Capricor Therapeutics(CAPR)2025-03-26 20:15Financial Performance - The company reported net losses of $40.5 million and $22.3 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of $199.8 million as of December 31, 2024 [467]. - Cash flow used in operating activities was approximately $40.0 million for 2024, compared to $25.6 million for 2023, indicating a significant increase in cash outflow [491]. - The net loss for the year ended December 31, 2024, was approximately $40.5 million, driven by increased R&D expenses [490]. - Clinical development income for the years ended December 31, 2024 and 2023 was approximately $22.3 million and $25.2 million, respectively, reflecting a decrease of 11.5% [474]. - Total research and development expenses increased by approximately $13.5 million, or 37%, from $36.4 million in 2023 to $50.0 million in 2024 [476][477]. - General and administrative expenses rose by approximately $2.1 million, or 16%, from $12.8 million in 2023 to $14.9 million in 2024 [478]. Cash and Securities - As of December 31, 2024, Capricor had cash, cash equivalents, and marketable securities totaling approximately $151.5 million [466]. - Cash and cash equivalents decreased from $14.7 million in 2023 to $11.3 million in 2024, while marketable securities increased significantly from $24.8 million to $140.2 million [488]. - Total cash, cash equivalents, and marketable securities as of December 31, 2024, were approximately $151.5 million, a significant increase from $39.5 million in 2023 [490]. - The fair value of the company's cash, cash equivalents, and marketable securities was approximately $151.5 million as of December 31, 2024 [538]. Clinical Trials and Development - The ongoing Phase 3 HOPE-3 clinical trial has enrolled approximately 105 eligible study subjects, with a positive outcome of the futility analysis for Cohort A [462]. - The HOPE-2 trial met its primary efficacy endpoint with a p-value of 0.01 for the mid-level dimension of the Performance of the Upper Limb (PUL) v1.2 [460]. - Capricor plans to provide clinical data on skeletal muscle myopathy to support potential label expansion for DMD treatment [463]. - Capricor received a CIRM grant of approximately $3.4 million for the HOPE-Duchenne clinical trial, with a co-funding requirement of approximately $2.3 million [508]. Funding and Revenue Recognition - Capricor received an upfront payment of $30.0 million in 2022 under the U.S. Distribution Agreement for deramiocel [497]. - The first milestone payment of $10.0 million was received upon completion of the futility analysis of the HOPE-3 trial, with a second milestone payment of $10.0 million due upon BLA submission to the FDA in December 2024 [497]. - Potential sales-based milestones could reach up to $605.0 million based on annual net sales of deramiocel, with Capricor entitled to 30-50% of product revenue [497]. - An upfront payment of $12.0 million was received in Q1 2023 under the Japan Distribution Agreement, with additional milestone payments of up to approximately $89.0 million possible [499]. - Capricor entered into a Binding Term Sheet with Nippon Shinyaku for the European region, with a potential upfront payment of $20.0 million and additional milestone payments of up to $715.0 million [501]. - The company evaluates the probability of significant reversals in cumulative revenue recognized for milestones and shared revenue payments at the end of each reporting period [521]. - The company recognizes grant income in the period in which the expense is incurred for reimbursable expenses under the terms of the grant [525]. - The company uses the proportional performance method or straight-line basis for revenue recognition when performance obligations are satisfied over time [523]. Future Expenses and Investments - The company anticipates significant increases in expenses and operating losses as it continues to develop deramiocel and other product candidates [469]. - The company expects to spend approximately $40.0 million to $50.0 million in 2025 for the deramiocel program, primarily for CMC expansion and pre-commercial expenses [484]. - The company anticipates spending approximately $5.0 million to $7.5 million in 2025 on development expenses related to its exosome platform [485]. - The company expects to record additional non-cash compensation expense in the future related to stock-based compensation [532]. - The company aims to mitigate default risk by investing in high credit quality securities and does not hedge interest rate exposure [539]. Stock and Share Transactions - In 2024, Capricor sold 6,252,229 shares of common stock at an average price of approximately $9.34 per share, resulting in gross proceeds of $58.4 million [468]. - On October 16, 2024, Capricor completed a public offering of 5,073,800 shares at $17.00 per share, raising approximately $86.3 million before expenses [502]. - A private placement on September 16, 2024, resulted in the sale of 2,798,507 shares at $5.36 per share for approximately $15.0 million [503]. - The ATM Program raised approximately $75.0 million from the sale of 9,228,383 shares at an average price of $8.13 per share, which was closed on October 1, 2024 [507]. Exosome Platform Development - The company is developing a precision-engineered exosome platform technology for therapeutic applications, including a vaccine for COVID-19 [465]. - The company performs assessments to determine if a significant financing component exists in its distribution agreements, typically finding that it does not [522]. - Research and development expenses primarily consist of salaries, clinical trial costs, and other related expenses, which are expensed as incurred [526]. - The company is currently evaluating the impact of ASU No. 2024-03 on its financial statement disclosures, effective after December 15, 2026 [536].