Capricor Therapeutics FY2018 Results & Guidance Staying Alive and More

Capricor Therapeutics FY2018 Results & Guidance - Staying Alive and More

17:44 EDT 28 Mar 2019 | Biotech Watcher


On Thursday, March 27, 2019, Capricor Therapeutics (CAPR) announcedQ4 & FY-2018 results and held a conference call.

Introduction

Capricor Therapeutics (CAPR) is a small Beverly Hills biopharmaceutical developing innovative treatments to treat heart disease. Capricor’s lead product is CAP-1002, an adult stem cell therapy for the treatment of heart disease. The cardiac stem cells are harvested from donor heart tissue and then cultured into enough doses to theoretically treat several hundred patients.The doses consist of cardiosphere-derived regenerative cells (CDCs), which appear to have superior properties for reducing inflammation and inducing healing.
The price has been languishing and it’s no surprise. The company recently removed a clinical-hold and has resumes its Phase 2 clinical trial for treating non-ambulatory, Duchenne muscular dystrophy (DMD) patients. The cash position is difficult, but the company has done everything to reduce cash burn. The ongoing trial has enrolled 20 patients and will not be recruiting more until the cash position is improved. There will be an interim look in Q3-2019 which will inform the trial design and program path.

Background Readings

If you want to reacquaint with the Capricor story, you may wish to skim these articles:
Clinical Hold Lifted(January 24, 2019)
BioWatch Commentary on Clinical Hold (December 27, 2018)
Capricor Q3-2018 Update(November 13, 2018)
Capricor’s New Shot on Goal(August 10, 2017)

Financial Summary

Basic Facts for Quarter & Year Ending December 31, 2018
(In Thousands unless otherwise noted)
Q4-2018
Q3-2018
Q2-2018
Q1-2018
Q4-2017
FY 2018
FY 2017
Collaboration Income
$-
$-
$-
$-
$-
$ -
$1,367
Grants & Other Revenue
*
173
287
307
345
*
1,115
Total Income
648
219
404
400
476
1,671
2,666
R&D Expense
2,849
3,132
3,389
2,697
2,518
12,067
10,766
G&A Expenses
1,104
1,259
1,178
1,390
1,237
4,932
4,763
Total Operating Expenses
3,954
4,391
4,567
4,086
3,756
16,998
15,529
Operating Income (Loss)
(3,306)
(4,172)
(4,163)
(3,686)
(3,280)
(15,327)
(12.862)
Net Income (Loss)
(3,260)
(4,136)
(4,124)
(3,672)
12,305
(15,191)
2,431
Comprehensive Income (Loss)
Inc. gains/losses on securities
(7,814)
(4,134)
(4,126)
(3,663)
12,305
(15,190)
2,440
Basic & diluted profit (loss) per share
(0.11)
(0.11)
(0.14)
(0.14)
(0.14)
(0.14)
(0.14)
(0.14)
0.48
0.42
(0.52)
(0.52)
0.10
0.09
Avg. Shares Outstanding (Basic)
31,038
30,610
29,031
26,905
25,810
29,410
23,193
Recent Price (per share)
$0.54
(3/28/19)
$0.89
(11/13/18)
$1.21
(7/27/18)
$1.33
(5/10/18)
$1.81
(3/14/18)
-
-
Market Capitalization
17M
28M
35M
37M
47M
-
-
Cash & Short-term Investments
$7,256*
$4,378
$6,339
$7,169
$6,140
-
-
Marketable Securities
*
5,994
5,995
5,995
7,985
*Await 10K for breakdown between cash vs. securities or further information
CFO AJ Bergmann says Capricor has enough cash to last into Q4-2018. As stated before, “…we expect Capricor to raise some funds in the near term. This was signaled in the announcement. To restart the trial, it will take a small bolus.Capricor will need to “bite the bullet” and exchange equity for shares. We don’t think it will be pretty, but the company is in a late stage trial and its best bet is to finish this trial.”
Although Capricor management will strive to be “creative” with raising funds, it may indeed have to “bite the bullet”. This makes the upcoming clinical results to be crucial, to say the least.

Duchenne Program Updates

CEO Linda Marban confirmed the restart of the clinical trial and medication (antihistamine) as a preventative agent. No further problems were observed. The clinical trial has currently enrolled 20 patients, with probably most having “early non-ambulant” disease stage. The company announcement states that interim results will arrive in Q3-2019. The data will be used to confirm trial design and program path going forward. The primary endpoint involves the mid-level PUL test 2.0. The primary endpoint reflects arm strength, which is important for navigating a wheelchair.

Exosome Program Updates

Capricor is advancing exosomes, the paracrine factors, that are secreted by CDCs. Exosomes are nano-sized vesicles or packets that contain microRNAs and other proteins. They are primitive cell-to-cell messengers, directing neighboring cells into coordinated action. Eventually, the exosomes should replace the cell therapies as it engenders a milder immunogenic response, and has cost, manufacturing, and optimization advantages.
The exosomes are also the subject of a collaboration with the U.S. Army Institute of Surgical Research (USAIR). USAIR is aiming for clinical solutions to treat severely traumatized soldiers.
Capricor scientists have been developing their exosomes as an alternative to viral carriers of genetic material. It presents several advantages over traditional methods.

Background Readings & Brief Thoughts

Potential of Exosomes(Evox Therapeutics Presentation)
Kimera Labs(“Meet Garrick”)
The background readings provide visual summaries about the exosome potential. We have examined articles including material published by Capricor competitors.
Regarding exosomes as carriers, the Evox scientists are loading proteins, antibodies, RNA, and small molecules onto exosomes. It is specifically being explored for crossing the blood-brain barrier to treat CNS disease. During the previous conference call, CEO Linda Marban said that Capricor exosomes appear topenetrate muscle satellite cells, and viral carriers currently don’t. This has important implications for treating many diseases - especially muscular dystrophies. We will await the results of further preclinical research.
Exosomes and other cell therapies have already been deployed to successfully treat burns and other trauma. We have not observed a proprietary application that is also sufficiently scalable. Capricor has a proprietary formulation that is being further optimized and standardized for scalability.

Milestones


Capricor Therapeutics - Clinical Milestones
CAP-1002 –Duchenne Muscular Dystrophy & Adult Heart Diseases
Cardiac tissue is extracted from cadavers and then explants are extracted and cultured in the lab. The aggregated cells are cardiospheres. These cardiospheres are efficiently multiplied and implanted into the patients. These implanted cells are called “cardiosphere-derived cells” or CDCs.
Duchenne Muscular Dystrophy – HOPE-2 Trial - Repeat Dosing & Chronic Administration - Skeletal Muscle Function
Capricor is expanding from the heart to skeletal muscle recovery in DMD patients. This will require systemic infusion, and thus a greater dose. The recent interim study results showed that a single dose to the heart results provides measurable advantages at 3 months, and that it largely dissipates at 6 months.The company proposes redosing intervals every 3 months. The primary endpoint is based on the middle PUL (Performanceof the UpperLimb) scores at 12 months.
The animal models did not display a meaningful immune response to the allogeneic cells. It will be crucial for the “booster shots” to show safety and prolonged efficacy.
The ongoing trial, HOPE-2, is a randomized, double-blind, placebo-controlled trial and may support FDA registration. The 84 DMD patients will include ambulatory and non-ambulatory patients. The redosing interval will be 3-months.The mid-PUL test at baseline vs. 12 months is the primary efficacy endpoint.
Capricor received an RMAT designation as well as Orphan and Rare Pediatric Disease designations from the FDA.
Success with DMD suggests CAP-1002’s applicability to related indications, e.g. other muscular dystrophies, cystic fibrosis, and limb-girdle disorders.
Phase 2b – HOPE-2 Trial - Finish Enrollment – 18 DMD Patients
Receive 150M cells of CAP-1002 or Placebo at every 3 months for 1 year
Q1-2019
Interim Results - HOPE-2 Trial in 20 DMD Patients
Receive 150M cells of CAP-1002 or Placebo at every 3 months
Q3-2019
FDA Meeting over 6-Month HOPE-2 TrialResults
2H-2019*
Top-line 12-Month Results -HOPE-2 Trial in 20 DMD Patients
Q1-2020
Independent Investigator Trials – Adult Heart Diseases
Capricor’s co-Founder, Eduardo Marban, is the lead investigator in these trials. He is the Cardiology Chief at Cedars-Sinai Medical Center in West Los Angeles. The studies advance the clinical development of CAP-1002 in different cardiovascular diseases: heart failure with preserved ejection fraction and pulmonary arterial hypertension (PAH). In both trials, CAP-1002 is infused through the coronary arteries.
With good results, Capricor may advance these indications through in-house programs.
Top-line Results – Phase 2a Regress-HFPEF Trial – 40 Pts with Heart Failure with Preserved Ejection Fraction – Randomized, double-blind, placebo-controlled study. The endpoints focus on functional measures as well as MRI-assessed fibrosis.
December 2019
Top-line Results – Phase 1a / 1b ALPHA trial – 26 PAH patients
ALlogeneic Cardiosphere-derived Stem Cells (CDCs) for Pulmonary Hypertension therApy
The open-label, single-arm dose escalation phase 1a part has 6 patients
Double-blind, placebo-controlled Phase 1b part has 20 patients
1H-2020
CAP-2003 (Exosomes) – Organ Diseases
Exosomes serve as a primitive, robust way for intercellular communication.It is a lipid bilayer that is secreted by cells and in Capricor’s case, it contains some microRNA growth factors that transmit regenerative instructions to cells.The goal is to recreate the rejuvenation and tissue repair of present stem-cell therapies without its associated hazards (e.g. immunogenicity).
Capricor and affiliated scientists have established that the exosomes are the regenerative source within CAP-2003. Exosomes elicit a weaker immune response than CAP-2003 and have a lower cost of goods coupled with a greater ease of manufacturing. CAP-2003 is an especially promising (future) candidate for retreatment dosing in future trials.
Hypoplastic Left Heart Syndrome
This indication is covered by an NIH grant of up to $4.2M. HLHS occurs in about 1,000 patients in the United States. It is a serious, pediatric orphan disease. In Phase I and II trials, Japanese investigators reportedsuccessusingcardiosphere-derived cells(CDCs) in HLHS patients. This acts as a good proof of concept as Capricor advances treatment with CDC-derived exosomes.
IND Submission
TBA
Launch Phase 1 Trial
TBA
Inflammatory Disease TBA
   IND Submission
TBA
U.S. Army Institute of Surgical Research (USAISR)
The military surgical research team is studying CAP-2003 and deploying it with severely injured soldiers. It will be a formulation that is stable at room temperature, which suggests that the lyophilized (freeze-dried) preparation is (almost) ready to be delivered.
Capricor may then receive solid data that extends well beyond the usual reach for a Phase 1 trial.
Ongoing Research & Clinical Application
TBA






















































































*Guesstimate
Our Thoughts
Our hats off to management. The company has reduced its cash burn and was exceptionally creative at restructuring its clinical program. This is more than expected.
With a small infusion, there will be enough cash to get Capricor to multiple clinical results: HOPE2, two independent investigator trials, and perhaps even anecdotal case studies from USAir.
Make no mistake, the company’s current financial situation is a drag on its valuation. Even though good clinical results should open doors, it is hard to envision the reaction from the public markets.
The original HOPE trial infused into the heart in a single-dose fashion. The HOPE-2 trial uses a systemic infusion with repeated dosing over 12 months. Nevertheless, Capricor is pursuing a major advance and will continue to go where no regenerative medicine company has gone before. We shall now see results in the nearer future.
From an investor’s standpoint, Capricor represents a highly risky situation. It’s obvious. Nevertheless, many of you deserve to follow Capricor. This company is on the science and regulatory edge of regenerative medicine. Even if you don’t invest, you should follow, watch, and then learn.
(At the time this was written, one or more BioWatch staff owned a long position in CAPR)
This blog post is fromThe Biotech Watcher
And about us, see http://alanhobbes.blogspot.com/2014/12/welcome-to-my-personal-thoughts-about.html

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