Capricor Therapeutics (NASDAQ: $CAPR): Turned a Rare Disease Into an Insider ATM – BMF Reports

Capricor's HOPE-2 open-label extension trial was still listed as "recruiting" five years after the original study ended, even as the company kept telling investors and Duchenne muscular dystrophy families the data were "transformational."

That contrast between an unfinished trial and finished marketing sits at the center of a new report on Capricor Therapeutics (NASDAQ: CAPR). The report also examines the September 2024 announcement of a $35 million deal with Nippon Shinyaku, which it says the underlying 8-K described as a non-binding letter of intent, not a signed agreement, and which was followed within weeks by stock sales from the CEO, CFO, and Executive Chairman. BMF Reports, which holds a short position in the stock, alleges the pattern reflects a company sustained by grants, dilution, and promotional timing rather than clinical progress.

Ticker: CAPR (Capricor Therapeutics, Inc.)
Research Firm: BMF Reports
Report URL: https://bmfreports.com/articles/capr?ref=shortreport.fyi
Position Disclosure: Short position in Capricor Therapeutics (exact disclosure wording not detailed beyond this in the source material)

Thesis

BMF Reports argues Capricor has spent more than a decade monetizing DMD patient hope, taxpayer grants, and retail equity financing without producing an approved therapy, while insiders and affiliated entities benefit along the way.

• Forever Trial: HOPE-2's open-label extension (NCT04428476) began in July 2020 with an estimated 2022 completion but remained ongoing as of 2025, and HOPE-3, announced in 2023, had no active ClinicalTrials.gov listing as of June 2025.
• Breakthrough Rhetoric: Capricor's June 2024 release called OLE data "transformational" and its March 2023 release promised "breakthrough potential" and "pivotal next steps," but no Phase 3 advancement or FDA filing followed in the two years after either release.
• Missing Mechanism Data: No public studies quantify cell persistence, biodistribution, dose response, or clearance for Deramiocel, and peer-reviewed MRI data in The Lancet showed no statistically significant LVEF improvement at six months in the 20-patient HOPE-2 trial (p=0.45).
• Endpoint Shifting: The report alleges Capricor moved primary endpoints away from objective measures like the six-minute walk test toward biomarkers and patient-reported outcomes, and that the open-label extensions lack placebo controls, an arrangement it argues avoids a definitive efficacy test.
• Undisclosed Chairman Ties: Executive Chairman Frank Litvack is allegedly linked through registration and IP records to WHE Investments, WHE Properties, IHCF Investments, and Connor Medsystems, ties the report says do not appear in Capricor's DEF 14A or 10-K filings; WHE Investments' own site reportedly lists Capricor as a portfolio company.
• Parallel IP Pipeline: Patents including US11224599B2 and US20230079997A1 are alleged to connect Capricor-related technology to Litvack-linked Credence MedSystems, raising the possibility, per the report, that IP could migrate to private vehicles if Capricor falters.
• Taxpayer-Funded Stagnation: Capricor has drawn roughly $17.78 million to $18 million in CIRM and NIH grants, including $10.99 million from three CIRM awards, with no FDA-approved therapy to date.
• Nippon "Partnership" Was an LOI: The September 2024 announcement of $15 million in equity and $20 million in milestones rested, per the report, on an 8-K reflecting a non-binding letter of intent with an unusual withholding-tax clause; the CEO, CFO, and Chairman sold shares within weeks as the stock rose roughly 50% to a 52-week high near $23.

Catalysts

• FDA decision on the Deramiocel/CAP-1002 BLA (2025 submission cited in the report): a Complete Response Letter or rejection would directly test the report's pharmacology-gap allegation.
• Any new clinical-data release, including confirmed HOPE-2-OLE results or a registered, enrolling HOPE-3 trial: would address the "forever trial" claim.
• Next Form 10-Q: current cash was cited at under $25 million against quarterly burn of roughly $6 million to $10 million, with a capital raise anticipated within one to two quarters.
• Confirmation, amendment, or non-payment of the Nippon Shinyaku $20 million milestone component: unconfirmed as of June 2025.
• Insider Form 4 filings: particularly any further sales tied to future announcements.
• Outcomes of the author's stated FOIA requests to Cedars-Sinai, CIRM, NIH, and FDA: on grant compliance, licensing, and IND history.

Company Response

The report does not describe a request for comment to Capricor, its executives, Nippon Shinyaku, Cedars-Sinai, CIRM, NIH, or the FDA, and it reports no response from any of them.

Notable Details

• CIRM announced $4.2 million in HOPE-3 launch funding in 2023, yet the report found no ClinicalTrials.gov listing, enrollment, or site confirmation for HOPE-3 as of June 2025.
• An NIH grant for CAP-1002 cardiovascular research (UT2HL131226), originally over $3.4 million, was reduced by roughly $1 million through a de-obligation entry that the report says Capricor never explained in an SEC filing or press release.
• Capricor's share count rose from approximately 10 million in 2020 to more than 26 million, driven by shelf registrations, ATM offerings, warrants, and convertibles.
• The Lancet's peer-reviewed MRI data (p=0.45, no significant LVEF change) sits alongside what the report describes as investor materials characterizing the same trial's results as statistically meaningful.

"The company shows us charts, not mechanisms. P-values, not persistence. 'Slowing of disease,' not how or why."

This appears in the report's critique of the alleged absence of public PK/PD evidence for Deramiocel.

FAQs

What does the BMF Reports report say about CAPR stock?

BMF Reports, which holds a short position in Capricor Therapeutics, argues that CAPR trades on promotional momentum rather than clinical or regulatory progress. It points to a stalled Duchenne trial program, an unconfirmed Nippon Shinyaku financing arrangement, and insider stock sales following price spikes as evidence the company depends on financing events rather than product revenue to sustain itself.

What is Capricor Therapeutics and what does it develop?

Capricor Therapeutics is a Nasdaq-listed biotechnology company developing Deramiocel (also called CAP-1002), a cell therapy for Duchenne muscular dystrophy, a genetic disease affecting roughly 1 in every 3,500 to 5,000 male births and fewer than 20,000 boys in the United States. The company's core intellectual property originated through licenses from Cedars-Sinai Medical Center and UCLA, per the report, and the therapy has been in development since 2011.

Who is BMF Reports and why did they publish on Capricor?

BMF Reports is the research firm behind the investigative report on Capricor, and it discloses a short position in the stock. Its report frames itself as a forensic look at Capricor's trial timelines, grant funding, insider trading activity, and alleged undisclosed related-party arrangements involving the company's Executive Chairman.

Did Capricor get FDA approval for its Duchenne therapy?

No FDA-approved therapy exists as of the report, despite Capricor operating for roughly 15 years and CAP-1002 being in development since 2011. The report notes Capricor lacked Breakthrough Therapy, Fast Track, or Priority Review designations for much of its history, even as it submitted a BLA in 2025.

What was the Nippon Shinyaku deal and why is it controversial?

In September 2024, Capricor announced a $35 million arrangement with Japanese pharmaceutical company Nippon Shinyaku, comprising $15 million in equity and $20 million tied to milestones. The report alleges the underlying 8-K reflected only a non-binding letter of intent, lacked disclosed milestone schedules or enforcement terms, and included a withholding-tax clause the author says is unusual for a commercial partnership; no receipt of the $20 million had been confirmed as of June 2025.

Why did Capricor insiders sell stock after the Nippon announcement?

Form 4 filings cited in the report show CEO Linda Marbán, CFO AJ Bergmann, and Executive Chairman Frank Litvack sold shares within weeks of the September 2024 Nippon announcement, as the stock rose roughly 50% to a 52-week high near $23 before declining. The report characterizes this timing, alongside other sales between 2021 and 2024, as part of a recurring pattern following positive press releases.

What is the HOPE-2 open-label extension and why does the report flag it?

The HOPE-2 open-label extension (NCT04428476) began in July 2020 with an estimated completion of June 2022 but remained listed as ongoing or recruiting as of 2025, longer than the original HOPE-2 trial itself. The report argues this extended, uncontrolled trial phase allowed Capricor to keep issuing positive data updates without progressing to a definitive, placebo-controlled Phase 3 study.

Is Frank Litvack's connection to other companies a conflict of interest?

The report alleges Capricor's Executive Chairman, Frank Litvack, is tied through registration and patent records to WHE Investments LLC, WHE Properties LLC, IHCF Investments LLC, and Connor Medsystems, none of which it says appear in Capricor's DEF 14A or 10-K filings. It notes WHE Investments' website lists Capricor as a portfolio company, which the author frames as an undisclosed dual role for Litvack as both investor and executive chairman.

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