Capricor Therapeutics, Inc. ($CAPR)

Good afternoon, ladies and gentlemen, and welcome to the Capricor Therapeutics Fourth Quarter and Full Year 2025 Conference Call. [Operator Instructions] This call may be recorded today, Thursday, March 12, 2026. I would now like to turn the conference over to CFO, AJ Bergmann, for the forward-looking statement. Please go ahead, sir.

Thank you, and good afternoon, everyone. Before we start, I would like to state that we will be making certain forward-looking statements during today's presentation. Statements may include statements regarding, among other things, the efficacy, safety and intended utilization of our product candidates, our future R&D plans, including our anticipated conduct and timing of preclinical and clinical studies, enrollment of patients in our clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates, potential regulatory inspections, revenue and reimbursement estimates projected terms of definitive agreements, manufacturing capabilities, potential milestone payments and our financial position and our possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. With that, I'll turn the call over to Linda, CEO.

Good afternoon, everyone, and thank you for joining us on Capricor's quarterly conference call. For our investors, collaborators, the team here at Capricor and especially the Duchenne muscular dystrophy patient community, thank you for your continued support and belief in our mission. We entered 2026 with a clear focus as we work to advance Deramiocel for potential approval for Duchenne muscular dystrophy in the United States. As we announced earlier this week, we were very pleased to report that the U.S. Food and Drug Administration has stated that our response to our complete response letter is complete and has therefore been accepted our previously submitted biologics license application or BLA for review. The agency assigned a PDUFA target action date of August 22, 2026. Clearly, this represents a significant regulatory milestone for Capricor and, of course, for all of those who have DMD. The BLA seeks full approval of Deramiocel. And while we have not yet had detailed label discussions with the FDA, our goal will be to position Deramiocel to treat as many eligible patients as possible consistent with the clinical data generated over more than a decade of development where both skeletal and cardiac muscle function have shown stabilization. If approved, Deramiocel has the potential to become the first therapy designed to address both skeletal and cardiac disease manifestations of Duchenne muscular dystrophy. We believe that distinction is highly meaningful, particularly given that cardiomyopathy remains one of the most serious and life-limiting aspects of this disease. Our highest priority as an organization is execution, working closely with the FDA, preparing for a potential commercial launch and continuing to build the capabilities required of a world-class commercial stage biotechnology company. We believe the strength of our data, our manufacturing readiness as well as strong balance sheet position us for well -- position us well for this next phase of growth. Our current corporate mission is to build an infrastructure to support launch and commercialization of Deramiocel as well as to expand our pipeline to treat other indications. Now let me turn to a brief summary of the HOPE-3 trial, the top line results of which were released in late 2025 and is one of the strongest data sets generated in this disease to date. The entire HOPE-3 data set was submitted to the FDA as the response to our CRO and was contained in our CSR. These data will now serve as the foundation for potential approval as well as for the preparation for commercial launch. For those of you who haven't been following our story, here is a brief recap of the HOPE-3 clinical trial. HOPE-3 is a pivotal Phase III multicenter, randomized, double-blind, placebo-controlled study evaluating Deramiocel and the treatment of Duchenne muscular dystrophy cardiomyopathy. The study enrolled 106 patients and met its primary efficacy endpoint on the performance of the upper limb, otherwise known as the pull as well as all Type 1 error controlled secondary endpoints. The key secondary endpoint of left ventricular ejection fraction showed a 91% slowing of disease progression in all evaluable patients regardless of cardiac disease status and importantly, achieved statistically significant results. Furthermore, the results were even stronger in specific patients with a diagnosis of cardiomyopathy, achieving a p value of 0.01. Over the last decade, it has become apparent, that cardiomyopathy is one of the leading causes of mortality in Duchenne and stabilizing cardiac function has remained a major unmet need with current guideline directed care to include standard cardiac medications, which are somewhat effective, but do not work long term and certainly are not addressing some of the root causes of the cardiac dysfunction. The statistically and clinically significant preservation of left ventricular ejection fraction in patients treated with Deramiocel observed in HOPE-3 underscores the potential of Deramiocel to address the DMG associated cardiomyopathy. In addition to the earlier reporting of the positive top line results, which I just highlighted, yesterday, we presented additional data from the HOPE-3 trial in a late-breaking oral presentation at the 2026 Muscular Dystrophy Association Clinical and Scientific Conference. This data was of great significance, not only from a clinical trial perspective, but to the patient community because it highlights the effectiveness of Deramiocel in multiple endpoints all pointing to the direction of stabilization of the disease process associated with DMD. I would like to provide a few highlights here. One of the most important was improvement in a direct activity of daily living and one that is also correlated with quality of life. We show that there was a statistically significant improvement in a measure of upper limb function analyzed in a home-based setting using a validated and published patient reported outcome measure, the DVA or Duchenne Video Assessment. The DVA was developed by frustrated caregivers and professionals who are concerned that a clinic-based assessments didn't tell the whole story, especially in a pediatric population. So they developed the DVA to track their sons at home. The measure we specifically use was called “eat 10 bites”, and it is manifested exactly at the sounds and represents not only the ability to self-feed but also to move one's arm between table and mouth. Caregivers would video their sons doing the prescribed -- doing the task at prescribed time post infusion of Deramiocel and then the videos were analyzed by a core lab and scored based on ability and compensatory measures. The DVA assessment of eat 10 bites supports the clinic-based measure of the performance of the upper limb and is supportive of the observed efficacy of Deramiocel that we have seen clinically. These data will also support payer discussions as it is a measure of fields, functions and survive. We also showed images of the heart of a treated patient as opposed to a placebo patient in the analysis of cardiac fibrosis. This is measured by MRI using a dye called gadolinium that can distinguish between healthy tissue and scar tissue. The data showed that there was significant reduction in fibrosis in the hearts of those that were treated with Deramiocel compared to placebo. For cardiologists, this is one of the most encouraging aspects of the HOPE-3 data because it's the aggregation of scar that ultimately leads the heart to fail and life to end for those with DMD. These data will also be used in our labeling negotiations it's important to begin treating the fibrosis as soon as it is evidence, which can be many years before there are functional implications. Remember, the heart is a terminally differentiated organ, so once a cardiac myocyte is lost, it cannot be easily replaced. Therefore, preservation of functional muscle and attenuation of fibrosis is one of the main goals in treating Duchenne cardiomyopathy. We were delighted to share these results with the Duchenne community as one of only 4 late-breaking presentations at the Muscular Dystrophy Association conference yesterday in Orlando. The full HOPE-3 data set has now been submitted for publication and a major peer-reviewed academic journal. One of the most important features of Deramiocel is, of course, a safety profile. To date, we have completed more than 800 intravenous infusions of Deramiocel across multiple clinical studies and the therapy continues to demonstrate a consistent safety profile. There is evidence of long-term safety and our open-label extension studies. Some of our young men participating in our HOPE-2 open-label extension study have been receiving continuous infusions for up to 5 years and with over 100 patients in our collective open-label extension studies at this time. Deramiocel offers the potential opportunity for functional stabilization and also a well-tolerated safety profile. Taken together, we believe Deramiocel will become an important and foundational therapy in the treatment of Duchenne muscular dystrophy. We believe the HOPE-3 results provide compelling evidence supporting Deramiocel's potential benefit in Duchenne and further strengthen our confidence in the therapeutic profile of this product candidate. The consistency of the data across both cardiac and skeletal muscle related matters supports our view that Deramiocel may offer a differentiated and meaningful therapeutic approach for patients living with this devastating disease. Turning now to the regulatory pathway. Following receipt of the Complete Response Letter in July 2025, we were able to complete our response based on the results from the already completed HOPE-3 trial. Through both formal and informal interactions with the FDA, we aligned that the HOPE-3 data would be sufficient to support resubmission, and we have now submitted that data set in its entirety. The FDA classified the submission as a Class II resubmission and a signed a PDUFA target action date of August 22, 2026. Importantly, at this stage, the FDA has not identified any potential review issues in its communication to the company, which we view as encouraging. We also expect to be eligible to receive a priority review voucher upon approval of Deramiocel. As these vouchers are transferable and can be monetized through sale, they represent a potential source of meaningful nondilutive capital that could further strengthen our financial position as we execute on our strategy. At the same time, we continue to make meaningful progress operationally. Our in-house GMP manufacturing facility located in San Diego, successfully completed its FDA pre-license inspection in connection with the BLA review process last year. All Form 483 observations were addressed and the facility is operational and positioned to support a potential initial commercial launch. That facility can meet the commercial demand of approximately 250 patients per year. However, our current plan is to begin stockpiling commercial doses as soon as we finalize our label with the FDA. In addition, we are now well underway with an expansion to the second floor of that same facility which will add approximately 6 additional clean rooms. At full capacity, this expansion is expected to support treatment of approximately 2,500 patients per year or roughly 10,000 doses annually. Our current projections are that the new facility will come online and be able to support commercial manufacturing in late 2027. Commercial readiness activities are also continuing to advance. We are cognizant that the DMD community is anxiously waiting for approval and launch. Due to the unmet need and our desire to have product to those who need it, our hiring plan is based on preparing across key areas relevant for launch, including patient support, market access, reimbursement planning and physician education. Capricor is at a transformational point and as a result, we are not simply preparing for only the launch of Deramiocel for DMD, we are building Capricor to operate as a world-class commercial biotech company. That means maintaining a disciplined approach to execution, investing in our pipeline and ensuring that our infrastructure can support both potential commercialization for DMD and beyond. On the scientific front, we continue to strengthen the foundation supporting Deramiocel. In the fourth quarter of last year, we published a peer-reviewed paper in biomedicine describing Deramiocel's antifibrotic and immunomodulatory mechanisms of action including the release of exosomes and soluble factors that suppressed by broader gene expression. These findings were produced across more than 100 manufacturing lots, supporting the biologic, consistency and potency of the product. As we move toward approval in Duchenne, we are also beginning to lay the groundwork for potential expansion into other diseases focusing initially on Becker muscular dystrophy, while engaging with regulatory authorities in Europe and Japan with the goal of bringing Deramiocel to as many patients as possible globally. Please stay tuned for more updates on this as we move through 2026. Now let me turn briefly to our exosome platform. The Phase 1 COVID vaccine study under Project NextGen with the National Institutes of Allergy and Infectious Diseases remain underway. Preliminary results indicate the StealthX vaccine has been well tolerated and demonstrated a favorable safety profile across all doses tested thus far. However, limited neutralization was observed in early results at the tested dose levels, which may reflect prior vaccination or infection in trial participants. Preclinical data in naive and primed animal models continue to support the efficacy of the StealthX COVID vaccine. Final results from the trial, including the cellular response data are expected in the second quarter of 2026. NIAID has requested expiration of expanded dosing range at higher dose levels and the potential use of adjuvants. At this time, we are evaluating how these options may fit with our broader pipeline development strategy and will provide additional updates as they become available. Importantly, this program demonstrated the safety of StealthX exosomes and supported the continued development of our broader engineered exosome delivery platform. It also enables us to expand our manufacturing capabilities to support future exosome programs. We are continuously advancing our StealthX platform focusing on muscle targeting and capable of delivering multiple payloads, including siRNA, proteins and small molecules. The platform is being applied across several therapeutic programs currently progressing towards IND-enabling studies with a target IND filing in 2027. From a financial perspective, we ended this year in a very -- last year in a very strong position. As of December 31, 2025, our cash position was approximately $318 million. This balance was significantly strengthened in the fourth quarter through a successful financing completed in late December, which included participation from dozens of new institutional health care-focused investors who we believe share our long-term vision for the company. Based on our current operating plan, we believe this capital is sufficient to support the business into the fourth quarter of 2027. Importantly, this outlook does not include any additional sources of capital including potential product revenue or the potential monetization of a priority review voucher, should we receive one upon approval. Earlier this week, Capricor's common stock was approved for uplifting to the NASDAQ Global Select Market, NASDAQ's highest listing tier. We believe this milestone further enhances our visibility within the institutional investment community as we move into what we believe could be a transformational period for the company. Overall, we believe Capricor entered this next chapter from a position of strength with our BLA under review, positive pivotal clinical trial data, manufacturing commercial readiness underway, additional pipeline opportunities beyond Deramiocel and the capital required to execute on our priorities. Most of all, we remain focused on what matters most, bringing forward a potentially transformative therapy for patients and families affected by Duchenne muscular dystrophin. With that, I will now turn the call over to AJ to review the financial results. AJ?

Thanks, Linda. For a brief overview of our financial position, which Linda summarized somewhat a moment ago, cash, cash equivalents and marketable securities totaled approximately $318.1 million as of December 31, 2025, and compared to approximately $151.5 million as of December 31, 2024. In December 25, we completed a public offering resulting in net proceeds of approximately $162 million and in addition, the company drew down approximately $75 million under our ATM program in December 2025. Revenue for the fourth quarter of '25 was 0 compared to approximately $11.1 million for the fourth quarter of '24. Revenue for the full year ended December 31, 2025, was also 0 compared to approximately $22.3 million for the full year ended December 31, 2024. As a reminder, our prior year revenue was primarily derived from the ratable recognition of our upfront and developmental milestone payments under our U.S. distribution agreement with Nippon Shinyaku all of which has now been fully recognized and was recognized as of December 31, 2024. Total operating expenses for the fourth quarter of '25 were approximately $29.2 million compared to approximately $18.8 million for the fourth quarter of '24. Total operating expenses for the full year ended December 31, '25 were approximately $108.1 million compared to approximately $64.8 million for the full year ended December 31, 2024. The year-over-year increase was primarily driven by continued investment in clinical, regulatory and manufacturing activities as well as infrastructure expenditures supporting our Duchenne program. Net loss for the fourth quarter of '25 is approximately $30.2 million compared to a net loss of approximately $7.1 million for the fourth quarter of '24 and net loss for the full year ended December 31, '25, was approximately $105 million compared to a net loss of approximately $40.5 million for the full year ended December 31, '24. Based on our current operating plan, as Linda mentioned a moment ago, our financial resources, we believe are available cash, cash equivalents and marketable securities will be sufficient to fund anticipated operating expenses and capital expenditures into the fourth quarter of 2027 and this expectation does exclude potential milestone payments under our agreements with Nippon Shinyaku as well as any strategic uses of capital that are not included in our current base case assumptions. And with that, we are ready to open the line up for questions.

[Operator Instructions] Our first question comes from the line of Ted Tenthoff from Piper Sandler.

So firstly, congrats on another really exciting progress this year, this week. Great to see you down at NDA, excited about some new data coming out of that and obviously, the BLA acceptance. Are you guys anticipating any AdComm, anything along those lines? And what commercial prep are you doing in preparation for potential Deramiocel approval?

Ted, I have to say it was great to see you in Orlando and you and I have been tracking each other for more than a decade on this. And so I'm very proud of what we're accomplishing together. Thank you so much for your years of good support. To answer your question, in terms of an AdComm, I've been getting a lot of questions about that. certainly, they haven't made any moves towards that at this point. I don't think anybody has had an AdComm in about a year. And I don't know if they're going to be putting one in place. I think with the departure of Vinay Prasad, It's a little bit up in the air as to what's happening within CBER and what their manifest will be. Either way, we'll be prepared. The good news about the HOPE-3 data is it's so very strong that I really would be delighted, whether I present it in an AdComm or we proceed directly to PDUFA without it. In terms of your second question, in terms of commercial readiness, look, Deramiocel has been in development for a long time. This data is extraordinary. Skeletal and cardiac disease attenuation and even improvement in those with cardiomyopathy and a product that's very safe and can be foundational and used with pretty much anything else that we can think of that is approved or coming along for DMD. So we are going to be building our own commercial program to support NS at this point so that we make sure that everything from market access, payers and all of the other aspects of commercial planning is done with the same precision that we have done the development of Deramiocel to this point.

That's great. And one quick clarification, if I may. When it comes to the actual label, I know this is something that will be negotiated later in the review process. Do you believe the current label would be for the original DMD cardiomyopathy submission? Or would this be now for DMD more broadly? Just appreciate any clarity on that.

Thanks, Ted. So I think this again is the biggest question that we all have. We approached this with FDA both in formal and informal meetings really since the issuance of the CRL last July. They've been relatively noncommittal, saying that they'll discuss it during labeling. We certainly believe that the data supports the label both for DMD in terms of some of the skeletal muscle ramifications related primarily, I would guess to upper limb loss, which starts very young and/or to the treatment and attenuation of Duchenne cardiomyopathy, so that's our plan internally. Obviously, we'll keep the Street updated as we enter into those conversations with FDA. Currently, we believe that, that would be the best path forward both for the therapeutic and also for the regulatory pathway.

Either way a big win for the boys and for Capricor.

Our next question comes from the line of Leland Gershell from Oppenheimer.

Appreciate the updates yesterday at MDA. Just wanted to ask, could you Linda refresh us on the import of the 2 different cohorts of HOPE-3 as you had material that was made at 2 different facilities. I think in the past, you said that Cohort B may have been more of a regulatory focus. I just wondered where we stand today in terms of how the FDA will consider those 2 different cohorts and in the context of the pooled analysis, as they go through their review. And I also want to ask if you have an expectation around the timing that we should see a peer-review publication of the HOPE-2 data.

Well, thanks. I haven't thought about the 2 cohorts in a while. So the FDA has not mentioned it in any conversations since probably 2024 when we decided to, under their recommendation file, the biologic license application for the cardiomyopathy based on the HOPE-2 only and natural history data. They then agree that we would pair Cohort A and Cohort B and consider them as one trial because of the nonclinical comparability of the products. So they haven't talked about it and we haven't talked about it. They have all of the raw data now. The good news is, and why I feel very confident is that Cohort B independent of Cohort A was statistically significant in both skeletal muscle performance, performance of the upper limb and in the cardiomyopathy ejection fraction. So that would be the more important Cohort to look at because that was what they're question was originally was that product comparable? It certainly is comparable in terms of its biologic activity. So we'll keep everybody updated if there's any more questions on the cohorts, but as far as we know, they consider 1 clinical trial, 1 cohort and the manufacturing facility here in San Diego passed PLI and so we're manufacturing ready. In terms of an update on an academic publication, I know you are an academic scientist as well as I was, and we both know that one of the reasons people are in academic because the time is not of essence. So the academic review is ongoing, and we'll keep the community updated as soon as it's ready to be published or published.

Our next question comes from the line of Joe Pantginis from H.C. Wainwright.

So 2 questions, if you don't mind, Linda. So first, I know you haven't had labeling discussions yet, but do you -- could you just sort of describe a before and after snapshot of did you have prior labeling discussions ahead of the CRL and how you think that may be similar or different? And then second, and this is strictly from a devil's advocate standpoint. Could you envision any scenario where this might be a conditional approval?

So I can answer your second question first because it's easy. No. There's no way this would be a conditional approval. There'll be no need for a confirmatory trial on a randomized double-blind, placebo-controlled trial that hit its primary and key secondary and type 1 error controlled end points. I can't imagine any scenario or they would make it conditional upon, but I will keep you updated on that. In terms of labeling conversations, we did not get that far before the CRL was issued last time, it was actually right before we would have begun them, so we don't have clarity there. The only tea leaves I can read is that they knew the HOPE-3 was powered and the primary efficacy endpoint was performance of the upper limb. They knew that we had filed a cardiomyopathy BLA under the existing data. When I gave the CRL and then we had the Type A meeting, they wanted to see the HOPE-3 data unaltered in terms of its primary, so we believe that they will consider both the skeletal muscle aspects of the disease as well as the cardiomyopathy in the labeling. I suppose they can ask for anything. It's the FDA. And so we will keep the Street informed as we get information ourselves, but my current belief is that the data is very strong. It supports labeling for both cardiomyopathy and skeletal muscle myopathy and that's what we're planning for internally at this point.

Appreciate the comments and here's to the end of the potential FDA drama.

Our next question comes from the line of Kristen Kluska from Cantor.

Nice to spend time with the broad Capricor team this week in Orlando. So with the Class II resubmission, can you just help us understand what parts of the review are going to be new versus what parts are already considered checked off with the first process. So for example, like on manufacturing, mid and lead cycle review meetings, et cetera.

Yes. So thanks. So this is obviously our first go around with the CRL and a resubmission. What I can tell you is that we know the manufacturing facility passed prelicensing inspection, all 483s were signed off on and so we are good to go there. We anticipate there'll be several CMC-related questions that come across as we go through this resubmission process just because there were a few loose ends. None of them that were areas that would be a major concern or slow things down. They just want clarification. We think that the noncritical and other aspects of the BLA have already been signed off on, so we don't anticipate any changes there. Obviously, the only thing that was really cited in this complete response letter that was now officially resubmitted was the HOPE-3 data. So we assume that clinical and stats will be the focus of the new review.

Okay. And then just on capacity, I wanted to confirm in your prepared remarks, you said it could support 250 patients per year with potential stockpiling, but then you are expanding to reach 2,500 patients per year. What will you need to show to the FDA to get the expansion up and running? Like is there any comparability work or runs that you have to do to show them it's the same material, et cetera?

Yes. So we very strategically built the new clean rooms in the same building as the 250 capacity clean room. So it does reduce the regulatory requirements if it is on the same street address as the original facility. You obviously have to demonstrate in PPQ runs that the product is the same and passes all of your requirements. I think they come and do another inspection, but they would be slated to do an inspection in early 2027 anyway as part of there's general maintenance on manufacturing plants. So I'm not anticipating a long run in terms of getting approval of the site based on sort of those components or that situation, but we'll obviously keep you updated as to how that goes. I know Marty Makary has spoken publicly, and I know Vinay Prasad prior to his exit also spoke publicly that they were thinking they would reduce the number of PPQ runs that are necessary from 3 to 1, which obviously, if that actually is put into place, could significantly reduce the time that a manufacturing facility would need to come online. So we're going very fast and anticipate getting those doses out to the commercial community as quickly as the FDA will allow us.

Okay. And then last question for me, just on MDA. Obviously, a lot of doctors there. We talked to plenty of ourselves. But curious what your takes were from these communications. This is really your big showing of the HOPE-3 data since it came out in December. So curious what the feedback is. Were there people even that were skeptical in the past that now that you have this data were willing to take a closer look? Anything you could share would be really helpful.

Yes. Thanks, Kristen. And let me just say it was wonderful to see you in Orlando, and I appreciate you turning out and spending some time with our team. The event we hosted was exactly what I had hoped for, which is that physicians and investors and new patients and everybody could be together and learn about Deramiocel. And you're correct, you did speak to physicians who I think are echoing now what you just alluded to, which is that the HOPE-3 data has solidified belief in this product across physicians, across patients really across the entire community is as I've said now a few times, randomized, double-blind, placebo-controlled trial. This primary endpoint hits secondary end points, hits Duchenne video assessments, which went along with the performance of the upper limb, as I said in my prepared remarks. And so yes, I think physicians who before were hopeful are now convinced and looking forward to putting their patients on and we're getting a lot more questions about prescribing, availability, launch that we -- than we ever have. So we're on fire here getting this product ready for approval and for launch.

Our next question comes from the line of Madison El-Saadi from B. Riley Securities.

Linda and team, congratulations on the data. Your partner has previously said that they expect to transition all clinical trial patients to commercial drug within 1 quarter of launch. So should we think of the, call it, 100 patients as kind of the base case for how many patients may be treated with Deramiocel in 2026, assuming approval? And then kind of to follow that. As you know, there are 7,000, 8,000 DMD boys, maybe more with cardiomyopathy and just given the data we saw in the subgroup, it's hard to imagine there being a circumstance in which a patient does not go on this drug. I guess how do you scale beyond the 2.5 to 2,500 capacity? Is that stuff that you guys are thinking about? What would it cost? Do you have the cash? Maybe if you could just kind of help illustrate what that road map may look like.

Yes. Madison, thanks so much and also great seeing you in Orlando. Thanks for making the trip. Always great to spend time together. So in terms of the OLE patients, yes, we have over 100 OLE patients on Deramiocel now. They all will be anxious to continue. We've seen that from the HOPE-2 OLE guys that have gone on for years. We anticipate all of them wanting to come over to commercial product. We haven't figured out a launch date yet. We just got the PDUFA date. So I don't want to give a year or a time line as to when, but yes, we will transfer all of them over as seamlessly as possible is why we're focusing internally on market access at this point so that, that can happen seamlessly. There are, Madison, a lot of young men that have been waiting in the wings for Deramiocel that didn't qualify for our trials for whatever reason. And I am getting a lot of calls now from them. So we will prioritize getting Deramiocel to any and all of those that need or want it as quickly as possible. And I will say that, that is my mandate and why we are taking on manufacturing as aggressively as we are. To that end and pertinent to your question, yes, we are now poised and in fact, ready to go forward with another manufacturing build-out in San Diego County very close to our current footprint that we'll be able to accommodate up to many more thousands of patients per year. We wanted to make sure that we completed our response. We want to make sure that we are proceeding well towards PDUFA before we invest that capital, but we now have internal confidence that, that will happen. And so we are actively planning to expand manufacturing to accommodate the needs of any and all of those that would like to have Deramiocel.

Our next question comes from the line of Catherine Novack from JonesTrading.

One thing we heard over and over at the meeting was about how patients with DMD do better with earlier intervention. Just thinking about how you can make the case based on HOPE-3 that its benefit to treat even before the development of cardiomyopathy, thinking that virtually all DMD patients will eventually develop cardiomyopathy and not thinking of it as then a separate indication, but as part of DMD as a whole. What in the application supports that?

Yes. Thanks. We, of course, are laser focusing on those younger kids and those earlier in the disease process. As we've said and sort of have been stating for a long time, it's very safe. The infusion protocol is really easy. Even a little guy could sustain it very well. And yes, the data that we've seen has been highly supportive of starting as young as possible. Getting a prevention label is very difficult until you can show prevention, which takes years. So we're comfortable right now with the treatment of cardiomyopathy. The good news is because these kids now most of them start getting MRI at a very young age, as soon as they see one segment of scars, cardiologist want to get them on Deramiocel. And so that will be a way that we will get more and more active in sort of the younger kids and moving towards that prevention target. Of course, if they go on for the attenuation of skeletal muscle function, myopathy, then we'll be able to track their hearts and be able to ultimately -- physicians will use it with skeletal muscle as well as cardio muscle myopathy, independent of progression of the disease.

Got it. And then can you remind us of the status of the European rights deal with NS Pharma?

Yes. So we've been negotiating with NS Pharma for a while for rights to Europe. Honestly, we haven't been focusing on it internally. There was clearly a lot going on here with the CRL and getting the HOPE-3 data ready and submit it. And now that we have a PDUFA date, and I feel like we're on a good pathway there. I can take a little bit of a breath and start focusing on our outside of U.S. activities. They do have the rights to Japan, so we're going to start working with PMDA and getting that going in 2026. And then in terms of Europe, we're evaluating those opportunities now, and we'll see sort of where the road map takes us and we'll provide updates as they become available.

Got it. It was great seeing you and great hearing all these updates looking forward to this year.

It was great to see you as well, stay well and see you soon.

Our next question comes from the line of Boobalan Pachaiyappan from ROTH Capital.

So a couple from us. Firstly, so you mentioned about the Duchenne Video Assessment. Can you maybe tell us how many patients were included in the Deramiocel and how many in the placebo arm? And also related to that, can you also comment on the inter-rater reliability of DVA because it is -- my understanding is that it's weighted by both caregivers and professionals.

That's right. So the DVA is actually a qualified and validated assessment tool that has been published and not only been used by us, but by others and not only by those with Duchenne muscular dystrophy, but in other disease states. So it really is quite rigorous in its measurements. The recorders or the video takers are trained and how to do it, what to do, then they are sent to a facility where they are read by a blinded trained reader and the data then delivered blinded to the company and ultimately treated like any other data set. So really a highly valuable data that is collected in a home-based setting. In terms of the number of patients that were in the DVA was about 50 patients in each group. So 50 in the Deramiocel group and then 50 in the placebo group.

Okay. And then is there a reason why the sample size is low for the late gadolinium enhancement secondary end point?

Yes. So we added LGE measurement for Cohort B only. When we were designing Cohort A, there had been some press around gadolinium and the fact that it might aggregate in the brain, especially young children and could be a safety risk. And so we decided not to look at scar in Cohort A. During the time between Cohort A and the initiation of Cohort B, that was considered not to be a safety risk and the value of the data collected would be highly necessary to sort of show the correlation between function and scar. The data is beautiful and having been somebody that's worked in MRI for many decades, I'm really excited by this data as are the cardiologist. So it was only those in Cohort B that were eligible for the gadolinium enhancement and then they also had to have certain levels of kidney function. So that's why those numbers are relatively small. But that data set is small but mighty.

Okay. All right. Maybe one last question from me. So the most recent PRV, as you probably know, it was sold for a very high price of $205 million. And we are also aware that there is a new sunset date, which is September 30, 2029. But do you think because this -- the new sunset date is 3 years from now, a little longer than 3 years, is this going to ease up some pressure from the buyers, maybe that could maybe impact the price that you will be selling your PRV for, any thoughts on that?

Yes. If I had a crystal ball, I would be a really wealthy woman. But all that being aside, I don't know. I certainly know that PRVs tend to be valuable. It really depends on how motivated the buyer is to get it when they come available. And we certainly are going to get the maximum price for our PRV should we be able to receive one.

Our next question comes from the line of Matthew Venezia from Alliance Global Partners.

Congrats on the progress. First, I think I asked this question about 6 months ago. But how have the conversations at the FDA with you guys changed, if at all, since Vinay Prasad left the agency once again?

Thanks, Matthew. Good to talk to you. So far, nothing. We got our letter reopening the file and setting our PDUFA date, and that was almost in conjunction with his leaving. So really, we have had no change in any interaction whatsoever at this point.

Okay. Got it. And another, talking about the age of the patient, it seems to be a drug where early intervention and a disease where early intervention is paramount to treatment. Is there -- do you expect a specific age on your label? Do you expect that to come up in labeling discussions with the FDA? I know like [ Elevidys ] had 4-plus on their label. But is that something that you expect to be ironing out with the FDA in your labeling discussions?

Yes. I don't know. We didn't ever have a 4 plus. I don't know who that was. That wasn't us. Age is a possibility we have treated down to age 8 in our clinical trials. So we haven't gone younger than that. We don't know. Again, I know everybody is hypothesizing around labeling discussions to build their models. And I certainly am doing the same myself. I don't know if there'll be an age cutoff or a function cutoff. As soon as we have clarity, though, we'll let you know. I would say, in building your models that the youngest we have actually treated to this point are those that are ambulant and down to age 8.

Okay. Great. And the 4 plus was for the device, not you guys. And just the final question. Yes. Just final question. The StealthX platform. Is there a specific time within the second quarter when we can expect Q1 trial results? Or is that kind of just up to NIAID.

Yes. I was just going to say you take the words from my mouth. It's an NIAID situation. So that data trickles in really slowly. We're super anxious to see the cellular response. We're really interested to see if there's a T cell response. COVID is kind of a crazy virus to try and get on top of these days because pretty much everybody either had it or been vaccinated multiple times. And so we're looking forward to seeing that data to continue to work with NIAID. But most importantly, I'll take -- thank you so much for asking me, we are very excited about our pipeline right now. We now have the opportunity to deploy on it. We were able to build out manufacturing for this vaccine. We know how to do it now. We know how to load the exosomes, target the exosomes. And so while the vaccine program is important, it really was about learning experience that is now driving it towards the therapeutic exosome platform and stay tuned for more information on that as we progress through '26.

Congrats on the progress.

I will now turn the call back to Capricor management for closing remarks. Please go ahead.

Thank you so much for joining us today. Thank you for those of you that attended the Muscular Dystrophy Association and took some time to be with Capricor at that event. I will say that it gave me incredible joy and pride to be at that event and see how prominently Capricor was featured at MDA, but also in the hearts and minds of those with DMD. We really feel like we have the opportunity now to meaningfully improve their lives and look forward to continuing that journey with them and with all of you. So we look forward to seeing you out in the community, and thank you so much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.