On Tuesday, Oppenheimer adjusted its outlook on Capricor Therapeutics (NASDAQ: ), increasing its price target to $15.00, up from $14.00 previously, while maintaining an Outperform rating on the stock. The company’s decision follows the recent announcement that Capricor has completed binding terms for the European commercialization of deramiocel with its existing partner, Nippon Shinyaku.
The agreement with Nippon Shinyaku, which has been Capricor’s partner in the US and Japan, is seen as an important step for the company, giving it access to another major pharmaceutical market. It also reflects the third party’s confidence in the global regulatory outlook for deramiocel, and is expected to exceed Capricor’s cash base through 2026.
Capricor is actively preparing to engage with European Union regulators. While the details of the approval path for deramiocel in the US are pending after recent discussions with the FDA, Oppenheimer expects that the product can be approved and launched in the US by the end of 2025. Analysts estimate that by 2030, sales of deramiocel by NS Pharma in the US market alone could reach about $1 billion.
The revised price target of $15 reflects a positive outlook for Capricor, albeit a conservative one, as it has not considered potential revenue from sales outside the United States. The company’s progress with deramiocel and its strategic partnership with Nippon Shinyaku continue to attract investors, with hopes for growth in the biopharmaceutical sector.
In other recent news, Capricor Therapeutics has reached a significant financial agreement with Nippon Shinyaku Co., Ltd., for a total of $35 million. The deal, which aims to extend Capricor’s financial footing into 2026, includes an equity investment of $15 million and an initial payment of $20 million. This funding will support the development and potential global distribution of Capricor’s lead candidate, deramiocel, for the treatment of Duchenne muscular dystrophy (DMD).
In addition, the biotech company reported a net loss of about $11 million for Q2 2024, despite a profit of about $4 million. However, Capricor maintains a strong cash position of $29.5 million, expected to fund operations in the first quarter of 2025.
Furthermore, the company is in advanced partnership discussions for distribution in Europe and has been included in the Russell 3000 Indexes. Capricor is also preparing for the potential commercial launch of deramiocel and is engaging with the FDA for label expansion.
InvestingPro Insights
With Capricor Therapeutics ( NASDAQ:CAPR ) making strides toward commercializing deramiocel in Europe, investors are keeping an eye on its financial health and market performance. According to InvestingPro data, Capricor has a market capitalization of $164.65 million and trades at a high Price/Book of 12.48 times, indicating that the market has high expectations for the company’s asset value. Despite a remarkable revenue growth of 187.15% over the last twelve months in Q2 2024, the company’s gross profit margin stood at -37.73%, indicating the challenge of translating sales into profitability.
InvestingPro Tips reveal a mix of caution and potential for Capricor. On the one hand, the company has more cash than debt, which is a positive sign for financial stability. On the other hand, analysts have revised the earnings down for the coming period and do not expect the company to be profitable this year. In addition, the share price has been quite volatile, with a 3-month total return of -11.09%, reflecting the uncertainty of the market.
For investors considering Capricor as part of their portfolio, there are 10 additional InvestingPro Tips available, which provide deeper insight into the company’s financials and market expectations. These tips can be a valuable resource for making sound investment decisions, especially when navigating the volatility and growth prospects of the biopharmaceutical sector. For more detailed analysis, visit InvestingPro at https://www.investing.com/pro/CAPR.
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