Capricor (CAPR) What’s next after the earnings call
This is an ongoing update on a series of previous analysis I’d presented on what’s been going on with Capricor. If you’re new to this or looking for prior context, it might be a good idea to go through my previous thoughts on this topic that can be found here -> https://kametresearch.com/capricor-capr-final-countdown/ and here -> https://kametresearch.com/capricor-capr-upcoming-fda-timelines/
This installment will be focused on the most recent happenings at Capricor with an eye on the reset of expectations post-earnings call held on Thursday 12th August 2021. The key points of discussion are:
- No Accelerated Approval – so what happens next?
- What will a Phase-III look like?
- Potential positive events for rest of 3Q and 4Q
No Accelerated Approval – what happens next
One key thing that we found out on the earnings call (you can read the full transcript here -> https://seekingalpha.com/article/4448990-capricor-therapeutics-inc-capr-ceo-linda-marban-on-q2-2021-results-earnings-call-transcript) is that the FDA has essentially asked for a Phase-III pivotal trial to confirm the Phase-II results. Although disappointing at face value, this was always considered a toss-up scenario and was not something that was widely expected. The expectation that the FDA will take a more considerate view of the Accelerated Approval scenario was bolstered by the expectation that something in the FINAL Phase-II data set had caused Capricor to request a type-B meeting and get the FDA to take a second look at the data.
So in terms of positives –
- The first and foremost is that we now KNOW that the FINAL data set is statistically significant across all Primary and Secondary endpoints. This is something that was clearly spelled out in the earnings call and bodes well for the Phase-III trial getting across the finish line. It also bodes well for a potential partner to be willing to invest upfront capital in a Phase-III trial.
- Additionally, it’s now almost 100% certain that Capricor will initiate the Pivotal trial with a partner rather than go it alone. This has the possibility of significant cash injection to the tune of anywhere from $100M-$400M upfront and likely a better negotiated endpoint using Big Pharma muscle that allows for a tighter INTERIM look. There are already some clues that confirms that this is no just mere posturing by Capricor. Besides making it clear in the earnings call that any movement on Phase-III will be with a partner, there was mention of 20+ clinical sites being leveraged for the trial.
- Additionally, its looking like the trial design will be accepted in a form more favorable to Capricor. This would be in the form of fewer participants (65-75 mentioned), newer endpoints (like DVA that was mentioned in the call) and an INTERIM look built into the trial. All these are parameters that would favor Capricor if they’re included in the P-III trial registration.
What will the Phase-III look like?
Some of the clues regarding the Phase-III were already mentioned in the earnings call – but the one that really caught my attention was the mention of DVA as an endpoint. DVA (Duchenne Video Assessment) is interesting because this is not something that has been included in any of the previous Clinical Trials that I’m aware of. This is another surrogate endpoint that represents a lower bar compared to the physical endpoints Capricor has been pursuing so far. To understand DVA, look at two snapshots taken from the demonstration we saw at the PPMD conference. What DVA does is take measurements (such as the angle of lean) for before and after and translates these measurements into a measure that determines clinical meaningfulness. The data below was collected after ONE infusion and as you can guess from the angles drawn in the picture, the DVA measure would already be significant based on this assessment.
Fig 1 – Initial Baseline
Fig 2 – After one infusion
If DVA is available during an INTERIM look, I expect this trial to execute a lot faster than previous trials. Another factor that was mentioned was the number of clinical sites – TWENTY – which is a lot more than the Phase – 2 (Seven Sites) and INSPIRE (Four Sites).
From experience, I can tell you that a baby biotech like Capricor talking about 20 sites is just not possible without Big Pharma Support – so it would not surprise me if something is already in the works.
Additionally, Linda mentioned this MULTIPLE times – they will not start the trial until they secure a partner and they’re already moving quickly to get the sites up and running. They would not be able to focus on getting the sites ready if they did not have a partner secured or nearly secured pending final discussions. (Because if you’re spending your day at the negotiating table – there’s no way you’re also working on getting more sites open)
Potential Positive events near term
Obviously, that was a lot to take in, so I’ll just list down the list of positive events that could potentially take place before the end of the year. I expect most of these events to come to fruition with varying levels of probability.
- Announcement and publication of the HOPE-2 FINAL data in a peer-reviewed journal
- Partnership with some $300M+ cash infusion (translates to $20+/share) (odds 80-90% on this one)
- Completion of enrollment for INSPIRE trial
- Actual data readout for INSPIRE Phase II
- Actual registration and pivotal trial agreement for HOPE-3
- IND Filing for the exosomes vaccine and possibly some publication of pre-clinical and clinical data
- Partnership for the exosomes platform and possible pipeline expansion
Disclosure: I am long CAPR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.