H.C. Wainwright slashes Capricor stock price target to $24 on FDA rejection

Investing.com - H.C. Wainwright has lowered its price target on Capricor Therapeutics (NASDAQ:CAPR) to $24.00 from $77.00 while maintaining a Buy rating following a Complete Response Letter (CRL) from the FDA. The stock has taken a significant hit, dropping nearly 23% in the past week, though analyst targets remain optimistic with a consensus high target of $31. According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet.

The FDA rejected Capricor's Biologics License Application (BLA) for deramiocel, its cell therapy treatment for cardiomyopathy in Duchenne muscular dystrophy patients, on July 11. The agency cited insufficient evidence of effectiveness from the OLE HOPE-2 trial and requested additional clinical data. Despite current challenges, InvestingPro analysis shows the company maintains a healthy current ratio of 6.55, indicating strong ability to meet short-term obligations.

The rejection came after the FDA withdrew a previously scheduled Advisory Committee meeting that was set for July 30. The CRL also mentioned outstanding items in the Chemistry, Manufacturing, and Controls section of the application, though these were not fully reviewed due to the timing of the rejection.

Capricor plans to submit data from its randomized, double-blind, placebo-controlled Phase 3 HOPE-3 clinical trial to address the FDA's concerns. The company expects to release topline results from this trial in the third quarter of 2025.

According to Capricor management, a completely new BLA submission will not be required, and a response to the CRL with the HOPE-3 data should restart the FDA review process. The company plans to discuss next steps with the FDA in an upcoming Type A meeting.

In other recent news, Capricor Therapeutics received a Complete Response Letter from the FDA, rejecting its application for Deramiocel, a therapy for Duchenne muscular dystrophy. The FDA cited insufficient evidence of effectiveness and outstanding Chemistry, Manufacturing, and Controls issues, prompting Capricor to plan a resubmission with data from its ongoing Phase 3 HOPE-3 trial. Despite this setback, B.Riley initiated coverage on Capricor with a buy rating, highlighting Deramiocel's potential to address cardiomyopathy in DMD patients. H.C. Wainwright also maintained its buy rating, emphasizing that recent FDA changes do not specifically concern Capricor's therapy. Deramiocel has received Orphan Drug Designation and Regenerative Medicine Advanced Therapy designation in the U.S. Previously, the FDA had not required an Advisory Committee meeting for Deramiocel, and the company's regulatory milestones had proceeded without major issues. Capricor remains focused on advancing its therapy, with topline results from the HOPE-3 trial expected in the third quarter of 2025. The FDA has offered Capricor the opportunity to request a Type A meeting to discuss next steps toward potential approval.

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