In an Aug. 8 research note, analyst Joseph Pantginis reviewed Capricor Therapeutics Inc.'s (CAPR:NASDAQ) Q2/19 financials and reported that H.C. Wainwright & Co. increased its target price on Capricor to $19.50 per share from $12.40. The biotech's current share price is around $3.02.
For Q2/19, Capricor reported an earnings per share of ($0.59), Pantginis relayed, which compare to H.C. Wainwright's reverse split-adjusted estimate of ($0.80). At quarter's end, Capricor had $5.9 million in cash then subsequently raised $1.3 million through a facility, its taking pro forma cash total to $7.2 million. That amount is enough to take the company into Q4/19, according to management.
Also noteworthy, indicated Pantginis, is during Q2/19 Capricor delivered "significant" results of a six-month interim analysis of CAP-1002, which is being evaluated in the HOPE-2 study as a treatment for Duchenne muscular dystrophy (DMD).
HOPE-2 is the first randomized, double-blind, placebo-controlled study to show "statistically significant functional improvement" in boys with DMD who were treated with steroids, explained Pantginis. Results of the six-month analysis confirmed and expanded that previously seen efficacy of CAP-1002, "overall boosting the confidence in the program."
Based on the company's findings to date regarding exosomes, which play a role in the effects of CAP-1002, Capricor is advancing a preclinical program for another asset, CAP-2003, for the treatment of fibrotic diseases, including DMD, Pantginis pointed out. The biotech expects to file an investigational new drug (IND) application for CAP-2003 in the next few months.
Regarding the increased target price on Capricor, it resulted from H.C. Wainwright taking into account the 1:10 reverse split in June and increasing its discount rate to 45% from 15%, explained Pantginis. The latter was meant to add some wiggle room to the estimate while further information is pending, on a potential pivotal DMD trial and on the company's future financing needs.
In terms of upcoming catalysts, Capricor should likely receive guidance in Q4/19 from the U.S. Food and Drug Administration on design of a pivotal DMD trial, wrote Pantginis. In the meantime, the developer of therapeutics will continue preparing for a "manufacturing scale-up and technology transfer of CAP-1002" and keep working toward filing the CAP-2003 IND.
H.C. Wainwright has a Buy rating on Capricor Therapeutics.
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Disclosures from H. C. Wainwright, Capricor Therapeutics Inc., Earnings Update, August 8, 2019
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Joseph Pantginis, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Capricor Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of July 31, 2019 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities Capricor Therapeutics, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Capricor Therapeutics, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Capricor Therapeutics, Inc. during the past 12 months.
The Firm does not make a market in Capricor Therapeutics, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.
