Capricor stock price target cut by Oppenheimer on FDA review concerns

Investing.com - Oppenheimer lowered its price target on Capricor Therapeutics (NASDAQ:CAPR) to $22.00 from $43.00 on Monday while maintaining an Outperform rating on the stock. The revision comes as CAPR shares have declined over 33% in the past week, though InvestingPro data shows the stock remains up 76% over the past year.

The price target reduction follows a STAT article published Friday that provided additional details about the removal of deramiocel’s lead FDA reviewers last Wednesday. Oppenheimer now does not expect the drug candidate to receive approval for Duchenne cardiomyopathy in its current review cycle, which has a PDUFA date of August 31. Despite recent challenges, InvestingPro analysis indicates strong financial health with a current ratio of 6.55 and more cash than debt on its balance sheet.

The investment firm anticipates that if a complete response letter is issued, Capricor will revert to its original plan from before what Oppenheimer described as "last fall’s regulatory upside surprise." This would mean pursuing approval for the drug to mitigate skeletal muscle function decline in both ambulant and non-ambulant Duchenne muscular dystrophy patients.

Oppenheimer’s revised outlook is based on results from a recently completed Phase 3 trial that remains blinded. The firm considers this trial "derisked by prior studies," according to its research note.

The investment firm warned investors to expect share price volatility as the company approaches upcoming regulatory news and events related to the drug candidate.

In other recent news, Capricor Therapeutics has reported several significant developments. The company announced four-year safety and efficacy results from its HOPE-2 Open-Label Extension study of Deramiocel for Duchenne Muscular Dystrophy (DMD), showing preservation of cardiac function in treated patients. Additionally, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation to Deramiocel for the treatment of Becker Muscular Dystrophy (BMD), expanding Capricor’s focus beyond DMD. Meanwhile, Capricor has encountered regulatory challenges, with the FDA’s inspection of its San Diego manufacturing facility resulting in a Form 483 due to observations primarily related to routine quality systems and documentation practices. Despite these observations, Capricor expressed confidence in meeting regulatory requirements. Furthermore, H.C. Wainwright reaffirmed its Buy rating for Capricor, maintaining a positive outlook on the approval prospects for Deramiocel despite recent regulatory uncertainties. The FDA has also withdrawn its notice regarding an Advisory Committee meeting for Deramiocel, citing the need for additional time. These developments come amid the FDA placing key officials overseeing cell and gene therapies on administrative leave, raising concerns about potential impacts on regulatory processes.

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