Dive Brief:

• Capricor Therapeutics shares soared more than 300% early Wednesday as investors bet a new study will be enough for the company to win approval of its experimental cell therapy for Duchenne muscular dystrophy.
• The Food and Drug Administration in July rejected Capricor’s initial application for the medicine, deramiocel, saying that more data was needed. After a meeting with regulators, Capricor announced in September that the agency was willing to reconsider its decision with new information from an already completed clinical trial titled Hope-3.
• Now, freshly released results from that Phase 3 trial show deramiocel offers patients “significant skeletal and cardiac benefits.” Importantly, the study succeeded on two main goals, helping preserve both upper limb function and the heart’s ability to pump blood.

Dive Insight:

Capricor far surpassed investor and analyst expectations with its results, according to Cantor Fitzgerald analyst Kristen Kluska. Before the announcement, sentiment was “skewing mixed or low.” Cantor’s discussions with investors found that those who were positive on the stock believed the company’s therapy would succeed in meeting one of the major endpoints, but not both, Kluska wrote in a note to clients.

The latest data represents a significant turnaround for Capricor, whose stock had been battered through much of the year and took a further dive following the July rejection. After closing at $6.36 on Tuesday, shares traded as high as $40 apiece early Wednesday. The settled back down, to hover around $25 apiece, by late morning.

If approved, deramiocel would be the first drug available to treat Duchenne cardiomyopathy, the leading cause of death in patients with the muscle-wasting disease. “We expect many physicians will elect to use this therapy, particularly given a strong safety profile,” Kluska wrote. Prior talks with doctors suggested they were intrigued by the treatment but needed to see more data, she added. “Today’s update provides this.”

The next step for Capricor is to submit a response to the FDA’s earlier rejection letter incorporating the latest data. The company noted its “prior alignment” with the agency on the path forward and its belief that the results should be enough to support approval.

The FDA’s rejection in July took Capricor by surprise and drew the attention of The Wall Street Journal editorial board, which chastised the agency for “torpedoing promising treatments.” The paper criticized FDA official Vinay Prasad, who oversees gene and cell therapies, for pushing out veteran leaders who had helped shepherd deramiocel through the application process.

Deramiocel is derived from special heart cells that have been shown to help preserve cardiac and skeletal muscle function. The drug has the potential to “meaningfully improve the course of Duchenne muscular dystrophy,” Capricor CEO Linda Marbán said in the company’s statement.