Capricor Therapeutics announced that it has entered into a partnership with Nippon Shinyaku Co., Ltd., a Japanese pharmaceutical company listed on the TYO, for the exclusive commercialization and distribution in the United States of Capricor's lead asset, CAP-1002, for the treatment of Duchenne muscular dystrophy (DMD), a rare neuromuscular disease with limited treatment options. Capricor's proprietary cell therapy, CAP-1002, is comprised of human allogeneic cardiosphere-derived cells, which have demonstrated positive results in patients with DMD. CAP-1002's mechanism of action is immunomodulatory and regenerative and its broad applicability makes it suitable for patients regardless of genetic mutation.

HOPE-Duchenne and HOPE-2, the Phase 1 and Phase 2 clinical trials using CAP-1002 to treat late-stage DMD patients, showed statistically significant improvements in upper limb and/or cardiac function in the treatment groups. HOPE-3, the Phase 3 clinical trial that will be supported by this partnership, will commence shortly and is expected to be the pivotal trial for CAP-1002 in DMD. The regulatory pathway for CAP-1002 is supported by RMAT (Regenerative Medicine Advanced Therapy Designation) as well as Orphan Drug Designation.

If Capricor were to receive market approval for CAP-1002 by the FDA, Capricor would be eligible to receive a Priority Review Voucher based on its designation as a rare pediatric disease. Under the terms of the agreement, Capricor will be responsible for the conduct of HOPE-3 as well as the manufacturing of CAP-1002. Nippon Shinyaku will be responsible for the distribution of CAP-1002 in the United States.

Capricor will sell commercial product to Nippon Shinyaku and in addition will receive a meaningful, double-digit share of product revenue and additional development and sales-based milestone payments. Capricor will receive an upfront payment of $30 million with potential additional milestone payments of up to $705 million.