Capricor Therapeutics Shares Plunge 40% as FDA Questions Drug Efficacy Ahead of Panel Review

Shares of Capricor Therapeutics (NASDAQ:CAPR) plummeted 40% on Monday after the U.S. Food and Drug Administration (FDA) posted briefing documents that raised questions about the company's lead drug candidate. The documents were released ahead of a key advisory committee meeting scheduled for July 29 to review the treatment.

FDA Raises Effectiveness Concerns

The FDA's Cellular, Tissue, and Gene Therapies Advisory Committee is set to discuss Capricor's resubmitted Biologics License Application (BLA) for deramiocel. The therapy is proposed for the treatment of cardiomyopathy in male patients with Duchenne muscular dystrophy (DMD), a severe genetic disorder.

According to the briefing documents, the panel will evaluate whether the pivotal HOPE-3 study provides "substantial evidence of effectiveness." The FDA noted that its standard for approval generally requires data from at least two adequate and well-controlled clinical investigations, putting a high bar on the single study under review.

A Challenging Regulatory History

This is not the first time Capricor has faced regulatory hurdles with deramiocel. The original BLA submission, which was based on the phase 2 HOPE-2 study, previously received a Complete Response Letter from the FDA.

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The agency's initial rejection cited a lack of substantial evidence of effectiveness and an unfavorable benefit-risk assessment. The FDA documents noted that the HOPE-2 trial and its open-label extension showed no evidence of effectiveness on skeletal or cardiac function based on key parameters.

Context on the Treatment

Deramiocel is an investigational allogeneic cellular product derived from donor hearts. It aims to address the progressive cardiac muscle weakness associated with DMD, a rare disease where heart failure is the major cause of mortality.

While therapies for DMD exist, the FDA documents stated that currently approved treatments have not been systematically studied for their effects on cardiomyopathy. This highlights a significant unmet medical need, but the regulatory path for Capricor's candidate remains uncertain following the agency's critical review.