On Thursday, Capricor Therapeutics (NASDAQ:CAPR) maintained its Buy rating and $40.00 price target from Jones Trading. Trading at $15.18, with analyst targets ranging from $25 to $77, the stock has experienced significant volatility, dropping 33% in the past week. According to InvestingPro data, the stock's RSI suggests oversold conditions.
This affirmation comes despite recent market fluctuations due to an FDA warning letter sent to a researcher involved with the company's deramiocel HOPE-3 study. Jones Trading has reviewed the situation and consulted with Capricor's management, concluding that the market's negative reaction was exaggerated.
The FDA warning letter in question was addressed to Dr. Phan, a neurologist participating in the HOPE-3 study through Rare Disease Research LLC, which is conducting 11 other Duchenne Muscular Dystrophy (DMD) studies and numerous other rare disease research projects. Notably, the letter originated from the Center for Drug Evaluation and Research (CDER), whereas Capricor's deramiocel is under review by the Center for Biologics Evaluation and Research (CBER).
The analyst from Jones Trading highlighted this distinction to suggest that the warning letter should not be linked to the deramiocel studies. InvestingPro's financial health analysis rates Capricor as 'FAIR', with strong liquidity metrics showing the company holds more cash than debt.
Capricor is on track to complete the rolling Biologics License Application (BLA) submission by the end of 2024. Jones Trading anticipates that the FDA could potentially approve the treatment in the second half of 2025.
The firm's stance remains firm on their Buy rating and price target for Capricor Therapeutics, reinforcing investor confidence in the company's prospects despite the recent hiccup linked to the FDA's communication. Despite recent volatility, the stock has delivered an impressive 285% return over the past year. For deeper insights into Capricor's valuation and 17 additional ProTips, visit InvestingPro for the comprehensive Pro Research Report.
In other recent news, Capricor Therapeutics has made notable advancements with deramiocel, a promising treatment for Duchenne muscular dystrophy (DMD) cardiomyopathy. The company's successful fundraising efforts have resulted in a cash balance of approximately $165 million, bolstering the upcoming commercial launch and manufacturing expansion. Analyst firms Piper Sandler and Jones Trading have reaffirmed their confidence in the company, maintaining a target price of $35 and $40 respectively, highlighting the potential of deramiocel.
The company has also broadened its distribution agreement with Nippon Shinyaku, now covering Europe. This expansion includes a $17.5 million equity investment, a $20 million upfront payment, and potential sales milestones up to $715 million.
Capricor has also been granted Orphan Drug and Advanced Therapy Medicinal Product (ATMP) designations by the European Medicines Agency (EMA) for deramiocel, potentially accelerating the development and market exclusivity in Europe.
Despite reporting a net loss of approximately $12.6 million for the third quarter of 2024, Capricor's San Diego facility is ready for production, and plans for a new manufacturing site are in progress to meet anticipated demand.
The company aims to complete its rolling Biologics License Application (BLA) submission for deramiocel by the end of 2024, with potential FDA approval for DMD cardiomyopathy in the following year.
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