BiQ: 11/25/25 The Deramiocel Debate (CAPR)

With shares of Capricor Therapeutics dropping precipitously over the past few days, there has been a lot of debate and anxiety around whether Deramiocel works. I have seen a few main criticisms circulate on social media and other forums:

1. Sufficient amounts of the drug do not reach diseased tissue.
2. Deramiocel has safety issues due to the CDCs (cardiosphere-derived cells) used in its manufacture.
3. In HOPE-2, PUL v2.0, the primary endpoint of HOPE-3, demonstrated only marginal statistical significance, with a p-value of .04.

Question 1: Does Deramiocel Reach the Diseased Tissue?

First, I'll start by agreeing with critics that prior studies on CDC biodistribution have demonstrated that CDCs have poor cellular retention in target tissues, whether delivered systemically or via direct intramyocardial injection; however, Deramiocel's MOA does not require CDC engraftment to work.

Deramioocel acts via exosome-mediated paracrine signaling, not through cell engraftment. Basically, Deramiocel releases signaling molecules, or paracrine factors, that travel short distances and modify macrophage behavior, switching them from a pro-inflammatory to a cardioprotective state.

This is a very different mechanism of action than, for example, DMD cell or gene therapies, which require engraftment to deliver functional dystrophin to target cells. Deramiocel works through cellular signaling, not direct engraftment. There is no need for the CDCs to engraft with the disesaed tissue.

Question 2: Does Deramiocel Have Safety Issues?

While I cannot predict the results of HOPE-3, the only significant safety issue observed with Deramiocel in the past has been infusion-site hypersensitivity reactions, which have been easily managed. There has been no evidence of drug-related oncogenicity, organ toxicity, or sustained harmful immune sensitization.

Question 3: Will HOPE-3 Meet its Primary Endpoint in PUL v2.0?

Of the three questions, this one is the hardest to answer since we don't know the outcome of HOPE-3 yet. However, let's review what we do know.

In HOPE-2, Deramiocel reached statistical significance in all 3 measured endpoints:

• For LVEF, a measure of cardiac health, Deramiocel achieved a p-value of .002 over 12-months, and p=.008 over the 3-year OLE follow-up period.
• For PUL v2.0, a measure of skeletal health, Deramiocel achieved a p-value of .04 over 12-months; however, this improved to p=.019 over the 3-year OLE follow-up period.

Given that HOPE-3 mirrors HOPE-2's 12-month randomized period, I think the marginal p-value demonstrated in HOPE-2 is a valid concern, and we won't know the answer until we see HOPE-3 results.

However, another factor to consider is that Capricor hopes to pursue a broad label for Deramiocel including both skeletal and cardiac indications. While PUL v2.0 is the primary endpoint for HOPE-3, it is primarily a measure of skeletal health. LVEF, a secondary endpoint in HOPE-3, is also being measured to demonstrate improvement in cardiac health. In HOPE-2, LVEF reached high statistical significance over both 12-month and 3-year timeframes. HOPE-2 also showed significant improvement in statistical significance in PUL v2.0 in the 3-year OLE period vs. the 12-month trial period.

I think there is a non-trivial risk that HOPE-3 may not reach its primary endpoint in PUL v2.0, and investors should consider this carefully. Furthermore, while I believe CAPR's exosome platform also has considerable potential value, it is too early-stage to support the valuation if HOPE-3 fails. I believe the results from HOPE-2 were encouraging, though not definitive, which is probably why the FDA issued the initial CRL. In light of this, if HOPE-3 fails, it is very likely that the share price will drop significantly.

On the other hand, there is also a chance that, even if HOPE-3 does not demonstrate statistical significance for PUL v2.0 over 12 months, it may still show statistically significant LVEF improvement, which could support a potential cardiac indication—even if the skeletal indication is not initially viable. Another option is for the FDA to grant conditional approval for both cardiac and skeletal indications and to require a longer-term follow-up trial, especially in light of the significant improvement demonstrated in the HOPE-2 PUL v2.0 scores in the 3-year OLE period.

The bottom line is we don't know what the outcome of HOPE-3 will be, and it should be considered a binary event in the near term. However, I believe some of the criticisms may be exaggerated, which creates anxiety for investors, especially as the company remains in a quiet period before announcing HOPE-3 results.

Full disclosure: CAPR is not included in the BiQ Active Portfolio; however, I have a speculative long position in my personal portfolio.

CAPR share price at time of publication: $4.56

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