Here’s Why Capricor Therapeutics Inc (NASDAQ:CAPR) Is Running This Week

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The biggest mover so far this week in the biotechnology sector is Beverly Hills-based Capricor Therapeutics Inc (NASDAQ:CAPR). The company initially started to run on Monday, Harry announced that it intends to put out data from an early stage trial at the 22nd International Congress of the World Muscle Society on October 4, 2017.

By Monday close, Capricor had risen 32% on the announcement. Fast-forward 20 hours to close the session on Tuesday on activity had a further 70% today’s number, bringing the company’s share price to $2.25 and market capitalization to a little over $58 million.

So why is this such big news?

Well, first up it’s worth noting exactly what the company is planning to present. The trial data derives from a phase 1/2 study set up to investigate the safety and efficacy of an asset called CAP-1002. It’s under investigation as a potential therapy for boys and young men with Duchenne muscular dystrophy (DMD). The reason that markets are paying so much attention to this announcement is twofold. First, this condition, DMD, is very much underserved as far as currently available treatment options are concerned. Some readings may remember Sarepta Therapeutics Inc (NASDAQ:SRPT) Eteplirsen, which picked up approval in the US from the Food And Drug Administration during September last year, and those that do may also remember the controversy surrounding the approval at the time.

For those new to this one, the drug had basically just about succeeded in its pivotal investigation but there remained concerns about just how much of a difference Eteplirsen could make in the lives of DMD patients (especially the younger ones) and whether or not this potential for efficacy was worth the risk of various safety concerns associated with the asset.

Anyway, the drug did eventually pick up approval but many believe that this was in no small part due to the fact that the current treatment options on the market are slim to nonexistent (or, at least, were back then). Since the approval, then, markets have been looking for any follow-up drug that could build on the efficacy of Eteplirsen and offer young DMD patients a safer and potentially improved treatment option.

The question is, can Capricor’s CAP-1002 be that drug?

Based on the market response to the company’s announcement that it is set to present data at the above-mentioned conference on October 4, wider sentiment suggests that the belief right now is that it can. Of course, this is development stage biotechnology and it’s impossible to say anything for certain as regards to the outcome of a clinical trial especially when said clinical trial is trying to treat a condition like DMD and, again, when the trial is mid-stage at best.

With that said, however, there are certain elements of this program that have already, hinted at the program being something of a winner. The data that is about to hit press is follow-up data based on a six-month extension study of the initial phase 1/2. Early data pointed towards some very noteworthy signals of efficacy and – if this follow-up data can reinforce this early signaling – the drug is going to head into a pivotal investigation (again, assuming that the FDA doesn’t special protocol this one and allow for a submission based on the phase 2 data) in a relatively strong position. There is also some validity in the suggestion that the announcement itself when combined with the fact that this upcoming presentation has been submitted as part of a late-breaking entry to the World Muscle Society Conference, is evidence enough of Capricor preparing to present positive results. Again, that’s a pretty speculative suggestion but it’s not unreasonable and it’s not one without precedents. After all, why would management submit a late-breaking application to a major conference and then get on stage to present disappointing results? It’s far more logical to suggest that the company knows its results are strong and that – in turn – it wants to get them out to as many people as quickly as possible, something that the conference presentation and the late-breaking application affords those involved.

As mentioned, the conference will take place on October 4 and that the next major catalyst in this scenario. Will it be a buy the rumor, sell the fact situation? We’ll have to wait and see…

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