Capricor's Q3 2025: Contradictions Emerge on HOPE-3 Data, FDA Flexibility, and Potency Assays

Date of Call: November 10, 2025

Financials Results

• Revenue: $0 in Q3 2025, compared to approximately $2.3M in Q3 2024; $0 for first 3 quarters 2025 vs approximately $11.1M for first 3 quarters 2024 (2024 included ratable recognition of $40M from Nippon Shinyaku).

Guidance:

• Cash, cash equivalents and marketable securities approximately $98.6M as of Sep 30, 2025; runway into Q4 2026.
• Top-line HOPE-3 results expected within weeks; plan to unblind after final data management and publish primary and key secondary endpoints.
• Will submit HOPE-3 results as formal response to CRL; FDA classified resubmission as Type 2 (up to a 6-month review); aiming for potential approval in 2026 and eligibility for a priority review voucher if approved before Sep 30, 2026.
• NIAID-funded StealthX Phase I initial data expected in Q1 2026.
• Preparing commercial readiness (San Diego GMP facility passed PLI; physician education, patient services, market access underway).

Business Commentary:

• Top Line Readout from HOPE-3 Phase III Clinical Study:
• Capricor Therapeutics is awaiting the top line readout from its HOPE-3 Phase III clinical study of deramiocel, an investigational cell therapy for Duchenne muscular dystrophy.
• The study enrolled 105 participants and is one of the largest double-blind placebo-controlled studies ever conducted in this patient population.

• The study focuses on non-ambulant patients, aiming to address the unmet medical need in this demographic, and measures both upper limb function and cardiac function as primary endpoints.

• Financial Performance and Cash Position:

• Revenue for the third quarter of 2025 was $0 compared to approximately $2.3 million in the same period last year.
• The decline in revenue was primarily due to the ratable recognition of the $40 million U.S. distribution agreement with Nippon Shinyaku, which was fully recognized by the end of 2024.
• As of September 30, 2025, Capricor's cash, cash equivalents, and marketable securities totaled approximately $98.6 million.
• The company anticipates that its current financial resources will be sufficient to cover expenses and capital requirements into the fourth quarter of 2026.

• Research and Development (R&D) Expenses:
• Capricor's research and development expenses were approximately $18.1 million for Q3 2025, excluding stock-based compensation, compared to approximately $11 million in Q3 2024.
• The increase in R&D expenses reflects the ongoing preclinical and clinical studies, including the HOPE-3 trial, as well as preparations for commercialization.

• Exosome Platform and StealthX Program:
• Capricor is advancing its StealthX program, a U.S. government-funded initiative to develop next-generation vaccines for COVID-19 and other potential infectious threats.
• The NIAID-sponsored Phase I clinical trial is ongoing, with initial data expected in the first quarter of 2026.
• The StealthX program serves as a critical proof of concept for Capricor's exosome platform, which could potentially extend to other infectious and rare diseases.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • CEO: 'we are just weeks away from a major milestone, the top line readout from our HOPE-3 Phase III' and 'we will make every effort to advance deramiocel toward approval as efficiently as possible in 2026.' CFO: 'cash... totaled approximately $98.6 million... sufficient to cover anticipated expenses and capital requirements into the fourth quarter of 2026.' Management emphasized manufacturing readiness (San Diego facility passed PLI) and no new safety signals across program.

Q&A:

• Question from Edward Tenthoff (Piper Sandler & Co., Research Division): What should we expect to be released in the initial top-line HOPE-3 data reporting?
  Response: They will publicly release the primary and key secondary endpoint results and host a conference call to explain the findings.

• Question from Edward Tenthoff (Piper Sandler & Co., Research Division): With LVEF being a key secondary, are there any statistical changes in the study because of elevating LVEF tanks?
  Response: No changes; the study was powered sufficiently for ejection fraction based on prior HOPE-2 results.

• Question from Leland Gershell (Oppenheimer & Co. Inc., Research Division): How does the SAP treat the LVEF secondary if you miss significance on the primary (PUL 2.0)?
  Response: Primary remains PUL with alpha allocation; no specific alpha reserved for LVEF, but FDA agreed to consider totality of data and they'll analyze combined cohorts and Cohort B separately to support a cardiomyopathy indication.

• Question from Leland Gershell (Oppenheimer & Co. Inc., Research Division): Can you summarize the cardiac MRI review procedure and adjudication?
  Response: All MRIs undergo CRO QC, then primary and secondary blinded reads; disagreements trigger a third reader and triage adjudication with independent time-point and patient blinding.

• Question from Joseph Pantginis (H.C. Wainwright & Co, LLC, Research Division): If you pursue skeletal muscle labeling after cardiomyopathy, would that be via an sBLA?
  Response: Label expansion approach is undecided; they will submit all HOPE-3 data in the CRL response and determine the regulatory path (e.g., sBLA) in discussions with FDA.

• Question from Joseph Pantginis (H.C. Wainwright & Co, LLC, Research Division): Does analyzing cohorts A and B separately consume alpha or impact the SAP?
  Response: They plan to use a Hochberg approach; prespecifying which cohort to direct alpha at can preserve alpha for secondaries, avoiding extra alpha spend.

• Question from Joseph Pantginis (H.C. Wainwright & Co, LLC, Research Division): Can you discuss expected burn going forward across clinical wrap-up, manufacturing, personnel and exosome spend?
  Response: Q3 expenses rose; HOPE-3 clinical spend should wind down, while manufacturing and commercial-prep expenses persist; exosome Phase I is NIAID-funded and doses already produced, limiting company cash outlay.

• Question from Kristen Kluska (Cantor Fitzgerald & Co., Research Division): Was the Phase III powered based on Cohort A and is Cohort B similar in size/powering?
  Response: Yes; Cohort B is slightly smaller (≈80% powering vs Cohort A 90%) but combined powering remains robust and acceptable for analysis.

• Question from Kristen Kluska (Cantor Fitzgerald & Co., Research Division): Are baseline characteristics, including cardiomyopathy prevalence, balanced across cohorts A and B?
  Response: Baselines are generally identical across cohorts; combined analysis included over 70 patients with diagnosed cardiomyopathy; Cohort B includes LGE (scar) measurements enabling scar–function correlations.

• Question from Catherine Novack (JonesTrading Institutional Services, LLC, Research Division): If PUL misses significance but LVEF shows benefit, will you ask FDA to consider totality of data and seek cardiomyopathy labeling?
  Response: Yes; they intend to request regulatory flexibility to emphasize strong cardiac results and seek a cardiomyopathy label based on totality despite a missed PUL primary.

• Question from Catherine Novack (JonesTrading Institutional Services, LLC, Research Division): What specifically did FDA say about exercising regulatory flexibility?
  Response: FDA asked them to submit all HOPE-3 data, will not change the primary to EF, but said it will consider the totality of the data and review cardiac findings carefully.

• Question from Madison Wynne El-Saadi (B. Riley Securities, Inc., Research Division): How did FDA view Cohort B and what is the bar for a more rapid review time?
  Response: Cohort B was emphasized to address CMC/manufacturing concerns (San Diego PLI); rapid review timing depends on data strength and agency discretion/staffing.

• Question from Madison Wynne El-Saadi (B. Riley Securities, Inc., Research Division): Was LGE stratification balanced or Cohort B–specific?
  Response: LGE was measured only in Cohort B (exploratory) to enable scar quantification and correlation with ejection fraction.

• Question from Boobalan Pachaiyappan (ROTH Capital Partners, LLC, Research Division): When was the decision to expect a Type 2 resubmission set and why not Class 1?
  Response: They were informed that most resubmissions are Type 2; expecting a Type 2 classification and the associated review window, though speed could vary with data strength.

• Question from Boobalan Pachaiyappan (ROTH Capital Partners, LLC, Research Division): Does the potency assay meet FDA expectations for a cellular product?
  Response: Yes; they developed a published potency profile using RNA-seq of 166 genes plus an antifibrosis (collagen 1/3 knockdown) assay per lot and are confident it fulfills expectations.

• Question from Matthew Venezia (Alliance Global Partners, Research Division): Could you receive both cardiac and skeletal labels at first launch if data support both?
  Response: If both cardiac and skeletal endpoints achieve statistical significance, they will request both on the label; otherwise expansion would follow subsequent discussions with FDA.

• Question from Matthew Venezia (Alliance Global Partners, Research Division): Any partnership interest or inbound for the StealthX exosome vaccine platform?
  Response: They expect to seek partners after NIAID Phase I data (expected Q1 2026); platform advantages support strong partnering potential but no specific inbound deals disclosed.

Contradiction Point 1

HOPE-3 Data Release Timeline

It involves the timeline for the release of HOPE-3 data, which is crucial for investor expectations and strategic planning.

What metrics will be included in the initial HOPE-3 data release? - Edward Tenthoff (Piper Sandler & Co.)

2025Q3: The top line data will include primary and key secondary endpoints. This will allow us to release those results as soon as they are available. The company will host a conference call to explain the ramifications of the data. - Linda Marbán(CEO)

Why was HOPE-3 delayed to Q4 instead of Q3? - Kristen Kluska (Cantor)

2025Q2: HOPE-3 data, we now expect to be available in the fall of this year. - Linda Marbán(CEO)

Contradiction Point 2

Statistical Powering of the HOPE-3 Study

It involves the statistical powering of the HOPE-3 study, which is critical for the validity of the study's results and the potential approval of the treatment.

Considering left ventricular ejection fraction as a key secondary endpoint, are there any statistical changes in this study due to elevated LVEF levels? - Edward Tenthoff (Piper Sandler & Co.)

2025Q3: The study was designed with substantial power to detect changes in ejection fraction. The study was overpowered for both cardiac and skeletal muscle assessments, so we feel confident in the statistical powering. - Linda Marbán(CEO)

What changes are in the BLA resubmission, and are there incremental data from HOPE-3? - Joseph Pantginis (H.C. Wainwright)

2025Q2: We believe our current BLA meets regulatory requirements. We are open to resubmitting as it is or supplementing with additional HOPE-3 data. - Linda Marbán(CEO)

Contradiction Point 3

FDA Regulatory Flexibility and PDUFA Date

It involves expectations regarding the FDA's regulatory flexibility and the potential PDUFA date, which are crucial for understanding the timeline and potential approval of the company's product.

Under what circumstances would the FDA consider regulatory flexibility if statistical significance isn't achieved in PUL but ejection fraction demonstrates clinical benefits? - Catherine Novack (JonesTrading Institutional Services, LLC)

2025Q3: We'll know more once we see the data. The FDA has expressed willingness to consider the totality of the data, focusing on cardiac benefits if missed on PUL. We're optimistic that the agency will be flexible. - Linda Marbán(CEO)

Have you completed the San Diego site inspection yet, and if not, when is it scheduled? What are the key features and specific preparation steps for AdCom? - Edward Tenthoff (Piper Sandler)

2025Q1: We're waiting for a PDUFA date. - Linda Marbán(CEO)

Contradiction Point 4

Site Inspection Timing

It involves the timing of the site inspection, which is a critical milestone for the regulatory approval process.

How will expenses evolve moving forward, and are there any significant changes anticipated? - Anthony Bergmann (CFO & Corporate Treasurer)

2025Q3: We haven't had our pre-licensing inspection yet. It's coming up this quarter within the next few weeks, and we feel confident about it. - Linda Marbán(CEO)

Have you conducted the site inspection in San Diego yet, and if not, when is it scheduled? - Edward Tenthoff (Piper Sandler)

2025Q1: We've been preparing well. We're anticipating an AdCom based on indications, and it's a positive sign. We've had 2 mock AdComs and passed them well. - Linda Marbán(CEO)

Contradiction Point 5

Potency Assay for Deramiocel

It involves the potency assay for deramiocel, which is crucial for ensuring the product's quality, consistency, and efficacy.

What prompted the Type 2 classification and when was this decision made? - Boobalan Pachaiyappan (ROTH Capital Partners, LLC)

2025Q3: The potency assay profile is robust and meets FDA expectations. It's based on 166 genes, with antifibrosis assays for each lot. This approach ensures product consistency and efficacy. - Linda Marbán(CEO)

Can you clarify the commercial preparations for deramiocel and the roles of Capricor and Nippon Shinyaku? - Ted Tenthoff (Piper Sandler)

2024Q4: We have validated a potency assay for our deramiocel product. It's a critical aspect of the BLA. Potency assays are critical component of any BLA and we're working with the FDA on a potency assay that would be acceptable for regulatory submission. - Linda Marbán(CEO)