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DATE
Tuesday, Nov. 10, 2026
CALL PARTICIPANTS
- Chief Financial Officer - Anthony J. Bergmann
- Chief Executive Officer - Linda Marbán
TAKEAWAYS
- Net Loss -- $42.7 million or $0.73 per share, compared to $24.6 million or $0.54 per share, reflecting increased precommercial activities and manufacturing scale-up expenses.
- Cash and Marketable Securities -- $198.5 million as of Sept. 30, 2026, which management stated is sufficient to fund operating capital requirements for at least 12 months.
- Operating Expenses -- $44.7 million for the third quarter, an increase from $26.3 million driven by preparation for the potential commercial launch of deramiocel.
- HOPE-3 Open Label Extension (OLE) -- 76% slowing of disease progression in patients switching from placebo to deramiocel, with a decline of 0.5 points compared to 2.0 points during the placebo year.
- HOPE-3 Primary Endpoint -- 1.1 point absolute difference in the Performance of the Upper Limb (PUL 2.0) scale versus placebo (p=0.029), which management characterized as a clinically meaningful result.
- Manufacturing Capacity -- 2,000 to 2,500 patients per year, supported by the ongoing build-out and validation of a second-floor clean room facility in San Diego.
- Workforce Reduction -- 10% of employees in the third quarter, implemented to align the organization with near-term priorities and reduce operating expenses.
- Cardiomyopathy Subgroup -- 2.8 percentage point improvement in ejection fraction relative to placebo, observed in patients with preexisting cardiomyopathy in the HOPE-3 trial.
- Integrated Summary of Efficacy (ISE) -- 1.29 point difference in PUL measures (p=0.0087) when combining data from the HOPE-2 and HOPE-3 placebo-controlled trials.
- Initial Production Capacity -- 1,000 doses annually, capable of treating approximately 250 patients from the currently operational first-floor GMP facility.
- Clinical Experience -- 1,300 infusions across more than 125 patients, with some individuals continuing in open-label extension studies for more than five years.
- U.S. Patient Population -- 15,000 individuals living with Duchenne muscular dystrophy, with approximately two-thirds aged 9 years and older.
- 9-Month Net Loss -- $117.3 million for the period ended Sept. 30, 2026, compared to $74.9 million for the same period in the prior year.
- Research and Development (R&D) Expense -- $29.6 million for the quarter, compared to $20.4 million in the third quarter of 2025.
- General and Administrative (G&A) Expense -- $15.1 million for the quarter, compared to $5.9 million in the third quarter of 2025.
- At-the-Market (ATM) Activity -- Zero shares sold during 2026, as the company prioritized maintaining its existing capital resources through the PDUFA date.
- Arbitration Timeline -- Mid-2027 start for the hearing regarding the contractual distribution agreement dispute with Nippon Shinyaku and NS Pharma.
- Robustness Analysis -- 900 reanalyses of HOPE-3 data, which management reported remained centered on a benefit of one point on the PUL 2.0 scale.
- Cardiac Scarring -- Reduction in heart muscle scarring as measured by Late Gadolinium Enhancement (LGE) on cardiac MRI versus placebo.
- PDUFA Target Action Date -- Nov. 22, 2026, following a three-month extension classified as a major amendment by the FDA to review additional data.
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RISKS
- Linda Marbán stated, "The concern we heard most was fragility. The worry that a result might depend on a few patients or a single analysis choice," regarding feedback from the Advisory Committee meeting.
- Management acknowledged that an FDA Bioresearch Monitoring (BIMO) inspection in July 2026 resulted in a Form 483 with one observation, for which the company is awaiting formal feedback.
SUMMARY
Capricor Therapeutics, Inc. (NASDAQ:CAPR) provided updates on the regulatory status of its lead candidate, deramiocel, as the company enters the final stages of the Food and Drug Administration (FDA) review process. Management reported that the recent major amendment to the Biologics License Application (BLA) included comprehensive efficacy data sets and robustness analyses to address questions raised during the Advisory Committee meeting. The company has implemented cost-alignment measures and maintains a cash position intended to support operations through the upcoming year. Additionally, management is prioritizing independent commercialization and manufacturing readiness in the U.S. while navigating a contractual dispute regarding its previous distribution agreement.
- Indication refinement: Management refined the proposed indication to focus on upper limb impairment in patients older than 9 years, matching the HOPE-3 primary endpoint population.
- Manufacturing expansion: The company is targeting validation of its second-floor facility in the first half of 2027 to significantly increase its production scale for a potential launch.
- Independent commercialization: CEO Marbán indicated the company is preparing for a solo launch, stating, "We are going into independently in preparation for launch and commercialization of deramiocel without the participation of NS Pharma at this point in any way."
- Pipeline prioritization: The company has slowed work on its exosome platform and younger-patient Duchenne muscular dystrophy programs to focus resources on the deramiocel BLA review.
- International engagement: Management reported the initiation of regulatory engagement in Europe and Japan, while also evaluating potential expansion into Becker muscular dystrophy.
- Cardiac recognition: The HOPE-3 cardiac data received the American Heart Association Outstanding Research Award in Pediatric Cardiology, reflecting outcomes in slowing heart muscle scarring.
INDUSTRY GLOSSARY
- Deramiocel (CAP-1002): Allogeneic cardiosphere-derived cells designed to exert immunomodulatory and anti-fibrotic actions in muscular dystrophies.
- PUL 2.0: Performance of the Upper Limb 2.0, a validated clinical tool to assess motor function in Duchenne muscular dystrophy.
- LGE: Late Gadolinium Enhancement, a cardiac MRI technique used to identify myocardial fibrosis or scarring.
- PDUFA: Prescription Drug User Fee Act, referring to the target date for the FDA to complete its review of a drug application.
- BIMO: Bioresearch Monitoring, an FDA program of on-site inspections and data audits to ensure clinical trial quality and integrity.
- ISE: Integrated Summary of Efficacy, a document that combines data from multiple clinical trials to support a regulatory submission.
- RMAT: Regenerative Medicine Advanced Therapy designation, which provides intensive FDA guidance and potential accelerated approval pathways.
- Duchenne Muscular Dystrophy (DMD): A genetic disorder characterized by progressive muscle degeneration affecting skeletal, respiratory, and cardiac muscles.
- StealthX™: Capricor's proprietary exosome platform for the targeted delivery of oligonucleotides, proteins, and small-molecule therapeutics.
Full Conference Call Transcript
Operator: Good afternoon, ladies and gentlemen, and welcome to the Capricorn Therapeutics Third Quarter 26 Conference Call. If at any time during this call, you require immediate assistance, please press 0 for the operator. This call is being recorded today. Tuesday, 11/10/2026. I would now like to turn the conference over to CFO, AJ Bergmann, for the forward-looking statement Please go ahead.
Anthony J. Bergmann: Thank you. Good afternoon. We begin, I would like to remind you that any statements made during today's call are not historical and are considered to be forward-looking statements. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, our most recent quarterly reports on Form 10-Q, as well as other reports filed with the SEC. Any forward-looking statements represent our views only as of today, 11/10/2026. A replay of the call will be available on our website following its completion. With that, I will turn the call over to Linda Marbán, CEO.
Linda Marbán: Good afternoon, everyone, and thank you for joining us. Let me remind you that as Duchenne muscular dystrophy progresses, boys and young men lose the use of their arms and hands, the ability to feed themselves, use a phone or computer, or handle the everyday tasks that keep them independent. The loss of independence is what deramiocel is designed to slow, and is the focus of the refined indication now under FDA review. This quarter, we took important steps to strengthen that case. And I will walk you through them today. Our BLA for daramyosil is in the final stages of FDA review.
Out of respect for that process, I will keep my comments on our interaction with the agency to what is already public. Today, I will cover 4 areas: our regulatory status, our data, our commercial and manufacturing readiness, and our dispute with NS Pharma. And then we will close with a brief pipeline update before handing it off to AJ. First, let me talk about our regulatory status. Following the Advisory Committee meeting, we held discussions with the agency. FDA then agreed to review additional data and a major amendment to our BLA and extended the PDUFA target action date to November 22, 2026.
In August, we submitted that amendment which included approximately 30,000 pages of documents, reports, tables, listings and files and data sets. It included the 24 month open label extension data from HOPE-3, along with additional sensitivity and robustness analyses. It also included an integrated summary of efficacy combining HOPE-2 and HOPE-3 efficacy data. Karen together, we believe these data support the refined indication the treatment of upper limb impairment in patients with age greater than 9 years old. The population studied in HOPE-3 and the focus of its primary endpoint, At this time, all requested information has been submitted to FDA and the review remains ongoing. Now let me turn to our data.
I would like to walk you through the full dataset in chronological order. The 1-year randomized results the 2-year data we provided in the amendments, and what we believe the totality of the evidence tells us. The full HOPE-3 results published in The Lancet this past July following extensive peer review showed that the trial met its primary efficacy endpoint, a statistically significant slowing of upper limb disease progression as measured by the performance of the upper limb 2.0. A validated measure of shoulder arm, and hand function. With a p-value of 0.029.
The trial was designed to detect a difference of approximately 1, a threshold that physicians who treat Duchenne and the FDA have described as clinically meaningful, And that is what we saw. The absolute difference between the deramiocel and placebo groups was 1.1 points. A result that was both clinically meaningful and statistically significant. For a boy who could no longer walk, a single point on the scale can mean keeping the ability to feed himself, bring a hand to his mouth, or operate his wheelchair or telephone. Other secondary endpoints measuring upper limb function such as the mid level performance of the upper limb and the Duchenne video assessment, told the same story. Hope 3 also evaluated cardiac outcomes.
This past weekend, Dr. Jonathan Soslow of Vanderbilt University presented the HOPE-3 cardiac data at the American Heart Association Scientific Sessions in Chicago. As we announced yesterday, the abstract received the American Heart Association outstanding research award in pediatric cardiology. This is a significant achievement and to our knowledge a first for research in DMD cardiomyopathy. As a reminder, the slides are available on our website, compared with placebo, deramiocel slowed the progression of heart muscle scarring as measured by LGE on cardiac MRI. Across all patients, the difference in ejection fraction did not reach statistical significance. However, in patients with existing cardiomyopathy, ejection fraction improved by approximately 2.8 percentage points relative to placebo.
Of note, patients with preexisting cardiomyopathy were a pre specified subgroup in the HOPE-3 clinical trial. The findings were also supported by a post hoc comparison to the natural history dataset collected by the Duchenne Muscular Dystrophy Cardiac Care Consortium and led by Dr. Soslow. Now, let me discuss the open label extension data from Year 2 of our HOPE clinical trial. In October, we presented the 24 month HOPE-3 data at the World Muscle Society Congress in Hiroshima, Japan. In the second year, all patients were eligible to be rolled over into an open label study and 82 patients received daramycin for a full year.
Which led us to ask a simple question: What happens when patients on placebo start treatment? In their first year, patients on placebo lost about 2 points on the performance of the upper limb which is consistent with natural history. However, when those same patients started on daramyosil, their decline in their second year slowed to about 0.5 a point. A difference of 1.56 points comparable to a clinically meaningful change observed in the randomized phase of HOPE-3. This also represents a 76% slowing of disease progression from Year 1 on placebo to Year 2 on deramiocel. In other words, disease progression slowed substantially once patients initiated deramiocel treatment.
Importantly, patients who started on daramycin in the randomized portion of the trial lost less than 1 point in Year 1 and maintained a similarly slow rate of decline in Year 2, supporting the durability of the treatment effect. We also compared both groups at 2 years to what natural history would predict for a similar patient population using 2 well-known data sets. By month 24, both groups had declined less than predicted. 3.4 points against the predicted 5.9 points in the group treated from the start. And 3.8 points against 5.4 points in the group that started on placebo. The slide depicting this data is available on our website and the HOPE-3 OLE presentation from the World Muscle Society.
Most importantly, the placebo group had a similar slope of decline to the natural history group until they went on deramiocel. And then the difference was striking. While these open label results are descriptive, they are consistent with our randomized data and support the potential of daramycin to slow Duchenne muscular dystrophy progression. FDA has increasingly recognized the role of real world evidence and has recently approved several products for natural history data played an important role in establishing efficacy. That brings me to the full body of evidence and to its strengths because we know the advisory committee left many people with questions The concern we heard most was fragility.
The worry that a result might depend on a few patients or a single analysis choice. So we put our data to the test. And we shared that work with FDA in terms of these robustness analyses. The answer was clear. The size and direction of the benefit held up across the analyses. For instance, the robustness analyses submitted to FDA ran more than 900 different reanalyses using the HOPE-3 data to answer 1 question How fragile were the results? The analyses addressed multiple questions raised by the FDA and the Advisory Committee, including how missing data is handled, which patients are included, and how progression is defined. If the results were fragile, the benefit would shrink or disappear.
However, in the large majority of these analyses, the result was at or near statistical significance with a p-value of p was or less than 0.05. Across the analyses, the estimated benefit stays centered on about 1 point on PUL 2.0 a level that is clinically meaningful and every analysis favored daramyosil. Not 1 favored placebo. We also included an integrated summary of efficacy or ISE in the major amendment, which brought together data from HOPE-2 and HOPE-3. An ISE is generally included in BLA submission. In the ISE, we analyze the data from our 2 placebo-controlled trials HOPE-2 and HOPE-3, which use the same dosing and the same assessments. With more patients the picture became clearer.
At 12 months, measurement of skeletal muscle function using the same pull measures showed that those patients on placebo, lost about 2 points of upper limb function while the patients on deramiocel lost less than 1. A combined difference of 1.29 points. And a p-value of 0.0087. All 8 sensitivity analyses pointed the same way. On the cardiac side, the integrated analysis of ejection fraction across both trials favor deramiocel by about 2.2 percentage points and the direction held across the sensitivity analysis. Put simply, the data tell a consistent story. 1 year, 2 years, 2 randomized trials, and a decade of clinical experience. All point in the same direction.
We do not believe that this is a case that rests solely on unmet medical need secondary endpoints, or regulatory flexibility. HOPE-3 met its primary efficacy endpoint. The long term data show the same trajectory. The natural history comparison suggests daramycin slows the progression of the disease. Safety continues to be a core strength of this program. Across 3 clinical trials, more than 125 patients with DMD have received over 1300 infusions of deramiocel. More than 80 patients continue in our open label extension studies some for more than 5 years. And deramiocel has been generally well tolerated throughout. Others have reached similar conclusions.
The HOPE-3 results were published in The Lancet, The cardiac data received the American Heart Association's Outstanding Research Award in Pediatric Cardiology. The data were presented at the World Muscle Society and at the Advisory Committee meeting, 26 speakers in the open public hearing urged that deramiocel be made available to people living with DMD. Finally, as many of you may have seen, Dr. Craig McDonald and 27 other Duchenne clinicians and researchers including the HOPE-3 investigators, sent a letter to FDA which they have since made public. In it, they explain why they believe FDA should approve deramiocel based on the strength of the data. Not just the unmet medical need.
Now let me turn to our commercial readiness and manufacturing. Approximately 15,000 people in The US are living with DMD. And we estimate that roughly 2-thirds are ages 9 and older. The population our proposed refined indication would address. Most boys lose the ability to walk by their early teens and from then on, their arms and hands are what keep them independent. There is no therapy approved specifically to preserve upper limb function. HOPE-3 was designed for exactly this group. Including those who are primarily non ambulant, patients who have historically been underrepresented in Duchenne clinical trials. We are continuing our commercial readiness activities in a disciplined way, pacing spend as the regulatory timeline evolves.
Launch planning is underway across all critical functions including distribution, patient support, market access, medical affairs, and physician education. Payer discussions have begun. And we will share more at the appropriate time. In terms of manufacturing, our San Diego GMP facility is up and running and ready to supply an initial launch if deramiocel is approved. Build out of the second floor of our facility is progressing with validation targeted for the first half of 2020. Once complete, we expect this facility to support 2,000 to 2500 patients or up to 10,000 doses per year operating at full capacity. Giving us room to grow based on demand.
Now turning to our dispute with NS Pharma, We continue to pursue our contractual dispute with Nippon Shinyaku and NS Pharma regarding the deramiocel distribution agreement. As we have previously shared, we withdrew our motion for a preliminary injunction without prejudice to resolve the dispute in arbitration following the FDA's decision. And we expect the arbitration period to commence in mid-2027. Our position on the underlying dispute has not changed. We will share more updates on this as they become available. Finally, our pipeline and organization. To keep our resources focused on deramiocel, we have moderated the pace of pipeline work, not directly tied to it. Until we have further regulatory clarity.
As part of that same discipline, we reduced our workforce by approximately 10% in the third quarter to align our organization with our near term priorities. These were not easy decisions, and we are grateful to the colleagues who contributed to Capricor and have gone in different directions now. Outside the U.S., we have initiated regulatory engagement in Europe and Japan, evaluating deramiocel in younger boys with DMD and Becker muscular dystrophy remain an area of focus. With next steps to be informed by the outcome of The US review. We look forward to sharing more about our longer term pipeline vision as the deramiocel review progresses.
And I will now hand it over to AJ to walk through the financials.
Anthony J. Bergmann: Thank you, Linda. As of September 30, 2026, Capricor's cash, cash equivalents, restricted cash and marketable securities totaled approximately $198.5 million No shares were sold under our ATM program this year. And there has been no revenue recognized for the third quarter of 26 or 2025. Turning to operating expenses for the third quarter of 2026 were approximately $44.7 million compared to approximately $20.3 million for the third quarter of 2025. The increase was primarily driven by pre commercial activities and manufacturing scale. Net loss for the third quarter of 2026 was approximately $42.7 million or $0.73 per share compared to a net loss of approximately $24.6 million or $0.54 per share for the third quarter of 2025.
For the 9 months ended September 30, 2026, net loss was approximately $117.3 million compared to approximately $74.9 million for the same period of 2025. We continue, as Linda mentioned, to pace commercial spending to the regulatory timeline and our workforce reduction further aligns our cost structure with our priorities. Based on our current operating plan, we believe our existing cash, cash equivalents and marketable securities are sufficient to fund operations for at least the next 12 months. And with that, we will now open up the line for Q&A session.
Operator: Thank you. Ladies and gentlemen, we will now begin the Q&A session. Should you have a question, please press * followed by the number 1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press * followed by the number 2. If you are using a speakerphone, please lift the handset before pressing any keys. 1 moment, please for your first question. Our first question comes from the line of Leland James Gershell from Oppenheimer. Please go ahead.
Leland Gershell: Great. Thank you very much for the update and taking our questions, and congrats on receiving the award. Just actually a question on the cardiomyopathy data. Wondering, Linda, even though you did not show significance the overall population as evaluated for LDEF in the secondary, but did on the cardiomyopathy subgroup wondering if from the data that you have to date, comprehensively, if you can offer perspective on how long deramiocel could delay the onset of clinical cardiomyopathy in patients who do not yet have it should they begin treatment. Perhaps before they actually have clinical cardiomyopathy? Thanks.
Linda Marbán: Yeah, thanks, Leland. You raised some really important points. I would like to highlight that in the intent to treat population of the HOPE-3 study, which was not designed specifically to evaluate cardiomyopathy, therefore inclusion exclusion criteria were not designed around cardiomyopathy. Approximately 1-third of the patients were healthier had ejection fractions well within the normal range, and you cannot make a healthy heart healthier, so to speak. So in fact, the fact that we were nearing significance in the full ICT population portended the value of the therapeutic and those with And those with cardiomyopathy unequivocally, which was 2-thirds of the population in the HOPE-3 study, unequivocally we saw clinical and statistically significant benefit.
So that is very important to note that in the patients with cardiomyopathy, deramiocel definitely shows a benefit and is similar to the benefit already shown in the HOPE-2 clinical trial. In terms of your very important question, which is, can we delay the progression of cardiomyopathy long term and prevent the development of long term functional consequences. This will require longer term evaluation of these patients in terms of ejection fraction. What we know from our clinical leaders in cardiology, including Jonathan Soslow, who presented the data, that we had a reduction in the amount of scar in the heart. That was evident from pretty early on And what we know is that kids get scarred pretty young.
So if we can get deramiocel to their hearts early, prevent the development of the scar, it is likely that it will delay the progression of the onset or continuation of the cardiomyopathy. And we look forward to having that opportunity both commercially and clinically to continue that program of understanding the cardiomyopathy associated with Duchenne. Alright. that is very helpful. Thanks. Thanks, Leland.
Operator: Our next question comes from the line of Ted Tenthoff from Piper Sandler.
Ted Tenthoff: Fingers crossed, coming up with the PDUFA date, I really hope the FDA sees the value that everybody recognizes in this drug. I know you went through some details with respect to launch prep on the positive outcome what can you tell us in terms of manufacturing supply now and kind of how that will expand going forward. Thank you.
Linda Marbán: Yeah. Thanks, Ted. Obviously, it is been really 1 of the important aspects of our clinical development program was to have come along behind and development of our GMP facility here in San Diego was critical in that. It passed its PLI inspection as the first-floor clean room is ready to go to be able to meet the needs of 250 patients per year or, numbers of doses that are equivalent to that around 1000 doses per year, which is important because remember, patients typically get a dose every quarter, so you can actually have a lot more patients that are treated without hitting that year mark. Our second-floor facility is pretty much built out.
We are going to be finishing clean rooms sort of in sequential order as demand implies. And that facility, as I stated, can meet the needs of about 2500 patients annually and so we do not anticipate that supply will be problem either in early stages of launch or as we continue commercial development If we are lucky enough to get approval in The US we are poised to continue the expansion of our manufacturing footprint into a new facility in San Diego, which we have already tentatively agreed to occupy and build out should the need prevail. Great. Thank you very much. Good luck. Thank you, Ted. Take good care.
Operator: Our next question comes from the line of Kristen Brianne Kluska from Cantor Fitzgerald.
Kristen Kluska: Hi. This is Kristen on for Kristen's line. Thank you for taking our questions here. With the arbitration hearing expected to begin mid-2027, next year. I am just wondering how you see this potentially impacting bringing daramycin to market if approved later this month.
Linda Marbán: So regardless of how the dispute is resolved, we are prepared. Our San Diego facility is operational, as I just mentioned, We are building out patient support, market access, and med affairs. We will share more on our specific commercialization plan. Following the FDA's decision. Obviously, if it is positive, commercialization will become our key focus, and we will have updates to the street. We do not anticipate that the arbitration or it is continuance or conduction will impact our ability to bring it to patients and that is going to be our goal. We want to take care of those boys and young men with DMD. Sounds good. Thanks for that color, Linda.
Kristen Kluska: I have just 1 more from us. With the July inspection, which you indicated that you have already submitted a response, I am just wondering if the FDA could proceed with an approval before formally responding. Just wondering your thoughts on this.
Linda Marbán: Yeah. that is in the hands of FDA. I do not know exactly how they manage it. We have had no further follow-up or questions related to that inspection. We sent in all the requisite documents, they closed out the actual inspection itself. So, in terms of how FDA will manage that information in terms of the timelines of approval is really in the hands of FDA. Alright. Thank you, Linda.
Kristen Kluska: Oh, if I could just sneak in 1 more. I am sorry. If I recall correctly, the FDA previously inspected the San Diego facility in 2025. I am just wondering if you anticipate any additional inspections ahead of the PDUFA date here.
Linda Marbán: Well, the PDUFA date is in 12 days. So they better hurry up if they are going to. No. No. No. I am being a little bit. I am being a little silly. We do not anticipate anymore. I think what we have heard is that they have conducted the inspections that they need to. They have the data that they seem to need, and we have not heard anything. So obviously, we will update the street should anything become clear that they need to do anymore. But right now, we are thinking we are done. Sounds good. Thank you, Linda, and we are voting for you. Thank you. Tell Kristen we said hi.
Operator: Our next question comes from the line of Madison Alsadi from B. Riley Securities.
Madison El-Saadi: Hey, guys. Thanks for taking our question. 1 from us. Would you expect any other cardiomyopathy subgroup data, like the LGE results, to appear anywhere in a potential label even though the focus now is on upper limb or do you think this really even matters in terms of the potential launch Maybe manufacturing is the greater constraint on scaling. Appreciate any color there. Thanks.
Linda Marbán: Thanks, Madison. Yeah. So we are not disclosing the label information at this point. What I can tell you is I am very bullish personally and professionally on the cardiomyopathy data. And whether it is in the label now or will be a future label expansion, it is something that we will update people on later. But that data is good and the patients definitely deserve it. Understood. Thanks for taking our questions, and good luck. Of course. Thanks, Madison.
Operator: Our next question comes from the line of Rick Binkowski from Ladenburg.
Analyst: So the press release mentioned the list of preparations that were being made for the commercial launch, including distribution, patient support, etcetera. And it seemed like it was a pretty comprehensive list for launching a drug solo. So my question is, once we get to the other side of arbitration, what do you see as the role of NS Pharma here And could any of these responsibilities eventually fall on NS?
Linda Marbán: Yeah, thanks for the question. Right now, because the dispute is ongoing and the agreement is written by our interpreter interpretation by our lawyers as nontransactable. We are going into independently in preparation for launch and commercialization of deramiocel without the participation of NS Pharma at this point in any way. Having said that, the arbitration panel, obviously, is important opportunities to direct how things go. And so in the future, if we work with NS, we will definitely disclose that and talk about that. But there is nothing better than being prepared. Right? So we would rather be prepared to go than unprepared. Alright. that is it for me. Thank you. Thank you.
Operator: As a reminder, if you have any questions, please press *. Our next question comes from the line of Catherine Clare Novack from Jones.
Catherine Clare Novack: Hi. Good afternoon. I just curious, in light of response to the cardiac data from HOPE-3, can you give us a sense of what an additional data they saw that maybe FDA did not have access to when they wrote the briefing documents going to the AdCom What do you think the most notable outcome was from AHA's perspective? And then, you know, how many of the IRs or information requests that you have got from FDA were related to anything cardiac? Thanks.
Linda Marbán: Yeah, so thanks for that. In terms of I think there was a totality of the data that drove them. Observation that DMD cardiomyopathy is an important problem and seems to be addressed by deramiocel. I think also, and this is all supposition obviously, but just based on my own experience with thought that the combination of scar data, LGE data, combined with function data was a really powerful tool.
And so, you know, I think it was sort of all taken together terms of the additional data, I think what FDA now has but was not part of the original review is the open label extension data compared to the natural history data, Jonathan Soslow's dataset, and then all the robustness analyses, which were really covered very much by the data, but taken together, it is a much stronger data set showing long term safety and efficacy. In terms of IRs from FDA, was the second part of your question, as I mentioned at the beginning, due to the sensitivity of the review process, we are really not disclosing what communication between Capricor and FDA at this time.
Got it. Well, thanks, Linda. Thank you. Take good care.
Operator: Our next question comes from the line of Joe Pantginis from H. C. Wainwright. Please go ahead.
Joseph Pantginis: Hi guys. Good afternoon. Thanks for taking the question and all the details today. So first with regard to NS, what are the terms to potentially part ways here pending arbitration versus being able to just move on? To potentially find someone else, number 1. And then, obviously, you made some thoughts and required pipeline moves here, but are there any out or ongoing, ISTs with regards to the exosome programs that we can expect to hear, some work or data from.
Linda Marbán: Yeah. So, in terms of NS, we really are focusing now on independent launch and preparation for commercialization. that is going very smoothly, and we stand poised and ready to do an effective launch should we be lucky enough to achieve approval. We are not looking, obviously, for a another partner. I think that if we are lucky enough to achieve separation from NS completely, we will do it on our own. it is a rare disease that and we are perfectly capable at this point in time of doing that. I am I am excited to have a good team in place to do so.
In terms of exosome pipeline opportunities, we are working diligently in the background as you know. We have talked about this for a long time. We have deemphasized the pipeline to conserve cash over time and focus on deramiocel. We continue to do that, although we have pretty exciting opportunities coming along in terms of the exosomes. We are successfully able to manufacture them to clinical and commercial scale now. We have GMP manufacturing of exosome and we have targeting and loading opportunities that we did not have before. So I can tell you that we are still excited about them.
We think that they are the future of drug delivery in many ways and look forward to sharing that as it moves forward. Great. Thanks, Linda. Thanks, Joe.
Operator: Our next question comes from the line of Gubalan Pachayapan from ROTH Capital Partners.
Gubalan Pachayapan: Hi. Thanks for taking your questions. So I wanted to revisit the July AdCom, which voted on cardiomyopathy. Rather than the upper limb indication you are proposing now. So I am just curious, whether during the interactions with the FDA, did they indicate that they can reach a decision using their existing board or whatever advisers they have advisers with? Or do you think there is a chance for a second AdCom focusing on
Linda Marbán: Well, they would have 12 days to organize, conduct, and get AdCom together if they stick with the current PDUFA dates. I do not think that is very likely. They use advisory committees in order to give them information or clarity in topics in which they do not feel they have enough information to render a decision. I think they got a lot of information from the AdCom, We tend to disagree with many of the ways that the AdCom is organized, the question that was asked, which was probably the worst part of the entire decision process for the advisers, was evidenced by their comments made post vote.
And so, no, I do not think that there will be another outcome within the next 12 days, but if there is, I suppose we will be ready.
Gubalan Pachayapan: Alright. Maybe just 1 more, very quickly. Let's just say you received CRL, and then the VA wants you to do another trial. What would you need to see in the FDA's feedback? To justify additional investment And what would the likely timeline could look like? Thank you.
Linda Marbán: Yeah, that is a really important question, and it is 1 that we have been debating internally. If the FDA issues us the CRL, obviously we will very carefully take in the information included in that CRL, and what they ask for, and then we will make the decisions prudently based on if we think that there is a way to establish greater efficacy and or safety in doing another clinical trial. What I can tell you is we believe that deramiocel works to make Duchenne less impactful to these boys and young men in terms of upper limb function.
We have seen it year over year and in multiple clinical studies and many independent peer reviewers have seen it as well. So I am reluctant to say goodbye to deramiocel if it requires some simple clinical work that could further support it. Having said that, internally, we are focusing primarily on approval We believe the FDA has enough data to make a positive decision and look forward to sharing that if and when it comes. Great. Thanks for taking our questions, and good luck. Thanks, Gubalan.
Operator: I will now turn the call over to management for closing remarks.
Linda Marbán: Thank you so much for joining us today. Since the Advisory Committee meeting in July, have submitted the 2-year open-label data from HOPE-3 to FDA. Present a new result at the World Muscle Society and the American Heart Association. The validation of work by our external review has continued to strengthen our confidence in the data. We recognize the urgent unmet need in Duchenne but we are not asking for a pass because of it. We have run this program with rigor and transparency, and we believe the evidence stands on its own.
We are encouraged by FDA's focus on rare disease, including the agency's recently launched Rare Disease Framework Initiative which recognizes the challenge of developing therapies for small, heterogeneous patient populations like Duchenne. We appreciate FDA's engagement throughout this review, and we respect this process. To the Duchenne community, the patients, families, clinicians and advocates, Thank you. Thank you. Thank you. We hear you. And we are working tirelessly to bring daramyosil to approval.
Operator: You may now disconnect. Ladies and gentlemen, this concludes our conference call for today. Thank you for your participation. You may now disconnect.
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