Capricor (CAPR) Q2 2026 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Thursday, Aug. 13, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Linda Marbn
• Executive Vice President and Chief Financial Officer - Anthony J. Bergmann
• Chief Commercial Officer - Michael Maurer

TAKEAWAYS

• Cash and Marketable Securities -- $237.9 million as of June 30, 2026, compared to $318.1 million as of Dec. 31, 2025.
• Net Loss -- $40.7 million, or $0.70 per share, for the second quarter of 2026, compared to a net loss of $25.9 million, or $0.57 per share, for the second quarter of 2025.
• Operating Expenses -- $42.9 million for the second quarter of 2026, representing an increase from $27.7 million in the prior year period driven by investment in clinical, regulatory, and manufacturing activities.
• HOPE-3 Primary Endpoint -- Statistically significant slowing of upper limb disease progression with a p-value of 0.029 and a 4.5% mean difference in favor of Deramiocel.
• Left Ventricular Ejection Fraction (LVEF) Data -- 1.8 percentage point treatment difference with a p-value of 0.09 across all patients, adjusted from a previously reported 2.4 percentage point difference and a p-value of 0.04.
• Cardiomyopathy Subgroup LVEF -- 2.8 percentage point treatment difference with a p-value of 0.02, which remained unchanged under the pre-specified statistical model.
• BLA Amendment Plan -- Management plans to submit an amendment to the Biologics License Application (BLA) for Deramiocel focused on an upper limb skeletal muscle indication, which is expected to extend the PDUFA action date.
• Advisory Committee Vote -- 3 in favor and 9 against regarding whether available evidence provides substantial evidence of effectiveness of Deramiocel for the treatment of cardiomyopathy in Duchenne muscular dystrophy (DMD).
• Clinical Safety Data -- Over 1,300 intravenous infusions administered to more than 200 patients across three clinical trials.
• Open Label Extension Participation -- More than 80 patients are enrolled in collective open-label extension studies, with some receiving infusions for over five years.
• Regulatory Inspections -- One observation was cited in a Form 483 following an FDA Bioresearch Monitoring inspection in July 2026.
• Manufacturing Expansion -- Full validation and FDA approval of the second floor of the San Diego GMP manufacturing facility is estimated to occur in 2027.
• NS Pharma Dispute -- Arbitration is expected to begin this fall after the company withdrew a motion for preliminary injunction regarding its distribution agreement.
• Accumulated Deficit -- $379.6 million as of June 30, 2026.
• Non-Deramiocel Pipeline Status -- All pipeline work not related to Deramiocel is currently on hold pending further regulatory clarity.
• Cash Runway -- Management expects current financial resources to be sufficient to fund operating capital requirements for at least 12 months.
• Revenue -- Zero revenue recognized for the second quarter of 2026 and 2025.
• Research and Development Expenses -- $28.9 million for the second quarter of 2026, compared to $22.0 million in the prior year period.
• General and Administrative Expenses -- $14.1 million for the second quarter of 2026, compared to $5.7 million in the prior year period.
• Investment Income -- $2.2 million generated for the second quarter of 2026.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• Marbn stated, "The vote was 3 in favor 9 against, with no abstentions," regarding the Advisory Committee recommendation on whether available evidence provides substantial evidence of effectiveness for the treatment of cardiomyopathy.
• Management noted the pricing structure in the U.S. distribution agreement with NS Pharma is "fundamentally flawed, in a way that would impede patient access," and continues to seek rescission.

SUMMARY

Capricor Therapeutics, Inc. (NASDAQ:CAPR) is transitioning its regulatory strategy for Deramiocel (CAP-1002) following a negative FDA Advisory Committee vote regarding its proposed cardiomyopathy indication. Management reported plans to submit a BLA amendment focusing on upper limb skeletal muscle function, supported by Phase 3 HOPE-3 primary endpoint data and 24-month open-label extension results. The company is pacing commercial expenditures and has placed non-core pipeline programs on hold while pursuing arbitration to rescind its distribution agreement with NS Pharma.

• The proposed BLA amendment will incorporate 24-month open-label extension data from the HOPE-3 study to support a refined indication for upper limb function.
• CEO Marbn noted the FDA's Cellular, Tissue and Gene Therapies Advisory Committee feedback on upper limb function was "directionally supportive of the clinical evidence."
• Capricor is scaling manufacturing capacity at its San Diego facility, with a second-floor expansion targeted for validation and inspection in 2027.
• Clinical data results were recently published in The Lancet, which management indicated will support the continued regulatory progress for Deramiocel.
• The company has initiated regulatory engagement for Deramiocel in international markets including Europe and Japan.

INDUSTRY GLOSSARY

• Deramiocel (CAP-1002): Allogeneic cardiosphere-derived cells (CDCs) being developed for Duchenne muscular dystrophy.
• BLA: Biologics License Application, a request for permission to introduce a biologic product into interstate commerce.
• PDUFA: Prescription Drug User Fee Act, the date by which the FDA intends to complete its review of a drug application.
• Duchenne Muscular Dystrophy (DMD): A genetic disorder involving progressive muscle degeneration affecting skeletal and cardiac muscles.
• PUL 2.0: Performance of the Upper Limb, a scale used to measure skeletal muscle function in patients with DMD.
• LVEF: Left ventricular ejection fraction, a measurement of the percentage of blood leaving the heart each time it contracts.
• BIMO: Bioresearch Monitoring, an FDA program of on-site inspections and data audits.
• Form 483: An FDA report issued after an inspection when investigators observe potential violations of regulatory requirements.

Full Conference Call Transcript

Operator: Good afternoon, ladies and gentlemen, and welcome to the Capricor Therapeutics second quarter 2 thousand 26 Conference Call. Please press 0 for the operator. This call is being recorded on Thursday, 08/13/2026. And I would now like to turn the conference over to CFO, AJ Bergmann, for the forward-looking statement. Thank you. Please go ahead.

Anthony J. Bergmann: Thank you very much. Before we begin, I would like to remind you that any statements made during today's call that are not historical are considered to be forward looking statements. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section of our company's most recent annual report on Form 10 ks, and our most recent quarterly reports on Form 10 Q as well as other reports filed with the SEC, Any forward looking statements may represent our views as of today, 08/13/2026 only. Replay of the call will be available on our website following its completion.

That, I will turn the call over to Linda Marbán, CEO.

Linda Marbán: Good afternoon, everyone, and thank you for joining Capricor's second quarter 26 Earnings Call. Our BLA for Daramycin remains under review with the FDA with a current PDUFA target action date of August 22, Because that review is ongoing, there is a limit to what I can say about our interactions with the agency, but I wanted to provide an update across 3 main topics: our regulatory status, and pathway for Daramycin, our commercial and manufacturing readiness, and our dispute with NS Pharma. I will then briefly address our pipeline programs before turning it back to AJ. On 07/29/2026, the FDA convened the Cellular Tissue and Gene Therapies Advisory Committee to review our BLA.

The committee was presented with a single voting question. Does the available evidence provide substantial evidence of effectiveness of Daramycin for the treatment of cardiomyopathy in patients with DMD. The vote was 3 in favor 9 against, with no abstentions. That is not the outcome we had planned for. And we are, of course, disappointed. But we remain committed to working with the FDA on the next steps for this program our priority is and always has been to get Deramiocel to those who need it most. I would like to provide some color and our perspective about why we continue to believe in the potential of Deramiocel and DMD patients.

First, the indication we originally requested in the BLA going back to 2024 was the treatment of cardiomyopathy and DMD. Therefore, the focus of the FDA and the advisory committee was on whether Daramycin should be approved to treat cardiomyopathy. However, the measurement of Derremia cell's effect on cardiomyopathy was a key secondary endpoint rather than the primary end point of the HOPE-3 study. And it measured change in ejection fraction across the full DMD population rather than in patients with an established cardiomyopathy. The population the proposed indication addresses By contrast, HOPE-3 was actually designed with a skeletal functional primary endpoint and was powered to assess efficacy in upper limb function.

Importantly, the advisory committee was not asked to vote on whether they believed the data on the HOPE-3 primary efficacy endpoint could support approval of the product. Nor whether the overall benefitrisk profile of daratomyosil was favorable, we continue to believe that the data on the primary as well as multiple other endpoints support a finding of effectiveness on these measures. It is worth noting that in a separate discussion on upper limb function during the AdCom, the committee's feedback was directionally supportive of the clinical evidence for the primary endpoint in upper limb function. The discussion was substantive and the full record is public for anyone who wants to review it.

Now this brings me to an update that I am very pleased to share. We are continuing to work closely with FDA on a potential path forward for Daramycin focused on an upper limb skeletal muscle indication reflected in the primary efficacy endpoint of HOPE-3. To that end, following discussions with the agency, subsequent to our advisory committee meeting, we plan to submit an amendment to our BLA that includes the 24 month open label extension data from the HOPE-3 study along with additional analyses on the existing data package in order to support a refined indication focused on the primary endpoint.

FDA has indicated it is willing to review this amendment and upon receipt to extend the PDUFA action date accordingly. We are finalizing the timing of that submission and will provide an update as appropriate. We appreciate the FDA's engagement throughout this process and its shared commitment to addressing the major unmet need in Duchenne muscular dystrophy. Now there were 2 other developments in the review this quarter. In July, we were proud to report that the results of the HOPE-3 clinical trial were published in The Lancet following extensive and independent peer review. The first publication of the full Phase 3 data set is an important milestone for this program and for the field.

The publication highlights the efficacy of Daramycin, and the supplement highlights the mechanism of action as well as the individual patient level data. There is a lot of information available publicly and we are confident that this highly regarded publication will help support continued progress for our Deramiocel program. In connection with that peer review, and as part of our dialogue with the agency and the SAP 3.0 put in place prior to unblinding. That model the 1 underlying our top line release, included an interaction term combining 2 independent variables, age and baseline. Which were part of the prespecified plan.

The only endpoint directly impacted by this was left ventricular ejection fraction in all patients, the key secondary endpoint of the HOPE-3 study. At top line, we reported a 2.4 percentage point treatment difference with a p value of 0.04. As published in The Lancet, under the pre specified model, the measure of the left ventricular ejection fraction in all patients was a 1.8 percentage point treatment difference with a p value of 0.09. We took the most conservative approach available to us in the publication and in interactions with FDA. Nothing else changed in the data or its analysis.

Let me remind you in the prespecified cardiomyopathy subgroup the result was unchanged at p equals 0.02 with a 2.8 percentage point treatment difference. The endpoints below left ventricular ejection fraction in the testing hierarchy are characterized now as nominally significant with treatment effects unchanged. Now let me be clear. That the HOPE-3 primary endpoint was unaffected and is significant both statistically and clinically Deramycin demonstrated a statistically significant slowing of upper limb disease progression as measured by PUL 2.0 with a mean difference of 4.5% in favor of Deramiocel with a p value of 0.029 which corresponds to a 1.2 absolute change in total PUL 2.0.

We believe the efficacy and safety data supporting the potential for Daramycin is strong. We have administered approximately 1.3 thousand intravenous infusions across our clinical program to over 200 patients with DMD in 3 separate clinical trials. More than 80 patients are in our collective open label extension studies with some receiving continuous infusions for more than 5 years and the long term safety profile is consistent and well characterized. The open public hearing part of the advisory committee included testimony from patients, families, and clinicians living with Duchenne muscular dystrophy. We were grateful that their experience is part of the record, and we look forward to continuing with the FDA on a path forward for Daramycin.

Also, in July, as part of the review process, the FDA conducted a Bioresearch Monitoring inspection or BIMO, and issued a 483 citing 1 observation. We have submitted our responses and are currently awaiting feedback. Second, let me talk a little bit about our commercial readiness and manufacturing. We are continuing our commercial readiness activities, but at a slower pace until we have further regulatory clarity and although the scope and timing of some of them may change, depending on the outcome of the review, we are controlling our cash against this. Our in house GMP manufacturing facility in San Diego is operational and positioned to support an initial commercial launch if approved.

The expansion to the second floor of that same facility continues, and our goal remains full validation and FDA approval of the expanded space estimated to be in 2027. The space is ideal for early commercialization and allows for the most flexibility as we continue to scale our CMC capacity to account for potential demand. On the commercial side, Michael Maurer joined us as our Chief Commercial Officer bringing direct DMD and rare disease commercial experience. And he has judiciously been building out the launch organization alongside our market access leadership. Now let me talk for a minute about our dispute with NS Pharma.

The state court, which was scheduled to hear our motion for preliminary injunction on August 10 ahead of the FDA's expected PDUFA date. However, we determined that resolving this contractual dispute and arbitration following the agency's decision would give the parties a more complete regulatory record to work from. Therefore, we withdrew the motion without prejudice. In terms of timeline, we estimate the arbitration process to begin to fall to begin this fall to address the contract dispute while continuing to pursue commercial readiness activities for Daramycin. Now let me be clear that our position on the underlying dispute has not changed.

We continue to believe that the pricing structure in the US distribution agreement is fundamentally flawed, in a way that would impede patient access, and we continue to seek rescission. What changed is the current process by which we are pursuing a remedy. Our view of the merits of the case has not changed. Now very quickly turning to our pipeline, I would like to state that all pipeline work is that is not directly related to Daramycin is on hold right now, until we have further regulatory clarity. Having said that, in terms of lifecycle management of Daramycin, we have initiated regulatory engagement in Europe and Japan.

Our expansion plans, including those for younger DMD patients and for Becker muscular dystrophy remain priorities and the timing of those clinical trial initiations will be stage-gated by the timeline of our regulatory pathway for Daramycin in the U.S. to treat those with Duchenne muscular dystrophy. Later stage. With that, I will now turn the call over to AJ to review the financial results.

Anthony J. Bergmann: Thank you, Linda. As of 06/30/2026, Capricor had cash, cash equivalents and marketable securities totaling $237.9 million and there was no revenue recognized for the second quarter of 26 or 2025. Total operating expenses for the second quarter of 2026 were $42.9 million compared to $27.7 million for the second quarter of 2025. Increase was primarily driven by continued investment in clinical regulatory and manufacturing activities, as well as commercial infrastructure supporting our Duchenne program. Net loss for the second quarter of 2026 was approximately $40.7 million or $0.70 per share compared to a net loss of approximately $25.9 million or $0.57 per share for the second quarter of 2025.

And for the 6 months ended 06/30/2026, our net loss was $74.7 million compared to $50.3 million for the same period in 2025. As of 06/30/2026, we had an accumulated deficit of approximately $379.6 million Our expense profile this quarter reflects investment across our 3 main areas regulatory and clinical activities in support of our DMD program, manufacturing capacity expansion efforts, and commercial readiness activities. As Linda noted, we are pacing certain commercial expenditures as the regulatory timeline develops and becomes more clear. And we continue to have flexibility in how we deploy capital across the remainder of the year. With that, I will turn the call back over to Linda for closing.

Linda Marbán: Thank you, AJ. As all of you know, the last year has been 1 of highs and lows for Capricor. We were stunned by the CRL and pleased by the HOPE-3 data. We were encouraged by the acceptance of the HOPE-3 data for resubmission in response to the CRL and disappointed by the advisory committee's recommendation. Although we understood it, based on the narrow voting question and the disparity between the indication we had previously asked for and the data from HOPE-3 which was powered to assess skeletal muscle as its primary goal. We have previously stated this.

We are reassured by the strength of our data by its publication in The Lancet, and we were amazed by the outpouring of support for Daramycin by the DMD community. We hear their voices as well and will continue to work tirelessly to try and get Deramiocel to every eligible patient based on their physician's recommendation. We are grateful to FDA for their flexibility and for their collaborative approach. We will be submitting updated data to the FDA as soon as possible and look forward to their review. Lastly, due to the sensitivity of our ongoing discussions with the Food and Drug Administration, we are not holding a Q and A today.

And we look forward to providing updates to you as they become available. Thank you for your time. We look forward to positive updates in the future.

Operator: Guests, you may now disconnect. Thank you. And this concludes today's call. Thank you all for participating. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.