Capricor Therapeutics(CAPR)2021-03-15 21:27Financial Performance - Grant income for the years ended December 31, 2020 and 2019 was approximately 0.5 million, respectively, indicating a decrease of approximately 60% in 2020 compared to 2019[535]. - General and Administrative (G&A) expenses for the years ended December 31, 2020 and 2019 were approximately 3.6 million, respectively, reflecting an increase of approximately 52.8% in 2020[537]. - The increase in G&A expenses in 2020 was primarily due to a 0.5 million increase in salaries and recruiting related expenses[537]. - Investment income decreased from 32,943 in 2020, a decline of approximately 65.3% due to reduced interest rates[540]. - The company reported a net loss of approximately 10.4 million in 2019[548]. - Cash used in operating activities rose to approximately 6.8 million in 2019, an increase of about 48.5%[548]. - The company raised approximately 9.2 million in 2019, marking an increase of about 258.7%[550]. Research and Development - Research and Development (R&D) expenses increased from approximately 8.5 million in 2020, a rise of about 66.7%[539]. - R&D expenses primarily include salaries, clinical trial costs, and manufacturing costs, with expenses recognized as incurred[583]. - The accrual policy for R&D activities aims to match expenses with actual services received, with variations in payment flows due to contract negotiations[585]. - The company monitors activity levels through communication with CROs and vendors, ensuring expenses align with budgeted amounts[584]. - The clinical trial accrual process is designed to reflect appropriate expenses in financial statements based on the progress of trials[592]. Clinical Trials and Product Development - The company has completed the Phase II clinical trial (HOPE-2) for CAP-1002, showing improvements in multiple measures of upper limb, cardiac, and respiratory functions[507]. - The FDA has encouraged the company to conduct a Phase III study for CAP-1002, although discussions regarding the pathway forward are still ongoing[507]. - The INSPIRE trial for CAP-1002 in severe or critical COVID-19 patients is a Phase II, randomized, double-blind, placebo-controlled study enrolling up to 60 patients[509]. - The company is developing two vaccine candidates for COVID-19, including a tripartite exosome-mRNA vaccine, with plans to file an IND by the third quarter of 2021[510]. - The company has submitted an IND for CAP-2003 to investigate its use in patients with Duchenne Muscular Dystrophy (DMD) and is evaluating the next steps for this program[514]. Funding and Grants - The Company received a CIRM Grant Award of approximately 2.3 million from the Company[565]. - As of December 31, 2020, the liability balance for the CIRM Award was approximately 4.2 million, with 2.4 million, with about 9.9 million in 2019 to 28.8 million, compared to a decrease of 32.7 million[598]. - The investment portfolio primarily consists of money market funds and short-term U.S. treasuries, aiming to limit credit exposure and default risk[598]. - The company does not hedge interest rate exposure and believes that a hypothetical 100 basis point change in interest rates would not significantly impact the fair value of its investment portfolio[599]. Stock-Based Compensation - Stock-based compensation expense is recognized over the vesting period, with significant future non-cash compensation expenses expected[591]. - The company accounts for stock options using the Black-Scholes option-pricing model, requiring assumptions about various variables[589].