Capricor Therapeutics, Inc. (CAPR) June 2026 Conference Transcript

Thank you for joining. By way of quick introduction, I'm Will Hahn, Senior VP of Biotech Investment Banking. I'm thrilled today to welcome Linda Marbin, CEO of Capricor, and A.J. Bergman, CFO of Capricor. As a quick background on Linda and A.J., as well as Capricor, Linda is co-founder of Capricor and has served as CEO since 2010. Linda has been in the biotech field for over 20 years and prior to Capricor held various senior roles at Exogen, a gene therapy biotech company. AJ has served as Capricor's CFO since 2018 and has been in the biotech industry for 15 years, joined the company in 2011. Capricor is a late-stage biotech company developing dermal cell, a hyaluronic cardiac-derived cell therapy that is filed for approval for the treatment of Duchenne's muscular dystrophy. New foot date of August 22, 2020.

Maybe to start, let's start with the regulatory pathway.

Can you provide an update on your interactions with FDA, including any feedback, recent meetings, maybe any upcoming labeling discussions?

Yeah, yeah. So it's been a really tumultuous year for Capricorn from a regulatory perspective, but we feel like we are coming out on top. As people may remember, last year our adcom was canceled at the last minute. We then got a CRL after filing for approval based on the feedback from the FDA of exactly what they wanted. They, upon review, decided they wanted more clinical evidence. We were lucky but also well-prepared in having the HOPE 3 Phase 3 pivotal trial, which had seen last patient last visit around the time of the CRL. We were able to meet with the FDA in a Type A meeting, confirm that the HOPE 3 data would suffice for approval. They turned down the opportunity for left ventricular ejection fraction as the primary efficacy endpoint, asked us to keep the performance of the upper limb 2.0 as the primary efficacy endpoint. That trial read out in early December of 2025. As many recall, we had our primary efficacy endpoint, our key secondary endpoint of ejection fraction, and then our three type 1 error-controlled secondary endpoints to have probably the best clinical data that's ever been presented in the Duchenne muscular dystrophy space in randomized double-blind placebo-controlled trial. We filed the new HOPE-3 data with the FDA. It allowed us to reopen our BLA. Our PDUFA date is August 22nd, so 10 weeks and three days from today. And we're very much in active conversations with the FDA now regarding information requests, regarding clinical opportunities, confirming all of the CMC data, which we had previously presented and all going very smoothly, and then, of course, discussing labeling opportunities, which we anticipate will go into a more serious mode in the next few weeks. That's very helpful.

And maybe kind of the other piece in terms of key recent developments, you recently filed legal action against NS Pharma. Can we just talk through that really quick in terms of the dynamics, you know, that you're focused on pricing structure, you know, the private label distributed model, any other kind of key aspects of that?

Yeah, so it's been, you know, it was very disconcerting to us. to find out that the partner that we had worked with so closely was really intractable in coming to terms in a new type of agreement or partnership that would be reflective of what is needed for a contractual situation to work. So basically what happened is in the original contract that was signed, we had all built in a concept of a transfer price. This would allow us to have some small stake in the ground financially from them when they went to distribute our product. Upon negotiations or discussions, not negotiations, but discussions with consultants that worked primarily on reimbursement and pricing, it became clear that the structure as stated would not work, that it would then establish the average sale price well below any number that would be reflective of what would be considered appropriate for DERM-ISL. NS Pharma acknowledged that it was the wrong structure. Capricorn acknowledged it was the wrong structure. We all agreed that we needed to negotiate a new agreement, and we went into a year of negotiations with them that failed because the only structure that they agreed to would be called a private label distributor, which has never, ever been done on a labeled product in the biopharma industry in the U.S. because it really eviscerates the company that gives those rights away and turns them into a contract manufacturer. As of March 27th of 2026, so just a few months ago, we tried one last time to get NS to agree to a different type of structure that would work for both companies. They would not agree, so we filed the litigation. And that's going very smoothly. Right now we have a really strong legal team that are working to defend the rights really of the patients with CMD who deserve Deremiacel. Capricor's plan is to launch Deremiacel independent of Nipunshinyaku or NS Pharma at this point so that we provide rapid access to those that need it the most and those are the patients. The legal stuff kind of goes on in the background and we look forward to a peaceful resolution, hopefully rescission, which allows both parties to kind of go back to ground zero. You keep your drugs, we keep ours. Thank you. It makes sense.

Do you anticipate any impact to regulatory timing around the legal action? Around the lawsuit?

So they kind of operate on separate arms. So the regulatory pathway, in fact, FDA, you know, maintains a very strong dogma that they don't pay attention to anything that happens out in the marketplace. Their job is to decide if something is safe and efficacious for an indication and then help you decide who that should go to. And so they really don't have any interest in what's going on outside in terms of sales marketing.

That makes sense. Maybe just talking about the data you guys announced, can you walk through the key efficacy and safety findings from the HOPE-3 trial, how they compare to the prior HOPE-2 results? Maybe we'll start there.

So we have had five clinical trials all showing approximately the same thing, which is the attenuation of skeletal muscle dysfunction as measured by the performance of the upper limb, first in Hope Duchenne and then in Hope II with the performance of the upper limb 1.2, primarily the mid-level pull in Hope II, which is the use of the arms and would be considered potentially the Goldilocks measure of upper limb function, which I can go through in more detail in a little bit. And then in Hope III, we use the performance of the upper limb 2.0. It's sort of like your smartphone. It's supposed to be the newer, better version with less redundancy. and less floor and ceiling effects, and so that's the primary efficacy endpoint of the HOPE-3 clinical trial. We hit that with statistically significant results, as well as a clinically significant result we saw on an absolute value change, a 1.2-point change in the performance of the upper limb, and FDA had stated previously and is in writing that a 1-point change would be considered relevant for clinical meaningfulness, so we were really excited not only for ourselves as a company, but also for the patients. This was the first clinical trial in Duchenne muscular dystrophy where a primary efficacy endpoint was not only hit from a clinical standpoint, but also a statistical standpoint, and also has been felt meaningfully by the patients. So we're excited about that. The secondary endpoint of ejection fraction we also hit. That was a key secondary endpoint. We had asked FDA consistently since 2015 to allow us to use a cardiac function ejection fraction as the primary efficacy endpoint. They had denied that because they felt that the pathophysiology of the cardio function or cardiomyopathy of Duchenne had not been well delineated or understood. I think that's changing now. But in regards to that, we have now both the only drug that I'm aware of in the Duchenne space that has demonstrated clinical relevance as well as statistical significance in skeletal as well as cardiac muscle function as defined by the statistical measures that were used and defined in the protocol and the statistical analysis plan presented to FDA. We've had the HOPE-2 open-label extension trial that, or the HOPE-2 trial, the HOPE-2 open-label extension, the three-year data has been presented publicly and both HOPE-3 and the HOPE-2 open-label extension three-year data are under review for publication at this We will present the five-year hope-to-open-label extension data at the Parent Project for Muscular Dystrophy meeting. This is unprecedented. We can't even find a natural history data set that goes out to five years and assessing dysfunction in Duchenne patients because nobody has that data. We will be the first. It's a small study, but what I can say is that the results suggest long-term efficacy of Deremiasel. But what makes Neremiacel even a better option for patients is its safety profile. So it's a quarterly infusion of 150 million cells. They don't need a port. They don't need anything fancy. It's a simple butterfly needle. About an hour infusion. Most patients tolerate it really, really well. There's been no long-term or even short-term safety events that are of any, you know, critical significance. Early-stage clinical development. We saw some anaphylaxis, and sometimes we still see some hypersensitivity that's well managed with simple drugs such as steroids, antihistamines, sometimes acetaminophen.

So in general, the kids love it.

They feel and function better, and there's a strong safety profile. We know that all of our long-term OLE patients show up literally the day that they qualify for their infusion because they start to feel the effects of the drug wearing off, and they want to get that boost again, and they can literally start to feel it work again. So we're very excited. The other piece of DERMIOSL that's really powerful is that we're a good player in the sandbox. So, you know, DERMIOSL is designed to address the inflammation and the fibrosis associated with Duchenne muscular dystrophy, so it should provide support to gene therapies, exon skippers, other drugs that might work to mediate the draconian effects of the genetic disease. So two sides of the same coin, let's work on fixing whatever the mutation has caused of the problem, the lack of dystrophin, and then the sequelae of inflammation fibrosis, which is the RMI.

That's very helpful. Maybe if you could just expand a little bit more on the competitive landscape, just again, kind of where specifically you see, and just given the fantastic ethics so far, and kind of how you see it, playing with other key assets.

So, you know, we don't feel that we really have any competitors. There's an antifibrotic drug that's been approved, Javinostat. that's being used does not seem to have the cardiac benefit and also does not seem to have the long-term antifibrotic effects that we see with Deremiocel, although anything that can be done for these boys and young men should be tried. We're focusing hard on the fact that we attenuate the inflammation and the fibrosis and the skeletal muscle realm, especially in the patients that we've studied most effectively, which are the later stage non-ambulant guides And let's remember, those guys really have no options left, right? So even the gene therapies, you know, I think they're going to start trying them again. Exxon skippers, those guys, some of them have been on them for a very long time. So whatever disease attenuation they've gotten from those dystrophin-modifying types of therapeutics is already in place. And this is an added benefit with Neremiocel. So we feel like rather than being competitive, as I mentioned a moment ago, we go well with nearly any other therapy. And I think, you know, it's also worth mentioning that diseases, genetic diseases seem so simple, right? Oh, you have, you know, just a mutation, tiny little mutation, tiny little exon that's just not working quite right in this, you know, genetic disease. We should be able to fix that, right? Take our toolbox of biology and let's fix it. And it's so tantalizing, even diseases like cystic fibrosis, you know, should be able to fix this, right? It's so simple. It's one amino acid on a chloride channel. But in general, you know, these diseases are very hard to fix. So it's going to be a polypharmacy approach with Duchenne and all these other diseases. And we're excited not only for Duchenne, but, you know, in the expansion of our pipeline, we expect to be able to make impacts in back or muscular dystrophy. We're looking at FSHD. We're looking at limb girdle, other types of pathologies that are similar to Duchenne that have cardiac complications that we'll be addressing as well.

Yeah, that makes sense. And I know, obviously, you're still in discussion with the FDA. so it may be limited in terms of what you can say. But as you think about the label going forward, just given obviously what we just talked about around competitive landscape or rather synergistic landscape, I'm just kind of curious how you look at the potential.

So the label that we're asking for is for attenuation of or improvement in upper limb dysfunction as demonstrated in HOPE 3. So anybody that has sort of loss of upper limb function, even in early stage, late stage ambulance patients that have an attenuated 10-meter walk time. Those will be our sweet spot patients. The youngest boy that we've treated thus far with Deremyosal is 10 years old, and so we're not anticipating going much younger than that, but we'll see how far the FDA will let us push that envelope towards the younger guys, and we think that the earlier that they get on to Deremyosal, the best impact it will have, and I know our key opinion leaders, a lot of the physicians, would love to see those young boys on Deremyosal, so we'll work hard on that. And then we're also going to ask for a cardiomyopathy label. What we see, and it's absolutely phenomenal, is that, and you'll see this actually, I'll give you kind of a hint that we're going to be presenting this data at Parent Project Muscular Dystrophy, but there really is a line in preservation of cardiac function of ejection fractions above 45% versus those below 45%. It literally is a dividing line that is unequivocal. And so it's going to be critical to give Jeremiah a cell while they still have preservation of cardiac function. Because remember, unlike skeletal muscle, where you can drive skeletal muscle back into the cell cycle, make new muscle, with the heart, once the cardiac muscle cell is lost, that cell is lost. And the replacement of cardiac muscle cells, at its most liberal understanding, is about 1% per year. So we don't get a lot of chances to fix cardiac muscle, so we have to get in there and preserve it. And that's where we're going to be focusing hard in our labeling discussions with the agency is that we've got to get early with these guys. And so the way that you would do that is attenuation of left ventricular ejection fraction, even on some basic level, but then also measurement of scar. So a lot of these guys now are getting MRIs as part of standard of care, especially at certified Duchenne care centers, starting pretty early on, six, seven years of age. And as soon as the clinicians start to see a scar, they'd like to see them on Dereomycel because we want to slow that process down. Because remember, the more scar tissue you have in your heart, the more burden you put on your heart, the more risk you are for cardiac dysfunction. And ultimately, that's what happens to these kids. They end up getting so much scar that their hearts can't function normally. And that's when their ejection fractions start to drop. And unlike an adult heart disease where you can sort of have a slow, steady decline of cardiac function. What we see in these Duchenne kids is sort of a paradoxic aggregation of scar and they're almost asymptomatic. Nobody really knows what's going on and a lot of that's because they're non-ambulant so there's not a lot of burden on their heart and so their hearts really kind of fail almost in a falling off the cliff way which is different than an adult disease. So if you see a you know an adult that's had a heart attack and cardiac dysfunction and they end up with an ejection fraction of 25%, they've probably got a lot of life left in them. With a Duchenne kid, when they start to drop below 30%, they really go very quickly. So we have to get in there early.

So I'd imagine, you know, some of the feedback you've heard from KOLs or neuromuscular specialists has been kind of the same in terms of areas that they would want to see, you know, therapy being used.

Yeah, yeah. So the KOLs love NERMI-SEL because it's safe, it works, It is easy to administer, and the benefits are clear to see. So the other thing that's really nice and the benefit of Deremyosil is the mechanism of action, which we've talked about and has been the subject of really several hundred academic papers now, both by our labs, our labs of our collaborators and others, shows that Deremyosil works primarily by anti-inflammatory, anti-fibrotic mechanisms. Our potency assay, which has been accepted by the FDA, is an antifibrotic potency assay, as well as an identity criteria, which identifies daramiocel as very unique from any other cell type. So the KOLs really like that the story is clean. We know what it's supposed to do. It measures that. It works like a drug. It's easy to deliver. It's safe, and it works. So, yeah, they're very supportive, and we look forward to rapid adoption on the commercial side.

That's fantastic. And maybe kind of talking about the commercial side, you obviously recently hired a new chief commercial officer. I'm just kind of curious what steps you're planning to take as you gear up for commercial launch.

So this is really an exciting time. You know, I'm a scientist, and I decided to go into biotech now, as you mentioned, several decades ago, because I wanted to bring the idea of we can make improvements in human health and therapies to people, medicines to people, and I'm actually going to be able to do this. I'm really excited, both on a personal and professional level. And so building the commercial team at Capricor is a dream come true. We have hired Mike Moore as our chief commercial officer. He comes to us from the rare disease phase. Specifically, he has experience in Duchenne muscular dystrophy. He was at Sarepta, was participating in launching at Levitas. So he knows our patients. He knows our community. He knows how the world of Duchenne muscular dystrophy commercialization works. And then we're building the team with him. And so I think most people know that in a rare disease, especially one like Duchenne, where patients are well-informed, tied to each other, Facebook groups, advocacy groups, the whole key is market access, market access, patient services, and reimbursement strategies. And so those are our three pillars that we're putting in place right now and building actively for launch. You know, we expect our PDUFA to be coming very soon. The number one focus of Capricor is commercial preparation and launch, and we intend to do it with aplomb. The good news is we have over 100 patients that are on open label extension at this point that will likely roll over into commercial products. We'll be able to help them get there again by sort of making sure that we get reimbursant strategies in place and payer engagement. Payers are excited about Dereomyosel. The cardiac benefits are the only that have been demonstrated in Duchenne muscular dystrophy, so we expect to have a good road with our payers. And as a result of that, you know, things are looking up in terms of getting ready for launch and getting this product to the people that really need it the most, those with Duchenne.

Yeah, that's great. And then kind of on that payer point, maybe not, I guess, how are you thinking about pricing? I don't know if you're giving that guidance now, but just relative to some of the other therapies out there, given obviously this potential synergistic use with some of the Yeah, so since I'm joined by my CFO, AJ Bergman, I'll let you take that pricing question.

Yeah, thanks. Well, obviously we're thinking and engaging really hard on the payer front right now, you know, speaking with multiple payers, developing our decks that are needed to get out there. But what we've guided to is that to be, you know, at or above the approved exon-skipping therapies. I think those are slightly different, that they're weight-based, but that's our aim in terms of the current price. This is a chronic therapy, so it will be administered over many years, four doses a year. And we feel fairly confident with the data that we've presented and the data that we're going to continue to generate. We should be able to achieve it very recently. Got it. Very helpful.

In terms of MFN, obviously, we would assume, given it's a rare disease, maybe it's a little bit lower for the impact, but just kind of curious if you have thought about that so Yeah, so obviously, we've thought about that a lot.

We have focused on U.S. approval, primarily for multiple reasons. One, we've done our clinical trials in the U.S. Two, we're a U.S.-based company, and so we have almost 350 U.S. employees, which, you We feel a tremendous responsibility to them, but also because getting into Europe independent of MSN is complicated, and so we want to make sure that we have the right partner, and the right partner will likely be one that understands not only that we got approval in the United States, but that what the EMA is going to ask of us, and so we're actively engaging with EMA now. That's always been part of our goal. Once we have clarity, which I think will know what they want, we've had some preliminary discussions with them, and we think that the HOPE-3 clinical trial might suffice for EMA approval, will then actively see a partner in Europe. MFN has been a headache for all of us because everybody's been trying to figure out how we fit, right? And rare disease, orphan designation, technically can get around the MFN. We have ATMP, which is orphan designation in Europe. But because of the focus on the U.S., we realized that we need to get across the line there and then find a European partner that knows how to negotiate MFN as well as all the other regulatory opportunities and commercialization opportunities in Europe.

Yeah, and I guess the other kind of part of just prepping for commercial launch is really then around manufacturing, you know, given it's a cell-based product. Can you just speak to kind of some of the prep work you are doing to make sure, you know, you're ready to hit the ground running day one?

Yeah, so Capricor made a commitment to ourselves a long time ago that we were going to maintain manufacturing as part of our core capabilities and ability to drive Jeremiah cells through commercialization.

It is a cellular therapy.

The good news is we really have fine-tuned the manufacturing into a very strategically driven, very efficient process. It's led by my chief operating officer, Dr. Christy Elliott, a background in cell biology and long-term in manufacturing, and she's just absolutely a star. And so she was able to design and build a small commercial manufacturing facility in our Torrey Pines location that will meet the needs of an initial launch, about 200, 250 patients annually. And then we're in late-stage construction in our exact same building of more plug-and-play clean rooms that will come on sequentially in 2027. Ultimately, by the end of the year, able to meet the needs of about 2,000 or 2,500 patients, which should be more than adequate for the first year or two post-launch. And then we have a new facility that we've identified close in, in La Jolla, close to our current facilities in Torrey Pines that is ready to be built out should we decide that that's an opportunity that we should take, which we're actively designing and planning right now.

Maybe kind of switching gears a little bit. you had mentioned a little bit earlier, dermal cell and kind of ability to go into potential other muscular dystrophies, other diseases, maybe just expanding a little bit more on that, you know, kind of the scientific rationale for that, you know, kind of where you might be focused quickly next.

Yeah, so as, you know, perfect jump off from our last question, which is we have fine-tuned manufacturing, we have a potency assay identity criteria, like we have a cell therapy that is a drug product. And it's very exciting to me, I just, you know, sort of as a sidebar, I've been in science for a long time, and I remember the advent of the antibody world where, you know, nobody thought antibodies could be commercialized, nobody thought they could be made, manufactured, you know, costs could be controlled, whatever, and now we know where antibody therapies are, they're as common as breathing. We're going to see cell therapies do the same thing in the next 10 years, and we're at the forefront of that, so I'm very excited about that opportunity. DMD is our first pass in terms of approval and commercialization of our cell-based Deremya cell, But then we look at other diseases of inflammation and fibrosis with both skeletal as well as cardiac implications. Becker is obviously one of our first targets. We'll be going after Becker very shortly after we achieve PDUFA for Duchenne. And then after that, you know, there'll be other ones that are in the similar dystrophic or dystrophinopathy type paradigm, so limb girdle, FSHD. We're looking at other types of rare cardiomyopathies that would be beneficial to preservation of cardiac muscle structure and function.

Maybe just kind of talk a bit more broad about the platform, the Stealth-X exosome platform, you know, some of the key advantages you might have, how you might think about utilizing that as well.

Yeah, so, you know, our exosome technologies have been coming behind for the last multiple years, six, seven years. We discovered the exosomes mediate the benefit of Deremyoselin. That's actually been part of our potency assay profile. The exosomes that are released by the cells are what drive the mechanism of action. So we became interested in exosomes as therapeutic mediators themselves quite a while ago. We decided not to pursue that in lieu of the cells because the cells are great for releasing exosomes. Why mess with what works? But now that we have identified that as sort of the API, we've now taken exosomes both from our cells, CDC-based exosomes, as well as StealthX, which is a generic exosome made by a standard cell line. And we're doing two different things with them. We're looking at biodistribution, we're looking at targeting, and we're looking at sort of the indications that would be appropriate for utilization of an exosome-based therapeutic. Following sort of behind in a lot of the footsteps of those that have pioneered bringing new therapies forward, our first indication that we used our exosomes were as in a vaccine. And that program has been funded and actually operated by the National Institutes of Allergy and Infectious Disease. It's an exosome-based vaccine that has the spike protein of COVID inside. The follow-on product will be the N plus S, so the nucleocapsid as well as the spike protein. It's safe. We'd like to sort of go up in dosing and sort of continue our work with NIAID, continue to build this vaccine platform forward. I think, as everybody knows, there has been a lot of negative implications of vaccine development and even vaccine utilization in the United States in the past few years. We think those times will pass soon, and so we'll continue to keep our vaccine program alive under a low simmer so that we can ultimately take it forward, and then also build therapeutics for the exosome-based technologies, which, again, will be an exciting opportunity in 27 and 28.

Very exciting. Maybe one final question just to close it out. Obviously, a lot to do ahead of you across the platform, pipeline, commercial launch. Can you just speak to maybe your cash balance now, kind of how you're thinking about funding all this going forward?

Yeah, sure. So Capricor has obviously built this Deremya cell program and the pipeline of ExoZone very strategically over this last 15 years as we've continued to mature. We have $278 million in the bank at the end of the first quarter, super strong balance sheet. We're growing, but we're investing very judiciously, as Linda pretty much articulated, in the CMC expansion as well as the commercial development. and then very judiciously in our pipeline. But we have strong conviction that building that pipeline behind the scenes is a huge value driver as we bring Deremias sell to the market. Secondarily to that, at approval, we're eligible for a priority review voucher. I think everybody knows those sell for quite significant sums of money.

I think the last one was $190 million.

We would look to sell that and monetize that in short order, which would give us an even stronger balance sheet as we move into the commercial launch. So we feel very, very good about the cash position we're in, the hiring we're doing. It's going right to the right areas. And then, of course, you add in the revenue element, hopefully post-launch, of course, and that presents a whole new range of operations, this pipeline, so we feel good about it.

Listen, you know, it sounds like you obviously guys have a very, very exciting, you know, next 12, 24 months ahead of you. Very much look forward to watching your continue to success.

Well, thank you so much for having us. Thank you for the insightful questions. and we look forward to getting to know you better as well.