE-2 open-label extension (OLE) data indicated that deramiocel led to an 8.1 point median improvement in LVEF and an 11.0ml/m2 benefit in median End Systolic Volume compared to external controls at two years. This benefit was maintained up to three years.
Capricor has started the rolling Biologics License Application (BLA) submission process. There is an anticipation that deramiocel could receive FDA approval for DMD cardiomyopathy in the second half of 2025.
Capricor has a global partnership with Nippon Shinyaku for deramiocel, with the company retaining 30-50% of potential blockbuster revenues. Additionally, Capricor stands to receive up to $1.5 billion in milestone payments.
In a recent financing move, Capricor issued 5.1 million shares at a price of $17 per share, raising gross proceeds of $86 million. This capital increase has brought the company's pro forma cash position to approximately $198 million, not including the cash burn for the third quarter of 2024.
In other recent news, Capricor Therapeutics has announced an underwritten public offering of 4,412,000 shares at $17.00 each, expecting to raise roughly $75 million in gross proceeds.
The firm has also made strides in its operations, preparing to submit a Biologics License Application (BLA) for deramiocel, a treatment for Duchenne muscular dystrophy (DMD) patients.
Additionally, Capricor is planning a merger of cohorts from the ongoing Phase 3 HOPE-3 trial for a post-approval study. The company's StealthX™ exosome-based multivalent vaccine for SARS-CoV-2 prevention has been selected for Project NextGen, a U.S. Department of Health and Human Services initiative.
Despite a reported net loss of approximately $11 million for Q2 2024, Capricor maintains a strong cash position. Analysts from firms such as Oppenheimer, H.C. Wainwright, and Maxim (NASDAQ:MXIM) Group have maintained their positive ratings for Capricor, reflecting optimism surrounding the company's recent developments.
InvestingPro Insights
Capricor Therapeutics' recent coverage initiation by Piper Sandler aligns with several key metrics from InvestingPro. The company's market cap stands at $856.36 million, reflecting investor optimism about its potential. This is further supported by the stock's strong performance, with a 583.33% price total return over the past year and a 273.47% return in the last month alone.
However, investors should note that Capricor is not yet profitable, with a negative P/E ratio of -30.65 for the last twelve months as of Q2 2024. This is consistent with the company's development stage and significant R&D investments in deramiocel. An InvestingPro Tip highlights that analysts do not anticipate the company will be profitable this year, which is typical for biotech firms in the pre-approval phase.
Despite the lack of current profitability, Capricor's revenue growth is impressive at 187.15% for the last twelve months, indicating increasing commercial traction. This growth, coupled with the potential FDA approval of deramiocel in 2025, supports the optimistic outlook presented in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Capricor Therapeutics, providing a deeper understanding of the company's financial health and market position.
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