SEC, please feel free to look at them should you have any questions. Capricor has been around for coming up on 20 years, upon which we have been building our allogeneic cell therapy called deramiocel. The technology was originally developed at Johns Hopkins University, and as I walk through my presentation today, we will hear about the mechanism of action, the publications that have been validated by the mechanism of action, the fact that we're treating Duchenne muscular dystrophy. We manufacture our product in-house, and we have a commercial-scale manufacturing facility, and we have a commercial partnership in the United States and Japan with Nippon Shinyaku. I won't be spending a lot of time today on our pipeline products, which is the StealthX exosome platform, but look forward to that becoming available as we get through the end of 2025 and into 2026.
Shown here is our product pipeline, and I'll just highlight for a moment the fact that we are going to be talking today primarily about deramiocel, which is an allogeneic, which means an off-the-shelf cell therapy product for which we are using to treat Duchenne muscular dystrophy, primarily the cardiomyopathy. Again, shown here are some of the exosome-based programs that are coming forward, anticipating to enter into the clinic and the therapeutic arena in 2026. Where are we in terms of our catalyst and development of deramiocel for Duchenne muscular dystrophy? The last 12 months have been really busy; actually, it's more like 15 months now, have been really busy ones for Capricor.
We have been able to meet with the FDA on a regular basis, starting with our pre-BLA meeting in August of 2024, where we decided, along with the support of the agency, to file on the cardiomyopathy associated with Duchenne muscular dystrophy. We then began submitting aspects of the BLA with the submission complete at the end of 2024. The application was accepted for review most recently, just a few weeks ago in March of 2025, with priority review granted. Our PDUFA is the stated date of August 31, 2025. We're looking forward to that. On the economic side of the house, we have multiple milestones coming our way as we proceed to and get to approval: $80 million from our partner, Nippon Shinyaku, sales-based milestones up to $605 million, and potential sale of the priority review voucher for which we are qualified and are in the queue for.
That has most recently been selling somewhere between $100 million and $150 million, and we anticipate selling that when we anticipate receiving it. We have plenty of cash in the bank. I did a fundraise in late 2024, which supported our balance sheet. We have money independent of those milestone payments I just discussed up into 2027, at which time we will have been commercial for quite some time. Let me tell you a little bit about deramiocel, how it works, what it does, and why we think it's an appropriate therapeutic for treating the cardiomyopathy associated with Duchenne. As I mentioned, it's an off-the-shelf product. I'll talk about manufacturing in the next few minutes.
What I'd like to highlight right now is that we have a stated mechanism of action, which has been validated by our potency assays that have been approved by the FDA as appropriate for this product and for approval. It is a multimodal mechanism of action starting with immunomodulation. There are over 200 patients that have been treated with deramiocel. As I mentioned in our first slide, there's over 300 publications from 55 labs worldwide talking about the scientific designation of this product, which is called a cardiosphere-derived cell. As I mentioned, we have potency assays, identity criteria, and other parameters with which to identify our cells and validate that batch-to-batch consistency is achieved in terms of the therapeutic window.
Because of the rare disease aspect, as well as treating a pediatric disease and the fact that we're a cell and gene therapy, we have multiple designations that have helped to pave our way in dealing with the regulatory pathways: orphan drug designation, RMAT, which is Regenerative Medicine Advanced Therapy, it's like Breakthrough for cell and gene therapy. We now have ATMP in Europe, similar to orphan designation. As I mentioned, we have rare pediatric disease designation in the United States, which is how we qualify for the PRV. How do we make deramiocel? Deramiocel starts with an explanted human heart that is transplant-qualified but cannot be used because of technical reasons. Now, you might be scratching your head and saying, "Wow, how often does that happen?
There are way more people that need heart transplants than are getting them. The answer is, fortunately for the people that can benefit from our cells, but unfortunately for those recipients, many times there are technical reasons for which those hearts cannot be transplanted safely into a human being, but are very appropriate for our use. That could be if there is an accident or some type of physical damage to the heart or something that happens in the transport of the heart that we are able to get that heart into our labs. We then cut the heart up. We isolate out our cells of interest. It is a stromal cell population. It is not a stem cell. They do not retain and graft or become part of a functioning syncytium. What they do is they release exosomes after they are infused into the body.
I'll talk a little bit about that over the next few slides. When we isolate out our cells, we then put them through some proprietary steps, which includes a spherical suspension step. We ultimately plate them on fibronectin-coated dishes, gather them up into vials where then they are cryopreserved and ultimately delivered to patients. The dose is 150 million cells four times a year. Once a quarter, our guys get an infusion. Let's talk now about the disease that we're treating, the cardiomyopathy associated with Duchenne muscular dystrophy. Highlighted in this quote here are some words taken from the publication from the paper published by John Soslow and his colleagues from the ACTION Network and the Cardiac Consortium to understand the pathogenesis of the cardiomyopathy associated with Duchenne muscular dystrophy.
What I want you to understand is that the cardiomyopathy is the leading cause of death in the Duchenne muscular dystrophy patient population. While most of these boys and young men are on standard-of-care cardiac medications, it is not enough to ameliorate the progression of this disease process. Finally, with deramiocel, we have an opportunity to directly treat the cardiomyopathy associated with Duchenne. I am going to walk you through this graphic here very quickly because I think it is really important. Shown on the Y-axis is ejection fraction, which is how the heart meets the needs of the body, and it is the primary efficacy endpoint for which we have asked for approval. On the Y-axis is age. The dotted blue line is an imaginary line that we have drawn through at the ejection fraction level of 45%.
That's because that's what we and others know is a very relevant cutoff where the heart is sick enough in these boys and young men that they need to be treated or they're going to continue towards death, which obviously is what we're trying to avoid, or where we are able to start the treatment paradigm as early as possible to preserve cardiac muscle. I want you to pay attention to the fact that ejection fractions continue to decline over the course of the lives of these boys and young men, as is shown with the regression line shown here, but also that the pathogenesis of the cardiomyopathy is age-independent. You can have a young guy with a pretty sick heart, and you can have an older guy with a pretty sick heart, and they don't necessarily go in correlation with the skeletal muscle myopathy.
It is very important to treat the cardiomyopathy as a separate but very relevant implication of Duchenne muscular dystrophy. Along that line, I want to highlight the fact that deramiocel can be used in conjunction with any approved or along-the-way approved therapeutics for treating the cardiomyopathy associated with Duchenne or Duchenne muscular dystrophy itself. On the sort of left side of this diagrammatic, you can see that there are the therapies that have been developed or are being developed to treat the dystrophinopathy. That is the lack of dystrophin caused by Duchenne muscular dystrophy. These therapies are gearing to try and create healthy muscle cells to try and sustain function in those muscles.
On the right side of this graphic, you also see the drugs that are approved to treat the sequelae, as you will call it, associated with Duchenne muscular dystrophy, which is the inflammation and the fibrosis that go along with the constant breakdown of muscle cells, whether it be skeletal or cardiac. What we have sort of in the middle is deramiocel. Deramiocel is a good player in the sandbox to treat Duchenne muscular dystrophy because it can be used in conjunction with something to treat the dystrophinopathy. Also, because all of our patients are on every approved standard-of-care medication, including steroids, we know that what happens when the patient is treated with deramiocel means that they actually do better than anything else that they're already on. This is very important to understand.
We know that a lot of people are looking at the cardiomyopathy associated with Duchenne muscular dystrophy. It is a very serious component of Duchenne muscular dystrophy. We fully expect other advances to be made in the therapeutic paradigm. We don't think that anything will surpass what deramiocel can do because of its sustained benefit in preserving cardiac function and also skeletal muscle function, which I'm going to show you over the next few minutes. I would like to go through some of our clinical trial results. I think these results, which I've talked about over time, are part of the backbone of our application for approval from the FDA. What we showed in the HOPE-2 clinical trial, which was published in the journal The Lancet, as you know, a highly regarded peer-reviewed journal.
What we showed is that we showed a 71% slowing of the progression of the skeletal muscle aspect of the disease. This was measured by a test called the Performance of the Upper Limb. The boys and the young men that were in HOPE-2 were primarily non-ambulant. That means that they could not do a North Star Ambulatory Assessment. They could not do a time-to-rise. The assay that has been developed and utilized to measure upper limb function in people that can no longer ambulate is called Performance of the Upper Limb, and it is a measure of shoulder, arm, and hand function. What we showed in the HOPE clinical trial was that we had a 71% slowing of disease progression, as I stated before. That means that the disease went much slower in those treated than in the placebo that were followed along at the same time.
We showed a 107% slowing of the cardiac disease, which actually could translate into an improvement in cardiac function in these boys and young men. That is validated by the very positive p-value associated with the improvement in cardiac function. p equals 0.002, which means that it is an almost infinitesimal chance that the data that we have seen is related to chance. That means that it is most likely due to a treatment effect of deramiocel. Most importantly, and what is most important in our application to FDA, is that we show a very significant attenuation of disease progression year over year in our open-label extension patients and a very safe and tolerable profile of the treatment of deramiocel in these boys and young men with Duchenne muscular dystrophy.
Now, one point I'd like to highlight here on this slide, which is that, remember I told you that the cardiomyopathy does not develop along the same lines as a skeletal muscle myopathy. You can have differential decline in function depending upon how your personal disease progresses. The fact that we see improvement in skeletal muscle function and cardiac muscle function really further supports the idea that deramiocel is having a relevant treatment effect in these guys with Duchenne muscular dystrophy. Let me highlight a little bit more the power of the cardiac data that we have shown. This is, again, taken from the HOPE-2 clinical trial published in The Lancet. This is called a forest plot.
A forest plot is the way of looking at multiple measures and whether the data is biasing towards a treatment effect to the right side of the center line or towards basically no treatment effect, which would be to the left side of the center line. What you can see here on the left is then 21 out of 22 measures of cardiac function as measured by MRI, which is the gold standard of measurement of cardiac function. We saw a treatment effect of deramiocel in Duchenne muscular dystrophy in HOPE-2.
In the pullout on the right side, so you can see it a little bit more clearly, are the measures by which we are able to assess the morbidity and mortality of Duchenne muscular dystrophy as published and assessed by what I showed a few slides ago, the John Soslow and ACTION Network data showing the relevant parameters that can predict progression of the disease. I'll just call those out very quickly in case you can't see them very well, which is left ventricular ejection fraction. Remember the Y-axis on the graph I showed of the pathogenesis of the cardiomyopathy and diastolic and end-systolic volumes. Basically, those are measures of the dimensions of the heart and how the heart shape can predict its function. Very important in sustaining the shape of the heart in order to meet the needs of the body.
Finally, an enzyme called CK-MB, which is an enzyme that is typically housed within a cardiac muscle cell and is only measured in the blood if heart cells are being broken down pathogenically. Like, for instance, if you go in and you think you're having a heart attack, it's one of the measures that they look for in your blood. If you have an elevated CK-MB, it means heart cells are breaking down in a pathologic way. What we see is a very significant attenuation of that cardiac muscle enzyme in our treated patients. These are the key measures from which we are using to identify the treatment effect, the efficacy, and the possible long-term outcomes of deramiocel in treating Duchenne muscular dystrophy cardiomyopathy. Because of the power of this data, we did an open-label extension study.
The original plan for the open-label extension was to treat the patients for one year, which was part of our protocol and is typically a way of showing our gratitude to patients that have entered into clinical trials. Because of multiple reasons, including trying to understand the efficacy of the product, the boys and young men were off all product, whether they were in a treated group or a placebo group for a year. They came into the open-label extension group. They're coming around the fourth year of open-label extension now, even though we always promised them one. They have done so well on it that we've kept it going. Some of them will be obviously starting their fifth year.
Those open-label extension patients will be our first patients to come onto the commercial product, and we'll be really excited for the opportunity for all boys and young men to have access to deramiocel. The open-label extension patients, there are 13 of them of our original 20. Six were the original deramiocel. Seven were the original placebo. One patient withdrew from the study. The age of our patients now are approximately 17 years. As I mentioned a few slides ago, I want to highlight all these guys are on stable corticosteroids, which means they're getting the best medicine has to offer them. All of them were non-ambulant. Because we studied these patients so far out after the end of the placebo-controlled trial, we needed a benchmark. We needed to figure out, like, what are we seeing in relation to what happens in the natural course of this disease.
We have been very lucky on the cardiac side to work with John Soslow at Vanderbilt University, the ACTION Network, and the Cardiac Consortium. They were funded by the Food and Drug Administration, the Office of Orphan Products, to understand by doing imaging of hundreds of Duchenne patients to understand the pathogenesis of Duchenne cardiomyopathy, the morbidity, and the mortality. That is sort of the quote that is shown here on this slide, which is the actual specific aim of this study, which is to understand what measures we can use to understand, are they getting worse or are they getting better? We were able to access that data both in a summary from the publication, but then also at the patient-level data for propensity matching, which we use in our Biologics License Application.
What you see here is the data that we have actually shown the Food and Drug Administration. The table, the graph bar chart on the top is the ejection fraction, again, how the heart meets the needs of the body. The bottom bar chart is end-systolic volumes, which, as you remember from the forest plot I showed you a few slides ago, we were able to show conclusively that there is reverse remodeling or stabilization of structure and function of these hearts. What we see is year over year, 24 months into the open-label extension, and then 36 months into the open-label extension, stabilization of ejection fraction and improvement in volumes.
We also are seeing when you use that external comparator of Dr. Soslow's study, we see a 5% decline in 24 months with a delta of 6.9 ejection fraction points of improvement when you are on deramiocel year over year. Similar improvement in structure as measured by end-systolic volume is shown in the bottom. In conjunction with Cincinnati Children's Hospital, we looked at the skeletal muscle function, the Performance of the Upper Limb. This is the same three years of data. The blue line is our deramiocel treated boys, and the red line is the Cincinnati Children's natural history study where they just measure their Performance of the Upper Limb when they come in for their annual visits.
What you can see is a very statistically significant as well as clinically relevant attenuation in disease. This is after three years of treatment that we are still seeing slowing of the disease process.
Showing long-term treatment with deramiocel has beneficial effects both in cardiac and skeletal muscle function. I'm just going to spend the last few slides very quickly running through the revenue opportunity here. Let me just remind you that this would be a first-in-class product, that there are 15,000-20,000 Duchenne patients in the United States. Theoretically and practically, every single one of them would qualify for deramiocel at some point in their life course because they all develop the cardiac disease as part of the pathogenesis of Duchenne. They get four doses a year. Reimbursement, we're targeting right now at about the price of an Exondys 51, which, as many of you know, is quite significant. With our partnership with Nippon Shinyaku, our revenue share is 30%-50% and is quite an extraordinarily positive revenue model for Capricor.
As I mentioned, I just want to highlight about 100 patients are already in open-label extension. They're likely to be the first to transition to commercial product. All things being equal, with PDUFA at the end of the summer, we anticipate being revenue-generating before the end of the year. Finally, just very quickly, our partnership with Nippon Shinyaku and NS Pharma. We are doing the development, the manufacturing, regulatory activities, everything getting it ready to go into the arm of a patient. Nippon Shinyaku takes care of sales, marketing, and distribution with exclusive U.S. marketing and also Japanese rights as well. We are actively working with them now, prepping for launch and looking forward to taking this forward commercially with them.
Finally, because this is such a powerful product, the pathogenesis of the muscular dystrophies in terms of the cardiomyopathy is very similar. While we're starting with Duchenne, our goals will be to be in Becker muscular dystrophy before too long after approval with Duchenne, as well as other orphan cardiomyopathies. We have a fully established manufacturing plant in our San Diego facility, which is commercial ready. We have just recently started to work on a new manufacturing facility in our same building to be able to expand to the needs of thousands of patients as necessary. Finally, I just want to thank the patients, the families, everybody that has made this possible. We have very strong relationships with the advocacy groups as they know that the heart disease is the number one cause of loss of life in these boys and young men.
We're going to continue to be out there working hand in hand to get this across the line with these patients and families. I'll stop there if anybody has any questions.
Sure. Is there a designation for this filing? Is it accelerated review? And if so, do you have the registration for full approval ongoing and started? What's the FDA dynamic here?
We have applied for full approval for our Biologics License Application, not accelerated. That's based on the data that I just showed you a little bit ago. We have priority review with our PDUFA date at the end of August 2025.
That means you don't have to have a large registration, so you're ongoing?
This is the registry. We've just presented two pivotal studies to FDA. This is the registration studies.
And the patient number, the N on the active side was what?
On the active side was 10 patients for the open-label extension group and 20 patients for the HOPE-2 study.
20 patients in HOPE-2.
That's correct.
So you have 20 patients of ejection fractions?
20 patients of ejection fraction in HOPE-2. That's correct.
Thank you. What sort of preconditioning do you have to do to the patient?
Yeah. They take a very simple oral pretreatment regimen of some steroids and antihistamines to prevent just a typical hypersensitivity reaction.
Okay. They're already on steroids.
They're already on steroids. This would be a bolus dose just given 24 hours before. It's an oral dose. It's pretty easy.
Okay. What sort of side effects have you seen?
We see sort of the typical malaise and kind of light flu-like symptoms in some proportion of the patients.
About 30% of the patients develop a little headache, a little nausea, a little achy pain.
Right. For three years, open-label, do those patients dose three or four times a year for three years?
Now four years, yes.
They've been getting dosing every year?
Every quarter for four years now they've been getting dosed. Yeah. Go ahead.
That's N of 20.
That's our N of 10.
N of 10 for three years?
For four years, yes.
N of 10 of four years? Yes. N of 10 of four years? Yes. Okay. Thank you.
Actually, 12. Let me just be clear. Twelve have been dosed in the open-label extension because two of them cannot get into the magnet because of physical limitations. We have MRI data on 10, but 12 are dosed four times a year for now coming up on four years.
In order to be clear, as I showed you, we did propensity matching of the natural history study from Vanderbilt. There are more of those patients, but they were not treated with deramiocel.
Is there an agreement with the FDA that 20 patients or I forget the number of patients in the OLE? What is the dynamic there? How many patients they want, how many patients you have, how you came to a mind agreement?
Yeah. Yeah. This was an active conversation with FDA. They have been following our data now for years. We had nine meetings with them in 2024, a variety of formal and informal meetings. They knew exactly how many patients we had studied. They have looked at the data. They look at the individual patient-level data. The reason they are so favorable to the application was, one, they have looked at patient-level data.
There's not an outlier that's kind of driving an average, which of course would be a concern. Two, it's an objective measure, MRI, which is able to—you can't wish your heart better, right? You can maybe feel better if you know that you have to lift your arms and you've gotten a drug, but you can't wish your heart better. Even though it's a small sample size, it's actually very relevant data. It's a very consistent dosing protocol. It's very safe, very little variability, and very statistically significant in terms of p-values when we did the propensity matching. Even though it's a small sample size, they've acknowledged that it's a small sample size. Because the data appears so relevant for those reasons that I just highlighted, they have been favorable to review the BLA.
Do they say this is acceptable for review versus acceptable for approval? Do they make a designation with respect to the N?
Yeah. When you get your BLA acceptance, they say this is acceptable for review, and they will review it. They have not found any deficiencies in the application thus far, and they will let you know anything as it comes along the way. So far, all good.
Is there a post-marketing commitment with respect to N?
Yeah. They tell you that they will discuss post-marketing requirements with you as you proceed along the PDUFA pathway. We have not had that conversation yet. They have highlighted that that will be sometime prior to PDUFA.
Last question. With the case studies, Exondys 51 was approved, I think, on a small N as well. Could you remind us what that one is and how this is set up?
I do not remember the N for Exondys because it has been for a while. But Elevidys, I know they had six non-ambulant patients. I do not know exactly how many they ended up qualifying for their phase three trial. Look, it is a rare disease. It is a terminal disease. There is nothing out there for them. Sarepta Therapeutics, Peter Marks and CBER, which is our regulatory body, has made the commitment to take safe and effective therapeutics and make them available. We feel very committed to that same pathway. Of course. Thank you. Thank you so much for your time. Any more questions? Do you want to? Please go ahead.
I just had a question. What have you told investors about the economic relationship if the drug is on the market with your partner?
Yeah. I had that on the one slide.
I'll just go back really quick so you can see. Ultimately, the revenue share that we will get is between 30% and 50%. Our partner won't let us disclose the exact number, but it's not very hard with that kind of a range to figure out exactly what the economics are. That is net sales revenue share for Capricor.
Who owns the cost of marketing?
They do. They handle all of SG&A. We just handle the development costs of the product.
Okay. Are you manufacturing the product at that point?
We are manufacturing the product, and we sell it to them.
Right. That 30% to 50%, that's what you sell the product for?
No. The 30% to 50% is what comes back to us when they sell it. Let's just—Right.
You functionally sell the product to your partner for that?
No, no, no, no.
No, we functionally sell our partner for about a tenth of what we anticipate the reimbursement cost will be. They sell it for whatever is going to be reimbursed, and then we get 30%-50% of that number. Yes. Sorry if I wasn't clear.
Thanks. Just the first two minutes. This is Allo.
It's an allogeneic off-the-shelf product made from explanted hearts. It's not a stem cell since you missed the first few minutes. It's a stromal—oh no, it's totally fine. It's a stromal cell population that is isolated, expanded upon, and delivered after being cryopreserved.
How do you make this allo? I mean, did you take something out? Did you knock out something or say—I mean, this is naturally allo by its—
Yeah. We use explanted human hearts.
These are transplant-qualified human hearts that we get from organ procurement organization that we take back to our labs. We isolate out the cells of interest, grow them up, and then use them as a product.
They have no MHC I or II that could naturally be—
No, they do. They absolutely do. And our patients, yes. They absolutely do. We don't have to match. There's no immune consequences. You don't have to worry about rejection because the only thing that could be rejected would be our cells, which actually do die and go away on their own anyway. There's no safety risk. There's no issues regarding this—
Without a problem. Without a problem.
We would probably not have seen an efficacy signal. This is something we learned, now gosh, about 10 years ago.
We were able to discern the fact that when you infuse in these allogeneic cells, if the immune system was going to kill them, it would kill the cells. It would kill the efficacy, but it would not do anything to the human being that was being treated.
I'm sorry. I'm a little confused as to why is it allo if you have a—
Allo means it does not come from you.
I understand. Why is it not rejected?
I guess the cells do die over time, so probably the immune system does ultimately take them down or they die naturally. That's what I'm saying. What we know is that the mechanism of action of the cells is mediated by the exosomes. Exosomes are released by the cells after they've been infused. Exosomes track to the sites of injury. The cells can die and go away.
Even if they are killed by the immune system at that point, it really has no impact on the efficacy signal.
Yes. Do their—
Do their work. That's right.
And they get released in the first week or two?
They get released within minutes.