Capricor Therapeutics shares staged a dramatic turnaround on Friday, climbing as much as 94% intraday after the US Food and Drug Administration signalled that it was willing to review fresh data for the biotech's experimental Duchenne muscular dystrophy treatment, deramiocel.
The stock jumped from the previous session's close of $4.21 to an intraday high of $8.15, translating into a gain of about 93.6%.
The sharp rebound came after investors received a potential new regulatory path for a drug whose prospects had been badly damaged by an FDA advisory panel vote last month.
The FDA advisory committee had voted 9-3 against the effectiveness data supporting deramiocel.
The panel raised concerns over changes to the way Capricor measured key trial outcomes and questioned whether patients enrolled in the study had Duchenne-related cardiomyopathy given their normal heart function at baseline.
That setback sent Capricor shares sharply lower from $19.70, their level before the FDA-related setbacks. Friday's rally therefore represents a powerful reversal, although the stock remains substantially below its earlier level.
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Why the FDA development changed investor sentiment?
Capricor CEO Linda Marban said the company plans to submit an amendment containing new 24-month data focused on upper-limb muscle function, which was the primary goal of its late-stage study.
Some members of the advisory panel had viewed the arm and hand-function results more favourably than the disputed cardiac data.
The FDA has indicated that it is willing to examine the additional information and could extend its decision timeline after receiving the submission. The agency's decision had been expected on August 22.
That willingness to keep reviewing the drug has transformed the market narrative from a near-term regulatory setback into a potential second chance.
Cantor analyst Kristen Kluska described the FDA's openness to the new data as a “potentially positive surprise.” Roth Capital analysts expect the submission could be treated as a major amendment, potentially extending the review by around three months.
Capricor had $237.9 million in cash at the end of June and said it is controlling commercial-launch spending while awaiting greater regulatory clarity.
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