A class action lawsuit was filed against Capricor Therapeutics (CAPR) by Levi & Korsinsky on July 17, 2025. The plaintiffs (shareholders) alleged that they bought CAPR stock at artificially inflated prices between October 9, 2024, and July 10, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Capricor stock during that period can click here to learn about joining the lawsuit.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Capricor Therapeutics is a clinical-stage biotechnology company focused on developing transformative cell and exosome-based therapeutics for the treatment and prevention of muscular and other selected diseases. The company is currently testing its lead drug candidate, deramiocel, for the treatment of cardiomyopathy associated with Duchenne muscular dystrophy (DMD).
Capricor’s claims about obtaining a Biologics License Application (BLA) for deramiocel from the U.S. Food and Drug Administration (FDA) are at the heart of the current complaint.
Capricor Therapeutics’ Misleading Claims
According to the lawsuit, Capricor and one of its senior officers and/or directors (the Defendants) repeatedly made false and misleading public statements throughout the Class Period. In particular, they are accused of omitting truthful information about its four-year safety and efficacy data from its Phase 2 HOPE-2 trial study of deramiocel from SEC filings and related material.
During the Class Period, Capricor announced in a press release dated November 13, 2024, that following feedback from the FDA and its pre-BLA meeting in August, the company began a rolling BLA submission in October 2024 for full approval of deramiocel in the treatment of DMD-related cardiomyopathy. Capricor noted that it expected to complete the submission by the end of 2024.
Additionally, during an earnings call held on the same day, the CEO noted that clinical trials have shown deramiocel reduces skeletal muscle myopathy and improves cardiomyopathy, with data consistently shared with the FDA demonstrating both statistically significant and clinically meaningful benefits. Skeletal muscle myopathy is a disease that weakens the muscles connected to the skeleton, impairing their function. Cardiomyopathy is when the heart muscle is weak or damaged, making it harder for the heart to pump blood.
Finally, in a March 19, 2025, press release, Capricor reported that its BLA submission for deramiocel included safety and effectiveness data from the Phase 2 HOPE-2 trial and its open-label extension. The studies showed deramiocel improved heart function for up to three years and maintained a strong safety profile.
However, subsequent events (detailed below) reveal that the defendants failed to inform investors about the actual results from the four-year safety and efficacy data from Capricor’s Phase 2 HOPE-2 trial study of deramiocel.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the company’s business and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the fact that the results from the Phase 2 HOPE-2 trial did not meet the statutory requirement for substantial evidence of effectiveness.
The information became clear on July 11, 2025, when Capricor announced that it received a Complete Response Letter (CRL) from the FDA, stating the BLA was denied because it did not meet the requirement for substantial evidence of effectiveness and additional clinical data is needed. Following the news, CAPR stock plunged nearly 33% the same day.
To conclude, the defendants failed to inform investors about Capricor’s inability to obtain a Biologics License Application for deramiocel from the U.S. FDA. Due to these issues, CAPR stock has lost 54.5% so far this year.
