On Tuesday, Ladenburg Thalmann updated its outlook on Capricor Therapeutics (NASDAQ:CAPR), increasing the stock's price target to $25 from $24, while reiterating a Buy rating. This adjustment reflects a positive view of the company's ongoing discussions with the FDA and potential developments expected later in the year.
Capricor is making strides in its regulatory discussions with the FDA, with the possibility of beginning a rolling BLA submission for its CAP-1002 treatment as early as the fourth quarter of 2024. This is contingent on the success of the upcoming results from the HOPE-3 Phase 3 pivotal trial for Duchenne Muscular Dystrophy (DMD).
The trial's Cohort B is expected to be fully enrolled next month, indicating the medical community's confidence in the treatment due to the current lack of options for late-stage nonambulant DMD patients.
Financially, Capricor has revealed that it will receive a substantial share of the gross revenues from CAP-1002 sales in the treatment of DMD. The terms entitle the company to 30%-50% of these revenues, a significant increase from the previously assumed 25%. This change has led to a revision of financial models and contributed to the raised price target for Capricor's shares.
The analyst's statement underscores the potential undervaluation of Capricor in the market. The optimism is based on the company's progress with the FDA and the favorable terms of revenue sharing for its DMD treatment, CAP-1002. The analyst's position suggests a belief that Capricor represents a compelling investment opportunity at its current valuation.
InvestingPro Insights
As Capricor Therapeutics (NASDAQ:CAPR) continues to make significant strides in the biopharmaceutical arena, analysts at Ladenburg Thalmann have expressed a bullish stance on the company. Echoing this sentiment, recent data from InvestingPro underscores some key financial metrics that potential investors may find informative. With a market capitalization of $171.38 million, Capricor's financial health is noteworthy, particularly with its substantial revenue growth over the last twelve months, reaching an impressive 886.81%. This surge in revenue is further highlighted by a quarterly increase of 1159.3% as of Q1 2023, reflecting the company's potential to capitalize on its developments.
InvestingPro Tips further illuminate the financial landscape for Capricor. While the company holds more cash than debt, indicating a solid balance sheet, it is also quickly burning through cash, which could be a concern for long-term sustainability. Additionally, Capricor's stock price has experienced significant volatility, with a notable price uptick of 80.73% over the last six months, and a strong return of 40.21% over the last three months, capturing the attention of market watchers.
For those considering an investment in Capricor, it's important to recognize that the company does not pay dividends and analysts do not anticipate profitability this year. Moreover, the stock is trading at a high Price / Book multiple of 7.58, which could suggest that the stock is richly valued relative to its book value. Despite these concerns, the recent analyst upgrade and the company's promising pipeline may offer a compelling narrative for some investors.
For a deeper dive into Capricor's financials and additional InvestingPro Tips, interested parties can visit https://www.investing.com/pro/CAPR. There are 9 additional tips available on InvestingPro, which can be accessed with a special discount using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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