‘Pharma Bro’ Martin Shkreli Goes Short On Capricor Therapeutics – Stock Tumbles 17%

• Results from the HOPE-3 study are slated to be announced in the fourth quarter.
• In July, the FDA refused to approve Capircor’s application for Deramiocel for the treatment of cardiomyopathy associated with Duchenne muscular dystrophy, stating that it does not meet the requirement for substantial evidence of effectiveness. 
• The company intends to meet the FDA’s additional clinical data requirement with the HOPE-3 study and expects a review period of up to six months for the resubmitted application.

Shares of Capricor Therapeutics (CAPR) slumped 17% on Monday morning after former biotech executive and businessman Martin Shkreli announced his short position.

Shkreli said that the company’s only asset, Dermiocel, will not yield positive results in the HOPE-3 study in the treatment of cardiomyopathy associated with Duchenne muscular dystrophy. Results from the study are slated to be announced in the fourth quarter (Q4).  

Shkreli’s Talking Points

Shkreli highlighted concerns, including limitations in cell therapies' ability to reach target tissue and other safety issues, provided they are derived from donor hearts and are not immunoprivileged cells.

He further alleged that data from the company’s previous HOPE-2 trial was not meaningful. “Note the company and the publication reported a successful PE met, but the FDA disagreed,” he said. He also co-authored a 46-page report on the issues facing Capricor with Anthony Staj, who also echoed pessimism about the upcoming trial data in a post on X.

“Deramiocel is a allogeneic cell therapy with no tropism for heart or skeletal muscle, and most of it ends up in the lungs. because of this it never acts upon target tissue,” Staj wrote.

HOPE-3 Trial Results

Capricor said earlier this month that it expects to announce results from the HOPE-3 trial in the coming weeks and submit an application to the U.S. Food and Drug Administration based on the study data. According to the firm, 105 DMD patients have been enrolled in the recent trial.

In July, the FDA refused to approve Capricor’s application for Deramiocel for the treatment of cardiomyopathy associated with Duchenne muscular dystrophy, stating that it does not meet the requirement for substantial evidence of effectiveness and expressed the need for additional clinical data. The company intends to meet the FDA’s additional clinical data requirement with the HOPE-3 study and expects a review period of up to six months for the resubmitted application.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around CAPR jumped from ‘neutral’ to ‘bullish’ territory over the past 24 hours, while message volume stayed at ‘normal’ levels.

CAPR stock is down by 66% this year and by about 75% over the past 12 months. 

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