Capricor Therapeutics Stock (CAPR) Down Big as FDA Rejects DMD Therapy

Capricor Therapeutics' stock (NASDAQ: CAPR) is reeling after receiving a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) for its Biologics License Application (BLA) for Deramiocel, a cell therapy aimed at treating cardiomyopathy associated with Duchenne muscular dystrophy (DMD).

The news, delivered this morning, sent shockwaves through the market, triggering a significant sell-off and raising serious questions about the future of Capricor and its lead candidate. CAPR is currently down 38% pre-market, having regained some of the earlier losses.

Over the last 12 months, leading into this mornings news, the stock had gained 148%, although the recent trend through 2025 was tempered, with a 23.8% pullback.

The FDA's rejection centers on the agency's assertion that the BLA, as submitted, fails to provide “substantial evidence of effectiveness,” a critical statutory requirement for approval. The CRL also pointed to outstanding issues related to Chemistry, Manufacturing, and Controls (CMC), although Capricor maintains that it had previously addressed most of these concerns in communications with the FDA.

These prior submissions, however, were not fully reviewed due to the timing of the CRL's issuance.

The setback is particularly surprising given that Deramiocel had been granted Priority Review in March 2025, a designation typically reserved for therapies that, if approved, would represent a significant improvement in safety or effectiveness in treating serious conditions.

The BLA was built upon data from the HOPE-2 trial, its open-label extension, and comparisons to natural history data from FDA-funded datasets. Capricor CEO Linda Marban expressed surprise at the FDA's decision, stating that the company had followed the agency's guidance throughout the process and that the review had progressed without major issues, including a successful pre-licensure inspection.

Now, Capricor faces an uphill battle to salvage its BLA. The FDA has offered the company the opportunity to request a Type A meeting to discuss the path forward, and Capricor plans to engage with the agency to determine the appropriate next steps.

The company's strategy now hinges on the upcoming topline results from the Phase 3 HOPE-3 clinical trial, a randomized, double-blind, placebo-controlled study involving 104 patients. These results are expected in the third quarter of 2025.

Capricor hopes that positive data from HOPE-3, combined with existing long-term clinical results demonstrating cardiac stabilization, preservation of skeletal muscle function, and a consistent safety profile, will be sufficient to address the FDA's concerns.

While Capricor's management remains committed to pursuing approval for Deramiocel, the CRL introduces substantial risk and uncertainty into the equation. The company's financial position will also come under scrutiny, as it will need to fund the additional clinical work and regulatory interactions required to address the FDA's concerns.