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Capricor Therapeutics (NASDAQ:) has completed enrollment in their Phase III HOPE-3 pivotal trial for Duchenne muscular dystrophy (DMD) treatment with their lead program, CAP-1002, and reported a positive continuation recommendation. CEO Linda Marban emphasized the potential for payer support and the therapy’s significant disease progression attenuation.

Capricor’s San Diego facility is prepared to meet demand post-approval, and the company has raised $23 million with further milestone payments expected.

The earnings call also highlighted Capricor’s exosome technology advancements, including a COVID-19 vaccine program, and financial details such as a Q4 2023 net loss of $800,000 and revenues of $12.1 million, primarily from a partnership with Nippon Shinyaku.

Key Takeaways

• Capricor completed enrollment for the Phase III HOPE-3 trial of CAP-1002 for DMD treatment.
• Positive feedback from payers for CAP-1002 and plans to seek FDA approval for use in younger patients.
• The San Diego manufacturing facility is ready to supply CAP-1002 upon approval.
• Exosome technology platform advancements, including a COVID-19 vaccine program.
• Raised $23 million in funding, with potential milestone payments of up to $695 million.
• Financials: $12.1 million in Q4 2023 revenue, $800,000 net loss, cash runway extending into Q1 2025.
• Ongoing discussions with potential European partners, with the San Diego facility EMA qualified.

Company Outlook

• Capricor expects positive payer support for CAP-1002 in DMD treatment.
• Plans to request FDA approval for CAP-1002’s use in younger DMD patients.
• Anticipates the release of three-year data from HOPE-2 trial in Q2, showing continued disease stabilization and heart function improvement.
• Discussions with potential European partners to make CAP-1002 available worldwide.

Bearish Highlights

• Reported a net loss of approximately $800,000 for Q4 2023.

Bullish Highlights

• Positive recommendation to continue the Phase III HOPE-3 trial.
• San Diego manufacturing facility is fully operational and EMA qualified.
• Secured $23 million in financing and potential for significant milestone payments.
• Revenue of $12.1 million in Q4 2023, primarily from Nippon Shinyaku partnership.

Misses

• No specific misses reported during the earnings call.

Q&A Highlights

• CEO Linda Marban discussed the potential for payer support for CAP-1002, citing positive feedback.
• Explained the importance of cardiovascular data from the HOPE-2 trial.
• Mentioned ongoing discussions with potential partners for the therapeutic arm of their exosome technology.
• Expressed optimism for the upcoming data release from the HOPE-2 Open Label Extension trial.
• Emphasized the intention to make CAP-1002 available globally, with discussions with European partners ongoing.

In conclusion, Capricor Therapeutics has made significant progress with its leading DMD treatment, CAP-1002, and its exosome technology platform. The company’s financial position appears stable, with a solid cash runway and potential for substantial milestone payments. The upcoming data release and regulatory milestones will be critical for Capricor’s future success.

InvestingPro Insights

Capricor Therapeutics (CAPR) shows a blend of financial and operational dynamics that investors should consider. With a market capitalization of $141.34 million, the company’s financial health and growth prospects are of interest. Here are some curated insights based on the latest data from InvestingPro:

InvestingPro Data:

• The company’s revenue has seen an impressive surge, with a growth of 782.77% over the last twelve months as of Q3 2023.

• Despite this revenue growth, Capricor reported a negative gross profit margin of -55.28% in the same period, indicating costs outstripping sales.

• The stock has experienced significant volatility, with a 41.89% return over the last three months, though it has seen a decline of 16.5% over the past year.

InvestingPro Tips:

• Analysts are optimistic about sales growth in the current year, which may align with the company’s recent positive trial results and potential market expansion.

• However, Capricor is not expected to be profitable this year, and it’s worth noting that the company has been quickly burning through cash, which is a critical factor for investors to monitor.

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Full transcript – Capricor Therapeutics Inc (CAPR) Q4 2023:

Operator: Good afternoon, ladies and gentlemen, and welcome to Capricor Therapeutics Fourth Quarter 2023 Earnings Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Thursday, February 29, 2024. I would now like to turn the conference over to AJ Bergmann, CFO of Capricor. Please go ahead.

AJ Bergmann: Thank you, and thank you for joining today. Before we start, I would like to state that we will be making certain forward-looking statements during today’s presentation. These 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, our 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 manufacturing capabilities, potential milestone payments, 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 Marban, CEO.

Linda Marban: Thanks, AJ. Good afternoon, and thank you for joining today’s call. I’m encouraged with the progress we have made at Capricor in 2023 and into 2024. And today, I will outline our main priorities for our lead CAP-1002 program as well as provide a brief update on our exosome platform technology. 2023 was a big year for Capricor as we are now gearing up for biologics license application and commercialization. To that end, Capricor has assembled a team primarily focused on executing in four main areas in order to be prepared to bring our lead product, CAP-1002 to market for the treatment of DMD as expeditiously as possible. These are clinical, manufacturing, BLA readiness and commercial preparation. I will provide an overview of each area today. First, let me provide a clinical update on our Phase III HOPE-3 pivotal trial, enrolling late-stage ambulant and non-ambulant young men with DMD across the United States. Late last year, we announced completion of enrollment in our Phase III pivotal HOPE-3 clinical trial, where we enrolled 61 subjects randomized 1:1 to CAP-1002 for placebo. In December, we conducted a prespecified interim futility analysis, and we were very pleased to announce that the trial was successfully deemed to not be futile with a positive recommendation to continue the trial. This analysis was based on an assessment by the data safety and monitoring board otherwise known, of course, is the DSMB of 30 subjects, who reached the six-month time point and assessing their poll scores in a blinded fashion. This important positive outcome triggered our first milestone payment of $10 million from Nippon Shinyaku further strengthening our balance sheet and extending our cash runway. Now as you know, 2024 is a pivotal year for Capricor as we will have data from Cohort A of our Phase III HOPE-3 clinical study at the end of the year as well as fully enroll Cohort B by the second quarter of this year. To remind you, Cohort B was designed at the request of FDA to demonstrate comparable efficacy of CAP-1002 from our San Diego manufacturing facility to that produced in Los Angeles. This cohort, which is designed to enroll approximately 44 subjects is enrolling very well. In fact, enrollment has proceeded even faster than predicted partially based on the fact that there are no current therapeutics approved and very few in clinical trials for these later-stage non-ambulant patients. The primary endpoint of HOPE-3 is the change from baseline and the performance of the upper limb, version 2.0, of course, commonly known as the PUL at one year, as well as various secondary skeletal and cardiac endpoints, including left ventricular ejection fraction. We have already seen efficacy in the PUL 2.0 and our Phase II HOPE-2 study, where the data showed a 1.8 point improvement relative to placebo and was statistically significant. Even more validating is that as shown in our Lancet paper, multiple pull endpoints, whether specific regions or in combination, showed improvements with statistically significant changes in multiple domains. Importantly, CAP-1002 treated patients saw improvements in left ventricular ejection fraction, which is the gold standard measure of cardiac function. We saw a 4% improvement in treated patients with a p-value of 0.002. In addition, there were significant improvements in left ventricular end-systolic and left ventricular end-diastolic volume further suggesting structural improvements in the heart. There are no approved therapeutics that we are aware of that directly address the cardiomyopathy associated with DMD. Therefore, the importance of CAP-1002 in this area of unmet medical need cannot be understated. We have long-term safety and efficacy data in this patient population as we are continuing to follow the patients from the HOPE-2 study in an Open Label Extension Study into their fourth year, and we will plan to have the three-year results available in the second quarter of 2024. The two-year results shared last year continued to show statistically significant differences in the PUL 2.0 in the open label extension treatment group when compared to the original rate of decline of the placebo group from HOPE-2 after one year. Further, while the natural history of DMD cardiomyopathy suggest a steady decline in cardiac function as measured by ejection fraction in the HOPE-2 Open Label Extension, we observed improvements in heart function in 66% of patients. The two-year results underscore the potential long-term benefits of CAP-1002 treatment in DMD. As we envisioned CAP-1002 as a multiyear treatment, this data set will strengthen both our potential revenue modeling and payer discussions for long-term reimbursement. DMD has rapidly become an orphan disease that has garnered a lot of attention, not only because of the terrible nature of a disease that robs children of the ability to use their muscles well, but also because of the promise of disease modification by gene therapies and exon-skipping technologies to potentially allow modification of the dystrophinopathy. Many have thought that along with exon-skipping technologies, if the gene therapies are approved, there will no longer be a need for other treatments for DMD, nothing to be further from the truth. The current gene therapy paradigm allows for a small albeit potentially relevant amount of microdystrophin protein to be made. Current clinical data suggests there is an attenuation of disease progression from treatment with the gene therapy. However, we believe that it will require a multidrug paradigm to address all of the pathological consequences of DMD, primarily inflammation and fibrosis caused by the lack of dystrophin. CAP-1002 is perfectly positioned to be a partner therapy for DMD as the stated mechanism of action is immunomodulation and reduction in fibrosis. In fact, some of the current subjects at HOPE-3 are post-gene therapy, but still qualified for CAP-1002 based on the study’s inclusion and exclusion criteria. CAP-1002 has a strong safety profile and as a once-a-quarter infusion that has shown to be well tolerated. If CAP-1002 delays the disease progression with years of data and multiple clinical trials have demonstrated, it is our hope that CAP-1002 would be a preferred treatment with gene or exon-skipping therapies. Now I would like to take a few minutes to update you on our recent FDA interactions and regulatory goals for the program over the next several quarters. As you may recall, we met with FDA last year and aligned on the design of our current Phase III program with Cohort A being the primary data set for the filing of the BLA and data from Cohort B to be used to transition to our San Diego manufacturing facility. Now that Cohort A has been fully enrolled and Cohort B is heading towards full enrollment, we have continued to discuss with FDA any opportunity to expedite the filing of our BLA. Keeping in mind that in order to successfully achieve BLA acceptance, a critical aspect is to meet all CMC requirements as outlined by FDA. To that end, we have successfully established a potency assay for CAP-1002 based on the mechanism of action of the product, which is acceptable to FDA for our 2B marketed products and critical to the establishment of comparability between each of our manufacturing sites. As many of you know, FDA leadership has taken a great interest in helping move the field of treating DMD forward, and we continue to believe that we can work with them on a strategy to move CAP-1002 towards approval. Importantly, our San Diego manufacturing facility is now fully operational, staffed and producing doses for clinical use. Currently, we can produce enough CAP-1002 in our San Diego facility to meet and exceed NS Pharma’s forecast for year one of product launch, if approved by FDA. We also have plans in place to expand our San Diego facilities operations to support a larger demand as may be necessary, but further expansion or investment would be something we will look forward to do following potential BLA acceptance. I would like to highlight that we have extended a relatively small amount of capital to build our commercial manufacturing plant. This has also allowed us to strengthen our IP portfolio with additional process and method-based patent filings and know-how. We also are able to control COGS effectively to drive margins as high as possible on revenue and/or revenue shares. Importantly, we can also potentially expand our CAP-1002 program to other indications, while replicating our manufacturing modules. All of this taken together puts Capricor in a good position as we prepare for our potential initial commercial product in DMD. A majority of the investment into our facility operations and personnel have gone into preparations for this endeavor and I feel confident that we can deliver according to the time lines we have set forth. Now for an update on our commercial partnership with NS Pharma, who is already actively preparing for the potential launch of CAP-1002 assuming the data is positive, and we have an accepted BLA. We continue to work closely with them as we move closer to that goal. As we have stated, subjects are continuing to report slowing of disease progression on CAP-1002, which is supported by the PUL data. This positive data, combined with the strong safety profile has led to nearly full participant in Open Label Extension studies. Therefore, by the time of a potential BLA acceptance, we would expect to have approximately 120 patients already on CAP-1002 on an ongoing basis. These patients would likely become our first commercial patients. This potential revenue stream will be very supportive of a strong launch and will provide an initial commercial market for this product. Additionally, we are in the early stages of establishing a strong commercial team to support our partners at NS Pharma. Now I’d like to briefly turn to provide an update on our exosome technology. Currently, we are pursuing two avenues of opportunity. One is our vaccine program using StealthX, our proprietary platform that is useful for engineering select proteins, either inside or on the surface of the exosome and the other is using the same basic platform, but for the development of therapeutics. One of our major achievements this year was being selected as part of the US government’s Project NextGen, which is related to text vaccine candidates for potential use in preventing COVID-19 as well as prepare for future pandemics. The structure of the arrangement with NIAID, which is otherwise known as the National Institute of Allergy and Infectious Diseases, is that Capricor will provide them with manufactured vaccine, the campaign for which is underway now, and they will conduct and fully fund a Phase I clinical trial. There will be three groups tested, a low-dose S, a high-dose S of the current strain of COVID-19 and then a bivalent candidate containing S and N, the nucleocapsid. I am pleased to inform you that we have submitted an IND to the FDA for our StealthX vaccine, which is currently under review, and we anticipate that once the IND is approved, the NIAID will initiate the clinical trial in late 2024. I will provide more specific time lines on this program as we progress through the year. This will be the only multivalent candidate tested as far as we know, and we have high hopes for success in terms of potential safety and efficacy. If NIAID finds that the vaccine meets its criteria for safety and efficacy, they may consider our program for a fully funded Phase II. This opportunity is very important for Capricor because it supports our exosome-based vaccine and while we don’t have intention to become a vaccine focused company, it sets up the program nicely for partnering and other business development opportunities. As a reminder, the power of this technology is that it combines the speed of an mRNA vaccine with the potential efficacy of a recombinant protein-based vaccines. Should it work in humans as well as in preclinical animal studies, it could be a very important improvement in vaccinology. Also on the exosome front, we are in discussions with several potential partners to develop the therapeutic arm of our engineered exosome technology. The strategy involves taking the same StealthX platform and using it to target a specific tissue and then appropriately deliver a payload. Each early preclinical data suggests the strategy works, and we are looking forward to sharing more color on this important program as data becomes available. And finally, on the corporate side, we raised approximately $23 million late last year and an equity offering to support our balance sheet into 2025. This strategic financing was anchored by Nippon Shinyaku further cementing our strong relationship and their commitment to Capricor. As we think about moving through 2024 and into 2025, I want to remind you that our US agreement with Nippon Shinyaku comes with it an additional $90 million of potential milestone payments up to the time of approval, which are triggered upon certain regulatory-based achievements. Following potential approval, there is an additional $605 million in potential milestone payments, which will be payable to Capricor based on various sales-based targets being met. Furthermore, if we receive FDA approval for CAP-1002 for the treatment of DMD, we would be eligible to receive a priority review voucher or the PRV based on our previous receipt of a rare pediatric disease designation, which we retain full right to and would look to sell to support our balance sheet. Lastly, we are in active discussions with several parties related to the European rights of CAP-1002 for DMD. Our main goal is to continue to support our balance sheet leveraging nondilutive partnerships to fuel CAP-1002 towards potential approval and support the exosome program. Overall, I want to thank you for your support. We continue to diligently manage our resources, focus our efforts on bringing CAP-1002 towards potential commercialization in the most expeditious way possible. We are very much looking forward to the next several months as we will be continuing our interactions with FDA announcing our three year Open Label Extension data, completing enrollment for Cohort B and presenting at various medical scientific and investor-related conferences. I will now turn the call over to AJ to run through our financials. AJ?

AJ Bergmann: Thank you, Linda. This afternoon’s press release provided a summary of our fourth quarter and full year 2023 financials on a GAAP basis. And you may also refer to our annual report on Form 10-K, which we expect to become available shortly and will be accessible on the SEC website as well as our website. Turning to the financials. Let me start with our cash position. We ended December 31st, 2023, with cash, cash equivalents, marketable securities of approximately $39.5 million. This excludes the $10 million milestone payment we received in January of ’24 from Nippon Shinyaku under our distribution and commercialization agreement. Based on our recent operating results and projections, we expect our cash runway to extend into the first quarter of 2025, but this expectation excludes any additional potential milestone payments under our exclusive commercialization and distribution agreements with Nippon Shinyaku. In the fourth quarter of ’23, our revenue was approximately $12.1 million compared to approximately $1 million for the fourth quarter of 2022, which was primarily attributable to the ratable recognition of the $40 million, which includes the upfront in milestone payment we have received in accordance with our US commercialization and distribution agreement with Nippon Shinyaku. Excluding stock-based compensation, our research and development expenses were approximately $9.4 million for the fourth quarter of 2023 compared to approximately $6 million for the fourth quarter of 2022. The increase in expenses of $3.4 million was primarily due to increased clinical and manufacturing costs associated with our Phase III HOPE-3 trial. Excluding stock-based compensation, our general and administrative expenses were approximately $1.9 million for both the fourth quarter of ’23 and 2022. Net loss for the fourth quarter of ’23 was approximately $800,000 compared to a net loss of $7.7 million for the fourth quarter of 2022 and net loss for the full year ’23 was approximately $22.3 million compared to a net loss of approximately $29 million for the full year 2022. And with that, we will now open the line-up for questions. Operator, go ahead.

Operator: Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. [Operator Instructions] Your first question comes from Joe Pantginis from H.C. Wainright. Your line is now open.

Joseph Pantginis: Hi, Linda and AJ, thanks for taking the questions. Good afternoon. First off, so wanted to talk about your regulatory discussion. So last year, you had some pretty clear frameworks that you shared with us again today about the need for Cohort A and giving some manufacturing comparability from Cohort B out of the San Diego facility, and you keep talking about ways to potentially expedite. So I wanted to explore that a little bit. So the first question is, I mean, when you look at this, you have the RMAT status is one of the potentials here rolling BLA because you’ll be able to start submitting data quicker as part of the filing and other options you might be considering?

Linda Marban: Always a pleasure. Thanks for the question. So I’m going to start answering by saying I’ve been working on this therapeutic for 19 years. And where we are right now is just so staggeringly exciting to me. It’s sometimes hard to express, but what has been the best part of the last few months has been the careful attention that FDA has been paying to Capricor and to CAP-1002. They recognize the positive safety and efficacy data. They’ve looked at the Open Label Extension data, the HOPE-2 data and they’re working very closely with us. So yes, all options are on the table right now in terms of how to get this across the line as fast as possible. As I mentioned, leadership within CBER is aware of our program and really working very closely with us. We have RMAT, we have rare pediatric disease designation, orphan disease designation. So we have a lot of the bells and whistles that will carry our program as quickly as possible into the arms of the DMD patients.

Joseph Pantginis: Got it. And then just curiosity for Cohort B, are you strictly needing to show manufacturing comparability? Or do these patients need to be follow-up for a certain time frame?

Linda Marban: So we built-in and suspended the program by building in a full one-to-one randomized clinical trial with safety and efficacy built-in. So it basically is a mirror image of Cohort A. We’re working with FDA on what they’re going to actually ask us for. What we know and what we can guarantee on is that they’re willing to accept the license application on Cohort A. What we’re going to need from Cohort B is still what we’re working with them on, but it really is almost — something that we’ve not only been prepared for, but something that comes along very naturally. So the trial Cohort B, let me reemphasize, will be fully enrolled by second quarter of this year. And then we’re going to be able to potentially position that as a post-marketing commitment for the program.

Joseph Pantginis: Got it. And then my last question, if you don’t mind and thanks for bearing with me.

Linda Marban: Absolutely.

Joseph Pantginis: We’ve been talking about this for several years because we’ve been excited about the data. So I guess how would you portray the role of the cardiovascular data you’ve been accumulating through HOPE-2 and beyond in the evolution of your regulatory discussions and how much that may or may not be coming into play to date.

Linda Marban: Yes. So it’s obviously one of the most important cornerstones of our regulatory strategy, but also in the eagerness of the community to get approval for CAP-1002. To remind you, and I stated this, we saw a 4% improvement in ejection fraction, the gold standard of cardiac function and HOPE-2. And HOPE-2 Open Label Extension, we didn’t start measuring cardiac function until two years in. We’ll have three years data in the second quarter of this year, so stay tuned for that on cardiac function. But we’re pretty convinced that it’s going to be one of the major parts of what we’re going to look for on our label, and it’s the primary secondary endpoints that has been built in to HOPE-3 both Cohort A and Cohort B.

Joseph Pantginis: Got it. Thanks for the added details, Linda.

Linda Marban: Absolutely, Joe. Always a pleasure.

Operator: Your next question comes from Kristen Kluska from Cantor Fitzgerald. Your line is now open.

Kristen Kluska: Hi, everyone. Good afternoon. Thanks so much for taking my question.

Linda Marban: Hi, Kristen. How are you?

Kristen Kluska: I’m well. How are you doing?

Linda Marban: Good.

Kristen Kluska: So thinking about the potential for combinations, I completely understand the need for this, but can you comment on what your expectation would be in terms of payer support and then gene therapy typically requires a lot more upfront timing to do the different testing, manufacturing, et cetera. Would it be your expectation that CAP-1002 would be the first therapy essentially given in this cascade? And would that be in an advantage in case there is some payer pushback?

Linda Marban: So we’ve had really positive feedback from payers, not just at Capricor, but also NS Pharma has done significant work in preparing for market launch. And the way that we’re understanding it is that there’s going to be therapy that would be necessary for a sort of management of dystrophinopathy, right? So the exon-skippers and the gene therapies. And because there’s not an approved gene therapy theoretically yet, we don’t really know how they’re going to approach choosing those or both or whatever. But what we do know is that there needs to be a junk of therapy that would manage and I’ve talked about this a lot, the immunomodulation or the inflammatory response caused by the constant breakdown of protein in the body due to the mutation as well as manage the fibrosis and help to support perhaps the framework laid down by a gene therapy or an exon-skipper, which would be a healthier protein. So we are very confident that payers would find it beneficial to cover both the dystrophinopathy management strategy as well as CAP-1002 for the management of the inflammation and the fibrosis. Now in terms of the order in which the therapeutics are given, that we would sort of have to talk to some of the KOLs. We’re already starting to do some of that market research. Obviously, because we’re going for our initial label for some of the later-stage patients at least based on the HOPE-3 data. We reserve the right to ask FDA to go as young as possible. Colloquially, we always say time is muscle. And the data has shown that once people get on CAP-1002, disease progression is significantly attenuated almost immediately. So in terms of the timing of how that’s done, that remains to be seen, but we’re very confident that it will be part of the overall treatment paradigm of Duchenne.

Kristen Kluska: Thank you for that. And then we have seen quite a bolus of the four to five year-old on the Sarepta therapy, which I think underscores the unmet need here. So I wanted to ask what your thoughts are about the cadence you might see in terms of patients wanting therapy, especially because you are going after that nonambulatory population? And then what capacity would you be able to help with given this is half of the patients with DMD? Thanks again.

Linda Marban: Yeah. So thank you. So we plan on swinging the door wide open in terms of what we ask FDA for. The benefit here, unlike many therapeutics, we’re going to come into BLA with four, five years’ worth of safety data tracking children from theoretically age 10 and beyond. So we’re going to open the door and see what the opportunity is. Obviously, if I had a child with DMD, I want to get my child on CAP-1002 as young as possible. There’s really no downside and potentially could even have impact on who knows, things like steroid dosing and things that may have ultimate impacts and side effects. In terms of what we’re looking for, I think that was your second question, we’re looking for utilization of CAP-1002 as early as it becomes available to the community. We’re right there with it.

Kristen Kluska: Thank you.

Linda Marban: Thank you. Thank you for your time.

Operator: Your next question comes from Aydin Huseynov from Ladenburg. Your line is now open.

Aydin Huseynov: Good afternoon, everyone. Good afternoon, Linda, AJ. Congratulations with the progress this quarter and staying on track with the guidance, with the top line in the fourth quarter ’24. I have a couple of questions. First, I wanted to ask you about the potential expansion of indication. I think you mentioned something on your — in your remarks. And we — this — the most natural expansion, I think we talked about it, it was the Becker dystrophy that we see tremendous increase in value in other bigger companies. And given your cardiomyopathy focus on improving skeletal or cardiac muscle function, could you expand a little bit on your — any potential efforts that you’re making regarding that expansion?

Linda Marban: Thanks, David, and always good to talk with you. So we’ve been talking about this for a while. Obviously, there’s tremendous opportunities for expansion. As I mentioned, the manufacturing paradigm is set. We have a potency assay that’s been accepted by FDA. We understand the mechanism of action and how to make the cells. And we certainly are poised to expand our efforts. Becker is certainly one that’s of great interest, especially since the primary manifestation later life is the cardiomyopathy, which as we’ve talked about, is one of the main targets that CAP-1002 seems to ameliorate. Having said that, we are right now focusing almost all of our efforts on getting CAP-1002 across the line for DMD. We’re working on the BLA. We’re working on a launch strategy, commercialization strategy. And so indication expansion will come behind that. And we’ll provide more color to you and to the market as those opportunities become available.

Aydin Huseynov: Okay. Understood. Another question I have is regarding the our HOPE-2 open extension — Open Label Extension trial, results in the second quarter. So what are your expectations regarding this data?

Linda Marban: Well, we have three-year data coming out in the second quarter of this year, as I said. The two-year data was extraordinary. We presented that most recently at PPMD and then I will be sharing some more data at the Muscular Dystrophy Association meetings next week in Orlando. We have every expectation based on the anecdotes that we hear from the subjects and their families that this trend of stabilization of disease and attenuation of disease progression will continue. We’re really looking forward to seeing the MRI data because that will be two years of sequential cardiac function data. And we have every reason to believe that we should be able to stabilize heart function as well. So we also have so many families that call us that tell us that their sons are able to do what they weren’t able to do before or they can’t wait for their next infusion, can we please get in sooner because we feel it wearing off after three months. So I’m very much looking forward to seeing that data and then ultimately sharing it with all of you.

Aydin Huseynov: Understood. Thank you for that. And the last question is regarding the European discussions, discussions with potential European parties. So in your discussions with them, first of all, if you could give us a little bit of insight? Are these like established players or these new players? And what are the typical questions that they answered. What is the — which part of CAP-1002 value they are most interested in, if you could expand a little bit on this?

Linda Marban: Yes. So I think the European community is as interested in getting therapies across the line for DMD as the US authorities. They have a little bit different strategy in Europe. As you probably are aware, there is a little bit of different way of going about it. The parties that we’re talking to are some new and some established. I think we’ve been on the radar for several larger companies for a long time now. And with the data coming around the corner, they’re paying more attention. Perhaps one of the best things is that our San Diego manufacturing facility can be EMA qualified. So we can make doses here and ship them to Europe, which is an added benefit. And in terms of the questions that we get, I think, would be the typical ones, which is regulatory strategy, getting CAP-1002 across the line, what clinical trial work will be needed. From our standpoint, it’s probably going to be fairly straightforward, and we definitely look forward to making CAP-1002 available worldwide.

Aydin Huseynov: Okay. Thank you so much and congratulations for the progress this quarter.

Linda Marban: Thanks, Aydin. Take care.

Operator: [Operator Instructions] There are no further questions at this time. I’m turning it over to the management for closing remarks.

Linda Marban: Before we conclude today’s call, I want to extend my sincere gratitude to the patients, their families, the clinicians and our partners at Nippon Shinyaku and NS Pharma and of course, at FDA who continue to work with us to bring CAP-1002 closer to potential approval. Again, thank you to everyone, who joined us this afternoon, and I look forward to seeing you at meetings in the future.

Operator: Ladies and gentlemen, this concludes today’s conference. Thank you for joining. You may now disconnect.

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