变量
美国
证券和交易委员会
华盛顿特区20549
表格
根据1934年证券交易法第13或第15(d)条规定的季度报告 | |
截至季度结束 | |
或 | |
根据1934年证券交易法第13或15(d)条款的过渡报告 | |
过渡期从 到 | |
委托文件编号：001-39866
（收录于其章程中的准确注册人名称）
（国家或其他管辖区的 | （纳税人识别号码） |
（总部地址，包括邮政编码）
(
(注册人电话号码，包括区号)
根据证券法第12(b)条注册的证券：
每种类别的证券 | 交易标志 | 名称为每个注册的交易所: | ||
该 |
请在以下方框内打勾：(1) 在过去的12个月内(或者在注册公司需要提交此类报告的较短时期内)，公司已经提交了根据证券交易法1934年第13或15(d)条规定需要提交的所有报告；以及 (2) 在过去的90天内，公司一直受到了此类报告提交的要求。☒
请在以下方框内打勾：公司是否已电子提交了在过去的12个月内（或者在公司需要提交此类文件的较短时期内）根据规则405 of Regulation S-T(232.405章节)所要求提交的每一个互动数据文件。
请在交易所法规则120.2规定的“大型加速申报人”、“加速申报人”、“小型报告公司”和“新兴成长公司”的定义中选中相应选项。
| 大型加速报告的提交者 | ☐ | 加速报告人 | ☐ |
| ☒ | 小型报告公司 | ||
|
| 新兴成长公司 |
如果是一家新兴成长型公司，请在核对标记内指示公司是否已选择不使用从根据证券交易法第13(a)条提供的依据进行遵守任何新的或修订的财务会计准则的扩展过渡期。 ☐
请勾选以下项目，指示注册人是否为壳公司（在证券交易法案规则12b-2中定义）。
截至2024年11月13日，
关于前瞻性声明的特别说明
本季度报告（表格10-Q）包含根据1933年证券法第27A条及1934年证券交易法第21E条修订版的前瞻性声明，这些声明涉及重大风险和不确定性。前瞻性声明通常与未来事件或我们的未来财务或运营表现有关。在某些情况下，您可以通过这些声明包含的词语如“可能”、“将”、“应该”、“期望”、“计划”、“预期”、“可以”、“打算”、“目标”、“项目”、“考虑”、“相信”、“估计”、“预测”、“潜在”或“继续”以及这些词的否定形式或其他类似的术语或表达来识别前瞻性声明，这些都是关于我们的预期、策略、计划或意图的。此季度报告（表格10-Q）中的前瞻性声明包括但不限于关于以下内容的声明：
| ● | 我们预计要维持资金流动性以支持我们计划的运营水平以及我们获取额外资金从事业务的能力需要多长时间 |
| ● | 我们药物和疫苗候选品的开发，包括我们预计何时进行、启动和完成临床试验。 |
| ● | 我们对研究和开发项目的期待、计划、预测、启动、时机、进展和结果，包括临床前研究、任何临床试验、人道使用、研究性新药申请、临床试验申请、新药申请、生物制品许可证申请及其他监管提交; |
| ● | 涉及产品和我们设施的监管发展，包括获得监管批准或将产品上市的能力。 |
| ● | 我们的药物和疫苗候选品的监管状况，包括我们获得和保持孤儿药物、罕见儿科和再生医学先进疗法的指定的能力，针对我们的首席产品候选品deramiocel（也被称为CAP-1002）； |
| ● | 我们在美国和美国以外国家获得产品批准的能力; |
| ● | 我们利用临床研究中心、第三方制造商和其他承包商； |
| ● | 我们生产和保持足够库存以满足商业需求的能力； |
| ● | 我们能否找到研究、开发和商业化潜在产品的合作伙伴，并保留产品候选者在合作中的商业权利； |
| ● | 我们是否能够为临床和商业用途生产产品； |
| ● | 我们是否能够获取生产产品候选者所需的材料； |
| ● | 我们保护专利和其他知识产权的能力; |
| ● | 我们筹集额外融资的能力和任何额外融资的条款; |
| ● | 我们推广任何产品的能力; |
| ● | 实施我们的商业模式和业务、技术及产品候选品的战略计划; |
| ● | 我们对费用、持续亏损、未来营业收入、任何商业产品未来报销价格和资本需求的估计； |
| ● | 税收对我们业务的影响； |
| ● | 我们与其他公司和研究机构竞争的能力; |
| ● | 我们扩大国际业务的能力； |
| ● | 潜在战略交易对我们业务的影响； |
| ● | 医生、患者或付款方对我们产品的接受程度以及产品候选者的可获得性保险； |
| ● | 吸引和留住关键人员的能力；和 |
| ● | 我们股价的波动性。 |
我们提醒您，上述前瞻性陈述并未涵盖本季度报告（10表格）中所有的前瞻性陈述。 - Q.
您不应将前瞻性陈述视为未来事件的预测。我们在本季度报告（10-Q表格）中所作的前瞻性陈述主要基于我们的当前预期和预测。
3
关于可能影响我们业务、财务状况、运营业绩和前景的未来事件和趋势。这些前瞻性声明描述的事件结果受风险、不确定性和其他因素的影响。此外，我们在一个竞争激烈且充满挑战的环境中运营。新的风险和不确定性不时出现，我们无法预测所有可能影响本份《10-Q表格季度报告》中包含的前瞻性声明的风险和不确定性。我们无法保证前瞻性声明中反映的结果、事件和情况将会实现或发生，实际结果、事件或情况可能会与前瞻性声明中描述的不同。另外，最终数据可能与本文档中报告的初步数据存在重大差异。
本份《10-Q表格季度报告》中所作的前瞻性声明仅涉及声明发布之日的事件。我们不承担义务更新本份《10-Q表格季度报告》中所作的任何前瞻性声明，以反映本份《10-Q表格季度报告》发布日期之后发生的事件或情况，或反映新信息或意外事件的发生，除非法律有要求。我们可能实际无法实现我们在前瞻性声明中披露的计划、意图或期望，您不应过分依赖我们的前瞻性声明。我们的前瞻性声明不反映任何未来收购、合并、处置、合资或投资可能产生的潜在影响，如果有的话。
本份《10-Q表格季度报告》还包含基于独立行业出版物或其他公开可获取信息以及我们内部来源的数据、估计和预测。尽管我们相信本份《10-Q表格季度报告》中提及的第三方来源可靠，但我们尚未独立核实这些第三方提供的信息。虽然我们并不知晓本报告中呈现的任何第三方信息存在任何错误陈述，但特别是有关预测的估计涉及大量假设，受风险和不确定性影响，并可能根据各种因素变化。
4
第一部分——财务信息
项目 1. 基本报表。
CAPRICOR治疗公司，INC。
简明合并资产负债表
资产 | ||||||
| 2024年9月30日 |
| ||||
(未经审计) | 2023年12月31日 | |||||
流动资产 | ||||||
现金及现金等价物 | $ | | $ | | ||
有价证券 |
| |
| | ||
应收账款 |
| |
| | ||
预付费用及其他流动资产 |
| |
| | ||
总流动资产 |
| |
| | ||
房地产和设备，净值 |
| |
| | ||
其他资产 |
|
|
|
| ||
租赁权使用资产，净额 | | | ||||
其他资产 |
| |
| | ||
资产总计 | $ | | $ | | ||
负债和股东权益 | ||||||
流动负债 |
|
|
|
| ||
应付账款和应计费用 | $ | | $ | | ||
租赁负债：流动 | | | ||||
递延收入，流动 | | | ||||
流动负债合计 |
| |
| | ||
开多期债务 |
|
|
|
| ||
CIRm 负债 | | | ||||
租赁负债，减去流动部分 | | | ||||
长期负债总额 |
| |
| | ||
负债合计 |
| |
| | ||
承诺和或有事项(注6) |
|
|
|
| ||
股东权益 |
|
|
|
| ||
优先股，$0.0001 |
|
| ||||
普通股，$ |
| |
| | ||
额外实收资本 |
| |
| | ||
累计其他综合收益 |
| |
| | ||
累积赤字 |
| ( |
| ( | ||
总股东权益 |
| |
| | ||
负债合计和股东权益 | $ | | $ | | ||
请查看附注的未经审计的简明合并财务报表。
5
CAPRICOR治疗公司，INC。
综合损失及综合损益简明综合表
（未经审计）
截至9月30日结束的三个月 | 截至9月30日结束的九个月 | ||||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
收入 | |||||||||||||
营业收入 | $ | | $ | | $ | | $ | | |||||
营业收入合计 |
| |
| |
| |
| | |||||
经营费用 |
|
|
|
|
|
|
|
| |||||
研发 |
| |
| |
| |
| | |||||
一般和管理费用 |
| |
| |
| |
| | |||||
总营业费用 |
| |
| |
| |
| | |||||
营业亏损 |
| ( |
| ( |
| ( |
| ( | |||||
其他收入（支出） |
|
|
|
|
|
|
|
| |||||
投资收益 | | | | | |||||||||
固定资产处置损失 | — | ( | — | ( | |||||||||
其他总收益(费用) |
| |
| |
| |
| | |||||
净损失 |
| ( |
| ( | ( | ( | |||||||
其他综合收益（损失） |
|
|
|
|
|
|
|
| |||||
证券未实现的净收益（亏损） |
| ( |
| ( |
| ( |
| | |||||
综合损失 | $ | ( | $ | ( | $ | ( | $ | ( | |||||
每股基本和摊薄净亏损 | $ | ( | $ | ( | $ | ( | $ | ( | |||||
加权平均股本，基本和稀释 |
| |
| |
| |
| | |||||
请查看附注的未经审计的简明合并财务报表。
6
CAPRICOR治疗公司，INC。
股东权益变动简明合并财务报表
（未经审计）
其它 | 总计 | ||||||||||||||||
普通股 | 额外支付- | 综合 | 累积 | 股东的 | |||||||||||||
| 股份 |
| 金额 |
| 在资本中 |
| 收入 |
| 赤字 |
| 股东权益 | ||||||
2023年12月31日的余额 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
净发行普通股 |
| |
| |
| |
| — |
| — |
| | |||||
股票酬勞 |
| — |
| — |
| |
| — |
| — |
| | |||||
行权的股票期权 |
| | |
| ( |
| — |
| — |
| — | ||||||
可交易证券的未实现收益 |
| — |
| — |
| — |
| |
| — |
| | |||||
净损失 |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
截至2023年6月30日的前六个月 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
净发行普通股 |
| |
| |
| |
| — |
| — |
| | |||||
股票酬勞 | — | — | | — | — | | |||||||||||
行权的股票期权 |
| | |
| |
| — |
| — |
| | ||||||
可供出售证券未实现减值损失 |
| — | — |
| — |
| ( |
| — |
| ( | ||||||
净损失 | — | — | — | — | ( | ( | |||||||||||
2024年6月30日的余额 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
净发行普通股 |
| |
| |
| |
| — |
| — |
| | |||||
行使普通认股权证 | | | | — | — | | |||||||||||
股票酬勞 | — | — | | — | — | | |||||||||||
行权的股票期权 | | | | — | — | | |||||||||||
可供出售证券未实现减值损失 |
| — | — |
| — |
| ( |
| — |
| ( | ||||||
净损失 | — | — | — | — | ( | ( | |||||||||||
截至2024年9月30日的余额 | | $ | | $ | | $ | | $ | ( | $ | | ||||||
7
其它 | 总计 | ||||||||||||||||
普通股 | 额外支付- | 综合 | 累积 | 股东的 | |||||||||||||
| 股份 |
| 金额 |
| 在资本中 |
| 收入 |
| 赤字 |
| 股权 | ||||||
2022年12月31日余额 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
股票酬勞 | — | — | | — | — | | |||||||||||
行权的股票期权 | | | | — | — | | |||||||||||
可供出售证券未实现减值损失 | — | — | — | ( | — | ( | |||||||||||
净损失 |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
2023年3月31日余额 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
净发行普通股 |
| |
| |
| |
| — |
| — |
| | |||||
股票酬勞 |
| — | — |
| |
| — |
| — |
| | ||||||
行权的股票期权 | | | | — | — | | |||||||||||
可交易证券的未实现收益 | — | — | — | | — | | |||||||||||
净损失 | — | — | — | — | ( | ( | |||||||||||
2023年6月30日的余额 |
| | $ | | $ | | $ | | $ | ( | $ | | |||||
发行普通股，扣除费用后 |
| |
| |
| |
| — |
| — |
| | |||||
股票酬勞 | — | — | | — | — | | |||||||||||
行权的股票期权 | | | ( | — | — | — | |||||||||||
可供出售证券未实现减值损失 | — | — | — | ( | — | ( | |||||||||||
净损失 | — | — | — | — | ( | ( | |||||||||||
2023年9月30日余额 | | $ | | $ | | $ | | $ | ( | $ | ( | ||||||
请查看附注的未经审计的简明合并财务报表。
8
CAPRICOR治疗公司，INC。
现金流量表简明综合报表
（未经审计）
截至2023年9月30日的九个月 | ||||||
| 2024 |
| 2023 | |||
经营活动现金流量： | ||||||
净损失 | $ | ( | $ | ( | ||
调整为净损失到经营活动现金流量净使用： |
|
|
|
| ||
固定资产处置损失 | — | | ||||
折旧和摊销 |
| |
| | ||
股票酬勞 |
| |
| | ||
租赁负债的变动 | ( | ( | ||||
运营资产和负债的变化： |
|
|
|
| ||
应收账款 |
| |
| — | ||
预付费用及其他流动资产 |
| |
| | ||
其他资产 |
| ( |
| — | ||
应付账款和应计费用 | | | ||||
递延收入 |
| ( |
| ( | ||
用于经营活动的净现金 |
| ( |
| ( | ||
投资活动现金流量： |
|
|
|
| ||
购买有市场流通的证券 |
| ( |
| ( | ||
出售和到期的有市场流通的证券收益 |
| |
| | ||
购买物业和设备 | ( | ( | ||||
租赁改善的支付 |
| ( |
| ( | ||
投资活动提供的净现金流量 |
| |
| | ||
筹集资金的现金流量： |
|
|
|
| ||
普通股出售的净收益 |
| |
| | ||
股票奖励和warrants行权所得 |
| |
| | ||
融资活动提供的净现金 |
| |
| | ||
现金及现金等价物的净增加（减少） |
| |
| ( | ||
期初现金及现金等价物余额 |
| |
| | ||
期末现金及现金等价物余额 | $ | | $ | | ||
补充现金流信息披露： |
|
|
|
| ||
现金支付的利息 | $ | — | $ | — | ||
以现金支付的所得税 | $ | — | $ | — | ||
请查看附注的未经审计的简明合并财务报表。
9
CAPRICOR THERAPEUTICS INC。
附注-简明合并财务报表注释
（未经审计）
1. 组织和重要会计政策的概述
业务描述
capricor therapeutics, Inc.是一家特拉华州公司（与其全资子公司合称为“capricor therapeutics”，“公司”，“我们”，“我们”或“我们的”），是一家临床阶段的生物技术公司，专注于开发变革性的电芯和外泌体基础治疗，用于治疗杜氏肌营养不良症（“DMD”），一种导致肌肉退化和过早死亡的罕见肌营养不良症，以及其他高度未满足医疗需求的疾病。Capricor, Inc.（“Capricor”）是capricor therapeutics的全资子公司，于2005年作为特拉华州公司成立。capricor在2013年完成与Nile Therapeutics, Inc.（一家特拉华州公司，“Nile”）的子公司的合并后上市，随后capricor成为Nile的全资子公司，Nile正式更名为capricor therapeutics, Inc. capricor therapeutics随后很快在纳斯达克资本市场上市。capricor therapeutics及其子公司capricor正在开发多个处于不同阶段的治疗药物候选品。
呈现基础
附带的未经审计的中期简明合并基本报表是为Capricor therapeutics及其全资子公司编制的，依据美国公认会计原则（“U.S. GAAP”）和10-Q表格的指令，因此未包含根据U.S. GAAP完全展示财务状况、经营成果和现金流所需的所有披露。根据公司的意见，已包含所有被认为对公平展示必要的正常且持续的调整。附带的财务信息应与公司的最新年度报告（10-K表格）中的基本报表及其附注一起阅读，该年度报告已于2024年3月11日向证券交易委员会（“SEC”）提交，其中反映了截至2023年12月31日的合并资产负债表。中期结果不一定反映2024年12月31日结束的年度可能预期的结果。
合并基础
我们的简明合并基本报表包括公司及其全资子公司的账目。所有的关联交易在合并时已被消除。
重分类
对前期金额进行了某些重新分类，以符合当前年度的展示。
流动性和资本资源
截至2024年9月30日，公司累计亏损约为$
在2021年6月21日，公司建立了一项“市场内”计划（“ATm计划”），其总发行价格最高可达$
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all amounts that were available to be sold under the ATM Program (see Note 2 - "Stockholder’s Equity"). Effective October 1, 2024, the ATM Program has been closed and terminated.
In the first quarter of 2024, the Company received our first milestone payment of $
In September 2024, the Company completed a private placement with Nippon Shinyaku whereby we issued and sold an aggregate of
Subsequent to September 30, 2024, the Company completed an underwritten public offering, pursuant to which the Company issued and sold an aggregate of
The Company’s future expenditures and capital requirements may be substantial and will depend on many factors, including, but not limited to, the following:
| ● | the timing and costs associated with our research and development activities, clinical trials and preclinical studies, including the enrollment and progress of our ongoing HOPE-3 Phase 3 clinical trial of deramiocel (also referred to as CAP-1002) in DMD; |
| ● | the timing and costs associated with the manufacturing of our product candidates, including the expansion of our manufacturing capacity to support the potential commercialization of deramiocel for DMD; |
| ● | the timing and costs associated with potential commercialization of our product candidates; |
| ● | the number and scope of our research programs, including the expansion of our exosomes program; |
| ● | the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and |
| ● | the costs associated with pursuing marketing approval and potential commercialization of deramiocel in countries outside the United States. |
The Company’s options for raising additional capital include potentially seeking additional financing primarily from, but not limited to, the sale and issuance of equity or debt securities, the licensing or sale of its technology and other assets, potential distribution and other partnering opportunities, and from government grants. The Company has incurred significant operating losses and negative cash flows from operations. The Company’s plan to address its financial position may include potentially seeking additional financing primarily from, but not limited to, the sale and issuance of equity or debt securities, the licensing or sale of its technology and from government grants.
The Company will require substantial additional capital to fund its operations. The Company cannot provide assurances that financing will be available when and as needed or that, if available, financing will be available on favorable or acceptable terms. If the Company is unable to obtain additional financing when and if required, it would have a material adverse effect on the Company’s business and results of operations. The Company would likely need to delay, curtail or terminate portions of its clinical trials and research and development programs. To the extent the Company issues additional equity securities, its existing stockholders would experience substantial dilution.
Business Uncertainty Related to the Coronavirus
In light of past uncertainties due to COVID-19 and its economic and other impacts and to uncertainties around the timing and availability of grant disbursements, the loss of revenue from the REGRESS and ALPHA trials as well as any potential equity and debt financings, the Company submitted for the Employee Retention Credit (“ERC”), a credit against certain payroll taxes allowed to an eligible employer for qualifying wages, which was established by the CARES Act. The Company has submitted $
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Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Management uses its historical records and knowledge of its business in making these estimates. Accordingly, actual results may differ from these estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of less than 30 days at the date of purchase to be cash equivalents.
Marketable Securities
The Company determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. All of the Company’s marketable securities are considered as available-for-sale and carried at estimated fair values. Realized gains and losses on the sale of debt and equity securities are determined using the specific identification method. Unrealized gains and losses on available-for-sale securities are presented as accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. As of September 30, 2024, marketable securities consist primarily of short-term United States treasuries.
Property and Equipment
Property and equipment are stated at cost. Repairs and maintenance costs are expensed in the period incurred. Depreciation is computed using the straight-line method over the related estimated useful life of the asset, which such estimated useful lives range from to
Property and equipment, net consisted of the following:
| September 30, |
| December 31, | |||
| 2024 |
| 2023 | |||
Furniture and fixtures | $ | | $ | | ||
Laboratory equipment |
| |
| | ||
Leasehold improvements |
| |
| | ||
| |
| | |||
Less accumulated depreciation |
| ( |
| ( | ||
Property and equipment, net | $ | | $ | | ||
Leases
ASC Topic 842, Leases (“ASC 842”), requires lessees to recognize most leases on the balance sheet with a corresponding right-to-use (“ROU”) asset. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU assets are evaluated for impairment using the long-lived assets impairment guidance.
Leases will be classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases if and when the Company has them.
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The Company leases office and laboratory space, all of which are operating leases (see Note 6 - “Commitments and Contingencies”). Most leases include the option to renew and the exercise of the renewal options is at the Company’s sole discretion. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew. In addition, the Company’s lease agreements generally do not contain any residual value guarantees or restrictive covenants.
The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.
For real estate leases, the Company has elected the practical expedient under ASC 842 to account for the lease and non-lease components together for existing classes of underlying assets and allocates the contract consideration to the lease component only. This practical expedient is not elected for manufacturing facilities and equipment embedded in product supply arrangements.
Revenue Recognition
The Company adopted ASU 606, Revenue for Contracts from Customers, (“ASU 606”), which amended revenue recognition principles under U.S. GAAP and provides a single, comprehensive set of criteria for revenue recognition within and across all industries (see Note 7 – “License and Distribution Agreements”).
The revenue standard provides a five-step framework for recognizing revenue as control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that it determines are within the scope of the revenue standard, the Company performs the following five steps: (i) identify the contract; (ii) identify the performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation, or whether they are not distinct and are combined with other goods and services until a distinct bundle is identified. The Company then determines the transaction price, which typically includes upfront payments and any variable consideration that the Company determines is probable to not cause a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is resolved. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when, or as, each performance obligation is satisfied.
The Company’s distribution agreements may entitle it to additional payments upon the achievement of milestones or shares of product revenue on sales. The milestones are generally categorized into three types: development milestones, regulatory milestones and sales-based milestones. The Company evaluates whether it is probable that the consideration associated with each milestone or shared revenue payments will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for its milestones and royalties, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income (loss) in the Company’s condensed consolidated statements of operation and comprehensive loss. Typically, milestone payments and shared revenue payments are achieved after the Company’s performance obligations associated with the distribution agreements have been completed and after the customer has assumed responsibility for the commercialization program. Milestones or shared revenue payments achieved after the Company’s performance obligations have been completed are recognized as revenue in the period the milestone or shared revenue payments were achieved. If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue.
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The revenue standard requires the Company to assess whether a significant financing component exists in determining the transaction price. The Company performs this assessment at the onset of its distribution agreements. Typically, a significant financing component does not exist because the customer is paying for services in advance with an upfront payment. Additionally, future shared revenue payments are not substantially within the control of the Company or the customer.
Whenever the Company determines that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using either the proportional performance method or on a straight-line basis if efforts will be expended evenly over time. Percentage of completion of patient visits in clinical trials are used as the measure of performance. The Company feels this method of measurement to be the best depiction of the transfer of services and recognition of revenue. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on its condensed consolidated balance sheets.
Certain judgments affect the application of the Company’s revenue recognition policy. For example, the Company records short-term (less than one year) and long-term (over one year) deferred revenue based on its best estimate of when such revenue will be recognized. This estimate is based on the Company’s current operating plan, and the Company may recognize a different amount of deferred revenue over the next 12-month period if its plan changes in the future.
Under the U.S. Commercialization and Distribution Agreement (the “U.S. Distribution Agreement”) with Nippon Shinyaku, the transaction price consists of variable shared revenue payments and fixed components in the form of an upfront payment and milestones. The timing of the fixed component of the transaction price is upfront, however, the performance obligation is satisfied over a period of time, which is the estimated duration of the HOPE-3 clinical trial, Cohort A arm. Therefore, upon receipt of the upfront payment and achievement of milestones, a contract liability is recorded which represents deferred revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the related revenue recognition.
Grant Income
Generally, government research grants that provide funding for research and development activities are recognized as income when the related expenses are incurred, as applicable. Because the terms of the grant award (the “CIRM Award”) from the California Institute for Regenerative Medicine (“CIRM”) allow Capricor to elect to convert the grant into a loan after the end of the project period, the CIRM Award is being classified as a liability rather than income (see Note 5 - “Government Grant Awards”). Grant income is due upon submission of a reimbursement request. The transaction price varies for grant income based on the expenses incurred under the awards.
Research and Development
Costs relating to the design and development of new products are expensed as research and development as incurred in accordance with Financial Accounting Standards Board (“FASB”) ASC 730-10, Research and Development. Research and development costs amounted to approximately $
Comprehensive Income (Loss)
Comprehensive income (loss) generally represents all changes in stockholders’ equity during the period except those resulting from investments by, or distributions to, stockholders. The Company’s comprehensive loss was approximately $
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Company’s other comprehensive income (loss) is related to a net unrealized gain (loss) on marketable securities. The Company’s other comprehensive income (loss) was $(
Clinical Trial Expense
As part of the process of preparing our condensed consolidated financial statements, we are required to estimate our accrued expenses. Our clinical trial accrual process is designed to account for expenses resulting from our obligations under contracts with vendors, consultants, contract research organizations (“CROs”), and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. Our objective is to reflect the appropriate clinical trial expenses in our condensed consolidated financial statements by matching the appropriate expenses with the period in which services are provided and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates through financial models that take into account discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from our estimates. We make estimates of our accrued expenses as of each balance sheet date in our condensed consolidated financial statements based on the facts and circumstances known to us at that time. Our clinical trial accrual and prepaid assets are dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low for any particular period.
Stock-Based Compensation
The Company accounts for stock-based employee compensation arrangements in accordance with guidance issued by the FASB, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, consultants, and directors based on estimated fair values.
The Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s statements of operations and comprehensive loss. The Company estimates the fair value of stock-based compensation awards using the Black-Scholes model. This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the stock options, all of which are highly complex and subjective variables. The variables take into consideration, among other things, actual and projected stock option exercise behavior. For employees and directors, the expected life was calculated based on the simplified method as described by the SEC Staff Accounting Bulletin No. 110, Share-Based Payment. For other service providers, the expected life was calculated using the contractual term of the award. The Company's estimate of expected volatility was based on the historical stock price of the Company. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the options.
Basic and Diluted Loss per Share
The Company reports earnings per share in accordance with FASB ASC 260-10, Earnings per Share. Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed similarly to basic earnings (loss) per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive.
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For the three and nine months ended September 30, 2024 and 2023, warrants and options to purchase
Fair Value Measurements
Assets and liabilities recorded at fair value in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories are as follows:
Level Input: |
| Input Definition: |
Level I | Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. | |
Level II | Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. | |
Level III | Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
The following table summarizes the fair value measurements by level at September 30, 2024 and December 31, 2023 for assets and liabilities measured at fair value on a recurring basis:
September 30, 2024 | ||||||||||||
| Level I |
| Level II |
| Level III |
| Total | |||||
Marketable Securities | $ | | $ | — | $ | — | $ | | ||||
| December 31, 2023 | |||||||||||
| Level I |
| Level II |
| Level III |
| Total | |||||
Marketable Securities | $ | | $ | — | $ | — | $ | | ||||
Carrying amounts reported in the balance sheet of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value due to their relatively short maturity. The carrying amounts of the Company’s marketable securities are based on market quotations from national exchanges at the balance sheet date. Interest and dividend income are recognized separately on the income statement based on classifications provided by the brokerage firm holding the investments. The fair value of borrowings is not considered to be significantly different from its carrying amount because the stated rates for such debt reflect current market rates and conditions.
Recent Accounting Pronouncements
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This standard was issued in response to the SEC’s disclosure update and simplification initiative, which affects a variety of topics within the Accounting Standards Codification. The amendments apply to all reporting entities within the scope of the affected topics unless otherwise indicated. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures.
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2. STOCKHOLDER’S EQUITY
September 2024 Private Placement
On September 16, 2024, the Company entered into a Subscription Agreement with Nippon Shinyaku pursuant to which the Company agreed to issue and sell to Nippon Shinyaku in a private placement (the “Private Placement”), an aggregate of
In connection with the Private Placement, the Company also entered into a Registration Rights Agreement with Nippon Shinyaku on September 16, 2024 (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company has filed with the SEC a registration statement to register for resale the shares sold in the Private Placement, which registration statement was declared effective on November 8, 2024.
ATM Program
The Company established an ATM Program on June 21, 2021, with an aggregate offering price of up to $
From June 21, 2021 through October 1, 2024, the Company sold an aggregate of
September 2023 Financing
On September 29, 2023, the Company entered into Securities Purchase Agreements, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Registered Direct Offering”), an aggregate of
Outstanding Shares
At September 30, 2024, the Company had
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3. STOCK AWARDS, WARRANTS AND OPTIONS
Warrants
The following table summarizes all warrant activity for the nine months ended September 30, 2024:
Weighted Average | |||||
| Warrants |
| Exercise Price | ||
Outstanding at December 31, 2023 |
| | $ | | |
Granted | — | — | |||
Exercised | ( | | |||
Outstanding at September 30, 2024 |
| | $ | | |
The following table summarizes all outstanding warrants to purchase shares of the Company’s common stock:
Warrants Outstanding | |||||||||||
September 30, | December 31, | Exercise Price | Expiration | ||||||||
Type |
| Grant Date |
| 2024 |
| 2023 |
| per Share |
| Date | |
Common Warrants | |
| | $ | | ||||||
Common Warrants | |
| | $ | |||||||
Common Warrants | | | $ | | |||||||
| | ||||||||||
Stock Options
The Company’s Board of Directors (the “Board”) has approved
In June 2021, the Company’s stockholders approved the 2021 Plan, which authorized
As of September 30, 2024,
The Company’s stock option plans are administered by the Board, in conjunction with the compensation committee of the Board, which determines the recipients and types of awards to be granted, as well as the number of shares subject to the awards, the exercise price and the vesting schedule. Each stock option granted will be designated in the award agreement as either an incentive stock option or a nonstatutory stock option. Notwithstanding such designation, however, to the extent that the aggregate fair market value of the shares with respect to which incentive stock options are exercisable for the first time by the participant during any calendar year (under all plans of the Company and any parent or subsidiary) exceeds $
The estimated weighted average fair value of the options granted during the three months ended September 30, 2024 and 2023 were approximately $
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the options granted during the nine months ended September 30, 2024 and 2023 were approximately $
The Company estimates the fair value of each option award using the Black-Scholes option-pricing model. The company used the following assumptions to estimate the fair value of stock options issued during the nine months ended September 30, 2024 and 2023:
| Nine months ended September 30, |
| |||
2024 | 2023 | ||||
Expected volatility |
| % | % | ||
Expected term |
| - |
| - | |
Dividend yield |
| % | % | ||
Risk-free interest rates |
| % | % | ||
Employee and non-employee stock-based compensation expense was as follows:
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
General and administrative | $ | | $ | | $ | | $ | | |||||
Research and development |
| |
| |
| |
| | |||||
Total | $ | | $ | | $ | | $ | | |||||
The Company does not recognize an income tax benefit as the Company believes that an actual income tax benefit may not be realized. For non-qualified stock options, the loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance.
Common stock, stock options or other equity instruments issued to non-employees (including consultants) as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. The fair value of stock options is determined using the Black-Scholes option-pricing model. The Company calculates the fair value for non-qualified options as of the date of grant and expenses over the applicable vesting periods. The Company accounts for forfeitures upon occurrence.
As of September 30, 2024, the total unrecognized fair value compensation cost related to non-vested stock options was approximately $
The following is a schedule summarizing employee and non-employee stock option activity for the nine months ended September 30, 2024:
Number of | Weighted Average | Aggregate | ||||||
| Options |
| Exercise Price |
| Intrinsic Value | |||
Outstanding at December 31, 2023 |
| | $ | |
| |||
Granted |
| |
| |
|
| ||
Exercised |
| ( |
| |
| $ | | |
Expired/Cancelled |
| ( |
| |
|
| ||
Outstanding at September 30, 2024 |
| | $ | | $ | | ||
Exercisable at September 30, 2024 |
| | $ | | $ | | ||
The aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock for each of the respective periods.
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4. CONCENTRATIONS
Concentration of Risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash, cash equivalents, and marketable securities. The Company maintains accounts at
5. GOVERNMENT GRANT AWARDS
CIRM Grant Award (HOPE)
On June 16, 2016, Capricor entered into the CIRM Award with CIRM in the amount of approximately $
After completing the CIRM funded research project and at any time after the award period end date (but no later than the
In 2019, Capricor completed all milestones and close-out activities associated with the CIRM Award and expended all funds received. As of September 30, 2024, Capricor’s liability balance for the CIRM Award was approximately $
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6. COMMITMENTS AND CONTINGENCIES
Short-Term Operating Leases
Capricor leases office space in Beverly Hills, California from The Bubble Real Estate Company, LLC ("Bubble Real Estate") pursuant to a lease which began in 2013. Capricor subsequently entered into several amendments modifying certain terms of the lease. Effective January 1, 2021, we entered into a month-to-month lease amendment with Bubble Real Estate, which is terminable by either party upon
Commencing March 13, 2024, we entered into a License and Services Agreement with Azzur Cleanrooms-on-Demand – San Diego, LLC (the “Azzur License Agreement”) pursuant to which we were granted an exclusive license to use certain space and the non-exclusive right to use certain equipment and property for our early phase clinical and/or pre-clinical manufacturing purposes. Our license fee was approximately $
Expenses incurred under short-term operating leases for the three months ended September 30, 2024 and 2023 were $
Long-Term Operating Leases
Capricor leases facilities in Los Angeles, California from Cedars-Sinai Medical Center (“CSMC”), pursuant to a lease (the “Facilities Lease”) entered into in 2014. Capricor has subsequently entered into several amendments modifying certain terms of the lease. In July 2022, we entered into an amendment for an additional period extending the term through July 31, 2024 with a monthly lease payment of $
Capricor leases facilities in San Diego, California from Altman Investment Co., LLC (“Altman”). The Company entered into a lease agreement commencing October 1, 2021 with Altman for
Effective November 1, 2021, the Company entered into a vivarium agreement with Explora BioLabs, Inc. (“Explora”), a Charles River Company, for vivarium space and services. Under the terms of the agreement, the Company is obligated to pay a base rent of $
The long-term real estate operating leases are included in “lease right-of-use assets, net” on the Company’s condensed consolidated balance sheet and represent the Company’s right-to-use the underlying assets for the lease term. The Company’s obligation to make lease payments are included in “lease liabilities, current” and “lease liabilities, net of current” on the Company’s condensed consolidated balance sheet.
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The tables below exclude short-term operating leases. The following table summarizes maturities of lease liabilities and the reconciliation of lease liabilities as of September 30, 2024:
2024 (remainder) | $ | | |
2025 | | ||
2026 | | ||
2027 | — | ||
2028 | — | ||
Total minimum lease payments | | ||
Less: imputed interest | ( | ||
Total operating lease liabilities | $ | | |
Included in the condensed consolidated balance sheet: | |||
Current portion of lease liabilities | $ | | |
Lease liabilities, net of current | | ||
Total operating lease liabilities | $ | | |
Other Information: | |||
Weighted average remaining lease term | |||
Weighted average discount rate |
As of September 30, 2024, ROU assets for operating leases were approximately $
Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Lease costs | $ | | $ | | $ | | $ | | ||||
Lease payments |
| |
| | | | ||||||
Legal Contingencies
The Company is not a party to any material legal proceedings at this time. From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business or otherwise. The Company records a loss contingency reserve for a legal proceeding when it considers the potential loss probable and it can reasonably estimate the amount of the loss or determine a probable range of loss. The Company has not recorded any material accruals for loss contingencies as of September 30, 2024.
Accounts Payable
During the normal course of business, disputes with vendors may arise. If a vendor disputed payment is probable and able to be estimated, we will record an estimated liability.
Other Funding Commitments
The Company is a party to various agreements, principally relating to licensed technology, that require future payments relating to milestones that may be met in subsequent periods or royalties on future sales of specific products (see Note 7 – “License and Distribution Agreements”).
Additionally, the Company is a party to various agreements with contract research, manufacturing and other organizations that generally provide for termination upon notice, with the exact amounts owed in the event of termination to be based on the timing of termination and the terms of the agreement.
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Employee Severances
The Board of Directors from time to time may approve severance packages for specific full-time employees based on their length of service and position ranging up to
7. LICENSE AND DISTRIBUTION AGREEMENTS
Intellectual Property Rights for Capricor’s Technology - CAP 1002 and Exosomes
Capricor has entered into exclusive license agreements for intellectual property rights related to certain cardiac-derived cells with Università Degli Studi Di Roma La Sapienza (the “University of Rome”), Johns Hopkins University (“JHU”) and CSMC. Capricor has also entered into an exclusive license agreement for intellectual property rights related to exosomes with CSMC. In addition, Capricor has filed patent applications related to the technology developed by its own scientists.
University of Rome License Agreement
Capricor and the University of Rome entered into a License Agreement, dated June 21, 2006 (the “Rome License Agreement”), which provides for the grant of an exclusive, world-wide, royalty-bearing license by the University of Rome to Capricor (with the right to sublicense) to develop and commercialize licensed products under the licensed patent rights in all fields.
Pursuant to the Rome License Agreement, Capricor paid the University of Rome a license issue fee, is currently paying minimum annual royalties in the amount of
The Rome License Agreement will, unless extended or sooner terminated, remain in effect until the later of the last claim of any patent or until any patent application comprising licensed patent rights has expired or been abandoned. Under the terms of the Rome License Agreement, either party may terminate the agreement should the other party become insolvent or file a petition in bankruptcy. Either party may terminate the agreement upon the other party’s material breach, provided that the breaching party will have up to
The Johns Hopkins University License Agreements
License Agreement for CDCs
Capricor and JHU entered into an Exclusive License Agreement, effective June 22, 2006 (the “JHU License Agreement”), which provides for the grant of an exclusive, world-wide, royalty-bearing license by JHU to Capricor (with the right to sublicense) to develop and commercialize licensed products and licensed services under the licensed patent rights in all fields and a nonexclusive right to the know-how. Various amendments were entered into to revise certain provisions of the JHU License Agreement. Under the JHU License Agreement, Capricor is required to exercise commercially reasonable and diligent efforts to develop and commercialize licensed products covered by the licenses from JHU.
Pursuant to the JHU License Agreement, JHU was paid an initial license fee and, thereafter, Capricor is required to pay minimum annual royalties on the anniversary dates of the JHU License Agreement. The minimum annual royalties are creditable against a low single-digit running royalty on net sales of products and net service revenues, which Capricor is also required to pay under the JHU License Agreement, which running royalty may be subject to further reduction in the event that Capricor is required to pay royalties on any patent rights to third parties in order to make or sell a licensed
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product. In addition, Capricor is required to pay a low double-digit percentage of the consideration received by it from sublicenses granted and is required to pay JHU certain defined development milestone payments upon the successful completion of certain phases of its clinical studies and upon receiving approval from the U.S. Food and Drug Administration (the “FDA”). The maximum aggregate amount of milestone payments payable under the JHU License Agreement, as amended, is $
The JHU License Agreement will, unless sooner terminated, continue in effect in each applicable country until the date of expiration of the last to expire patent within the patent rights, or, if no patents are issued, then for
Cedars-Sinai Medical Center License Agreements
License Agreement for CDCs
On January 4, 2010, Capricor entered into an Exclusive License Agreement with CSMC (the “Original CSMC License Agreement”), for certain intellectual property related to its cardiosphere-derived cell (“CDC”) technology. In 2013, the Original CSMC License Agreement was amended twice resulting in, among other things, a reduction in the percentage of sublicense fees which would have been payable to CSMC. Effective December 30, 2013, Capricor entered into an Amended and Restated Exclusive License Agreement with CSMC (the “Amended CSMC License Agreement”), which amended, restated, and superseded the Original CSMC License Agreement, pursuant to which, among other things, certain definitions were added or amended, the timing of certain obligations was revised and other obligations of the parties were clarified.
The Amended CSMC License Agreement provides for the grant of an exclusive, world-wide, royalty-bearing license by CSMC to Capricor (with the right to sublicense) to conduct research using the patent rights and know-how and develop and commercialize products in the field using the patent rights and know-how. In addition, Capricor has the exclusive right to negotiate for an exclusive license to any future rights arising from related work conducted by or under the direction of Dr. Eduardo Marbán on behalf of CSMC. In the event the parties fail to agree upon the terms of an exclusive license for any future rights, Capricor will have a non-exclusive license to such future rights, subject to royalty obligations.
Pursuant to the Original CSMC License Agreement, CSMC was paid a license fee and Capricor was obligated to reimburse CSMC for certain fees and costs incurred in connection with the prosecution of certain patent rights. Additionally, Capricor is required to meet certain spending and development milestones.
Pursuant to the Amended CSMC License Agreement, Capricor remains obligated to pay low single-digit royalties on sales of royalty-bearing products as well as a low double-digit percentage of the consideration received from any sublicenses or other grant of rights, subject to certain exclusions. The above-mentioned royalties are subject to reduction in the event Capricor becomes obligated to obtain a license from a third party for patent rights in connection with the royalty-bearing product.
The Amended CSMC License Agreement will, unless sooner terminated, continue in effect on a country by country basis until the last to expire of the patents covering the patent rights or future patent rights. Under the terms of the Amended CSMC License Agreement, unless waived by CSMC, the agreement shall automatically terminate: (i) if Capricor ceases, dissolves or winds up its business operations; (ii) in the event of the insolvency or bankruptcy of Capricor or if Capricor makes an assignment for the benefit of its creditors; (iii) if performance by either party jeopardizes the licensure, accreditation or tax exempt status of CSMC or the agreement is deemed illegal by a governmental body; (iv) within
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Capricor and CSMC have entered into several amendments to the Amended CSMC License Agreement, pursuant to which the parties agreed to add and delete certain patent applications from the list of scheduled patents and extend the timing of certain development milestones, among other things. Capricor reimbursed CSMC for certain attorneys’ fees and filing fees incurred in connection with the additional patent applications.
License Agreement for Exosomes
On May 5, 2014, Capricor entered into an Exclusive License Agreement with CSMC (the “Exosomes License Agreement”), for certain intellectual property rights related to CDC-derived exosomes technology. The Exosomes License Agreement provides for the grant of an exclusive, world-wide, royalty-bearing license by CSMC to Capricor (with the right to sublicense) in order to conduct research using the patent rights and know-how and to develop and commercialize products in the field using the patent rights and know-how. In addition, Capricor has the exclusive right to negotiate for an exclusive license to any future rights arising from related work conducted by or under the direction of Dr. Eduardo Marbán on behalf of CSMC. In the event the parties fail to agree upon the terms of an exclusive license, Capricor shall have a non-exclusive license to such future rights, subject to royalty obligations.
Pursuant to the Exosomes License Agreement, CSMC was paid a license fee and Capricor reimbursed CSMC for certain fees and costs incurred in connection with the preparation and prosecution of certain patent applications. Additionally, Capricor is required to meet certain non-monetary development milestones and is obligated to pay low single-digit royalties on sales of royalty-bearing products as well as a single-digit percentage of the consideration received from any sublicenses or other grant of rights. The above-mentioned royalties are subject to reduction in the event Capricor becomes obligated to obtain a license from a third party for patent rights in connection with the royalty bearing product.
The Exosomes License Agreement will, unless sooner terminated, continue in effect on a country by country basis until the last to expire of the patents covering the patent rights or future patent rights. Under the terms of the Exosomes License Agreement, unless waived by CSMC, the agreement shall automatically terminate: (i) if Capricor ceases, dissolves or winds up its business operations; (ii) in the event of the insolvency or bankruptcy of Capricor or if Capricor makes an assignment for the benefit of its creditors; (iii) if performance by either party jeopardizes the licensure, accreditation or tax exempt status of CSMC or the agreement is deemed illegal by a governmental body; (iv) within
Capricor and CSMC have entered into several amendments to the Exosomes License Agreement. Collectively, these amendments added additional patent applications and patent families to the Exosomes License Agreement, added certain defined product development milestone payments, modified certain milestone deadlines, added certain performance milestones with respect to product candidates covered by certain future patent rights in order to maintain an exclusive license to those future patent rights, and converted certain exclusive rights to co-exclusive rights. These amendments also obligated Capricor to reimburse CSMC for certain attorneys’ fees and filing fees in connection with the additional patent applications and patent families.
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Cell Line License Agreement with Life Technologies
On March 7, 2022, Capricor entered into a non-exclusive cell line license agreement with Life Technologies Corporation, a subsidiary of Thermo Fisher Scientific, Inc., for the supply of certain cells which we will use in connection with the development of our exosomes platform. An initial license fee payment was made in 2022 and additional milestone fees may become due based on the progress of our development program.
Commercialization and Distribution Agreement with Nippon Shinyaku (Territory: United States)
On January 24, 2022, Capricor entered into the U.S. Distribution Agreement with Nippon Shinyaku, a Japanese corporation and related party (see Note 8 – “Related Party Transactions”). Under the terms of the U.S. Distribution Agreement, Capricor appointed Nippon Shinyaku as its exclusive distributor in the United States of deramiocel for the treatment of DMD.
Under the terms of the U.S. Distribution Agreement, Capricor will be responsible for the clinical development and manufacturing of deramiocel. Nippon Shinyaku and NS Pharma, Inc. (its wholly-owned U.S. subsidiary) will be responsible for the distribution of deramiocel in the United States. Pursuant to the U.S. Distribution Agreement, Capricor received an upfront payment of $
The Company has evaluated the U.S. Distribution Agreement in accordance with ASU 606, Revenue for Contracts from Customers. At the inception, the Company identified one distinct performance obligation. The Company determined that the performance obligation is the conduct of the HOPE-3, Phase 3 clinical study.
The Company determined the transaction price totaled $
For the three months ended September 30, 2024, the Company recognized approximately $
The Company had no opening or closing contract asset balances recognized. The difference between the opening and closing balances of the Company’s contract liability results from the Company performance of services in connection to its performance obligation.
The transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized. As of September 30, 2024, remaining performance obligations related to the U.S. Distribution Agreement were approximately $
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Commercialization and Distribution Agreement with Nippon Shinyaku (Territory: Japan)
On February 10, 2023, Capricor entered into a Commercialization and Distribution Agreement (the “Japan Distribution Agreement”) with Nippon Shinyaku. Under the terms of the Japan Distribution Agreement, Capricor appointed Nippon Shinyaku as its exclusive distributor in Japan of deramiocel for the treatment of DMD.
Under the terms of the Japan Distribution Agreement, Capricor received an upfront payment of $
The Company has evaluated the Japan Distribution Agreement in accordance with ASU 606, Revenue for Contracts from Customers. The Company determined the initial transaction price totaled $
Binding Term Sheet with Nippon Shinyaku (Territory: Europe)
On September 16, 2024, Capricor entered into a Binding Term Sheet (the “Term Sheet”) with Nippon Shinyaku for the commercialization and distribution of deramiocel for the treatment of DMD in the European region, as defined in the Term Sheet. Subject to finalization of a definitive agreement, under the terms of the Term Sheet, Capricor would be responsible for the development and manufacturing of deramiocel for potential approval in the European region. Nippon Shinyaku would be responsible for the sales and distribution of deramiocel in the European region. Subject to regulatory approval, Capricor would receive a double-digit share of product revenue and additional development and sales-based milestone payments. If the definitive agreement is entered into on the same economic terms as the term sheet, Capricor will receive an upfront payment of $
8. RELATED PARTY TRANSACTIONS
Consulting Agreements
In 2013, Capricor entered into a Consulting Agreement with Dr. Frank Litvack, the Company’s Executive Chairman and a member of its Board of Directors, whereby Capricor agreed to pay Dr. Litvack $
In January 2024, Capricor entered into a Consulting Agreement with Michael Kelliher, a member of its Board of Directors, related to business development services unrelated to his duties on behalf of the Board, whereby he was granted an option to purchase
Commercialization and Distribution Agreements
As noted above, Capricor is party to multiple commercialization and distribution agreements with Nippon Shinyaku, which holds more than
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9. SUBSEQUENT EVENTS
October 2024 Underwritten Public Offering
On October 16, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Piper Sandler and Oppenheimer as representatives of the underwriters (the “Underwriters”), pursuant to which the Company agreed to sell and issue, in a public offering an aggregate of
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第2项。 管理层对基本状况和运营业绩的讨论与分析。
对我们的基本状况和运营业绩的以下讨论应结合在本季度报告表10-Q的其他地方包含的简明合并财务报表和简明合并附注以阅读。该讨论包括涉及风险和不确定性的前瞻性声明。由于诸多因素的影响，我们的实际结果可能与这些前瞻性声明中预期的结果存在实质性差异。
根据本季度报告表10-Q中的用法，“Capricor Therapeutics”，“公司”，“我们”，“我们”，“我们”的参考等术语包括Capricor Therapeutics，Inc.及其全资子公司。“Capricor”的参考是指Capricor Inc.，我们的全资子公司。
概览
Capricor Therapeutics, Inc.是一家临床阶段的生物技术公司，专注于开发用于治疗肌营养不良型杜兴氏肌肉萎缩症（“DMD”）等高度未满足医疗需求疾病的转型电芯和外泌体疗法。这种疾病是一种罕见的肌肉萎缩症，导致肌肉退化和早逝。
自成立以来，我们已投入大量资源于开发deramiocel（又称CAP-1002）及我们的其他产品候选者，包括我们的外泌体平台技术的开发，制造过程的开发，公司人员配备以及为这些运营提供一般和行政支持。我们还没有任何产品获得商业销售的批准。我们最终能否产生足够的产品收入以实现盈利将取决于deramiocel成功的开发，批准和最终商业化，用于治疗DMD及我们的其他产品候选者。如果成功开发和批准，我们打算并计划在与我们的合作伙伴Nippon Shinyaku Co.，Ltd.（一家日本公司，以下简称为“Nippon Shinyaku”）的协作下在美国，欧洲和日本商业化deramiocel，并可以在其他市场签订授权协议或战略合作。如果我们产生产品销售或签订授权协议或战略合作伙伴关系，或进一步分销关系，预计我们产生的任何收入会由于任何产品销售，授权费，里程碑款项和其他款项的时间和金额而在季度和年度之间波动。如果我们未能及时完成我们的产品候选者的开发，我们产生未来收入的能力，以及我们的运营结果和财务状况，都将受到重大不利影响。
我们的核心项目专注于开发和商业化一种名为deramiocel的细胞疗法技术，由心脏球膜来源的细胞（以下简称为CDCs）组成，这些细胞是从健康人类心脏捐赠细胞中分离出的一群基质细胞，用于治疗DMD。Deramiocel的设计旨在通过CDCs的免疫调节、抗炎、促血管生成和抗纤维化作用来减缓DMD的病情进展，这些作用是通过携带生物活性载体的分泌外泌体介导的。CDC外泌体已知具有生物活性的载体元素包括微小RNA。总体而言，这些非编码RNA物种改变了巨噬细胞和其他靶细胞的基因表达，在DMD中降低了广泛炎症，并刺激组织再生（以及各种其他炎症性疾病）。通过迄今在循环炎性生物标志物中观察到的变化，这种作用机制与旨在恢复狄斯特罗芬表达的外显子跳跃寡核苷酸和基因疗法方法相对。DMD的病理生理学是由功能性狄斯特罗芬的受损产生驱动的，这种狄斯特罗芬通常在肌肉中充当结构蛋白。肌肉细胞中功能性狄斯特罗芬的减少导致显着的细胞损伤，最终导致肌细胞死亡和纤维化替代。在DMD患者中，心脏肌细胞逐渐死亡，并被疤痕组织取代。这种心肌病最终导致心力衰竭，目前是DMD患者死亡的主要原因。对于患有DMD的患者，护理费用非常高，并且随着疾病进展而增加。目前尚无治疗DMD心肌病的批准，因此，我们认为DMD对于我们的产品候选者Deramiocel代表着一个重要的市场机遇。
迄今为止，我们已经完成了多项有前景的关于治疗DMD的deramiocel的临床试验。我们的第2期HOPE-2研究结果已发表在《柳叶刀》，显示该试验实现了其中级维度的主要疗效终点表现（PUL v1.2）（p=0.01），并有进一步积极的结果
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全 PUL v2.0 的终点（p=0.04）和左心室射血分数的心脏终点（p=0.002）。在整个研究过程中，Deramiocel 一般是安全的并且耐受性良好。
此外，我们目前正在进行 HOPE-2 试验的开放标签扩展（"OLE"）研究，其中 12 名患者选择继续接受 Deramiocel 治疗。我们最近展示了三年的数据，显示 PUL v2.0 总分相较于类似 DMD 患者的外部对照数据集具有统计学显著益处（+3.7 分，p<0.001）。数据还显示在多个心脏指标上有改善，包括左心室射血分数，以及指数化容积（左心室末收缩容积和左心室末舒张容积）。在 24 个月和 36 个月的时间点通过心脏 MRI 测量的改善被观察到。这些都是心脏功能的指标，并被认为在预测长期结果方面高度相关。在研究的 OLE 部分进行 Deramiocel 治疗继续展现出一致的安全性特征，并且在整个研究中耐受性良好。
在 2024 年 8 月，我们与 FDA 举行了预 BLA 会议，讨论了我们的滚动 BLA 提交时间表、潜在标签扩展、商业制造计划以及其他话题。在此会议之后，我们与 FDA 举行了几次额外会议，并宣布我们的意图根据现有的心脏数据向患者级自然历史数据提交生物制品许可证申请（"BLA"），以治疗所有被诊断为 DMD-心肌病的患者。我们于 2024 年 10 月启动了 BLA 提交，预计将在 2024 年年底完成全面提交。为了支持潜在的标签扩展以治疗 DMD，我们计划通过将 3 期 HOPE-3 临床试验的 A 和 b 队列结合起来提供骨骼肌肌病的临床数据，作为批准后的研究，而不打算在此时揭盲 A 队列，这原本计划在 2024 年第四季度进行。此外，如有必要，HOPE 3 研究还将支持美国以外的营销授权。目前，我们已在欧洲和日本启动了监管活动，并将与各个卫生主管部门合作，制定 Deramiocel 在这些地区的最有效的监管批准路径。
在美国，deramiocel的监管路径得到了RMAt认定以及孤儿药认定的支持。此外，如果Capricor获得FDA对deramiocel治疗DMD的市场批准，Capricor将有资格根据其之前获得的罕见小儿疾病认定获得优先审查奖励（“PRV”）。如果获得，Capricor保留PRV的全部权利。此外，Capricor已与Nippon Shinyaku签署了两份商业化和分销协议，指定Nippon Shinyaku为其在美国和日本的deramiocel独家分销商。
我们继续使用我们专有的StealthX™平台开发工程化外泌体科技，专注于靶向治疗和生物-疫苗领域，以潜在治疗和预防多样化疾病。外泌体是膜结合的细胞外囊泡，包含脂质、蛋白质和核酸。它们作为信使调节邻近或远离细胞的功能。它们的大小、低或无免疫原性以及能够以本地细胞语言进行通信，使它们成为一种令人兴奋的新型治疗剂，有潜力扩展我们应对复杂生物反应的能力。我们的StealthX™平台专注于开发具有传递特定效应分子能力的精确工程外泌体，这些效应分子通过明确的作用机制发挥效应并指向特定目标。我们的平台基于基本的RNA和蛋白质科学、靶向技术和制造的进展，为我们提供了潜在建立一条新治疗候选药物宽广管道的机会。目前，我们正在开发针对传染病、单基因疾病和其他潜在适应症的基于外泌体的生物-疫苗和治疗方法。我们当前的策略专注于确保合作伙伴提供资金和额外资源，使我们能够将该项目引入临床。
在2024年第一季度，我们宣布我们已被选择作为Project NextGen的一部分，这是美国卫生与公众服务部推动的一项倡议，旨在开发一系列新的创新疫苗，以提供更广泛和更持久的COVID-19保护。作为Project NextGen的一部分，国家过敏和传染病研究所（“NIAID”），作为国家卫生研究院的一部分，将对我们的StealthX™疫苗进行一期临床研究，需经监管批准。目前，我们的StealthX™疫苗候选产品正处于制造阶段，计划在2025年第一季度将其交付给NIAID。此时，我们正在更新之前提交给FDA的StealthX™疫苗的研究新药申请（“IND”），以便NIAID诱导的IND可以参考。受FDA批准的条件下，NIAID计划在2025年第一季度启动该试验，我们预计在2025年第二季度可获得初步数据，具体取决于来自NIAID的可用性。此外，如果NIAID发现
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我们的StealthX™生物-疫苗符合安全性和有效性的标准，他们可能会考虑进一步资助我们的项目，以进入第二阶段研究。
截至2024年9月30日，我们的现金、现金等价物和可交易证券总计约为8500万。在2024年9月30日之后，公司完成了一项有承销的公开发行，按照该发行，我们发行并售出了总计5,073,800股普通股，获得的总收益约为8630万。我们相信，现有的现金余额将使我们能够资助计划中的营业费用和资本支出需求，至少持续到未来12个月。
我们尚未从产品的商业销售中产生任何营业收入。我们只有在获得FDA或其他监管机构的批准后，才能产生任何产品收入。由于我们在研究和开发方面的重大支出，以及与运营相关的一般管理费用，自成立以来的每个时期我们均产生了重大营业损失。我们的净损失在2024年和2023年截至9月30日的三个月里分别约为1260万和640万。我们的净损失在2024年和2023年截至9月30日的九个月里分别约为3340万和2150万。截至2024年9月30日，我们的累积赤字约为19270万。我们预计在可预见的未来将产生重大费用和营业损失。
在我们寻求开发和商业化deramiocel或任何其他产品候选者，包括与我们的外泌体项目相关的产品时，我们预计我们的费用将显著增加，我们将需要大量额外的资金来支持我们的持续运营。在我们能够从产品销售中产生显著的营业收入之前（如果能的话），我们预计将通过公募或股权投资融资、债务融资或其他来源来融资，这可能包括许可协议、战略合作或其他分销协议。我们可能无法在需要时以有利的条件筹集额外资金或签订这样的协议或安排。如果我们未能在需要时筹集资本或其他潜在资金，或签订这样协议，我们可能不得不显著延迟、缩减或停止deramiocel或我们的其他产品候选者的开发或商业化。
财务业务概况
截至目前，我们尚无商业产品销售，且在获得FDA或相应外国监管机构的批准之前，将无法产生任何商业产品营业收入。开发生物产品是一个漫长且非常昂贵的过程。即使我们获取了继续开发产品候选所需的资本，无论是通过战略交易还是其他方式，我们也不期望在几年内完成某个产品候选的开发。迄今为止，我们的大多数开发费用与我们的产品候选相关，包括deramiocel和我们的外泌体技术。在我们继续进行deramiocel的临床开发以及进一步开发我们的外泌体技术时，我们的费用将进一步增加。因此，我们的成功不仅依赖于产品候选的安全性和有效性，也依赖于我们融资开发产品及临床项目的能力。我们最近的主要营运资金来源主要是证券公开发行的收益和根据与日本新药公司（Nippon Shinyaku）签署的分销协议收到的预付款。在进行临床前和临床项目的同时，我们继续探索在美国及全球其他地区开发一项或多项产品候选的潜在合作伙伴关系。
我们的结果包括由于发行股票期权和warrants而产生的非现金薪酬费用（如适用）。我们将股票期权和warrants的公允价值在其归属期内计入费用（如适用）。当更精确的定价数据不可用时，我们通过使用Black-Scholes期权定价模型来判断股票期权的公允价值。基于股权奖励的条款和归属时间表因授予类型和受赠人的雇佣状态而异。一般而言，奖励基于时间条件而归属。基于股票的薪酬费用计入合并的经营报表中的一般和管理（“G&A”）或研发（“R&D”）费用（如适用）。我们预计将来将记录额外的非现金薪酬费用，这可能会很显著。
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业务运营结果
收入
临床开发收入。2024年9月30日和2023年结束的三个月，临床开发收入分别约为$230万和$620万。2024年9月30日结束的九个月，临床开发收入分别约为$1110万和$1310万。公司目前收到日本新药株式会社相关的《独家商业化与分销协议》（“美国分销协议”）中的$4000万支付。营业收入采用与HOPE-3临床试验（A组）完成进度成比例性能方法按比例确认。
运营费用
研发费用。研发费用主要包括工资和其他相关人员成本、用品、临床试验成本、患者治疗成本、实验室和制造设施租金、咨询费、制造人员和用品成本、临床前、临床和制造服务提供者成本、由知识产权诉讼产生的某些法律费用、股票补偿费用以及与设计、开发、测试和增强产品候选人相关的其他费用。
以下表格总结了我们按指定期间的类别划分的研发支出:
截至2023年9月30日的三个月 | |||||||||||||
| 2024 |
| 2023 |
| 变动（美元） |
| 变动（%） |
| |||||
薪酬和其他人员费用 | $ | 3,684,188 | $ | 2,726,092 | $ | 958,096 | 35 | % | |||||
杜兴氏肌肉营养不良程序（德拉米欧赛） |
| 5,430,428 |
| 5,616,093 |
| (185,665) |
| (3) | % | ||||
外泌体平台研究 | 842,952 |
| 549,022 |
| 293,930 |
| 54 | % | |||||
设施费用 | 755,373 | 379,969 | 375,404 | 99 | % | ||||||||
基于股票的补偿 | 777,045 | 481,974 | 295,071 | 61 | % | ||||||||
折旧费 | 200,727 | 162,794 | 37,933 | 23 | % | ||||||||
研究和其他 | 117,154 | 113,020 | 4,134 | 4 | % | ||||||||
研发总费用 | $ | 11,807,867 | $ | 10,028,964 | $ | 1,778,903 | 18 | % | |||||
2024年9月30日结束的三个月，研发费用增加了约180万美元，增长了18%，与2023年9月30日结束的三个月相比。增加主要是由以下原因驱动:
| ● | 薪酬和其他人员费用增加了100万美元，主要是由于人数增加; |
| ● | 与NIAID合作相关的外泌体平台研究费用增加了30万美元，主要与我们的研究合作有关; |
| ● | 租用空间扩大导致的设施费用增加了40万美元，主要与扩展的租赁空间有关; |
| ● | 由于员工人数增加，股权补偿费用增加了30万美元。 |
该增加部分被DMD（deramiocel）项目相关费用约200,000美元的减少部分抵消。
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截至2023年9月30日的九个月 | |||||||||||||
| 2024 |
| 2023 |
| 变动（$） |
| 变动（%） |
| |||||
补偿和其他人事费用 | $ | 10,697,603 | $ | 7,419,586 | $ | 3,278,017 | 44 | % | |||||
杜兴肌肉萎缩症计划 (deramiocel) |
| 16,674,567 |
| 14,325,922 |
| 2,348,645 |
| 16 | % | ||||
外泌体平台研究 | 2,518,052 |
| 1,566,963 |
| 951,089 |
| 61 | % | |||||
设施费用 | 1,982,886 | 1,033,799 | 949,087 | 92 | % | ||||||||
基于股票的补偿 | 2,617,244 | 1,372,985 | 1,244,259 | 91 | % | ||||||||
折旧费 | 580,030 | 457,951 | 122,079 | 27 | % | ||||||||
研究和其他 | 343,267 | 330,666 | 12,601 | 4 | % | ||||||||
研发总费用 | $ | 35,413,649 | $ | 26,507,872 | $ | 8,905,777 | 34 | % | |||||
截至2024年9月30日的前九个月，研发费用增加了约890万美元，同比增长34%，主要是由以下原因推动的:
| ● | 薪酬和其他人员支出增加了330万美元，主要是由于人数增加; |
| ● | DMD（deramiocel）项目相关费用增加了230万美元，主要与我们的HOPE-3临床试验、我们的HOPE-2 OLE临床试验以及为deramiocel的潜在商业推出做准备的扩大制造业生产工作有关; |
| ● | 研究费用增加了100万美元，主要与我们与NIAID的外泌体平台合作有关; |
| ● | $90万的设施费用增加主要与扩大的租赁空间有关；以及 |
| ● | $120万的股权补偿费用增加主要是由于员工人数增加。 |
一般和行政费用G&A费用主要包括高管、财务和其他行政人员的薪酬和其他相关人员费用，股权补偿费用，会计、法律和其他专业费用，咨询费，公司办公室租金，业务保险和其他公司费用。
下表总结了我们各个时期的G&A费用分类。
截至2023年9月30日的三个月 | |||||||||||||
| 2024 |
| 2023 |
| 更改（$） |
| 变动（%） | ||||||
基于股票的补偿 | $ | 1,274,238 | $ | 1,235,219 | $ | 39,019 | 3 | % | |||||
补偿和其他人员费用 |
| 1,049,146 |
| 845,332 |
| 203,814 |
| 24 | % | ||||
专业服务 | 506,525 |
| 489,732 |
| 16,793 |
| 3 | % | |||||
设施费用 | 79,978 | 67,076 | 12,902 | 19 | % | ||||||||
折旧费 | 160,440 | 113,677 | 46,763 | 41 | % | ||||||||
其他企业支出 | 393,328 | 270,414 | 122,914 | 45 | % | ||||||||
总管理费用 | $ | 3,463,655 | $ | 3,021,450 | $ | 442,205 | 15 | % | |||||
2024年9月30日结束的三个月内，管理和行政支出增加了约40万美元，或15%，相比2023年9月30日结束的三个月。 增加主要是由以下原因驱动：
| ● | 由于员工人数增加，薪酬和其他人员支出增加了20万美元；以及 |
| ● | 其他企业费用增加了$10万。 |
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截至2023年9月30日的九个月 | |||||||||||||
| 2024 |
| 2023 |
| 变化（$） |
| 变动（%） | ||||||
基于股票的补偿 | $ | 4,852,244 | $ | 4,157,704 | $ | 694,540 | 17 | % | |||||
赔偿和其他人事开支 |
| 2,664,553 |
| 2,579,847 |
| 84,706 |
| 3 | % | ||||
专业服务 | 1,290,693 |
| 1,288,883 |
| 1,810 |
| 0 | % | |||||
设施费用 | 231,111 | 195,233 | 35,878 | 18 | % | ||||||||
折旧费 | 469,479 | 303,324 | 166,155 | 55 | % | ||||||||
其他企业支出 | 1,085,228 | 853,681 | 231,547 | 27 | % | ||||||||
总管理费用 | $ | 10,593,308 | $ | 9,378,672 | $ | 1,214,636 | 13 | % | |||||
截至2024年9月30日的九个月G&A费用同比增加约120万美元，增长了13%。这一增长主要是由以下因素推动的：
| ● | $70万美元的股票薪酬费用增加，主要是由于员工人数的增加； |
| ● | $10万美元的薪酬和其他人员费用增加，与员工人数的增加有关： |
| ● | $20万美元的折旧费用增加，主要与我们圣地亚哥总部的租赁改善有关；和 |
| ● | 其他企业费用增加20万美元。 |
其他收入
投资收入截至2024年9月30日和2023年9月30日的三个月的投资收入约为50万美元。截至2024年9月30日和2023年9月30日的九个月的投资收入分别约为150万美元和130万美元。2024年9月30日的三个月和九个月与2023年9月30日的三个月和九个月相比，投资收入的增加是由于利率期货的上升以及我们在可交易证券、储蓄和货币型基金账户中的更高本金余额。
正在积极开发的产品
用于治疗DMD的Deramiocel – 我们目前正在进行HOPE-3，DMD的第三阶段研究，以及我们正在进行的HOPE-2试验的OLE研究，预计在2024年支出约为3000万到3500万美元。我们DMD项目的费用将包括人员、临床、监管和制造相关费用，包括如果我们的deramiocel产品获得批准，潜在商业规模制造的扩展费用。
以外泌体为基础的治疗和生物-疫苗 – 我们的外泌体平台正在进行临床前开发。我们预计在2024年将花费约300万到500万美金用于与我们的外泌体项目相关的开发费用，包括人员、临床前研究和与这些技术相关的制造费用。我们对该项目的支出主要集中在扩展我们的工程外泌体平台上，包括制造与我们与NIAID合作相关的StealthX™生物-疫苗。
我们目前和未来临床开发项目的支出，尤其是我们的deramiocel和外泌体项目，无法在任何显著的程度上进行预测，因为它们依赖于我们当前试验的结果，以及我们获得额外资金和战略合作伙伴的能力。此外，我们无法在任何显著的程度上预测完成我们的临床试验所需的时间、完成研究和开发项目的成本，或者我们是否、何时以及在什么程度上从我们任何产品候选人的商业化和销售中产生收入。临床试验的持续时间和费用可能会由于在制造和临床开发过程中出现的意外事件以及其他各种因素而显著变化，包括：
| ● | 临床项目中的试验和研究数量； |
| ● | 参加试验的患者数量； |
| ● | 试验中包含的网站数量; |
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| ● | the rates of patient recruitment and enrollment; |
| ● | the duration of patient treatment and follow-up; |
| ● | the costs of manufacturing our product candidates; |
| ● | the availability of necessary materials required to make our product candidates; |
| ● | the costs, requirements and timing of, and the ability to secure, regulatory approvals; and |
| ● | the availability and cost of facilities needed to manufacture our products. |
Liquidity and Capital Resources
The following table summarizes our liquidity and capital resources as of September 30, 2024 and December 31, 2023 and our net increase (decrease) in cash and cash equivalents for the nine months ended September 30, 2024 and 2023 and is intended to supplement the more detailed discussion that follows. The amounts stated in the tables below are expressed in thousands.
Liquidity and capital resources |
| September 30, 2024 |
| December 31, 2023 | ||
Cash and cash equivalents | $ | 68,377 | $ | 14,695 | ||
Marketable securities | $ | 16,651 | $ | 24,793 | ||
Working capital | $ | 65,348 | $ | 19,586 | ||
Stockholders’ equity | $ | 68,265 | $ | 22,601 | ||
Nine months ended September 30, | |||||||||
Cash flow data |
| 2024 |
| 2023 | |||||
Cash provided by (used in): | |||||||||
Operating activities | $ | (25,199) | $ | (14,003) | |||||
Investing activities | 7,198 | 10,971 | |||||||
Financing activities | 71,684 | 2,413 | |||||||
Net increase (decrease) in cash and cash equivalents |
| $ | 53,683 |
| $ | (619) | |||
Our total cash, cash equivalents and marketable securities as of September 30, 2024 were approximately $85.0 million compared to approximately $39.5 million as of December 31, 2023. The increase in cash, cash equivalents and marketable securities from December 31, 2023 to September 30, 2024 is primarily due to equity financings through our at-the-market offering and $15.0 million private placement with Nippon Shinyaku. As of September 30, 2024, we had approximately $24.7 million in total liabilities, of which approximately $13.1 million relates to deferred revenue, and approximately $65.3 million in net working capital.
Cash used in operating activities was approximately $25.2 million and approximately $14.0 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of approximately $11.2 million in cash used in operating activities is due to approximately $11.8 million increase in net loss for the nine months ended September 30, 2024 as compared to the same period in 2023. Furthermore, there was an increase of approximately $1.9 million in stock-based compensation and a decrease of approximately $1.6 million in accounts payable and accrued expenses for the nine months ended September 30, 2024 as compared to the same period in 2023. To the extent we obtain sufficient capital and/or long-term debt funding and are able to continue developing our product candidates, including if we expand our platform technology portfolio, engage in further research and development activities, and, in particular, conduct preclinical studies and clinical trials, we expect to continue incurring substantial losses.
We had cash flow provided by investing activities of approximately $7.2 million and approximately $11.0 million for the nine months ended September 30, 2024, and 2023, respectively. The change in investing activities for the nine months ended September 30, 2024 as compared to the same period of 2023 is due to the net effect from purchases, sales and maturities of marketable securities and the decrease of approximately $0.4 million in leasehold improvements.
We had cash flow provided by financing activities of approximately $71.7 million and approximately $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in cash provided by financing activities for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 is due
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to the net proceeds from the sale of common stock under our at-the-market program and Nippon Shinyaku private placement.
Our estimates regarding the sufficiency of our financial resources are based on assumptions that may prove to be wrong. We may need to obtain additional funds sooner than planned or in greater amounts than we currently anticipate. The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control. These factors include the following:
| ● | the progress of our clinical and research activities; |
| ● | the number and scope of our clinical and research programs; |
| ● | the progress and success of our preclinical and clinical development activities; |
| ● | the progress of the development efforts of parties with whom we have entered into research and development agreements; |
| ● | our ability to successfully manufacture product for our clinical trials and potential commercial use; |
| ● | the availability of materials necessary to manufacture our product candidates; |
| ● | the costs of manufacturing our product candidates, and the progress of efforts with parties with whom we may enter into commercial manufacturing agreements, if necessary; |
| ● | our ability to maintain current research and development programs and to establish new research and development and licensing arrangements; |
| ● | additional costs associated with maintaining licenses and insurance; |
| ● | the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and |
| ● | the costs and timing of obtaining marketing approval both in the United States and in countries outside of the United States. |
Collaborations
Commercialization and Distribution Agreement with Nippon Shinyaku (Territory: United States)
On January 24, 2022, Capricor entered into a Commercialization and Distribution Agreement (the “U.S. Distribution Agreement”) with Nippon Shinyaku, a Japanese corporation. Under the terms of the U.S. Distribution Agreement, Capricor appointed Nippon Shinyaku as its exclusive distributor in the United States of deramiocel for the treatment of DMD.
Under the terms of the U.S. Distribution Agreement, Capricor will be responsible for the clinical development and manufacturing of deramiocel. Nippon Shinyaku and NS Pharma, Inc. (its wholly-owned U.S. subsidiary) will be responsible for the distribution of deramiocel in the United States. Pursuant to the U.S Distribution Agreement, Capricor received an upfront payment of $30.0 million in 2022. The first milestone payment of $10.0 million was paid upon completion of the interim futility analysis of the HOPE-3 trial whereby the outcome was determined to be not futile. Capricor received this milestone payment from Nippon Shinyaku in January 2024. Additionally, there are potential milestones totaling up to $90.0 million leading up to and including the BLA approval. Further, there are various potential sales-based milestones, if commercialized, tied to the achievement of certain sales thresholds for annual net sales of deramiocel of up to $605.0 million.
Commercialization and Distribution Agreement with Nippon Shinyaku (Territory: Japan)
On February 10, 2023, Capricor entered into a Commercialization and Distribution Agreement (the “Japan Distribution Agreement”) with Nippon Shinyaku. Under the terms of the Japan Distribution Agreement, Capricor appointed Nippon Shinyaku as its exclusive distributor in Japan of deramiocel for the treatment of DMD.
Under the terms of the Japan Distribution Agreement, Capricor received an upfront payment of $12.0 million in the first quarter of 2023 and in addition, Capricor will potentially receive additional development and sales-based milestone payments of up to approximately $89.0 million, subject to foreign currency exchange rates, and a meaningful double-digit share of product revenue. Nippon Shinyaku will be responsible for the distribution of deramiocel in Japan. Capricor will
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be responsible for the conduct of clinical development and regulatory approval in Japan, as may be required, as well as the manufacturing of deramiocel. Subject to regulatory approval, Capricor or its designee will hold the Marketing Authorization in Japan if the product is approved in that territory.
Binding Term Sheet with Nippon Shinyaku (Territory: Europe)
On September 16, 2024, Capricor entered into a Binding Term Sheet (the “Term Sheet”) with Nippon Shinyaku for the commercialization and distribution of deramiocel for the treatment of DMD in the European region, as defined in the Term Sheet. Subject to finalization of a definitive agreement, under the terms of the Term Sheet, Capricor would be responsible for the development and manufacturing of deramiocel for potential approval in the European region. Nippon Shinyaku would be responsible for the sales and distribution of deramiocel in the European region. Subject to regulatory approval, Capricor would receive a double-digit share of product revenue and additional development and sales-based milestone payments. If the definitive agreement is entered into on the same economic terms as the term sheet, Capricor will receive an upfront payment of $20.0 million upon execution of the definitive agreement, with potential additional development and sales-based milestone payments of up to $715.0 million.
Financing Activities by the Company
September 2023 Financing
On September 29, 2023, the Company entered into Securities Purchase Agreements, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “Registered Direct Offering”), an aggregate of 4,935,621 shares of its common stock, par value $0.001 per share, at a price per share of $4.66 for an aggregate purchase price of approximately $23.0 million. Each share of common stock offered was sold with a warrant to purchase one share of common stock at an exercise price of $5.70 per share. Each warrant became exercisable beginning six months after issuance and will expire seven years from the date of issuance.
ATM Program
On June 21, 2021, the Company initiated an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $75.0 million (the “ATM Program”), with the common stock to be distributed at the market prices prevailing at the time of sale. The ATM Program was established under a Common Stock Sales Agreement (the “Sales Agreement,”), with H.C. Wainwright & Co. LLC (“Wainwright”), under which we may, from time to time, issue and sell shares of our common stock through Wainwright as sales agent. The Sales Agreement provides that Wainwright will be entitled to compensation for its services at a commission rate of 3.0% of the gross sales price per share of common stock sold. All shares issued pursuant to the ATM Program were issued pursuant to our shelf registration statement on Form S-3 (File No. 333-254363), which was initially filed with the Securities and Exchange Commission (the “SEC”), on March 16, 2021, amended on June 15, 2021 and declared effective by the SEC on June 16, 2021. From June 21, 2021 through October 1, 2024, the Company sold an aggregate of 9,228,383 shares of common stock under the ATM Program at an average price of approximately $8.13 per share for gross proceeds of approximately $75.0 million which represents all amounts that were available to be sold. Effective October 1, 2024, the ATM Program was closed and terminated. The Company paid cash commissions on the gross proceeds, plus reimbursement of expenses to Wainwright, as well as legal and accounting fees, in the aggregate amount of approximately $2.4 million.
September 2024 Private Placement
On September 16, 2024, the Company entered into Subscription Agreement with Nippon Shinyaku pursuant to which the Company agreed to issue and sell to Nippon Shinyaku in a private placement (the “Private Placement”), an aggregate of 2,798,507 shares of the common stock of the Company at a price per Share of $5.36, which was issued at a 20% premium to the 60-day VWAP, for an aggregate purchase price of approximately $15.0 million. The Subscription Agreement also includes lock-up provisions restricting Nippon Shinyaku from selling or otherwise disposing of shares of Common Stock until the six-month anniversary of the Closing Date.
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In connection with the Private Placement, the Company also entered into a Registration Rights Agreement with Nippon Shinyaku on September 16, 2024 (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company has filed with the SEC a registration statement to register for resale the shares sold in the Private Placement, which registration statement was declared effective on November 8, 2024.
October 2024 Underwritten Public Offering
On October 16, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Piper Sandler and Oppenheimer as representatives of the underwriters (the “Underwriters”), pursuant to which the Company agreed to sell and issue, in a public offering an aggregate of 5,073,800 shares of common stock, including the exercise in full of the underwriters’ option to purchase additional shares to cover over allotments, at a public offering price of $17.00 per share for total gross proceeds of approximately $86.3 million, before deducting underwriting commissions and other offering expenses payable by Capricor. The Company paid cash commissions on the gross proceeds, plus reimbursement of expenses to the Underwriters, as well as legal and accounting fees in the aggregate amount of approximately $5.5 million.
CIRM Grant Award
On June 16, 2016, Capricor entered into an award (the “CIRM Award”) with the California Institute for Regenerative Medicine (“CIRM”) in the amount of approximately $3.4 million to fund, in part, Capricor’s Phase I/II HOPE-Duchenne clinical trial investigating deramiocel for the treatment of Duchenne muscular dystrophy-associated cardiomyopathy. Pursuant to terms of the CIRM Award, the disbursements were tied to the achievement of specified operational milestones. In addition, the terms of the CIRM Award included a co-funding requirement pursuant to which Capricor was required to spend approximately $2.3 million of its own capital to fund the CIRM funded research project. The CIRM Award is further subject to the conditions and requirements set forth in the CIRM Grants Administration Policy for Clinical Stage Projects. Such requirements include, without limitation, the filing of quarterly and annual reports with CIRM, the sharing of intellectual property pursuant to Title 17, California Code of Regulations (CCR) Sections 100600-100612, and the sharing with the State of California of a fraction of licensing revenue received from a CIRM funded research project and net commercial revenue from a commercialized product which resulted from the CIRM funded research as set forth in Title 17, CCR Section 100608. The maximum royalty on net commercial revenue that Capricor may be required to pay to CIRM is equal to nine times the total amount awarded and paid to Capricor.
After completing the CIRM funded research project and at any time after the award period end date (but no later than the ten-year anniversary of the date of the award), Capricor has the right to convert the CIRM Award into a loan, the terms of which will be determined based on various factors, including the stage of the research and development of the program at the time the election is made. On June 20, 2016, Capricor entered into a Loan Election Agreement with CIRM whereby, among other things, CIRM and Capricor agreed that if Capricor elects to convert the grant into a loan, the term of the loan could be up to five years from the date of execution of the applicable loan agreement; provided that the maturity date of the loan will not surpass the ten-year anniversary of the grant date of the CIRM Award. Beginning on the date of the loan, the loan shall bear interest on the unpaid principal balance, plus the interest that has accrued prior to the election point according to the terms set forth in the CIRM Loan Policy and CIRM Grants Administration Policy for Clinical Stage Projects (the “New Loan Balance”), at a per annum rate equal to the LIBOR rate for a three-month deposit in U.S. dollars, as published by the Wall Street Journal on the loan date, plus one percent. Interest shall be compounded annually on the outstanding New Loan Balance commencing with the loan date and the interest shall be payable, together with the New Loan Balance, upon the due date of the loan. Depending on the timing of our election, additional funds may be owed. If Capricor elects to convert the CIRM Award into a loan, certain requirements of the CIRM Award will no longer be applicable, including the revenue sharing requirements. Capricor has not yet made its decision as to whether it will elect to convert the CIRM Award into a loan. If we elect to do so, Capricor would be required to repay the amounts awarded by CIRM, therefore the Company accounts for this award as a liability rather than income.
In 2019, Capricor completed all milestones and close-out activities associated with the CIRM Award and expended all funds received. As of September 30, 2024, Capricor’s liability balance for the CIRM Award was approximately $3.4 million.
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Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis, including research and development and clinical trial accruals, and stock-based compensation estimates. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. We believe the following critical accounting policies reflect the more significant judgments and estimates used in the preparation of our financial statements and accompanying notes.
Leases
ASC Topic 842, Leases (“ASC 842”), requires lessees to recognize most leases on the balance sheet with a corresponding right-to-use (“ROU”) asset. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU assets are evaluated for impairment using the long-lived assets impairment guidance.
Leases will be classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases if and when the Company has them.
The Company leases office and laboratory space, all of which are operating leases. Most leases include the option to renew and the exercise of the renewal options is at the Company’s sole discretion. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew. In addition, the Company’s lease agreements generally do not contain any residual value guarantees or restrictive covenants.
The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.
For real estate leases, the Company has elected the practical expedient under ASC 842 to account for the lease and non-lease components together for existing classes of underlying assets and allocates the contract consideration to the lease component only. This practical expedient is not elected for manufacturing facilities and equipment embedded in product supply arrangements.
Revenue Recognition
The Company applies ASU 606, Revenue for Contracts from Customers, which amended revenue recognition principles and provides a single, comprehensive set of criteria for revenue recognition within and across all industries. The Company has not yet achieved commercial sales of its drug candidates to date, however, the new standard is applicable to its distribution agreements.
The revenue standard provides a five-step framework for recognizing revenue as control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that it determines are within the scope of the revenue standard, the Company performs the following five steps: (i) identify the contract; (ii) identify the performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance
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obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation, or whether they are not distinct and are combined with other goods and services until a distinct bundle is identified. The Company then determines the transaction price, which typically includes upfront payments and any variable consideration that the Company determines is probable to not cause a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is resolved. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when, or as, each performance obligation is satisfied.
The Company’s distribution agreements may entitle it to additional payments upon the achievement of milestones or shares of product revenue. The milestones are generally categorized into three types: development milestones, regulatory milestones and sales-based milestones. The Company evaluates whether it is probable that the consideration associated with each milestone or shared revenue payments will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for its milestones and shared revenue payments, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income (loss) in the Company’s condensed consolidated statements of operation and comprehensive loss. Typically, milestone payments and shared revenue payments are achieved after the Company’s performance obligations associated with the distribution agreements have been completed and after the customer has assumed responsibility for the respective clinical program. Milestones or shared revenue payments achieved after the Company’s performance obligations have been completed are recognized as revenue in the period the milestone or shared revenue payments was achieved. If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue.
The revenue standard requires the Company to assess whether a significant financing component exists in determining the transaction price. The Company performs this assessment at the onset of its distribution agreements. Typically, a significant financing component does not exist because the customer is paying for services in advance with an upfront payment. Additionally, future shared revenue payments are not substantially within the control of the Company or the customer.
Whenever the Company determines that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using either the proportional performance method or on a straight-line basis if efforts will be expended evenly over time. Percentage of completion of patient visits in clinical trials are used as the measure of performance. The Company feels this method of measurement to be the best depiction of the transfer of services and recognition of revenue. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on its condensed consolidated balance sheets.
Certain judgments affect the application of the Company’s revenue recognition policy. For example, the Company records short-term (less than one year) and long-term (over one year) deferred revenue based on its best estimate of when such revenue will be recognized. This estimate is based on the Company’s current operating plan, and the Company may recognize a different amount of deferred revenue over the next 12-month period if its plan changes in the future.
Grant Income
The determination as to when income is earned is dependent on the language in each specific grant. Generally, we recognize grant income in the period in which the expense is incurred for those expenses that are deemed reimbursable
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under the terms of the grant. Grant income is due upon submission of reimbursement request. The transaction price varies for grant income based on the expenses incurred under the awards.
CIRM Grant Award
Capricor accounts for the disbursements under its CIRM Award as long-term liabilities. Capricor recognizes the CIRM grant disbursements as a liability as the principal is disbursed rather than recognizing the full amount of the grant award. After completing the CIRM funded research project and after the award period end date, Capricor has the right to convert the CIRM Award into a loan, the terms of which will be determined based on various factors, including the stage of the research and the stage of development at the time the election is made. In June 2016, Capricor entered into a Loan Election Agreement with CIRM whereby, among other things, CIRM and Capricor agreed that if Capricor elects to convert the grant into a loan, the term of the loan could be up to five years from the date of execution of the applicable loan agreement; provided that the maturity date of the loan will not surpass the ten-year anniversary of the grant date of the CIRM Award. Since Capricor may be required to repay some or all of the amounts awarded by CIRM, the Company accounts for this award as a liability rather than income.
Research and Development Expenses and Accruals
R&D expenses consist primarily of salaries and related personnel costs, supplies, clinical trial costs, patient treatment costs, rent for laboratories and manufacturing facilities, consulting fees, costs of personnel and supplies for manufacturing, costs of service providers for preclinical, clinical, manufacturing and commercial activities, and certain legal expenses resulting from intellectual property prosecution, stock compensation expense and other expenses relating to the design, development, testing and enhancement of our product candidates. Except for certain capitalized intangible assets, R&D costs are expensed as incurred.
Our cost accruals for clinical trials and other R&D activities are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial centers and contract research organizations (“CROs”), clinical study sites, laboratories, consultants or other clinical trial vendors that perform activities in connection with a trial. Related contracts vary significantly in length and may be for a fixed amount, a variable amount based on actual costs incurred, capped at a certain limit, or for a combination of fixed, variable and capped amounts. Activity levels are monitored through close communication with the CROs and other clinical trial vendors, including detailed invoice and task completion review, analysis of expenses against budgeted amounts, analysis of work performed against approved contract budgets and payment schedules, and recognition of any changes in scope of the services to be performed. Certain CRO and significant clinical trial vendors provide an estimate of costs incurred but not invoiced at the end of each quarter for each individual trial. These estimates are reviewed and discussed with the CRO or vendor as necessary, and are included in R&D expenses for the related period. For clinical study sites which are paid periodically on a per-subject basis to the institutions performing the clinical study, we accrue an estimated amount based on subject screening and enrollment in each quarter. All estimates may differ significantly from the actual amount subsequently invoiced, which may occur several months after the related services were performed.
In the normal course of business, we contract with third parties to perform various R&D activities in the on-going development of our product candidates. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients, and the completion of portions of the clinical trial or similar conditions. The objective of the accrual policy is to match the recording of expenses in the financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical trials and other R&D activities are recognized based on our estimates of the degree of completion of the event or events specified in the applicable contract.
No adjustments for material changes in estimates have been recognized in any period presented.
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Stock-Based Compensation
Our results include non-cash compensation expense as a result of the issuance of stock, stock options and warrants, as applicable. We have issued stock options to employees, directors and consultants under our five stock option plans: (i) the 2006 Stock Option Plan, (ii) the 2012 Restated Equity Incentive Plan (which superseded the 2006 Stock Option Plan), (the “2012 Plan”), (iii) the 2012 Non-Employee Director Stock Option Plan (the “2012 Non-Employee Director Plan”), (iv) the 2020 Equity Incentive Plan (the “2020 Plan”), and (v) the 2021 Equity Incentive Plan (the “2021 Plan”). At this time, the Company only issues options under the 2020 Plan and the 2021 Plan and no longer issues options under the 2006 Stock Option Plan, the 2012 Plan, or the 2012 Non-Employee Director Plan.
We expense the fair value of stock-based compensation over the vesting period. When more precise pricing data is unavailable, we determine the fair value of stock options using the Black-Scholes option-pricing model. This valuation model requires us to make assumptions and judgments about the variables used in the calculation. These variables and assumptions include the weighted-average period of time that the options granted are expected to be outstanding, the volatility of our common stock, and the risk-free interest rate. We account for forfeitures upon occurrence.
Stock options or other equity instruments to non-employees (including consultants) issued as consideration for goods or services received by us are accounted for based on the fair value of the equity instruments issued. The fair value of stock options is determined using the Black-Scholes option-pricing model. The Company calculates the fair value for non-qualified options as of the date of grant and expenses over the applicable vesting periods.
The terms and vesting schedules for share-based awards vary by type of grant and the employment status of the grantee. Generally, the awards vest based upon time-based conditions. Stock-based compensation expense is included in general and administrative expense or research and development expense, as applicable, in the Statements of Operations and Comprehensive Income (Loss). We expect to record additional non-cash compensation expense in the future, which may be significant.
Clinical Trial Expense
As part of the process of preparing our condensed consolidated financial statements, we are required to estimate our accrued expenses. Our clinical trial accrual process is designed to account for expenses resulting from our obligations under contracts with vendors, consultants, CROs and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. Our objective is to reflect the appropriate clinical trial expenses in our condensed consolidated financial statements by matching the appropriate expenses with the period in which services are provided and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates through financial models that take into account discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from our estimates. We make estimates of our accrued expenses as of each balance sheet date in our condensed consolidated financial statements based on the facts and circumstances known to us at that time. Our clinical trial accrual and prepaid assets are dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low for any particular period.
Recently Issued or Newly Adopted Accounting Pronouncements
In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This standard was issued in response to the SEC’s disclosure update and simplification initiative, which affects a variety of topics within the Accounting Standards Codification. The amendments apply to all reporting entities within the scope of the affected topics unless otherwise indicated. The effective date for each amendment will be the date on which the SEC’s
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removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Sensitivity
Our exposure to market risk for changes in interest rates relates primarily to our marketable securities and cash and cash equivalents. As of September 30, 2024, the fair value of our cash, cash equivalents and marketable securities was approximately $85.0 million. Additionally, as of September 30, 2024, Capricor’s investment portfolio was classified as cash, cash equivalents and marketable securities, which consisted primarily of money market funds which included short-term U.S. treasuries, bank savings and checking accounts.
The goal of our investment policy is to place our investments with highly rated credit issuers and limit the amount of credit exposure. We seek to improve the safety and likelihood of preservation of our invested funds by limiting default risk and market risk. Our investments may be exposed to market risk due to fluctuation in interest rates, which may affect our interest income and the fair market value of our investments, if any. We will manage this exposure by performing ongoing evaluations of our investments. Due to the short-term maturities, if any, of our investments to date, their carrying value has always approximated their fair value. Our policy is to mitigate default risk by investing in high credit quality securities, and we currently do not hedge interest rate exposure. Due to our policy of making investments in U.S. treasury securities with primarily short-term maturities, we believe that the fair value of our investment portfolio would not be significantly impacted by a hypothetical 100 basis point increase or decrease in interest rates.
Item 4. Controls and Procedures.
We have adopted and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving the desired control objectives.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Controls over Financial Reporting
There has been no change in our internal control over financial reporting during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are not involved in any material pending legal proceedings.
Item 1A. Risk Factors.
Part 1, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 11, 2024, describes important risk factors that could cause our business, financial condition, results of operations and prospects to differ significantly from those suggested by forward-looking statements made in this Quarterly Report on Form 10-Q or otherwise presented by us from time to time. There have been no material changes in our risk factors from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 11, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits.
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101 | The following financial information from Capricor Therapeutics, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit), (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.* | ||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
+ Portions of the exhibit have been excluded because it is both not material and is the type of information that the registrant treats as private or confidential.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CAPRICOR THERAPEUTICS, INC. | |
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Date: November 14, 2024 | By: | /s/ Linda Marbán, Ph.D. |
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| Linda Marbán, Ph.D. |
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| Chief Executive Officer |
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| (Principal Executive Officer) |
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Date: November 14, 2024 | By: | /s/ Anthony J. Bergmann |
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| Anthony J. Bergmann |
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| Chief Financial Officer |
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| (Principal Financial and Principal Accounting Officer) |
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