Capricor Therapeutics (NASDAQ:CAPR) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Summary
Capricor Therapeutics' Biologics License Application (BLA) for Daramyocell is under FDA review with a PDUFA date of August 22, 2026, based on positive Phase 3 trial results.
The company is involved in legal action against NS Pharma and Nippon Shinyaku over a distribution agreement, citing pricing issues as a barrier to patient access.
Capricor Therapeutics is preparing for potential commercialization of Daramyocell, including building a commercial team and expanding manufacturing capacity.
The financial position includes approximately $279 million in cash and equivalents, with operating expenses increasing due to regulatory and manufacturing investments.
Future plans involve expanding Daramyocell's indications and exploring international markets, while developing exosome-based therapeutics for other applications.
Full Transcript
OPERATOR
Ladies and gentlemen and welcome to the Capricor Therapeutics first quarter 2026 conference call. at this time, all participant lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, May 12, 2026. I would now like to turn the conference over to our CFO AJ Bergman for the forward looking statement. Please go ahead.
AJ Bergman (Chief Financial Officer)
Thank you and good afternoon everyone. Before we start, I would like to state that we will be making certain forward looking statements during today's presentation. These statements may include statements regarding, among other things, the efficacy, safety and int utilization of our product candidates, potential regulatory developments involving our product candidates, our future R and D plans, our anticipated conduct and timing of preclinical and clinical studies, enrollment of patients in our clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory inspections, revenue and reimbursement estimates, directed terms of definitive agreements, manufacturing capabilities, our financial position, our possible uses of existing cash investment resources, statements regarding our litigation with Nippon Sinaku and NS Pharma Inc. Including the nature of the dispute, our expectations regarding any legal proceedings and our ability to commercialize Daramycel independent of our existing distribution agreement. These forward looking statements are based on our current information assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These and other risks are described in our periodic filings with the sec, including our quarterly and annual reports. You're cautioned not to place undue reliance on these forward looking statements and we disclaim any obligation to update such statements. With that, turn the call over to Linda Marban, CEO.
Linda Marban (Chief Executive Officer)
Good afternoon everyone and thank you for joining Capricorn's first quarter 2026 earning call to our investors, collaborators, the Capricorps team and especially the Duchenne patient community. Thank you for your continued support and and belief in our mission. We are at a truly defining moment in this company's history and I want to take a few minutes to give you a clear picture of where we stand across our three most important priorities. Our regulatory path to approval, our commercial readiness and our legal action against NS Pharma and Nippon Shinyaku. I'll start with the most significant development. Our Biologics License application or BLA for Daramycel is currently under active review by the FDA with a PDUFA target action date of August 22, 2026 as a reminder following receipt of the complete response letter In July of 2025, we moved quickly and decisively. We submitted our response based on the Hope 3 Phase 3 trial results, which we belief represent one of the most compelling data sets generated for DMD to date. The FDA accepted our response as complete and classified the resubmission as Class 2, resuming its full review of the BLA. There has been a significant number of information requests from the FDA to Capricor, all of which we have been able to provide answers to. We look forward to continuing our active dialogue with the FDA and are looking forward to labeling discussions in the very near future. As this is a BLA resubmission review, there will not be a mid cycle review meeting now. The data submitted as a response to The CRL the Hope 3 data demonstrated statistical as well as clinical significance across a variety of endpoints. To remind you, HOPE three was a pivotal phase three multi center randomized double blind placebo control study that enrolled 106 patients in a one to one randomization scheme. The trial met its primary efficacy endpoint which was the performance of the upper limb, otherwise known as the Pole version 2.0 with an approximate 54% reduction in disease severity at 12 months and a P value of 0.029 as well as all type 1 error controlled secondary endpoints also hitting significance. As the current BLA was for the indication of cardiomyopathy, it was very important that the key secondary endpoint of left ventricular ejection fraction demonstrated an approximate 91% slowing of disease progression in all evaluable patients. Further, in a subset of patients with a confirmed diagnosis of cardiomyopathy, the LVEF effect showed an approximate 120% slowing of disease and achieved a P value of 0.01, further supporting Daramycel's potential to address the DMD associated cardiomyopathy. We are also pleased that we presented additional Hope3 data at the 2026 MDA muscular dystrophy Association Clinical and Scientific Conference, also with the American Academy of Neurology and the American Society of Cell and Gene Therapy being held this week. Two highlights are worth emphasizing. The Duchenne video assessment of each 10 bites measure a home based caregiver captured video assessment of upper limb function. These showed statistically significant improvement in treated patients versus placebo. This is a real world home based outcome measure that directly reflects independence and quality of life. In addition, the cardiac MRI data data demonstrated a significant stabilization in the progression of cardiac fibrosis in treated patients versus placebo fibrosis is cumulative and irreversible. Its attenuation before functional symptoms appear is one of the most clinically meaningful things we can demonstrate. These data will be central to labeling discussions and support the case for early treatment initiation. The full Hope 3 dataset has been submitted for publication in a major peer reviewed journal and we look forward to that publication following acceptance in due course. On safety we have now completed more than 800 intravenous infusions across multiple clinical studies. Daramycel continues to demonstrate a consistent and well tolerated safety profile. Several of our young men in the Hope2 open label extension have been receiving continuous infusions for up to five years with approximately 90 patients in our collective OLE studies. Importantly, the long term safety profile of Daramycel is supported by these five years of open label extension data. This is reassuring for the DMD community as well as supportive of regulatory approval. Lastly, we also expect to be eligible to receive a priority review voucher upon potential approval. PRVs are transferable and can be monetized through sale representing a meaningful potential source of non dilutive capital. We will continue to provide updates to the market on the progress toward the path to approval for Daramycel to treat dmd. Now I'd like to turn your attention to directly address our legal action against Nippon Shinyaku and its US subsidiary NS Pharma, which we announced last week. On May 7, 2026, we filed suit seeking rescission of our US distribution agreement through an expedited process requesting a preliminary injunction that would allow Capricor Therapeutics to distribute Daramycel to patients in either on our own or through other distributors pending FDA approval. Now let me be clear about what drove this decision and why we believe it is both necessary and correct. The core problem is related to pricing. The pricing structure embedded in our commercialization and distribution agreement with NS Pharma contains a fundamental flaw that if left unaddressed, would make it economically impossible to deliver Daramycel to patients covered by Medicare, Medicaid or private insurance providers would face potentially hundreds of thousands of dollars in reimbursement shortfalls per dose. This is not a commercial preference. It is a structural barrier to patient access. We tried to fix the pricing structure, but NS Pharma refused to address the flaw on acceptable terms. After we identified this issue, we engaged in good faith negotiations with senior leaders at NS Pharma to find a resolution acceptable to both parties. But NS Pharma refused to compromise and demanded that Capricor Therapeuticsn agree to a structure that would result in Capricor Therapeuticsn ceding all control of the products. We developed our regulatory relationships and our commercial and brand identity as a condition for resolution. That arrangement was just not acceptable to us. At the point of the CRL in July of 2025, it was clear that NS Pharma failed to continue the commercial investments needed to ensure a successful launch of Daramycel. Upon regulatory approval. NS Pharma did not provide status updates to inform Capricor Therapeutics on their launch planning efforts specific to the commercial interest of daramycel. Patients, caregivers, HCPs and payers. These were core requirements of our partnership that they did not uphold. With the PDUFA date of August 22, 2026 approaching, we could not allow a flawed contractor and a distributor who was unwilling to fix it stand between DMD patients and Daramycel. Every month of delay for boys and young men with DMD means irreversible loss, muscle destroyed, cardiac function permanently diminished, or independence that may never be returned. We did not rush this decision. After exhausting every alternative to address NS Pharma's inaction, we concluded that litigation was our only acceptable option. The FDA review process and the PDUFA Day are unaffected by this lawsuit and as I mentioned earlier, our BLA remains under active review. Capricor Therapeuticsps has hired and continues to hire key individuals to support the successful commercialization of Daramyocell. We have been working to ensure that our commercial readiness and a product launch plan that considers patients, healthcare providers and payers. With a focus on seamless patient access. We are thoughtfully scaling our manufacturing capacity to meet the needs of those patients exiting our clinical trials and in preparation for commercialization. Now, our regulatory pathway is only meaningful when we deliver the therapy directly to patients and that is exactly what we are building towards with the same discipline and urgency we have applied to the science over the past two decades. Now let me walk you through some of the respect the specifics with respect to manufacturing. First, our in house GMP manufacturing facility in San Diego successfully completed its FDA pre license inspection or PLI last year. All Form 483 observations were addressed. The facility is operational and positioned to support initial commercial launch for approximately 200 to 250 patients per year. Additionally, we are also well underway with our expansion to the second floor of that same facility, adding several additional clean rooms at full capacity. This expansion will support treatment of approximately 2000 to 2500 patients per year, roughly 10,000 doses annually. We are staging the build out deliberately. My goal is to have the facility fully validated and approved by the FDA in the first half of 2027 during the FDA review period. We will continue to produce material and increased capacity as we move through 2027. Finally, our primary manufacturing priority will begin stockpiling commercial doses once we have guidance on the label from the fda. Since Daramycel is an ultra cold chain product, it has to be labeled before it is frozen. FDA has been apprised of this and is working with us on a temporary label solution so that we can begin production of commercial doses. Based on current planning, we will have ample product to support our future launch if approved. While the litigation against NS Pharma probably came as a surprise to many of you, we had become increasingly aware that not only was the deal structure impossible from an economic perspective, but they were seriously lagging behind in commercial planning. As I just mentioned, I have guided multiple times that we were building a small commercial team to provide support to NS when they were going to be the sole distributor. Now that we are gearing up to launch on our own, subject to the court's decision, we have accelerated those efforts and are in the process of building a fully functional commercial team. We already have a Senior Vice President of Market Access with significant rare disease experience who is actively preparing the market for Daramycel. In addition, I am pleased to inform you that we have now secured a Chief Commercial Officer who will join us in the next few weeks. This executive brings direct DMD and rare disease commercial experience and will be an integral member of our launch leadership team. We look forward to introducing him to the investment and DMD community shortly. To that end, we are actively working towards approval and commercialization of Daramycel and our current deliverables are to continue to work on hiring key individuals to support the successful commercialization of Daramycel to support patients and their caregivers. We are building to ensure commercial readiness and a product launch plan that considers all With a focus on seamless patient access across all payer segments, we are rapidly building the physician education and disease awareness infrastructure required to support responsible and rapid adoption consistent with our expected label and other rare disease patient populations. And lastly, the building of our patient support and distribution services is underway with a strong commitment to patients and their families while enabling access across all channels for as many eligible patients as possible. The DMD community is small, defined and engaged and we know who the prescribers are now turning to our pipeline. Over many years, Capricor has been focused on translating the science of Daramycel into a potential commercial therapy, marshaling the majority of our resources to advance it from discovery to this pivotal stage, we have developed deep expertise in product development, manufacturing and clinical development. While we are proud of these accomplishments, pipeline expansion has not been our first priority. However, we have worked at a slow but steady pace in developing exosomes as therapeutic agents, taking advantage of their biological role as cellular delivery vehicles. We continue to explore and develop opportunities for pipeline expansion with CDC based exosomes and our patented Stealth-X technology made from HEK293 cell exosomes and now being used in vaccine studies in collaboration with the National Institutes of Allergy or Infectious Disease for Covid prevention. It is important to note that has been a lot of instability in vaccine development over the past year and so this program has moved a bit more slowly than originally planned. However, the most important milestones were reached which were manufacturing of clinical grade vaccine exosomes and an approved CMC from FDA for large scale manufacturing as well as showing that an exosome based vaccine is safe. We are moving away now from vaccine development at this time and will focus on developing therapeutics with both classes of exosomes. We are actively presenting and publishing our rapidly expanding pipeline of exosome based therapeutics and look forward to providing updates on the clinical development program as they become available throughout this year. In terms of life cycle management of Daramyocell, we have spent 20 years developing our therapy and now will be actively looking to expand it to other indications. Our first target will likely be expansion to the younger DMD patients we are working on now. In addition, we plan to initiate the clinical pathway for Becker Muscular Dystrophy, which we plan to begin discussing with the FDA immediately following PDUFA for dmd, expansion of Daramycel outside the United States is also underway and we expect to meet with the EMA and PMDA later this year. We believe daramycella should be available to all patients worldwide and that will be a goal that we actively work towards this year. In addition, we're evaluating opportunities in other rare neuromuscular diseases where inflammation and fibrosis are the primary pathologies. And now with that I will turn the call over to AJ to review our financial results. AJ thanks Linda.
AJ Bergman (Chief Financial Officer)
As of March 31, 2026, we maintained a strong balance sheet with approximately $279 million in cash, cash equivalents and marketable securities. We believe our current capital is sufficient to fund anticipated operating expenses and capital expenditures into the fourth quarter of 2027. That expectation excludes potential product revenue or a priority review voucher monetization. Upon potential approval, there was no revenue recognized for the first quarter of 2026 or 2025. Our total operating expenses for the first quarter of 2026 were approximately 36.8 million, compared to approximately 25 million for the first quarter of 2025. The increase was primarily driven by continued investment in clinical, regulatory and manufacturing activities, as well as infrastructure expenditures supporting our Duchenne program. Net loss for the first quarter 2026 was approximately 33.9 million or $0.59 per share, compared to a net loss of approximately 24.4 million or $0.53 per share for 1Q25. Our operating expense profile reflects a calibrated investment across our three priority areas of regulatory and clinical activities in support of our BLA. Manufacturing capacity expansion and commercial infrastructure buildout all align with our path towards potential approval and our balance sheet provides the Runway for us to execute with that Operator let's please open up the line for questions.
OPERATOR
Thank you ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one. 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 the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Leyland with Oppenheimer. Please go ahead.
Leyland
Thank you. Linda. As we continue to digest the news on the lawsuit, wondering if you could share more color? Nippon Shinyaku, a large company with many products, but NS Pharma is a much more focused company with one product which is for tradition and is complementary to Daramycel. So they would seem to be very well set up to enter the market with your product and would be motivated to do so given the, you know, the money to be made. So I'm just curious if you could share more color or insight on your discussions with NSFarma as to their reluctance to move at all toward what could be a resolution that would enable Daramycel to be sold in such a way that the ASP based pricing would, you know, work for the system. Again, given that, you know, NS Pharma would not be able to have any return on Daramycel until that's worked out in the follow up. Thank you.
Linda Marban (Chief Executive Officer)
Thank you, Leland. I think that was your longest question ever, so I appreciate the clarity and the depth to which it's gone. So, you know, the answer is a little bit of a head scratcher for us as well. You know, as I've been guiding since the filing filing of the suit on May 7th. We actually entered negotiations with them regarding this very issue in March of 2025. So it's been over a year that we went back and forth and proposed a variety of solutions that we believed and several sets of lawyers, including some of the lawyers that represented NS Pharma, believed would be a reasonable structure that would allow us to keep the economics essentially in place. You know, the way that they had been divided in the original agreement. We don't have a clear answer as to why they were so intransigent on accepting any of these other opportunities. But what I can tell you is that within about one week before we filed the suit, they confirmed by email that the structure that they proposed, which essentially eviscerated Capricorn's brand and Daramycel in future indications, was the only structure that they would accept. So they really left us with no options. Now, having said that, while we would never break an agreement that was being enacted upon appropriately, this gives a great opportunity for capricorp to become the distributor of Daramycel. And I think all of you know how passionate we are about Daramycel spending nearly 20 years, more than 20 years developing it. We know the patients, we know the community, we know the doctors, we know the networks. And so I'm excited by this opportunity as well as respectful of the terms of the original agreement which are no longer applicable.
Leyland
In your statements you said that Capricorn determined that this would be a non viable pricing structure. Do you have evidence or admission on NS Pharma's part or nipponschinaku's part that they also did not, they were not aware of the implications of this when they signed the agreement?
Linda Marban (Chief Executive Officer)
Well, I'm assuming that they didn't know the implications of it because they signed the agreement. So I think what, you know, I don't know what was in their head or, or, you know, most people don't typically go into a agreement that is non transactable if they know that there is, you know, sort of a killer clause in there. Having said that, you know, we were all made aware of this problem based on the ASP at the exact same time by an independent consultant in the field. So we know that they knew that this was a problem, as I said, starting from March 2025. So there's definitely not an ignorance is bliss kind of opportunity here.
Leyland
All right. And lastly, in terms of your planning for commercial, so you know, you're getting, you're getting going, you do have, you know, a few months until a presumed approval. But you know, most companies would be well ahead of that in terms of, you know, time, time to market for these various preparations. Could you maybe share kind of where you expect to be assuming approval in August in terms of launch readiness relative to where you one would ideally be, you know, to be launching a rare disease product to Tervisil. Thank you.
Linda Marban (Chief Executive Officer)
Yeah, so thanks Leland. So I think I've stated pretty clearly that we were very disappointed with NS Pharma's approach to launch planning over the past few months, especially since the CRL, they had stated that they were putting pencils down. They didn't pick them back up theoretically again until March of this year. Just a few months ago. They were egregiously behind in some of the very critical launch activities which typically take place 12 to 18 months before and also, you know, paved the way whether or not you have responses from fda. Having said that we at Capricor new launch was coming. I have been laying the groundwork quietly behind the scenes for many months now. We're building out not only a commercial team with a newly hired chief commercial officer, but we've been working on market access, advocacy, planning, the patient journey, the product journey, getting a distributor which we believe that we'll be able to secure very quickly. And so I have high hopes for a very strong launch. Most importantly, we have nearly 100 open label extension patients that we will be actively working to get over to commercial product and working with the payers to do so. And we remain committed to providing Daramycel to as many eligible patients as is possible as soon as possible. Post pdufa.
Leyland
Thank you.
OPERATOR
Thank you. Your next question comes from Ted with Piper Sandler. Please go ahead.
Ted
Great. Thank you very much and appreciate all the color on the priorities to get approval, launch and then the lawsuit. I have a question, just sort of what the steps are from here with respect to the lawsuit. I know you mentioned that you had requested an expedited lawsuit or I forget the exact word you used. How does that play out and if it should go past PDUFA approval or PDUFA or the approval comes ahead of the PDUFA, you're in a position where you're manufacturing the drug and you're putting your own sales force in place so you're just going to launch it yourselves. Is that accurate?
Linda Marban (Chief Executive Officer)
So our current plan is to launch Daramycel. Yes, we have the drug. Yes, we manufacture it. And that is what we're working towards here at Capricor Therapeutics. In terms of the timing it is dependent upon the court for which we have very little. In fact, we have no control. Having said that, the reason our lawyers filed a motion for preliminary injunction was they typically act very quickly on those and will give us some guidance and hopefully will be heard on an expedited basis. We can't provide any other details on the litigation, but what we can tell you is that my plan now is to distribute Jeremiah Cell on time and well thought out and strategic fashion while this is continuing either in the background
Ted
or has been resolved. Great. Well, I wish you all the luck because I do think this drug is best served to patients in your hands. So thank you for that update.
Linda Marban (Chief Executive Officer)
Thank you, Ted.
OPERATOR
Thank you. Your next question comes from Kristin with Cantor. Please go ahead.
Kristin
Hi, good afternoon, everybody. Thank you for the questions and for all the transparency today. So when the press release first came out last week, I think some investors initially read it as they weren't preparing for a commercial launch appropriately because they didn't have conviction in an approval. But then on the other hand, you know, myself and others read it as well. If they truly believe that they would happily just give the Daramycel back to you and move on their way, I guess. Can you just clarify that in no way is this in your opinion based on them lacking conviction in an approval?
Linda Marban (Chief Executive Officer)
Yeah. Thanks. You know, that sort of is icing on the cake in the sense that we were disappointed in the progress they were making. We believe that it shows a lack of belief in Dera Miacel from their perspective and a lack of focus on their part. Having said all that, that would not have been the foundation nor the basis of an action at this point. We would have tried to work with them. And I think as I guided and have answered in a previous question, we would have just shadow boxed behind them with our own commercial efforts, you know, trying to support and help them get this to patients as quickly as possible. I think all of you know that we have, you know, great connections within the Duchenne space and relationships with patients and advocates and providers. So no, the foundation of the lawsuit is really this contractual basis which really gives us good potential evidence for rescission, which is a decision that each party sort of went about the contract in good faith, it didn't work out, and everybody goes back to square one and does their own thing, which would then allow us to have the rights back and we would be, you know, fully engaged as the sole distributor of Daramycel. But, you know, stay tuned. We don't have any answers from the court yet. Obviously this is material. So we will provide updates as soon as they become available.
Kristin
Okay, thanks, Linda. And then maybe just on the review side, you made the comment. Sorry, you made the comment that you're nearing potential labeling discussions. Seems a little bit quick. It's usually like a month or two before the PDUFAs. I recognize we're three months out here. So is that just kind of based on the trajectory of the questions that you've been getting? Have they told you one way or another whether these labeling discussions are happening? And then again, appreciate the transition transparency around the information requests FDA has been giving you. Can you just provide more color? Is that on like understanding the data? Anything specific you can give us there? Thank you so much.
Linda Marban (Chief Executive Officer)
Yeah, so thanks, Kristin. It's always a pleasure to hear from you. So my regulatory lead advises us that, you know, information about labeling should be coming within the next few weeks. We are already in an interim labeling conversation with them because as I mentioned in my prepared remarks, when you use an ultra cold chain product, you have to put a label on before you freeze it. We want to start stockpiling for commercial so they know that this is something we're interested in and working on. And we look forward to providing updates as those labeling conversations come to fruition. In terms of the information requests, they have been quite prolific coming from the CMC side, most of them sort of standard form types of things asking for extra data or asking for extra clarification on the clinical side and the statistical side as well, additional data clarification when analyses were done, blinding protocols, that kind of information that you would expect FDA to be digging into at this time. So we remain very optimistic about the review process for Daramycel and dmd.
Kristin
Thanks, Linda. All the best.
Linda Marban (Chief Executive Officer)
Thanks, Kristin. Take care.
OPERATOR
Thank you. Your next question comes from Madison with B. Riley securities. Please go ahead.
Madison
Hi, thanks for taking our question. Maybe a couple from us. Maybe could you help us understand any commercial readiness activities that you have either started or plan to start rather that were previously being conducted by your partner? For example, payer discussions, has Capagor engaged
Linda Marban (Chief Executive Officer)
any third party logistics distributors, things like that, and then maybe a follow up afterwards? Yeah, Madison, absolutely. Great to hear from you. Yeah. So as I mentioned, because we were concerned about the speed and efficiency at which NS was going about commercial planning, we were shadow boxing behind them the whole time. So yes, we have a 3 PL identified. We can enter into an independent contract with them and that we're in the process of doing that at this time. Most of the other parameters of launch preparation were being either bird dogged by Capricorps or in fact led by Capricorn. So there's not really any areas right now that we've identified where NS had really taken the lead and we were sort of running behind or need to play some catch up ball. My general hunch is that we're up to speed and moving as quickly as possible with PDUFA coming right up.
Madison
Got it. Understood. And then on the, I guess interim label related to the cold storage. So if you're able to manufacture around 250 valves doses per year currently, do you have a sense of how many you could complete between finalizing that interim label and the actual PDUFA date? Thanks.
Linda Marban (Chief Executive Officer)
Yeah, we haven't disclosed that number. We are actively working now starting to prepare for commercial manufacturing. The lag in time will be that each lot has to be reviewed and approved by fda and we expect to do that, you know, prior to and getting ready for launch. And so what's most important is we will not delay dosing on any level of our open label extension patients and we will continue to make sure that we provide access to them and have no plans on delaying based on commercial manufacturing. We're up to speed there. Just one quick correction. It's 200 to 250 patients who each receive four doses. So it will be 1,000 doses per year from our downstairs facility here in San Diego.
Madison
Got it. Thanks for that clarification.
Linda Marban (Chief Executive Officer)
You're welcome.
OPERATOR
Thank you. Your next question comes from Michael with Maxim Group. Please go ahead.
Michael
Hey there. Thank you so much for taking my questions today. And I mean, lots of interesting stuff going on here. I would like to see if you could just provide a bit more color on what the basis for a suspension or an injunction of the commercialization agreement would be and then if there's any sort of precedent for a court issuing an injunction to allow the manufacturer to distribute the drug while the intellectual property or the some sort of licensing agreement is under dispute.
Linda Marban (Chief Executive Officer)
Yeah, thanks. Those are really clear questions. I'm going to take the second one. I might ask you to repeat the first one because the second one was kind of, you know, intense. So. Yeah, so there are precedent cases of rescission? Not exactly. Similarly, where you have in a product, a drug product that is allowed to be manufactured and distributed while the other one is not able to. Part of the reason for that is the structure that NS proposed to us has literally never been done in US Biopharma. It's only been done in generics once the drugs are off patents. So a Patented product has never been type of agreement that NS had proposed. Our current plan is, you know, to continue to wait to hear the results of the injunction. Typically in situations like this where the drug is, you know, potentially life saving, life extending, or certainly disease modifying, the lawyers think that the courts pretty much would not stop the distribution of the drug because of the need by patients. And we provided up to five affidavits with our lawsuit from patients and physicians stating that their micel should be available to patients regardless of who distributes it because of its importance to patients. So we don't anticipate being shut down on that level. And we look forward to the results of the preliminary injunction and also to potential rescission. That was your second question. What was your first one again, Michael?
Michael
I'm sorry, I forgot. Hi there. I'm not sure if you can hear me. I think my connection might be a little bit bad here. But I just, I think you actually answered the first part of that question with the second part of the question. So I think we're clearing that up.
Linda Marban (Chief Executive Officer)
Well, I'll take it as a two for one special.
OPERATOR
Thank you so much.
Katherine
Thank you. Your next question comes from Katherine with Joan. Please go ahead. I guess, you know, can you expand on the definition of the private label distributor? You know, what would that entail for Capricor? Whether this would, in your view, constitute a breach of contract on their part? So we don't have a private label distributor agreement in place. We never did. The agreement that we have in place was a sales, marketing and distribution agreement. And the foundational aspect of it which has led to this lawsuit, is the transfer price that was originally built into the deal where NSFARMA would give Capricor a portion, and just a portion by the way, of the cost of goods sold (COGS) in order to defray expenses. And then NSFARMA would take X number of doses, distribute them, and then give us back our share of the royalties minus that small transfer price. So pretty, pretty clear opportunity seemed like a rational deal structure at the time. Except this transfer price would then set the average sale price, which would be disastrous, as I've said many times.
Linda Marban (Chief Executive Officer)
So there is no PLD relationship or
Katherine
agreement in place and therefore there's no breach. The problem is that we can't agree on the structure. They want a PLT and we would have liked a co commercial agreement. Okay, got it. And then I recall there were some milestone payments that they were owed that were owed to you on approval. They're unwilling to walk away from the contract. You know, are they still required to pay those milestones. What happens if they choose not to? You know, if the lawsuit is going on so well and I'm not a
Linda Marban (Chief Executive Officer)
lawyer, so I will say that please, you know, take my answers not from the perspective of a lawyer, but from the CEO guiding the company through this very challenging but exciting time. And so what we have been made to understand from the lawyers is that the agreement as a stand is non transactable. That means everything in the agreement is at this point not not able to be acted upon. So we are assuming that they're not going to be paying the milestones. We're not expecting them to pay the milestones. And in fact, you know, one of the things that we have actively considered is if there is rescission, we will probably pay them back the $50 million that they've paid us in initial upfront payments and then the two milestone payments. So we're ready to do that. Happy to do that actually, if that becomes necessary and we're not expecting any future payments from them at this time.
Katherine
Got it. Thanks. Thank you.
OPERATOR
Your next question comes from Matthew with AGP Global Partners. Please go ahead.
Matthew
Hey guys, thank you for taking my questions. So first is 60 million kind of a fair estimate of what would need to be paid back to NSFarma in the event that both of you guys just kind of shake hands, you know, as you put it, divorce and walk away. Or would it maybe be a little bit less? I know they've already paid you the 50 million, so color on that would be great.
Linda Marban (Chief Executive Officer)
We're expecting that if we have to pay something back, it would be the $50 million. But we don't know, we don't know what agreement we're going to come to. We don't know what the court is going to say. We stand ready to do so certainly if that becomes part of the ruling in the case.
Matthew
Understood. And then just pivoting a little bit to the opportunity in Becker. If you could give us just an idea of the market size, what your work already has been in reaching out maybe to patients or providers for becker and the Sevasem 10, it's in phase three clinical studies right now for Becker. Would Daramycel be an additive onto this potentially approvable drug? And has that been something that you guys have been looking into in Becker?
Linda Marban (Chief Executive Officer)
Yeah, so we're very much looking forward to the opportunity in Becker. Muscular dystrophy. I've been kind of eyeballing it for a bit. You know, the pathophysiology of Becker is literally identical to dmd, it's just the slower progressor. The primary cause of death in those men with Becker is the cardiomyopathy. And our cardiology key opinion leaders tell us that if you give them an MRI of a Becker patient and of a Duchenne patient, you can't tell them apart. So we have a drug that treats the cardio as well as the skeletal muscle myopathy and therefore think it would be ideal for Becker. The market size in the US is about 5,000 patients per year. So I think it's considered an ultra rare group and it's a very slow progressor. So, you know, I have some idea of what I'd like to go after with fda. One of my first goals post PDUFA will be to meet with them on Becker. The reason that I'm waiting until after PDUFA is strategic because we qualify for a PRV and for a prv, a priority review voucher, you have to be treating solely a pediatric condition. So I don't want to sort of cloud it with an adult based disease until we have clarity on our PDUFA ferduchenne and get our PRV and are able to use that to provide a source of non dilutive capital to the company.
Matthew
Great, thanks. And just on the seven centen question, very quickly. Yeah. Is that something you guys are looking at or you know, is that part of the plan?
Linda Marban (Chief Executive Officer)
Yeah, we feel like Jaramyosol is additive to literally any of the other products that are on the market right now or could be on the market in the clinical evaluation stage, given if it's activity, bioactivity and efficacy in the heart. And that's in patients by the way, with a diagnosed cardiomyopathy, not just healthy hearts. And then in addition to that, the ability to control inflammation and fibrosis can only help those other therapies be more effective. So we look forward to partnering with the other drugs that will become part of the polypharmacy to treat DMD and of course Becker in the future.
Matthew
Great. Thank you guys for taking my questions and best of luck going forward.
Linda Marban (Chief Executive Officer)
Thanks Matthew. Have a good day.
OPERATOR
Thank you.
Boobalong
Thank you. Your next question comes from Boobalong with Ross Capital Partners. Please go ahead. Hi, good afternoon and thanks for taking more questions. So maybe a couple from us. Firstly, I wanted to start or maybe delve a little deeper between ML, MFP and asp. So maybe can you provide some context in terms of what the difference between average selling price and the maximum fair price for a drug like Daramisol or maybe for rat disease drugs in general.
Linda Marban (Chief Executive Officer)
Yeah, we haven't really been disclosing any
Boobalong
of that information yet. We're still working on gathering that information. As I said, you know, we are working now actively to build our commercial planning strategies. And so please stay tuned for more information on asc, mst, that kind of thing as it comes available.
Linda Marban (Chief Executive Officer)
All right. And then I think somewhere in your press release it states that NS Pharma demanded that Capicor give up the control of regulatory relationships. So my understanding is that NS Pharma is brought in to sell, market or distribute their amiacel in the hospital setting. So why are they heavy handed on regulatory relationship? Because it looks like, I mean, I don't know whether they just wake up one day and decided to meddle in regulatory aspects of the army sale as well. So maybe any color on that?
Boobalong
Yeah, so it was really a situation where.
Linda Marban (Chief Executive Officer)
Oh, the AJ can take this question.
AJ Bergman (Chief Financial Officer)
Yeah, I think they were focused. Thanks Babalin. On with respect to the PLD that they were looking to propose for us. Some of the regulatory relationships would fall under the guise of that potential agreement, which of course we're not comfortable with. So that, that's, that's kind of the root of your question, I believe. And so that that's fundamentally one of the reasons why of course, it didn't work for us.
Boobalong
And then maybe one last, I think somewhere in the 8K it says that although the distribution agreement is no longer binding, blah, blah, blah, and then the distributor may interfere with Capricorn's relationship with third parties. So I just feel that this text, it appears, you know, nsfarm has been in the driver's seat throughout the process and Capricorn is playing a defensive game even though, you know, Capricorn is the innovator of the drug. So curious, you know, why? If the distribution agreement is no longer binding, where does the concern of interference come from?
Linda Marban (Chief Executive Officer)
Yeah, first of all, we don't feel like we're on the defensive. We feel like we're equal weighted partners that were actively interested in commercializing Daramycel together, each of us playing to our individual strengths. Unfortunately, that relationship is no longer possible based on the existing agreement. And we're prepared now to launch on our own in terms of interaction with vendors. Of course, in an 8K, it's incumbent upon the company to put forth all of the potential risk factors. Boots on the ground. We haven't really had any problems with any vendors. In fact, they like working with us. We're efficient, we're smart, we're well informed and strategic. So in practice, we're not seeing any problems with vendors. In theory, if one occurred, we would just find a different vendor to work with. There's, there's lots of different vendors out there to take advantage of for commercializing a product.
Boobalong
All right, thank you. Have a great day.
OPERATOR
Thank you. Your next question comes from Michael with Maxim Group. Please go ahead.
Michael
Hey there. Sorry I got bumped off there before. I just had one follow up. I wanted to ask. You seem to be making great progress on prepping a commercial for us. But. But there's a pretty quick time window that you have before the PDUFA date. So my question is first, are you expecting that you will be able to hit the ground running, assuming this gets approved right on time and launch shortly thereafter? And then what gives you confidence that you will be able to build a salesforce capable of addressing this market?
Linda Marban (Chief Executive Officer)
So take the second part first. The sales force becomes a relatively easy question to answer. In a rare disease, especially like Duchenne, with a very connected set of patients, physicians, providers, it really becomes less about, you know, getting a big sales force. So we're not going after adult heart disease, but what we are going after is efficiency. And so I have a lot of confidence that we'll be able to build a good sales force. We have a good reputation in the community and get it out there in terms of the distribution of Dara Micel, we are the ones that have been getting ready to do so. We expect that we will launch in a time efficient manner. We hadn't announced date for launch and by the way, neither had ns, so we're not gearing or guiding towards an actual launch date as yet. We're working towards pdufa. We're guaranteeing drug in an uninterrupted format to the open label extension patients and perhaps other patients as the information becomes available. And we'll update the street on our potential launch data as we get some clarity there.
Michael
All right, thank you very much and best of luck. I think it's abundantly clear to anyone who's seen the data just how important getting access to this is as quick as possible.
Linda Marban (Chief Executive Officer)
Thank you so much, Michael. That means a lot. We feel the same way.
OPERATOR
Thank you. I will now turn the call back to Capricorn Management for final thoughts.
Linda Marban (Chief Executive Officer)
Yeah. Thank you again for joining us today and for your continued support again for the boys and young men living with Duchenne and their families who have waited alongside them. We are eagerly anticipating the approval of Daramycel to treat dmd. The science is strong, the data are strong and before the fda, and we are wholly focused on ensuring that when approved, will be made available to every eligible patient as quickly and as broadly as possible. For our investors, the thesis is straightforward. A potential first in class approval in defined rare disease populations, proprietary in house manufacturing, a growing pipeline and a leadership team with the conviction and capital to execute. We believe that we are building something that will create meaningful value for patients and for this company and for shareholders who have believed in this mission. We look forward to a transformational summer. Thank you.
OPERATOR
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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