Capricor Therapeutics (CAPR) Q2 2026 Earnings Call: Deramocel BLA Path and FDA Update

Key Takeaways

• The FDA’s advisory committee voted 3 in favor and 9 against on whether the evidence supported deramocel’s effectiveness for treating cardiomyopathy in patients with Duchenne muscular dystrophy (DMD).
• Capricor plans to amend the deramocel BLA with 24-month HOPE-3 open-label extension data and additional analyses, seeking a refined indication focused on upper-limb skeletal muscle function. The FDA indicated it would review the amendment and extend the current August 22 PDUFA action date upon receipt.
• The HOPE-3 primary endpoint remained statistically significant. Deramocel slowed upper-limb disease progression on PUL 2.0, with a 4.55% mean difference and a p-value of 0.029.
• Cash, cash equivalents and marketable securities totaled $237.9 million at June 30, 2026. Q2 net loss widened to $40.7 million, or $0.70 per share.
• Q2 operating expenses rose to $42.9 million from $27.7 million, driven by clinical, regulatory, manufacturing and commercial investments supporting the DMD program.
• Capricor is slowing certain commercial-readiness spending and has paused pipeline work unrelated to deramocel pending greater regulatory clarity.

Key Financial Data

Business and Operating Performance

Deramocel regulatory pathway

The FDA advisory committee’s negative vote addressed a narrow question concerning cardiomyopathy in DMD. Management emphasized that cardiomyopathy was a key secondary endpoint in HOPE-3, while the trial was designed and powered around an upper-limb skeletal function primary endpoint.

Following discussions with the FDA, Capricor plans to submit a BLA amendment containing 24-month open-label extension data and further analyses of the existing dataset. The proposed indication would focus on the upper-limb skeletal muscle endpoint measured in HOPE-3.

The primary endpoint showed a 4.55% mean difference in favor of deramocel on PUL 2.0, with a p-value of 0.029. Capricor said this corresponded to an absolute difference of approximately 1.2 points.

The company has administered about 1,300 intravenous infusions to more than 200 DMD patients across three clinical trials. More than 80 patients are participating in open-label extension studies, with some receiving continuous infusions for over five years.

HOPE-3 statistical update

During peer review and discussions with the FDA and The Lancet, Capricor identified an issue with the statistical model used for the left ventricular ejection fraction endpoint. Under the prespecified model, the treatment difference for all patients changed from the previously reported 2.4 percentage points with a p-value of 0.04 to 1.8 percentage points with a p-value of 0.09.

Management said the HOPE-3 primary endpoint was unaffected. In the prespecified cardiomyopathy subgroup, the result also remained unchanged at a 2.8-percentage-point treatment difference and a p-value of 0.02. Endpoints below left ventricular ejection fraction in the testing hierarchy are now characterized as nominally significant, with their treatment effects unchanged.

Manufacturing and commercialization

Capricor’s in-house GMP manufacturing facility in San Diego is operational and positioned to support an initial commercial launch if deramocel is approved. Expansion of the facility’s second floor is continuing, with management targeting full validation and FDA approval of the expanded space in 2027.

Commercial-readiness activities are continuing at a slower pace pending regulatory clarity. Michael Moore joined Capricor as Chief Commercial Officer and is building the launch organization alongside the company’s market-access leadership.

NS Pharma dispute and pipeline priorities

Capricor withdrew its preliminary-injunction motion without prejudice and plans to pursue its contractual dispute with NS Pharma through arbitration. Management estimates that arbitration will begin in fall 2026 and continues to seek rescission of the U.S. agreement.

Work on pipeline programs not directly related to deramocel is on hold. Capricor has initiated regulatory engagement in Europe and Japan, while potential studies in younger DMD patients and Becker muscular dystrophy will depend on progress in the U.S. regulatory process.

Management Outlook

Management expects the FDA to extend the current August 22 PDUFA action date after receiving the planned BLA amendment. The company is finalizing the submission timing.

Capricor continues to pace commercial expenditures and said it retains flexibility over capital deployment for the remainder of 2026. The company’s manufacturing expansion remains targeted for full validation and FDA approval in 2027, subject to the regulatory process.

Risks and Watch Items

• The deramocel BLA remains under FDA review, and the advisory committee voted against the evidence supporting the proposed cardiomyopathy indication.
• The planned BLA amendment will extend the regulatory timeline, with the revised PDUFA date dependent on submission and FDA review.
• The revised analysis of the left ventricular ejection fraction endpoint produced a p-value of 0.09 in the full study population.
• An FDA bioresearch monitoring inspection resulted in a Form 483 with one observation. Capricor submitted its response and is awaiting feedback.
• The NS Pharma contract dispute remains unresolved and is expected to proceed to arbitration.
• Commercial spending, pipeline timing and expansion plans remain contingent on greater regulatory clarity for deramocel.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good afternoon ladies and gentlemen and welcome to the Capricor Therapeutics Second Quarter 2026 Conference Call. [Operator Instructions] The call is being recorded on Thursday, August 13, 2026. And I would now like to turn the conference over to CFO, AJ Bergmann, for the forward-looking statement. Please go ahead.

Anthony Bergmann

Thank you very much. Before we begin, I'd like to remind you that any statements made during today's call that are not historical are considered to be forward-looking statements. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factors section of our company's most recent annual report on Form 10-K. And our most recent quarterly reports on Form 10-Q, as well as other reports filed with the SEC, any forward-looking statements may represent our views as of today, August 13, 2026. An audio replay of the call will be available on our website following its completion. With that, I will turn the call over to Linda Marbán, CEO.

Linda Marbán

Good afternoon everyone and thank you for joining Capricor's second quarter 2026 earnings call. Our BLA for deramocel remains under review with the FDA with a current PDUFA target action date of August 22. Because that review is ongoing, there is a limit to what I can say about our interactions with the agency, but wanted to provide an update across 3 main topics: our regulatory status, pathway for deramocel, our commercial and manufacturing readiness, and our dispute with NS Pharma. I will then briefly address our pipeline programs before turning it back to AJ.

On July 29, 2026, the FDA convened the Cellular, Tissue, and Gene Therapies Advisory Committee to review our BLA. The committee was presented with a single voting question. Does the available evidence provide substantial evidence of effectiveness of deramocel for the treatment of cardiomyopathy in patients with DMD? The vote was 3 in favor, 9 against, with 0 abstentions.

That is not the outcome we had planned for, and we are, of course, disappointed, but we remain committed to working with the FDA on the next steps for this program. Our priority is, and always has been, to get deramocel to those who need it most.

I would like to provide some color in our perspective about why we continue to believe in the potential of deramocel in DMD patients. First, the indication we originally requested in the BLA going back to 2024 was the treatment of cardiomyopathy in DMD. Therefore, the focus of the FDA and the advisory committee was on whether deramocel should be approved to treat cardiomyopathy. However, the measurement of deramocel's effect on cardiomyopathy was a key secondary endpoint rather than the primary endpoint of the HOPE-3 study. And it measured change in ejection fraction across the full DMD population, rather than in patients with established cardiomyopathy, the population the proposed indication addresses.

By contrast, HOPE-3 was actually designed with a skeletal functional primary endpoint and with power to assess efficacy in upper limb function. [ In pre, ] the advisory committee was not asked to vote on whether they believe the data on the HOPE-3 primary efficacy endpoint could support approval of the product, nor whether the overall benefit-risk profile of deramocel was favorable. We continue to believe that the data on the primary, as well as multiple other endpoints, support a finding of effectiveness on these measures.

It is worth noting that in a separate discussion on upper limb function during the ADCOM, the committee's feedback was directionally supportive of the clinical evidence for the primary endpoint in upper limb function. The discussion was substantive and the full record is public for anyone who wants to review it.

Now, this brings me to an update that I am very pleased to share. We are continuing to work closely with FDA on a potential path forward for deramocel focused on an upper limb skeletal muscle indication reflected in the primary efficacy endpoint of HOPE-3.

To that end, following discussions with the agency, subsequent to our Advisory Committee meeting, we plan to submit an amendment to our BLA that includes the 24-month open-label extension data from the HOPE-3 study, along with additional analyses on the existing data package, in order to support a refined indication focused on the primary endpoint. The FDA has indicated it is willing to review this amendment and upon receipt to extend the PDUFA action date accordingly. We are finalizing the timing of that submission and will provide an update as appropriate.

We appreciate the FDA's engagement throughout this process and its shared commitment to addressing the major unmet need for Duchenne muscular dystrophy.

Now there were 2 other developments in the review this quarter. In July, we were proud to report that the results of the HOPE-3 clinical trial were published in The Lancet following extensive and independent peer review. The first publication of the full Phase 3 dataset, an important milestone for this program and for the field.

The publication highlights the efficacy of deramocel and the supplement highlights the mechanism of action as well as the individual patient-level data. There's a lot of information available publicly, and we are confident that this highly regarded publication will help support continued progress for our deramocel program.

In connection with that peer review and as part of our dialogue with the FDA and The Lancet, we identified an issue with the statistical model in the clinical study report and reverted back to the statistical analysis plan version 3.0 put in place prior to unblinding. That model, the one underlying our top-line release, included an interaction term combining 2 independent variables, age and baseline, which were part of the pre-specified plan.

The only endpoint directly impacted was left ventricular ejection fraction in all patients, the key secondary endpoint of the HOPE-3 study. At top line, we reported a 2.4 percentage point treatment difference with a p-value of 0.04. As published in The Lancet under the pre-specified model, the measure of left ventricular ejection fraction in all patients was a 1.8 percentage point treatment difference with a p-value of 0.09. We took the most conservative approach available to us in the publication and in follow-up interactions with FDA.

Nothing else changed in the data or its analysis. We remind you in the pre-specified cardiomyopathy subgroup, the result was unchanged at p equals 0.02 with a 2.8 percentage point treatment difference. The endpoints below left ventricular ejection fraction in the testing hierarchy are characterized now as nominally significant with treatment effect unchanged.

Now, let me be clear that the HOPE-3 primary endpoint was unaffected and is significant both statistically and clinically. Deramocel demonstrated a statistically significant slowing of upper limb disease progression as measured by PUL 2.0 with a mean difference of 4.55% in favor of deramocel with a p-value of 0.029, which corresponds to a 1.2 point absolute change in [ total full point of ]. We believe the efficacy and safety data supporting the potential for deramocel is strong.

We have administered approximately 1,300 intravenous infusions across our clinical program to over 200 patients with DMD in 3 separate clinical trials. More than 80 patients are in our collective open-label extension studies, with some receiving continuous infusions for more than 5 years, and the long-term safety profile is consistent and well-characterized.

The open public hearing part of the advisory committee included testimony from patients, families and clinicians living with Duchenne muscular dystrophy. We were grateful that their experience is part of the record, and we look forward to continuing with the FDA on a path forward for deramocel.

Also in July, as part of the review process, the FDA conducted a bioresearch monitoring inspection, or BIMO, and issued a Form 483 citing 1 observation. We have submitted our responses and are currently awaiting feedback.

Second, let me talk a little bit about our commercial readiness and manufacturing. We are continuing our commercial readiness activities, but at a slower pace until we have further regulatory clarity. And although the scope and timing of some of them may change, depending on the outcome of the review, we are controlling our cash against this.

Our in-house GMP manufacturing facility in San Diego is operational and positioned to support an initial commercial launch if approved. The expansion to the second floor of that same facility continues, and our goal remains full validation and FDA approval of the expanded space estimated to be in 2027. The space is ideal for early commercialization and allows for the most flexibility as we continue to scale our CMC capacity to account for potential demand.

On the commercial side, Michael Moore joined us as our Chief Commercial Officer, bringing direct DMD and rare disease commercial experience. And he has judiciously been building out the launch organization alongside our market access leadership.

Now let me talk for a minute about our dispute with NS Pharma. The state court was scheduled to hear our motion for preliminary injunction on August 10, ahead of the FDA's expected PDUFA date. However, we determined that resolving this contractual dispute in arbitration following the agency's decision would give the parties a more complete regulatory record to work from. Therefore, we withdrew the motion without prejudice.

In terms of timeline, we estimate the arbitration process to begin this fall to address the contract dispute while continuing to pursue commercial readiness activities for deramocel. Now, let me be clear that our position on the underlying dispute has not changed. We continue to believe that the pricing structure in the U.S. agreement is fundamentally flawed in a way that would impede patient access and we continue to seek rescission. What changed is the current process by which we are pursuing a remedy. Our view of the merits of the case has not changed.

Now, very quickly turning to our pipeline, I would like to state that all pipeline work that is not directly related to deramocel is on hold right now until we have further regulatory clarity. Having said that, in terms of life cycle management of deramocel, we have initiated regulatory engagement in Europe and Japan. Our expansion plans, including those for younger DMD patients and for Becker muscular dystrophy, remain priorities, and the timing of those clinical trial initiations will be stage-gated by the timeline of our regulatory pathway for deramocel in the U.S. to treat those with Duchenne muscular dystrophy later stage.

With that, I will now turn the call over to AJ to review the financial results.

Anthony Bergmann

Thank you, Linda. As of June 30, 2026, Capricor had cash, cash equivalents and marketable securities totaling approximately $237.9 million, and there was no revenue recognized for the second quarter of 2026 or 2025.

Total operating expenses for the second quarter of 2026 were approximately $42.9 million compared to approximately $27.7 million for the second quarter of 2025. The increase was primarily driven by continued investment in clinical, regulatory and manufacturing activities as well as commercial infrastructure supporting our Duchenne program.

Net loss for the second quarter of '26 was approximately $40.7 million or $0.70 per share compared to a net loss of approximately $25.9 million or $0.57 per share for the second quarter of 2025. And for the 6 months ended June 30, 2026, our net loss was approximately $74.7 million compared to approximately $50.3 million for the same period in 2025.

As of June 30, 2026, we had an accumulated deficit of approximately $379.6 million. Our expense profile this quarter reflects investment across our 3 main areas: regulatory and clinical activities in support of our DMD program, manufacturing capacity expansion efforts, and commercial readiness activities.

As Linda noted, we are pacing certain commercial expenditures as the regulatory timeline develops and becomes more clear, and we continue to have flexibility in how we deploy capital across the remainder of the year. With that, I will turn the call back over to Linda for a closing.

Linda Marbán

Thank you, AJ. As all of you know, the last year has been one of highs and lows for Capricor. We were stunned by the [indiscernible] and pleased by the HOPE-3 data. We were encouraged by the acceptance of the HOPE-3 data for resubmission in response to the [indiscernible] and disappointed by the advisory committee's recommendation. Although we understood it based on the narrow voting question and the disparity between the indication we had previously asked for and the data from HOPE-3, which was powered to assess skeletal muscle as its primary goal.

We have previously stated this, we were reassured by the strength of our data by publication in The Lancet, and we were amazed by the outpouring of support for deramocel by the DMD community. We hear their voices as well and will continue to work tirelessly to try and get deramocel to every eligible patient based on their physician's recommendation.

We are grateful to FDA for their flexibility and for their collaborative approach. We will be submitting updated data to the FDA as soon as possible and look forward to their review.

Lastly, due to the sensitivity of our ongoing discussions with the Food and Drug Administration, we are not holding a Q&A today, and we look forward to providing updates to you as they become available. Thank you for your time. We look forward to positive updates in the future.

Operator

This concludes today's call. Thank you all for participating. You may now disconnect.