Capricor Therapeutics(CAPR)2020-08-10 12:00Clinical Trials and Drug Development - Capricor Therapeutics completed the HOPE-2 Phase II clinical trial for CAP-1002, showing statistically significant improvements in upper limb, cardiac, and respiratory function with p-values less than 0.05[203] - The 12-month data from the HOPE-2 trial indicated a mean change of 2.4 points in the PUL 2.0 for CAP-1002 treated patients compared to placebo, with a p-value of 0.05[203] - In the same trial, CAP-1002 demonstrated a reduction in CK-MB levels (p=0.006), indicating a decrease in cardiac muscle cell damage[204] - The primary efficacy endpoint of the HOPE-2 trial was the relative change in patients' abilities to perform manual tasks, measured through the Performance of the Upper Limb (PUL) test[200] - CAP-1002 was generally safe and well tolerated, with no significant safety signals identified during the HOPE-2 trial[208] - The Phase I/II HOPE-Duchenne clinical trial involved 25 patients, with a total dose of 75 million cells infused, showing significant improvement in motor function in 89% of lower-functioning patients treated with CAP-1002[216][217] - The FDA has granted CAP-1002 Orphan Drug Designation and Rare Pediatric Disease Designation, providing incentives such as tax credits and potential market exclusivity upon approval[219][220] - CAP-1002 is one of the few therapies in development for non-ambulant patients with DMD, with the FDA encouraging a Phase III study for its approval pathway[214][222] - Capricor has initiated a Phase II, randomized, placebo-controlled study for CAP-1002 in severe or critical COVID-19 patients, aiming to treat up to 60 patients[183] - The company is developing two vaccine candidates using its exosomes platform technology for potential COVID-19 prevention, with pre-clinical studies showing an antibody response[184] Financial Performance and Funding - Grant income for Q2 2020 was approximately 144,000 in Q2 2019, primarily due to the timing of the DoD Grant Award expected to end in September 2020[237] - Miscellaneous income for Q2 2020 was zero, compared to approximately 5.6 million for the six months ended June 30, 2020[249] - The company has raised approximately 6.59 per share[258] - The company has not generated any revenue from the commercial sale of its products to date and does not expect to generate revenue for several years, necessitating the need for substantial additional capital[254] - The company expects to spend approximately 6.0 million in 2020 on the further development of CAP-1002 for DMD and COVID-19[244] - The company anticipates spending approximately 6.0 million in 2020 on pre-clinical and other research expenses related to its exosomes program[246] Expenses and Financial Management - Research and development expenses primarily consist of clinical trial costs, personnel costs, and other related expenses, which are expected to increase as clinical development progresses[233] - General and Administrative (G&A) expenses for Q2 2020 were approximately 0.8 million in Q2 2019, primarily due to a 0.5 million rise in stock-based compensation[240] - Research and Development (R&D) expenses for Q2 2020 were approximately 1.9 million, up 18.75% from 3.2 million, a slight decrease from 36.3 million, a significant increase from 29.7 million[249] - Cash flow from financing activities for the six months ended June 30, 2020, was approximately 2.0 million for the same period in 2019, reflecting a substantial increase due to the May 2020 ATM Program[253] - As of June 30, 2020, the fair value of the company's cash and cash equivalents was approximately 232,803 for its lease agreement, which was subsequently canceled and funds returned[294] Grants and Awards - The Company received a CIRM Grant Award of approximately 2.3 million from the Company[267] - As of June 30, 2020, the liability balance for the CIRM Award was approximately 2.4 million from the U.S. Department of Defense to develop a scalable process for manufacturing CAP-2003, with approximately $2.3 million incurred under the award as of June 30, 2020[270] - The Company accounts for the CIRM Award as a liability rather than income, as it may be required to repay some or all of the awarded amounts[283] Risk Management and Accounting - The company manages market risk by investing in highly rated credit issuers and does not hedge interest rate exposure[301] - The company's investment policy aims to limit credit exposure and improve the safety of invested funds[301] - The company calculates the fair value of stock options using the Black-Scholes option-pricing model, accounting for various assumptions[290] - Clinical trial expenses are accrued based on contracts with vendors and are adjusted as actual results differ from estimates[295] - The Company utilizes estimates for clinical trial costs based on contracts with various vendors, which may lead to significant differences between estimated and actual costs[285] - The Company has not recognized any adjustments for material changes in estimates in any presented period[287] - The company accounts for stock-based compensation expense in general and administrative or research and development expenses[292]