Kaos Capital in a letter to other Capricor Therapeutics shareholders called for “an immediate meeting, board change, and capital-preservation plan.” The biotech recently put all other pipeline work on pause as it awaits an Aug. 22 PDUFA date for embattled cell therapy deramiocel.
While Capricor Therapeutics seeks to amend the application for its Duchenne muscular dystrophy cell therapy—potentially extending its Aug. 22 PDUFA date—one investor is focused on the company’s future beyond deramiocel.
In a Friday letter to other Capricor shareholders, Kaos Capital—which describes itself as a “significant and growing shareholder” of the biotech—demanded “an immediate meeting, board change, and capital-preservation plan.”
The firm plans to nominate two independent directors and will seek a board-led “M&A and Strategic Alternatives Committee” chaired by a shareholder-backed director, according to the letter.
Capricor has been fighting an uphill battle for over a year to secure FDA approval of its cell therapy for Duchenne muscular dystrophy (DMD) deramiocel. First rejected by the agency last July after a canceled advisory committee meeting, the company finally had its adcomm on July 29. It did not go well. After much discussion on the FDA’s decision to base its review on an outdated statistical analysis plan, the agency’s Cellular, Tissue, and Gene Therapies Advisory Committee (CTGTAC) voted 9-3 against approval of the candidate.
While the FDA is not obligated to follow the recommendations of its advisory committees, it often does. Deramiocel has a target action date of Aug. 22.
Capricor energized investors last week when CEO Linda Marbán said during the biotech’s second quarter earnings call that the FDA is receptive to open-label extension data being added to the current biologics license application.
“Following discussions with the agency subsequent to our advisory committee meeting, we plan to submit an amendment to our BLA that includes the 24-month open label extension data from the [Phase 3] HOPE-3 study along with additional analyses on the existing data package in order to support a refined indication focused on the primary endpoint,” she said on a Thursday earnings call. The pivotal trial’s primary endpoint was a statistically significant benefit in upper-limb function, but panelists instead voted on whether deramiocel offered substantial evidence of effectiveness for the treatment of cardiomyopathy in patients with DMD—a secondary endpoint of the study.
Shares of the company skyrocketed 68% following the Q2 call.
As deramiocel’s fate hangs in the balance, Capricor has halted all other pipeline work until the biotech receives “further regulatory clarity.”
The paused pipeline includes StealthX, an exosome-based vaccine that was in a Phase 1 trial for COVID-19 that was run by the Department of Health and Human Services and wrapped in June. The program is designed as an alternative to mRNA vaccines, with Capricor believing its vaccine platform holds potential across a variety of indications.
Kaos seems to oppose this strategy, urging for a greater focus on the company’s efforts outside of deramiocel, such as StealthX.
“We are shareholders because we believe deramiocel may still have meaningful value for patients and because we recognize the potential inherent in Capricor’s cell-therapy and exosome capabilities,” the authors of the letter wrote. “But conviction in a lead program is not a license for a Board to concentrate all of a public company’s capital, risk, and future in a single regulatory outcome.”
Kaos also appears to be concerned with Capricor’s financial position. As of June 30, the biotech had $237.9 million in cash, cash equivalents and marketable securities—down about $80.2 million from year-end 2025, according to the letter. “The Company must now treat cash preservation as imperative, not optional.”
