CAPR Stock On Track For Worst Day Ever — Analysts Divided On Deramiocel’s Approval Probability After FDA Documents Paint ‘Ugly Picture’

• The FDA will decide on the Deramiocel application by August 22. 
• The documents released by the FDA on Monday highlighted disagreements over the company’s late-stage trial’s statistical analysis. 
• Cantor Fitzgerald described the FDA panel briefing documents as painting “an ugly picture.”

Capricor Therapeutics (CAPR) saw its shares tumble roughly 65% on Monday after the U.S. Food and Drug Administration released briefing documents for an upcoming Advisory Committee meeting to evaluate the company's application seeking approval for its drug Deramiocel.

The Cellular, Tissue, and Gene Therapies Advisory Committee will review the company’s application for Deramiocel, a treatment for cardiomyopathy in Duchenne muscular dystrophy patients, on July 29. The FDA will then decide on the application by August 22.

The documents released by the FDA on Monday, ahead of the meeting, have raised a divide among Wall Street experts over what to expect. CAPR stock is now on track for its worst day ever.

What Do The FDA Documents Say?

The documents released by the FDA on Monday highlighted disagreements over the company’s late-stage trial’s statistical analysis, with the FDA stating that the study failed to meet its pre-specified primary and secondary efficacy endpoints and found no statistically significant difference between Deramiocel and placebo after 12 months. It also alleged that certain changes to the statistical analysis plan were not pre-approved or fully reviewed before the application submission.

Capricor's original application for Deramiocel was rejected last year, citing a lack of “substantial evidence of effectiveness.” The company resubmitted the application earlier this year with additional data and the FDA restarted the review.  

Capricor Defends Itself

Capricor pushed back on the FDA’s briefing documents, stressing transparency and defending its trial data. CEO Linda Marbán said that the late-stage trial results followed the final analysis plan, finalized before the data were unblinded, while the FDA relied on an older, incomplete draft that was no longer valid. Marbán highlighted that the late-stage data showed clear benefits on the main endpoint and heart function, calling Deramiocel a meaningful option for Duchenne patients.

Cantor Fitzgerald: Documents “Paint An Ugly Picture”

Cantor Fitzgerald described the FDA panel briefing documents as painting “an ugly picture.” The FDA documents raise several concerns and allegations about the integrity of data collection, the analyst noted, while highlighting that the difference is due to the two parties relying on different analyses.

Oppenheimer Maintains Outperform Despite Surprises

Oppenheimer analyst Leland Gershell, meanwhile, expressed “surprise” at differences between Capricor’s and the FDA’s views on the applicability and appropriateness of the late-stage statistical analysis protocols. Still, Gershell emphasized that “at the end of the day what should matter most for the stock will be the vote.” Oppenheimer is optimistic for a “positive outcome” and maintains its ‘Outperform’ rating on the stock.

B. Riley Downgrades, Sees Approval Unlikely

B. Riley analyst Madison El-Saadi, however, cut Capricor to ‘Neutral’ from ‘Buy’ and lowered the price target to $10 from $63. The briefing document observations are “likely incompatible with approval,” the analyst said, while adding that it now sees approval as “unlikely in its current form.” However, the firm said it continues to evaluate the effectiveness of Deramiocel, especially in DMD patients with early to moderate stage cardiomyopathy.

How Did CAPR Retail Traders React?

On Stocktwits, retail sentiment around CAPR stock jumped from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume increased from ‘high’ to ‘extremely high’ levels.

A Stocktwits user expressed disappointment over the company’s management.

Another user opined that the FDA will delay the meeting to a later date to evaluate the latest data.

CAPR stock has fallen 76% year-to-date. 

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