Biotech Capricor soars 530% in last month; Wall Street still sees more upside

Shares of biotech Capricor Therapeutics have surged about 530% over the past month after the company reported positive results from a phase III trial of its experimental therapy, deramiocel, for a rare disease called Duchenne muscular dystrophy. If the drug receives regulatory approval, Capricor shares could rise another 75%, according to Wall Street.

Capricor Therapeutics is a U.S. biotech company with a market capitalization of about $1.5 billion that focuses on cell- and exosome-based therapies. Founded in 2005, the company is led by CEO Linda Marbán, who is also a cofounder.

The scientific foundation of Capricor’s work is rooted in decades of research by cardiologist and scientist Eduardo Marbán, the husband of the CEO. His work at Johns Hopkins University on cardiac progenitor cells, known as cardiosphere-derived cells, or CDCs, capable of preserving cardiac and skeletal muscle function, underpins Capricor’s current development programs. These approaches have also shown promise in patients with Duchenne muscular dystrophy.

In 2006, Capricor, initially a startup built around Eduardo’s research, raised its first $4 million to begin commercial operations. Since 2007, the company has consistently advanced therapeutic programs based on CDC technology.

In 2013, Capricor merged with its subsidiary Nile Therapeutics and listed its shares on the Nasdaq as Capricor Therapeutics. Between 2014 and 2016, the company began developing a cell-based therapy that later became deramiocel. In 2022, Capricor entered into an agreement with Japan’s Nippon Shinyaku to commercialize and distribute deramiocel in the U.S. The partnership was expanded in 2023 and 2024 to include Japan and Europe.

In early December, Capricor completed a $150 million public offering, selling 6 million shares at $25 apiece. The company said it plans to use the proceeds to support further drug development and expand manufacturing capacity.

Capricor’s lead drug candidate, deramiocel, is a cell therapy with immunomodulatory and antifibrotic properties designed to preserve cardiac and skeletal muscle function during Duchenne muscular dystrophy. Beyond deramiocel, the company is developing several additional candidates, most of them at the preclinical stage, including StealthX, an exosome-based platform targeting a range of diseases, as well as CDC-derived exosomes for Duchenne therapy.

Capricor shares have risen sharply in recent months after the company completed a successful phase III clinical trial of deramiocel. The study enrolled 106 boys and young men across 20 U.S. clinical centers. Participants received deramiocel or a placebo every three months, alongside corticosteroids, the standard of care for the disease. After 12 months, investigators assessed upper limb function and cardiac performance. According to Capricor, deramiocel slowed the progression of skeletal muscle deterioration by 54%, an outcome the company described as rare in Duchenne muscular dystrophy. The therapy also reduced the progression of cardiac dysfunction by 91%.

Capricor expects this data to form the basis of its case to get regulatory approval for deramiocel. In July, the U.S. Food and Drug Administration rejected the company’s initial application, a decision Capricor said was unexpected. Following additional discussions, the company said in September that the FDA was willing to reconsider its decision in light of updated clinical data.

Other companies are also developing treatments for muscular dystrophy, but results across the sector have been mixed, and failures have weighed on investor confidence. In June, shares of Sarepta Therapeutics fell 42% after the second death in three months of a teenager treated with Elevidys, the first gene therapy for muscular dystrophy approved in the U.S. Sarepta shares have not returned to their pre-decline levels since.

If deramiocel is approved, peak sales could exceed $1 billion, says B. Riley Securities analyst Madison El-Saadi. He expects the therapy to be approved, citing the latest trial results, which he said delivered an “unambiguous efficacy signal” across all trial goals. Alliance Global Partners analyst James Molloy has a similar view and estimates an 85% probability of FDA approval. If approved, the company could launch deramiocel as early as the fourth quarter of 2026, or potentially sooner, he says.

“We expect many physicians will elect to use this therapy, particularly given a strong safety profile,” Cantor Fitzgerald analyst Kristen Kluska wrote in early December. Prior talks with doctors suggested they were intrigued by the treatment but needed to see more data, she added. “Today’s update provides this.”

Analysts at Oppenheimer, Jones Research, and Roth Capital are also positive and expect FDA approval. Roth Capital reiterated a “buy” rating on December 3 and raised its target price to $13 from $12 per share. JonesResearch maintained its “buy” rating and lifted its target price to $29 per share. Oppenheimer raised its target price to $54 from $22 per share, implying upside of nearly 87%.

All 10 Wall Street analysts covering Capricor recommend “buy,” with the average target price indicating about 75% upside from the stock’s closing price on December 23.

This material does not constitute individualized investment advice.