Capricor and Codiak poised to be Moderna 2.0
Are Capricor / Codiak poised to be Moderna 2.0?
- Capricor Therapeutics (CAPR) held their earnings on March 11th 2021 and provided guidance for 2021 that shows a rapid evolution of their pipeline into the exosomes space.
- Codiak (CDAK) became the first public company to sign a license deal involving exosomes when they inked a two-year agreement with Sarepta that included up to five neuromuscular targets.
- Capricor Management indicated in their most recent earnings call that they would be filing an IND for their first exosomes target – a COVID-19 vaccine in Q3 this year.
- The 2022 and beyond, the exosomes market is going to explode as it becomes more and more accepted as a frontline delivery mechanism for a variety of payloads.
- Every other company in the exosomes space besides CAPR and CDAK are privately held and are behind in the race. The third spot in the race (in terms of commercialization pathway) belongs to a privately held company called EVOX, giving these two a massive competitive advantage and a very significant head start.
Before we get to what exosomes are and what role they could potentially play in the mRNA space, let’s flashback to late 2019 where we had a company with impressive and pioneering technology in the mRNA space, but with no obvious pathway to rapid commercialization. That company – Moderna (MRNA) was trading at a valuation of just over $5B with a share price hovering in the teens as they progressed their impressive mRNA technology. Then, all of a sudden that pioneering technology and capability built over the years suddenly met what wa
s missing – an opportunity. With COVID-19 raging worldwide, mRNA technology was in pole position to develop a vaccine, and with it Moderna was suddenly a lot more relevant than the other players in this space. We all know the rest – fast forward to today, MRNA’s valuation has increased 10-fold and there stock price stands at an impressive $150+/share.
Now that Moderna has the financial means through the large scale distribution of its vaccine, its now using the newfound financial muscle to expand the rest of the mRNA pipeline into several therapies beyond the COVID space and this is where another revolution is taking place very quietly as we witness the shift of mRNA technologies from Lipid nanoparticles (LNPs) to exosomes.
Exosomes and drug delivery
With the evolution of mRNA (Messenger RNA) companies (Moderna is NOT the only one anymore), its becoming more and more common practice to look for treatments beyond the traditional drugs and biologics. mRNA consists of cell proteins and can be used or altered to induce a therapeutic effect on cells. There are a lot of players now in the mRNA space with different therapeutic targets and this landscape is getting more and more crowded as investments (fueled by Moderna’s success) keep pouring into this developing field.
The challenge all these therapies face is in the delivery system – mRNA therapies currently rely on Lipid nanoparticles (LNPs) as their non-viral gene delivery system. The first RNAi drug (Patisiran) that uses lipid nanoparticles was approved by FDA in 2018. Since then, there has been a proliferation of new indications and targets in this space, within the now ‘standard’ framework of mRNA -> LNP -> Drug Delivery.
Source: Capricor Therapeutics
Reckoning for LNPs -A new research paper
That widely accepted framework has recently been rocked by the publication of a new research paper by Johns Hopkins showing that long-term exposure to LNPs can have some serious side effects including organ damage. The full research paper can be found here -> https://www.biorxiv.org/content/10.1101/2020.11.06.371419v2 . By comparison, the publication shows that exosomes are safe and highly effective as a delivery mechanism for all kinds of mRNA and other therapeutic payloads. The potential (and likely) fallout of this new study is that the entire newly minted pipeline of mRNA drugs that were reliant on LNPs as a delivery mechanism will gradually shift into the exosomes delivery model leading to a windfall for the exosome companies. This is where the Moderna comparison makes sense – just as Moderna was at the leading edge of mRNA development that came to fruition with the mRNA vaccine, Capricor and Codiak seems to be on the brink of a massive pipeline explosion, riding on a wave of exosomes based therapeutic delivery.
Capricor and Codiak
Codiak (CDAK) was the first out of the gate when they inked a deal worth $72.5M with Sarepta for a single exosomes based therapeutic target of Sarepta’s choosing. This deal was inked in June 2020 with Codiak guaranteed the upfront payment of $72.5M and Sarepta having the option to take forward candidates for up to five targets in the neuromuscular space. If Sarepta pulls the trigger on any of those targets, Codiak will take care of research and preclinical development through IND preparation, at which point Sarepta will pick up clinical development and commercial activities. Details of this deal can be found here -> https://www.fiercebiotech.com/biotech/sarepta-taps-codiak-s-exosome-tech-72-5m-neuromuscular-disease-deal
Then, Capricor Therapeutics (CAPR) held their earnings on March 11th 2021 and provided some really good guidance for the rest of 2021. You can view the full earnings transcript of the earnings call here -> https://seekingalpha.com/article/4413330-capricor-therapeutics-capr-ceo-linda-marban-on-q4-2020-results-earnings-call-transcriptadvancements
Among the most interesting development has been their advancements in the exosomes space with the pre-IND meeting with the FDA having taken place in March 2021, and an imminent IND filing in Q3 2021 for their exosomes based COVID vaccine, as they become the most commercially ready exosomes company.
mRNA Exosomes Companies
None of this novel scientific commentary is relevant unless this is accompanied by a sound investment hypothesis, so let’s look at the current valuation and the deal sizes for similar exosomes companies. This is still a developing field with a lot of fledging, private companies still trying to figure out their way, but two of the leading public companies are CDAK and CAPR, and the most advanced privately held company is EVOX.
|Company||Market Cap||License Deal Signed||Background|
|$380M||Recently signed a $75M deal with $SRPT for one unidentified target||CDAK is a clinical-stage biopharmaceutical company focused on pioneering the development of exosome-based therapeutics as a new class of medicines. They’ve published two novel exosome-associated proteins, PTGFRN and BASP1, that enable Codiak’s proprietary engEx Platform and facilitate precise design and engineering of exosomes for potential therapeutic purposes|
|Recently raised $95M to Propel Exosomes Pipeline||Evox has created substantial proprietary technology to modify exosomes using various molecular engineering, drug loading, and targeting strategies to facilitate targeted drug delivery to organs of interest, including the brain and the central nervous system.|
|$106M||None so far||CAPRICOR’s recent publications show that they’re exploring the expression of RNAs with their exosome-based delivery system their most advanced candidate is the COVID-19 therapeutic vaccine with an IND filing imminent in Q3 2021.|
Codiak has two promising candidates in initial Phase 1 and was able to sign a licensing deal with Sarepta whereby Codiak is eligible to receive up to $72.5 million in upfront and near-term license payments plus research funding for a single exosomes candidate. Likewise, EVOX was able to attract $95M in private placement funding with not a single candidate in clinical trial. This sort of sets the benchmark for Capricor’s lead exosomes candidate – and exosomes based mRNA vaccine for which they have a potential Phase-1 clinical trial in early Q3. If CAPR were to sign a partner for advancing this vaccine, an upfront investment of $100M would not be out of the question. Given that CAPR’s Market Cap sits at a measly $100M, that would immediately double the valuation.
Exosomes is an evolving field much like mRNA was a couple of years back with a few players – CAPR, CDAK and EVOX at the forefront likely to benefit the most if this takes off in a big way. There have been recent publications in peer-reviewed journals that demonstrate that exosomes offer a far superior delivery mechanism for mRNA than LNPs which have been widely adopted. With the likelihood of a shift to exosomes for all mRNA pursuits, these three front-runners are poised to benefit enormously and could easily attract a lot of investment in the form of partnerships, license deals or even buyouts. Investors with an appetite for growth would do well to pick up a position in this emerging technology and benefit early from its potential. All this reminds me of mRNA in 2019 when the opportunity presented by COVID led to massive adoption of mRNA technologies. I suspect we will see the same type of explosion in the exosomes space in the next year and beyond.