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Thursday, October 22, 2020

Capricor Therapeutics Inc (NASDAQ:CAPR) Explodes Higher on Rare Drug Designation

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Capricor Therapeutics Inc (NASDAQ:CAPR) is a recent biotech blow-up story that just started to really pop off of deeply oversold lows. The move to start this week was dramatic and came on an extraordinary jump in trading volume, with over 32M shares changing hands against a three-month average of 119K shares per day.

The principal catalyst underlying the action was the company’s announcement that the U.S. Food and Drug Administration (FDA) has granted Rare Pediatric Disease Designation to CAP-1002, CAPR’s development candidate for the treatment of Duchenne muscular dystrophy, a debilitating genetic disorder characterized by progressive weakness and chronic inflammation of skeletal, heart, and respiratory muscles. According to the release, the Rare Pediatric Disease Designation, as well as the Orphan Drug Designation previously granted to CAP-1002 by the FDA, covers the broad treatment of DMD. Upon receiving market approval for CAP-1002 by the FDA, CAPR would be eligible to receive a Priority Review Voucher.

Capricor Therapeutics Inc (NASDAQ:CAPR) trumpets itself as a clinical stage biotechnology company focused on the development and commercialization of regenerative medicine and large molecule products for the treatment of diseases.

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CAPR has six drug candidates in stages of development which includes CAP-1002, CAP-1001, CSps, Exosomes, Cenderitide and CU-NP. Capricor’s lead product candidate, an allogeneic cardiosphere-derived cell (CDC) product, CAP-1002, aims to attenuate and potentially improve damage to the heart caused by a heart attack and is currently under evaluation in the Phase I/II ALLSTAR clinical trial of patients 30-days to 1-year after a heart attack.

Ongoing research at the company focuses on in-depth product characterization, expanded use of current products, development of next generation products, and identification of new technologies. The company was founded in 2005 and is headquartered in Beverly Hills, CA.

According to company materials, “CAPR is a clinical-stage biotechnology company developing first-in-class biological therapies. Thelead candidate, CAP-1002, is a cell-based candidate currently in clinical development for the treatment of Duchenne muscular dystrophy. CAPR is exploring the potential of CAP-2003, a cell-free, exosome-based candidate, to treat a variety of disorders.”

As noted above, shares of CAPR exploded higher on record volume on Monday in response to news that the company’s lead pipeline asset was granted the Rare Pediatric Disease Designation.

The FDA defines a “rare pediatric disease” as a serious or life-threatening disease affecting individuals primarily aged from birth to 18 years and that affects fewer than 200,000 individuals in the U.S. Under the FDA’s Rare Pediatric Disease Priority Review Voucher program, upon the approval of a qualifying new drug application (NDA) or biologics license application (BLA) for the treatment of a rare pediatric disease, the sponsor of such application would be eligible for a Rare Pediatric Disease Priority Review Voucher that can be used to obtain priority review for a subsequent NDA or BLA. The Priority Review Voucher may be sold or transferred an unlimited number of times.

“The Rare Pediatric Disease Designation adds to our previous Orphan Drug Designation for CAP-1002 for the treatment of Duchenne muscular dystrophy, which together underscore the urgent need for treatment options for this devastating rare disease as well as provide CAPR with certain incentives for their development,” said Linda Marbán, Ph.D., president and chief executive officer. “We believe CAP-1002 has the potential to provide meaningful clinical benefit to patients. We look forward to commencing our next clinical trial in DMD, for which design will be relevant to the overall registration plan for this candidate.”

Traders will note 94% added to share values of the name over the past week of action, a rally that has pushed up against longer standing distributive pressure in the stock. However, CAPR has evidenced sudden upward volatility on many prior occasions. Furthermore, the listing has benefitted from a jump in recent trading volume to the tune of just under 1300% over what the stock has registered over the longer term.

Currently trading at a market capitalization of $58.56M, CAPR has a significant war chest ($3.9M) of cash on the books, which is balanced by virtually no total current liabilities. CAPR is pulling in trailing 12-month revenues of $3.2M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -25%. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $CAPR stock, as well as our other breakout picks, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: we hold no position in $CAPR, either long or short, and we have not been compensated for this article.

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