Daily Stock Watch: Is CAPR Stock a Buy?

By Kirsteen Mackay


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CAPR stock climbed 42% in the first half of 2022 despite considerable volatility. Can it continue to rise, and is CAPR a good biotech investment?

Should You Invest in Capricor Therapeutics?

CAPR stock is a well-established $100m biotech company. Naturally, you may wonder, are Capricor Therapeutics shares worth investing in? Read on for the key info you need before investing money in CAPR stock. 

What Is Capricor Therapeutics?

Capricor Therapeutics, Inc. (NASDAQ: CAPR) is an American biotech company developing biological therapeutics for treating muscular and other severe medical conditions. Its product candidate portfolio is currently focused on key therapeutics: CAP-1002, and Exosomes.

The company was investigating CAP-1002 as a potential treatment for cytokine storm associated with COVID-19 (Phase 2). However, it has decided not to continue with this despite positive results in its Phase 2 clinical study.

Investigating CAP-1002 for the treatment of Duchenne muscular dystrophy (DMD) and developing its exosome platform are Capricor’s primary focus.

CAP-1002 HOPE-2 Open-Label Extension Study

On 25 June, Capricor Therapeutics announced positive results in a study treating DMD patients with CAP-1002, its late-stage cell therapy program.

In its HOPE-2 Open-Label Extension Study, Capricor noted statistically significant clinical benefits in skeletal muscle function in the patients taking its CAP-1002 therapeutic. Therefore, the study met its primary endpoint, suggesting the long-term safety of CAP-1002 with positive disease modification.

The company is now initiating the HOPE-3, Phase 3 clinical study investigating CAP-1002 for treating late-stage DMD patients for the potential approval of CAP-1002 in the United States.

HOPE-3 is a randomized, double-blind, placebo-controlled study that will aim to enroll around 70 patients at approximately 20-30 sites in the United States.

What are Exosomes?

Exosomes are nature's delivery vehicle to take protein, DNA, and RNA to cells. Capricor Therapeutics is developing an exosome platform to harness its power.

The company wants to engineer these exosomes with different payloads for a potentially more efficient, targeted delivery of small molecules, RNAs, proteins, and other payloads.

The company is developing a precision-engineered exosome platform technology. For now, this means developing therapeutics and vaccines for infectious diseases, monogenic diseases, and other potential indications.

How Does Capricor Therapeutics Make Money?

Capricor Therapeutics does not yet have any products approved for sale.

If successfully developed and approved, Capricor intends to commercialize CAP-1002 in the United States with its partner, Nippon Shinyaku and may enter into additional licensing agreements or strategic collaborations in other markets.

In January 2022, Capricor entered into a Commercialization and Distribution Agreement with Nippon Shinyaku for the exclusive commercialization and distribution of CAP-1002 for DMD in the US.

The company received an upfront payment of $30m in Q1, 2022, with potential additional milestone payments of up to $705m.

As Capricor is heavily involved in the costly process of R&D, it needs to raise money to fund its ventures. Sometimes it does this via share placings. For instance, it issued shares in June 2021, intending to use the net proceeds for research related to its product candidates, working capital and general corporate purposes. 

The company hopes to eventually make money from commercializing its drug candidates but makes no guarantees.

Developing biopharma product candidates, including conducting preclinical studies and clinical trials and establishing manufacturing capabilities, is expensive.

CAPR Stock Financials

As of March 31, 2022, the company’s cash and cash equivalents were approximately $58.3m. It estimates this will fund its operating expenses and capital expenditure requirements at least into Q2 2024.

The company has racked up substantial operating losses in each period since its inception.

Its net losses were $7.8m for the first three months of 2022 and $5.2m in the first three months of 2021.

Capricor Therapeutics expects to incur significant expenses and operating losses for the foreseeable future.

Capricor Therapeutics Growth Potential

Capricor Therapeutics is working on developing several product candidates, so if any of them reach commercialization, the company has considerable growth potential.

CAPR Stock Risks

Any product candidates CAPR takes to market are likely to face stiff competition.

CAPR stock does not pay shareholders a dividend. Therefore, there is no guaranteed income from holding CAPR shares, and its share price is likely to be subject to considerable volatility.

Should You Invest in Capricor Therapeutics?

Whether you should invest in CAPR stock depends on your propensity to risk. Investors should note that any investment in biotech R&D is speculative and prone to share price volatility.

However, some investors are happy to take the additional risk to reap the rewards should a product candidate reach commercialization.

In May, Joseph Pantginis, an analyst at HC Wainwright, placed a Buy rating on CAPR stock with a target share price of $18.

If you're interested in life sciences stocks have a read of our Cardiol Therapeutics online report.


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Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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