Capricor yo-yos as Johnson & Johnson dumps stem cell partnership

Capricor is planning a second trial in Duchenne muscular dystrophy later this year.

After three and a half years, Johnson & Johnson is ducking out of a partnership with Capricor Therapeutics focused on the use of stem cells to treat cardiovascular disease.

The decision by J&J's Janssen unit not to pursue a license comes as little surprise. The therapy at the center of their end-2013 deal—CAP-1002 (off-the-shelf cardiosphere-derived cells)—has already been marked up as missing the target in a phase 1/2 study involving patients who had suffered a heart attack, although the data remains under wraps.

Added to that, in April, interim results from a trial in Duchenne muscular dystrophy revealed promising activity, and prompted Capricor to upgrade the importance of the new indication—which lies outside the scope of its license with J&J.


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The California biotech has already said it plans to start a second trial in DMD in the latter half of the year. But while the back-up indication is a comfort to investors, there is no question that the company will miss the financial backing from J&J, which included $12.5 million upfront and up to $325 million in milestone payments, as well as the kudos of a big pharma partner in a sector that has failed so far to live up to early promise.

Weak or scarred heart muscle is a major cause of heart failure, so using stem cells to repair scar tissue appears to be a logical way of improving outcomes. Attempts to show a benefit have met with marginal success, however. Last year for example, Celyad's 271-patient trial of its C-Cure stem cell therapy revealed no improvement compared to a sham procedure.

Capricor's CEO Linda Marbán, Ph.D. accentuated the positive of claiming full rights to CAP-1002, including not only the DMD data but also work with Janssen on developing a commercial-scale manufacturing process for the cell therapy, to which it now has a "fully paid-up nonexclusive license."

She also said it settled "uncertainty concerning the scope of the license for CAP-1002" and frees the company to seek partners elsewhere.

"We discussed potential product registration strategies for this indication at our recent meeting with the U.S. FDA, and we look forward to providing an update on our clinical development plans in DMD very shortly," continued Marbán.

Capricor also announced in an SEC filing that it is filing for resale of up to 1.2 million shares of its common stock but would not be receiving any proceeds from the transaction. It ended the first quarter with $2.75 million in cash.

Shares in the biotech fell after the announcement but had rebounded at the time of writing, though they are still in penny stock territory at $0.80.

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