Capricor Therapeutics(CAPR)2020-03-27 12:31Clinical Trials and Efficacy - The company is conducting the HOPE-2 Phase II clinical trial for CAP-1002, focusing on Duchenne muscular dystrophy (DMD), with 20 patients randomized to date [436]. - Interim results from the HOPE-2 trial showed meaningful improvements in skeletal assessments, with CAP-1002 demonstrating a mean change of 0.5 in shoulder and mid-level dimensions at 3 months compared to a -1.2 change in placebo (p-value 0.0549) [442]. - At 6 months, CAP-1002 showed a mean change of -0.3 in mid-level dimensions compared to -2.3 in placebo (p-value 0.0299), indicating significant efficacy [442]. - The primary efficacy endpoint of the HOPE-2 trial is the Performance of the Upper Limb (PUL) test, which assesses manual task performance critical to patients' daily living [437]. - The company plans to report final 12-month results from the HOPE-2 trial in the second quarter of 2020, which will inform the decision to conduct a Phase III trial [435]. - The FDA has indicated support for conducting a Phase III trial of CAP-1002 for DMD treatment, although it did not support an accelerated approval pathway based on interim data [449]. - CAP-1002 has been administered to approximately 150 human subjects across several clinical trials, demonstrating its potential in cardiac and skeletal muscle regeneration [425]. - The HOPE-Duchenne Phase I/II trial showed that 25 million cells of CAP-1002 were infused into each of the three main coronary arteries, totaling 75 million cells per patient, with a focus on safety and exploratory efficacy [451]. - CAP-1002 showed significant improvement in motor function, with 89% of lower-functioning patients maintaining or improving function at 12 months compared to 0% in the control group (p=0.007) [452]. Financial Performance and Funding - Grant income decreased from approximately 0.5 million in 2019, primarily due to the completion of the pre-clinical phase of the NIH grant [473]. - General and Administrative expenses decreased from approximately 3.6 million in 2019, a reduction of about 12.1 million in 2018 to 7.0 million [476]. - The company expects to spend approximately 4.0 million on the clinical development of CAP-1002 during 2020 [478]. - The company anticipates spending approximately 3.0 million on pre-clinical and research expenses related to its exosomes program in 2020 [479]. - Investment income decreased from 94,791 in 2019 due to reduced capital [477]. - As of December 31, 2019, the company had cash, cash equivalents, and marketable securities totaling approximately 7.3 million as of December 31, 2018, primarily due to net financing activities of approximately 7.6 million for the year ended December 31, 2019, a decrease of approximately 13.9 million in 2018 [486]. - Cash used in operating activities was approximately 13.9 million in 2018, reflecting improved operational efficiency [486]. - The company experienced cash flow from financing activities of approximately 6.9 million in 2018, primarily due to net proceeds from the sale of common stock [488]. - The company initiated an at-the-market offering in August 2019, resulting in gross proceeds of approximately 3.07 per share [494]. - The company completed a public offering in December 2019, raising approximately 4.4 million after fees [493]. - The company has not generated any revenue from the commercial sale of its products to date and does not expect to do so for several years, necessitating substantial additional capital to fund operations and research [490]. - The company received a CIRM grant award of approximately 2.3 million from its own capital [498]. - As of December 31, 2019, the company had approximately 9.6 million in net working capital [485]. - The company anticipates continuing to incur substantial losses as it develops its product candidates and expands its technology portfolio [486]. - As of December 31, 2019, Capricor's liability balance for the CIRM Award was approximately 4.2 million for studying CAP-2003, with 2.4 million for developing a scalable process to manufacture CAP-2003, with 2.2 million incurred as of December 31, 2019 [503]. - Capricor completed all milestones associated with the CIRM Award and expended all funds received by June 2019 [501]. - The company accounts for the CIRM Award as a liability rather than income due to potential repayment obligations [511]. Expenses and Financial Management - R&D expenses primarily consist of salaries, clinical trial costs, and other related expenses, which are expensed as incurred [512]. - Stock-based compensation expense is recorded over the vesting period, with significant future non-cash compensation expected [520]. - The company has not recognized any adjustments for material changes in estimates in any period presented [515]. - Capricor has entered into a letter of credit for lease security, amounting to 232,803, which was subsequently cancelled [522]. - The adoption of ASU 2016-02 on leases did not have a material impact on the company's financial statements [525]. - As of December 31, 2019, the fair value of the company's cash, cash equivalents, and marketable securities was approximately $9.9 million [530]. - The investment policy aims to limit credit exposure by investing in highly rated credit issuers [531]. - The company does not hedge interest rate exposure and believes a hypothetical 100 basis point change in interest rates would not significantly impact the fair value of its investment portfolio [531]. Regulatory Designations - CAP-1002 received Orphan Drug Designation from the FDA in April 2015, providing incentives such as tax credits and potential seven-year market exclusivity upon approval [454]. - In July 2017, CAP-1002 was granted Rare Pediatric Disease Designation, allowing eligibility for a Priority Review Voucher upon approval of a qualifying application [456]. - CAP-1002 received Regenerative Medicine Advanced Therapy (RMAT) designation in February 2018, expediting development and review processes [457].