CAPR

This call is being recorded on Tuesday, May 12th, 2026. I would now like to turn the conference over to our CFO, Anthony J. Bergmann, for the forward-looking statement. Please go ahead.

Thank you. Good afternoon, everyone. 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, potential regulatory developments involving our product candidates, our future R&D plans, 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 inspections, revenue and reimbursement estimates, projected terms of definitive agreements, manufacturing capabilities, our financial position, our possible uses of existing cash and investment resources, and statements regarding our litigation with Nippon Shinyaku and NS Pharma Inc., including the nature of the dispute, our expectations regarding any legal proceedings, and our ability to commercialize deramiocel independent of our existing distribution agreement.

These forward-looking statements are based on our 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 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, turn the call over to Linda Marbán, CEO.

Good afternoon, everyone, thank you for joining Capricor's first quarter 2026 earnings call. To our investors, collaborators, the Capricor team, and especially the Duchenne patient community, thank you for your continued support and belief in our mission. We are at a truly defining moment in this company's history, and I want to take a few minutes to give you a clear picture of where we stand across our three most important priorities: Our regulatory path to approval, our commercial readiness, and our legal action against NS Pharma and Nippon Shinyaku. I'll start with the most significant development. Our biologics license application, or BLA for deramiocel, is currently under active review by the FDA with a PDUFA target action date of August 22nd, 2026. As a reminder, following receipt of the complete response letter in July of 2025, we moved quickly and decisively.

We submitted our response based on the HOPE-3 phase III trial results, which we believe represent one of the most compelling data sets generated for DMD to date. The FDA accepted our response as complete and classified the resubmission as Class 2, resuming its full review of the BLA. There has been a significant number of information requests from the FDA to Capricor, all of which we have been able to provide answers to. We look forward to continuing our active dialogue with the FDA and are looking forward to labeling discussions in the very near future. As this is a BLA resubmission review, there will not be a mid-cycle review meeting. The data submitted as a response to the CRL, the HOPE-3 data, demonstrated statistical as well as clinical significance across a variety of endpoints.

To remind you, HOPE-3 was a pivotal phase III multi-center randomized double-blind placebo-controlled study that enrolled 106 patients in a 1-to-1 randomization scheme. The trial met its primary efficacy endpoint, which was the Performance of the Upper Limb, otherwise known as the PUL version 2.0, with an approximate 54% reduction in disease severity at 12 months and a P value of 0.029. As well as all type 1 error-controlled secondary endpoints also hitting significance. As the current BLA was for the indication of cardiomyopathy, it was very important that the key secondary endpoint of left ventricular ejection fraction demonstrated an approximate 91% slowing of disease progression in all evaluable patients.

In a subset of patients with a confirmed diagnosis of cardiomyopathy, the LVEF effect showed an approximate 120% slowing of disease and achieved a P value of 0.01, further supporting deramiocel's potential to address the DMD-associated cardiomyopathy. We are also pleased that we presented additional HOPE-3 data at the 2026 Muscular Dystrophy Association Clinical and Scientific Conference, also at the American Academy of Neurology and the American Society of Gene & Cell Therapy being held this week. 2 highlights are worth emphasizing. The Duchenne Video Assessment of Eat Ten Bites measure a home-based caregiver-captured video assessment of upper limb function. These showed statistically significant improvement in treated patients versus placebo. This is a real-world home-based outcome measure that directly reflects independence and quality of life.

In addition, the cardiac MRI data demonstrated a significant stabilization in the progression of cardiac fibrosis in treated patients versus placebo. Fibrosis is cumulative and irreversible. Its attenuation before functional symptoms appear is one of the most clinically meaningful things we can demonstrate. These data will be central to labeling discussions and supports the case for early treatment initiation. The full HOPE-3 dataset has been submitted for publication in a major peer-reviewed journal, and we look forward to that publication following acceptance in due course. On safety, we have now completed more than 800 intravenous infusions across multiple clinical studies. deramiocel continues to demonstrate a consistent and well-tolerated safety profile. Several of our young men in the HOPE-2 open label extension have been receiving continuous infusions for up to five years, with approximately 90 patients in our collective OLE studies.

Importantly, the long-term safety profile of deramiocel is supported by these 5 years of open label extension data. This is reassuring for the DMD community as well as supportive of regulatory approval. Lastly, we also expect to be eligible to receive a priority review voucher upon potential approval. PRVs are transferable and can be monetized through sale, representing a meaningful potential source of non-dilutive capital. We will continue to provide updates to the market on the progress toward the path to approval for deramiocel to treat DMD. Now I'd like to turn your attention to directly address our legal action against Nippon Shinyaku and its U.S. subsidiary, NS Pharma, which we announced last week on May 7, 2026.

We filed suit seeking rescission of our U.S. distribution agreement through an expedited process, requesting a preliminary injunction that would allow Capricor to distribute deramiocel to patients either on our own or through other distributors pending FDA approval. Let me be clear about what drove this decision and why we believe it is both necessary and correct. The core problem is related to pricing. The pricing structure embedded in our commercialization and distribution agreement with NS Pharma contains a fundamental flaw that, if left unaddressed, would make it economically impossible to deliver deramiocel to patients covered by Medicare, Medicaid, or private insurance. Providers would face potentially hundreds of thousands of dollars in reimbursement shortfalls per dose. This is not a commercial preference. It is a structural barrier to patient access. We tried to fix the pricing structure. NS Pharma refused to address the flaw on acceptable terms.

After we identified this issue, we engaged in good faith negotiations with senior leaders at NS Pharma to find a resolution acceptable to both parties. NS Pharma refused to compromise and demanded that Capricor agree to a structure that would result in Capricor ceding all control of the product we developed, our regulatory relationships, and our commercial and brand identity as a condition for resolution. That arrangement was just not acceptable to us. At the point of the CRL in July of 2025, it was clear that NS Pharma failed to continue the commercial investments needed to ensure a successful launch of deramiocel upon regulatory approval. NS Pharma did not provide status updates to inform Capricor on their launch planning efforts specific to the commercial interest of deramiocel patients, caregivers, HCPs, and payers. These were core requirements of our partnership that they did not uphold.

With the PDUFA date of August 22, 2026 approaching, we could not allow a flawed contractor and a distributor who was unwilling to fix it stand between DMD patients and deramiocel. Every month of delay for boys and young men with DMD means irreversible loss, muscle destroyed, cardiac function permanently diminished, or independence that may never be returned. We did not rush this decision. After exhausting every alternative to address NS Pharma's inaction, we concluded that litigation was our only acceptable option. The FDA review process and the PDUFA date are unaffected by this lawsuit. As I mentioned earlier, our BLA remains under active review. Capricor has hired and continues to hire key individuals to support the successful commercialization of deramiocel.

We have been working to ensure that our commercial readiness and a product launch plan that considers patients, healthcare providers, and payers with a focus on seamless patient access. We are thoughtfully scaling our manufacturing capacity to meet the needs of those patients exiting our clinical trials and in preparation for commercialization. Our regulatory pathway is only meaningful when we deliver the therapy directly to patients, and that is exactly what we are building towards with the same discipline and urgency we have applied to the science over the past two decades. Let me walk you through some of the specifics with respect to manufacturing. First, our in-house GMP manufacturing facility in San Diego successfully completed its FDA pre-license inspection, or PLI, last year. All Form 483 observations were addressed.

The facility is operational and positioned to support initial commercial launch for approximately 200 to 250 patients per year. We are also well underway with our expansion to the second floor of that same facility, adding several additional clean rooms. At full capacity, this expansion will support treatment of approximately 2,000 to 2,500 patients per year, roughly 10,000 doses annually. We are staging the build-out deliberately. My goal is to have the facility fully validated and approved by the FDA in the first half of 2027. During the FDA review period, we will continue to produce material and increase capacity as we move through 2027. Our primary manufacturing priority will begin stockpiling commercial doses once we have guidance on the label from the FDA.

Since deramiocel is an ultra-cold chain product, it has to be labeled before it is frozen. FDA has been apprised of this and is working with us on a temporary label solution so that we can begin production of commercial doses. Based on current planning, we will have ample product to support our future launch if approved. While the litigation against NS Pharma probably came as a surprise to many of you, we had become increasingly aware that not only was the deal structure impossible from an economic perspective, but they were seriously lagging behind in commercial planning, as I just mentioned. I have guided multiple times that we were building a small commercial team to provide support to NS when they were going to be the sole distributor.

Now that we are gearing up to launch on our own, subject to the court's decision, we have accelerated those efforts and are in the process of building a fully functional commercial team. We already have a senior vice president of market access with significant rare disease experience who is actively preparing the market for deramiocel. I am pleased to inform you that we have now secured a chief commercial officer who will join us in the next few weeks. This executive brings direct DMD and rare disease commercial experience and will be an integral member of our launch leadership team. We look forward to introducing him to the investment and DMD community shortly.

To that end, we are actively working towards approval and commercialization of deramiocel, and our current deliverables are to continue to work on hiring key individuals to support the successful commercialization of deramiocel to support patients and their caregivers. We are building to ensure commercial readiness and a product launch plan that considers all, with a focus on seamless patient access across all payer segments. We are rapidly building the physician education and disease awareness infrastructure required to support responsible and rapid adoption consistent with our expected label and other rare disease patient populations. Lastly, the building of our patient support and distribution services is underway with a strong commitment to patients and their families while enabling access across all channels for as many eligible patients as possible. The DMD community is small, defined, and engaged, and we know who the prescribers are.

Now turning to our pipeline. Over many years, Capricor has been focused on translating the science of deramiocel into a potential commercial therapy, marshaling the majority of our resources to advance it from discovery to this pivotal stage. We have developed deep expertise in product development, manufacturing, and clinical development. While we are proud of these accomplishments, pipeline expansion has not been our first priority. We have worked at a slow but steady pace in developing exosomes as therapeutic agents, taking advantage of their biological role as cellular delivery vehicles. We continue to explore and develop opportunities for pipeline expansion with CDC-based exosomes and our patented StealthX technology made from HEK293 cell exosomes, and now being used in vaccine studies in collaboration with the National Institute of Allergy and Infectious Diseases, NIAID, for COVID prevention.

It is important to note that there has been a lot of instability in vaccine development over the past year, this program has moved a bit more slowly than originally planned. However, the most important milestones were reached, which were manufacturing of clinical-grade vaccine exosomes and an approved CMC from FDA for large-scale manufacturing, as well as showing that an exosome-based vaccine is safe. We are moving away now from vaccine development at this time and will focus on developing therapeutics with both classes of exosomes. We are actively presenting and publishing our rapidly expanding pipeline of exosome-based therapeutics and look forward to providing updates on the clinical development program as they become available throughout this year. In terms of lifecycle management of deramiocel, we have spent 20 years developing our therapy and now will be actively looking to expand into other indications.

Our first target will likely be expansion to the younger DMD patients we are working on now. In addition, we plan to initiate the clinical pathway for Becker muscular dystrophy, which we plan to begin discussing with the FDA immediately following PDUFA for DMD. Expansion of deramiocel outside the United States is also underway, and we expect to meet with the EMA and PMDA later this year. We believe deramiocel should be available to all patients worldwide, and that will be a goal that we actively work towards this year. In addition, we're evaluating opportunities in other rare neuromuscular diseases where inflammation and fibrosis are the primary pathologies. And now with that, I will turn the call over to AJ to review our financial results. AJ?

Thanks, Linda. As of March 31, 2026, we maintained a strong balance sheet with approximately $279 million in cash equivalents, and marketable securities. We believe our current capital is sufficient to fund anticipated operating expenses and capital expenditures into the fourth quarter of 2027. That expectation excludes potential product revenue or a priority review voucher monetization upon potential approval. There was no revenue recognized for the first quarter of 2026 or 2025. Our total operating expenses for the first quarter of 2026 were approximately $36.8 million, compared to approximately $25 million for the first quarter of 2025. The 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 first quarter 2026 was approximately $33.9 million, or $0.59 per share, compared to a net loss of approximately $24.4 million, or $0.53 per share for the first quarter of 2025. Our operating expense profile reflects a calibrated investment across our 3 priority areas of regulatory and clinical activities in support of our BLA, manufacturing capacity expansion, and commercial infrastructure build-out, all aligned with our path towards potential approval, and our balance sheet provides the runway for us to execute. With that, operator, let's please open up the line for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. One moment, please, for your first question. Your first question comes from Leland with Oppenheimer. Please go ahead.

Thank you. Linda, as we continue to digest the news on the lawsuit, wondering if you could share more color. You know, Nippon Shinyaku is a large company with many products, but NS Pharma is a much more focused company, you know, with one product, which is for Duchenne and is complementary to deramiocel. They would seem to be very well set up to enter the market with your product, and would be motivated to do so, given the, you know, the money to be made.

I'm just curious if you could share more color or insight on your discussions with NS Pharma as to their reluctance to move at all toward what could be a resolution that would enable deramiocel to be sold in such a way that the ASP-based pricing would, you know, work for the system. Again, given that, you know, NS Pharma would not be able to have any return on deramiocel until that's worked out in the follow-up. Thank you.

Thank you, Leland. I think that was your longest question ever. I appreciate the clarity and the depth to which it's gone. You know, the answer is a little bit of a head-scratcher for us as well. You know, as I've been guiding, since the filing of the suit on May 7th, we actually entered negotiations with them regarding this very issue in March of 2025. It's been over 1 year that we went back and forth and proposed a variety of solutions that we believed and, several sets of lawyers, including some of the lawyers that represented NS Pharma believed would be a reasonable structure that would allow us to keep the economics essentially in place, you know, the way that they had been divided in the original agreement.

We don't have a clear answer as to why they were so intransigent on accepting any of these other opportunities. What I can tell you is that within about one week before we filed the suit, they confirmed by email that the structure that they proposed, which essentially eviscerated Capricor's brand and deramiocel, and future indications, was the only structure that they would accept. They really left us with no opportunity. Now, having said that, while we would never break an agreement that was being enacted upon appropriately, this gives a great opportunity for Capricor to become the distributor of deramiocel. I think all of you know how passionate we are about deramiocel, spending nearly 20 years, more than 20 years developing it. We know the patients, we know the community, we know the doctors, we know the networks.

I'm excited by this opportunity as well as respectful of the terms of the original agreement, which are no longer applicable.

In your statements, you said that Capricor determined that this would be a non-viable pricing structure. Do you have evidence or admission on NS Pharma's part or Nippon Shinyaku's part that they also were not aware of the implications of this when they signed the agreement?

Well, I'm assuming that they didn't know the implications of it because they signed the agreement. I think what, you know, I don't know what was in their head or, you know, most people don't typically go into an agreement that is non-transactable if they know that there is, you know, a sort of a killer clause in there. Having said that, you know, we were all made aware of this problem based on the ASP at the exact same time by an independent consultant in the field. We know that they knew that this was a problem, as I said, starting from March of 2025. There's definitely not an ignorance is bliss kind of opportunity here.

All right. Lastly, in terms of your planning for commercial, you know, you're getting going. You do have, you know, a few months until a presumed approval, but, you know, most companies would be well ahead of that in terms of, you know, time to market for these various preparations. Could you maybe share kind of where you expect to be, assuming approval in August, in terms of launch readiness relative to where one would ideally be, you know, to be launching a rare disease product such as deramiocel? Thank you.

Thanks, William. I think I've stated pretty clearly that we were very disappointed with NS Pharma's approach to launch planning over the past few months, especially since the CRL. They had stated that they were putting pencils down. They didn't pick them back up theoretically again until March of this year, just a few months ago. They were egregiously behind in some of the very critical launch activities which typically take place 12 to 18 months before and also, you know, paved the way whether or not you know, have responses from FDA. Having said that, we at Capricor knew launch was coming. I have been laying the groundwork quietly behind the scenes for many months now.

We're building out not only a commercial team with a newly hired chief commercial officer, but we've been working on market access, advocacy, planning, the patient journey, the product journey, getting a distributor, which we believe that we'll be able to secure very quickly. I have high hopes for a very strong launch. Most importantly, we have, you know, nearly 100 open-label extension patients that we will be actively working to get over to commercial product and working with the payers to do so. We remain committed to providing deramiocel to as many eligible patients as is possible as soon as possible post PDUFA.

Thank you.

Thank you. Your next question comes from Ted with Piper Sandler. Please go ahead.

Great. Thank you very much, appreciate all the color on the priorities to get approval launch and then the lawsuit. I have a question, just sort of what the steps are from here with respect to the lawsuit. I know you mentioned that you had requested an expedited lawsuit, or I forget the exact words you used. How does that play out? If it should go past PDUFA approval or PDUFA or the approval comes ahead of the PDUFA, you're in a position where you're manufacturing the drug, and you're putting your own sales force in place. You're just gonna launch it yourselves. Is that accurate?

Our current plan is to launch deramiocel. Yes, we have the drug. Yes, we manufacture it, and that is what we're working towards here at Capricor. In terms of the timing, it is dependent upon the court, for which we have very little, in fact, we have no control. Having said that, the reason our lawyers filed a motion for preliminary injunction was they typically act very quickly on those and will give us some guidance, and, you know, hopefully will be heard on an expedited basis. We can't provide any other details on the litigation. What we can tell you is that my plan now is to distribute deramiocel on time and in a well, you know, thought out strategic fashion, while this is continuing either in the background or has been resolved.

Great. Well, I wish you all the luck because I do think this drug is best served to patients in your hands. Thank you for that update.

Thank you, Ted.

Thank you. Your next question comes from Kristen with Cantor. Please go ahead.

Hi. Good afternoon, everybody. Thank you for the questions and for all the transparency today. When the press release first came out last week, I think some investors initially read it as they weren't preparing for a commercial launch appropriately because they didn't have conviction in an approval. On the other hand, you know, myself and others read it as, well, if they truly believe that, they would happily just give the deramiocel back to you and move on their way. I guess, can you just clarify that in no way is this, in your opinion, based on them lacking conviction in an approval?

Yeah. Thanks. You know, that sort of is icing on the cake in the sense that, you know, we're disappointed in the progress they were making. We believe that it shows a lack of belief in deramiocel from their perspective and a lack of focus on their part. Having said all that would not have been the foundation nor the basis of an action at this point. We would have tried to work with them, I think as I guided and have answered in a previous question, we would have just shadow boxed behind them with our own commercial efforts, you know, trying to support and help them get this to patients as quickly as possible.

I think all of you know that we have, you know, great connections within the Duchenne space and relationships with patients and advocates and providers. No, the foundation of the lawsuit is really this contractual basis, which really gives us good potential evidence for rescission, which is a decision that each party sort of went about the contract in good faith. It didn't work out, everybody goes back to square one and does their own thing, which would then allow us to have the rights back, and we would be, you know, fully engaged as the sole distributor of deramiocel. You know, stay tuned. We don't have any answers from the court yet. Obviously, this is material, we will provide updates as soon as they become available.

Okay. Thanks, Linda. Then maybe just on the review side, Sorry, you made the comment that you're nearing potential labeling discussions. Seems a little bit quick. It's usually, like, a month or two before the PDUFAs. I recognize we're three months out here. Is that just kind of based on the trajectory of the questions that you've been getting? Have they told you one way or another whether these labeling discussions are happening? Then again, appreciate the transparency around the information requests FDA's been giving you. Can you just provide more color to that on, like, understanding the data? Anything specific you can give us there? Thank you so much.

Yeah. Thanks, Kristen. It's always a pleasure to hear from you. My regulatory lead advises us that, you know, information around labeling should be coming within the next few weeks. We are already in an interim label conversation with them because, as I mentioned in my prepared remarks, when you use an ultra cold chain product, you have to put a label on before you freeze it. We want to start stockpiling for commercial. They know that this is something we're interested in and working on, and we look forward to providing updates, you know, as those labeling conversations come to fruition. In terms of the information requests, they have been quite prolific coming from the CMC side.

Most of them sort of standard form types of things, you know, asking for extra data or asking for extra clarification. On the clinical side and the statistical side as well, additional data clarification, what analyses were done, blinding protocols, that kind of information that you would expect FDA to be digging into, at this time. We remain very optimistic about the review process for deramiocel and DMD.

Thanks, Linda. All the best.

Thanks, Kristen. Take care.

Thank you. Your next question comes from Madison with B. Riley Securities. Please go ahead.

Hi, thanks for taking our question. Maybe a couple from us. Maybe could you help us understand any commercial readiness activities that you have either started or plan to start rather, that were previously being conducted by your partner? For example, payer discussions, has Capricor engaged any third-party logistic distributors, things like that? Maybe a follow-up afterwards.

Madison, absolutely. Great to hear from you. As I mentioned, because we were concerned about the speed and efficiency at which NS was going about commercial planning, we were shadow boxing behind them the whole time. Yes, we have a 3PL identified, we can enter into an independent contract with them and that we're in the process of doing that at this time. Most of the other parameters of launch preparation were being either bird-dogged by Capricor or in fact led by Capricor. There's not really any areas right now that we've identified where NS, you know, had really taken the lead and we were sort of running behind or need to play some catch-up ball.

My general hunch is that we're up to speed and moving as quickly as possible with PDUFA coming right up.

Got it. Understood. On the interim label related to the cold storage. If you're able to manufacture around 250 vials, doses per year, currently, do you have a sense of how many you could complete between finalizing that interim label and the actual PUFA date? Thanks.

Yeah, we haven't disclosed that number. We are actively working now, starting to prepare for commercial manufacturing. The lag in time will be that each lot has to be reviewed and approved by FDA, and we expect to do that, you know, prior to and getting ready for launch. What's most important is we will not delay dosing on any level of our open label extension patients. We will continue to make sure that we provide access to them and have no plans on delaying based on commercial manufacturing. We're up to speed there. Just 1 quick correction. It's 200 to 250 patients who each receive 4 doses, so it will be 1,000 doses per year from our downstairs facility here in San Diego.

Got it. Thanks for that clarification.

You're welcome.

Thank you. Your next question comes from Michael with Maxim Group. Please go ahead.

Hey there. Thank you so much for taking my questions today. I mean, lots of interesting stuff going on here. I would like to see if you could just provide a bit more color on what the basis for a suspension or an injunction of the commercial agreement would be. If there's any sort of precedent for a court issuing an injunction to allow the manufacturer to distribute the drug while the IP or the some sort of licensing agreement is under dispute.

Yeah, thanks. Those are really clear questions. I'm gonna take the second one. I might ask you to repeat the first one because the second one was kind of, you know, intense. Yeah. There are precedent cases of rescission, not exactly similarly where you have in a product, a drug product that is allowed to be manufactured and distributed while the other one is not able to. Part of the reason for that is the structure that NS proposed to us has literally never been done in U.S. biopharma. It's only been done in generics once the drugs are off patent. A patented product has never been in this type of agreement that NS had proposed. Our current plan is, you know, to continue to wait to hear the results of the injunction.

Typically in situations like this where the drug is, you know, potentially life-saving, life-extending, or certainly disease modifying, the lawyers think that the courts pretty much would not stop the distribution of the drug because of the need by patients. We provided up to 5 affidavits with our lawsuit from patients and physicians stating that deramiocel should be available to patients regardless of who distributes it because of its importance to patients. We don't anticipate being shut down on that level, and we look forward to the results of the preliminary injunction and also to potential rescission. That was your 2nd question. What was your 1st one again, Michael? I'm sorry, I forgot.

Hi there. I'm not sure if you can hear me. I think my connection might be a little bit bad here. I just I think you actually answered the first part of that question with the second part of the question.

Oh, okay.

I think we're clear on that.

Well, I'll take it as a 2-for-1 special. Thank you so much.

Thank you. Your next question comes from Catherine with JonesTrading. Please go ahead.

Hi. I guess, you know, can you expand on the definition of the private label distributor? You know, what would that entail for Capricor? Whether this would, in your view, constitute a breach of contract on their part?

We don't have a private label distributor agreement in place. We never did. The agreement that we have in place was a sales, marketing, and distribution agreement. The foundational aspect of it, which has led to this lawsuit, is the transfer price that was originally built into the deal where NS Pharma would give Capricor a portion, and just a portion, by the way, of the COGS, in order to defray expenses. Then NS Pharma would take X number of doses, distribute them, and then give us back their, our share of the royalties, minus that small transfer price. Pretty, pretty clear opportunity.

Seemed like a rational deal structure at the time, except this transfer price would then set the average sale price, which would be disastrous, as I've said many times. There is no PLD relationship or agreement in place, and therefore there's no breach. The problem is that we can't agree on the structure. They want a PLD, and we would have liked a co-commercial agreement.

Okay. Got it. If I recall, there were some milestone payments that they were owed, that were owed to you on approval. If they're unwilling to walk away from the contract, you know, are they still required to pay those milestones? What happens if they choose not to, if, you know, if the lawsuit is going on?

Well, and I'm not a lawyer, so I will say that please, you know, take my answers not from the perspective of a lawyer, but from the CEO guiding the company through this very challenging, but exciting time. What we have been made to understand from the lawyers is that the agreement as it stand is non-transactable. That means everything in the agreement is at this point not able to be acted upon. We are assuming that they're not going to be paying the milestones. We're not expecting them to pay the milestones.

In fact, you know, one of the things that we have actively considered is if there is rescission, we will probably pay them back the $50 million that they've paid us in initial upfront payments and then the 2 milestone payments. We're ready to do that. Happy to do that actually, if that becomes necessary. We're not expecting any future payments from them at this time.

Got it. Thanks.

Thank you. Your next question comes from Matthew with AGP Global Partners. Please go ahead.

Hey, guys. Thank you for taking my questions. First, is $60 million kind of a fair estimate of what would need to be paid back to NS Pharma in the event that both of you guys just kinda shake hands, you know, as you put it, divorce and walk away? Would it maybe be a little bit less? I know they've already paid you the $50 million, so color on that would be great.

We're expecting that if we have to pay something back, it would be the $50 million. We don't know. We don't know what agreement we're going to come to. We don't know what the court is going to say. We stand ready to do so, certainly, if that becomes part of the ruling in the case.

Understood. Then just pivoting a little bit to the opportunity in Becker. If you could give us just an idea of the market size, what your work already has been in reaching out maybe to patients or providers for Becker. The sevisentan is it's in, you know, phase III clinical studies right now for Becker. Would deramiocel be an additive onto this potentially approvable drug? Has that been something that you guys have been looking into in Becker?

Yeah. We're very much looking forward to the opportunity in Becker muscular dystrophy. I've been kind of eyeballing it for a bit. You know, the pathophysiology of Becker is literally identical to DMD, it's just a slower progressor. The primary cause of death in those men with Becker is the cardiomyopathy. In our cardiology, key opinion leaders tell us that if you give them an MRI of a Becker patient and of a Duchenne patient, you can't tell them apart. We have a drug that treats the cardio as well as the skeletal muscle myopathy, and therefore think it would be ideal for Becker. The market size in the U.S. is about 5,000 patients per year. I think it's considered an ultra-rare group, and it's a very slow progressor.

You know, I have some idea of what I'd like to go after with FDA. One of my first goals post-PDUFA will be to meet with them on Becker. The reason that I'm waiting till after PDUFA is strategic because we qualify for a PRV, and for a PRV, a priority review voucher, you have to be treating solely a pediatric condition. I don't wanna sort of cloud it with an adult-based disease until we have clarity on our PDUFA for Duchenne and get our PRV and are able to use that to provide a source of non-dilutive capital to the company.

Great. Thanks. Just on the sevesamtin question very quickly.

Oh, right, right.

Is that Yeah. Is that something you guys are looking at or, you know, is that part of the plan right now?

We feel like deramiocel is additive to literally any of the other products that are on the market right now or could be on the market and, you know, are in the clinical evaluation stage, given its activity, bioactivity and efficacy in the heart. And that's in patients, by the way, with a diagnosed cardiomyopathy, not just healthy hearts. In addition to that, you know, the ability to control inflammation and fibrosis can only help those other therapies be more effective. We look forward to partnering with the other drugs that will become part of the polypharmacy to treat DMD and of course, Becker in the future.

Great. Thank you guys for taking my questions and best of luck going forward.

Thanks, Matt, and have a good day.

Thank you.

Thank you. Your next question comes from Boobalan with, Roth Capital Partners. Please go ahead.

Hi, good afternoon, and thanks for taking my questions. Maybe a couple from us. Firstly, I wanted to start or maybe delve a little deeper between MFP and ASP. Maybe can you provide some context in terms of what the difference between average selling price and the maximum set price for a drug like deramiocel or maybe for rare disease drugs in general?

Yeah, we haven't really been disclosing any of that information yet. We're still working on gathering that information. As I said, you know, we are working now actively to build our commercial planning strategies. Please stay tuned for more information on ASP, MSP, that kind of thing as it comes available.

All right. I think somewhere in your press release, it states that NS Pharma demanded that Capricor give up the control of regulatory relationships. My understanding is that NS Pharma is brought in to sell, market or distribute deramiocel in the hospital settings. Why are they heavy-handed on regulatory relationship? Because it looks like, I mean, I don't know whether they just wake up one day and decided to meddle in regulatory aspects of deramiocel as well. Maybe any color on that?

Yeah. Oh, the AJ can take this question.

Yeah. I think, they were focused, thanks, Boobalan, on with respect to the PLD that they were looking to propose for us, some of the regulatory relationships would fall under the guise of that potential agreement, which of course we're not comfortable with. That's kind of the root of your question, I believe. That's fundamentally one of the reasons why, of course, it didn't work for us.

Then, maybe one last. I think somewhere in the 8-K it says that although the distribution agreement is no longer binding, blah, blah, then the distributor may interfere with Capricor's relationship with third parties. I just feel that this text, it appears, you know, NS Pharma has been in the driver's seat throughout the process, Capricor is playing a defensive game even though, you know, Capricor is the innovator of the drug. Curious, you know, why, if the distribution agreement is no longer binding, where does the concern of interference come from?

Yeah. First of all, we don't feel like we're on the defensive. We feel like we're equal weighted partners, that we're actively interested in commercializing deramiocel together, each of us playing to our individual strengths. Unfortunately, that relationship is no longer possible based on the existing agreement, and we're prepared now to launch on our own. In terms of interaction with vendors, of course, in an 8-K, it's incumbent upon the company to put forth all of the potential risk factors. Boots on the ground, we haven't really had any problems with any vendors. In fact, they like working with us. We're efficient, we're smart, we're well-informed and strategic. In practice, we're not seeing any problems with vendors. In theory, if one occurred, we would just find a different vendor to work with.

There's lots of different vendors out there to take advantage of for commercializing a product.

All right. Thank you.

Have a great day.

Thank you. Your next question comes from Michael with Maxim Group. Please go ahead.

Hey there. Sorry, I got bumped off there before. I just had one follow-up I wanted to ask. You seem to be making great progress on prepping a commercial for us, but, you know, there's a pretty quick time window that you have before the PDUFA date. My question is, first, are you expecting that you will be able to hit the ground running, assuming this gets approved right on time and launch shortly thereafter? What gives you confidence that you will be able to build a sales force capable of addressing this market?

I'll take the second part first. The sales force becomes a relatively easy question to answer. In a rare disease, especially like Duchenne, with a very connected set of patients, physicians, providers, it really becomes less about, you know, getting a big sales force, so we're not going after adult heart disease. What we are going after is efficiency. I have a lot of confidence that we'll be able to build a good sales force. We have a good reputation in the community and get it out there. In terms of the distribution of deramiocel, you know, we are the ones that have been getting ready to do so. We expect that we will, you know, launch in a, in a time efficient manner.

We hadn't announced date for launch, and by the way, neither had NS, so we're not gearing or guiding towards an actual launch date as yet. We're working towards PDUFA. We're guaranteeing drug in an uninterrupted format to the open label extension patients and perhaps the other patients, as, you know, the information becomes available, and we'll update the street on our potential launch date as we get some clarity there.

All right. Thank you very much, and best of luck. I think, you know, it's abundantly clear to anyone who's seen the data just how important getting access to this is as quick as possible.

Thank you so much, Michael. That means a lot. We feel the same way.

Thank you. I will now turn the call back to Capricor management for final thoughts.

Yeah. Thank you again for joining us today and for your continued support. Again, for the boys and young men living with Duchenne and their families who have waited alongside them, we are eagerly anticipating the approval of deramiocel to treat DMD. The science is strong, the data are strong and before the FDA. We are wholly focused on ensuring that when approved, deramiocel will be made available to every eligible patient as quickly and as broadly as possible. For our investors, the thesis is straightforward: a potential first-in-class approval in defined rare disease populations, proprietary in-house manufacturing, a growing pipeline, and a leadership team with the conviction and capital to execute. We believe that we are building something that will create meaningful value for patients and for this company and for shareholders who have believed in this mission. We look forward to a transformational summer. Thank you.

You may now disconnect.

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

Good afternoon, ladies and gentlemen, and welcome to the Capricor Therapeutics, Inc. fourth quarter and full year 2025 conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call may be recorded today, Thursday, 03/12/2026. I would now like to turn the conference over to CFO, Anthony J. 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 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 above 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 will turn the call over to Linda, CEO.

Good afternoon, everyone, and thank you for joining us on Capricor Therapeutics, Inc.’s quarterly conference call. For our investors, collaborators, the team here at Capricor Therapeutics, Inc., 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 Garamia cell 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 08/22/2026. Clearly, this represents a significant regulatory milestone for Capricor Therapeutics, Inc., of course, for all of those who have DMD. The BLA seeks full approval of deramycin. While we have not yet had detailed label discussions with the FDA, our goal will be to position deramycin 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, deramycin 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 well for this next phase of growth. Our current corporate mission is to build an infrastructure to launch and commercialization of deramycin 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 CRL 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 have not been following our story, here is a brief recap of the HOPE-3 clinical trial. HOPE-3 is a pivotal Phase 3 multicenter, randomized, double-blind, placebo-controlled study evaluating deramycin in 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 PUL, 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 deramycin observed in HOPE-3 underscores the potential of deramycin to address the DMD-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 deramycin 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 an 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 were concerned that clinic-based assessments did not tell the whole story, especially in a pediatric population. So they developed a DVA to track their sons at home. The measure we specifically used was called EAT 10 BITE, and it is manifest exactly as it 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 during the task at prescribed times post-infusion of daratumumab and then the videos were analyzed by a core lab and scored based on ability and compensatory measures. The DVA assessment of E10 BITE supports the clinic-based measure of the Performance of the Upper Limb and is supportive of the observed efficacy of deramycin that we have seen clinically. These data will also support payer discussions as it is a measure of feels, functions, survives. We also showed images of the hearts 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 deramycin compared to placebo. For cardiologists, this is one of the most encouraging aspects of the HOPE-3 data because there is 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 is important to begin treating the fibrosis as soon as it is evident, which can be many years before there are functional implications. Remember, the heart is a terminally differentiated organ, so once a cardiomyocyte 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 four late-breaking presentations at the Muscular Dystrophy Association Conference yesterday in Orlando. The full HOPE-3 dataset has now been submitted for publication in a major peer-reviewed academic journal. One of the most important features of deramycin is, of course, its safety profile. To date, we have completed more than 800 intravenous infusions of deramycin across multiple clinical studies, and the therapy continues to demonstrate a consistent safety profile. There is evidence of long-term safety in 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 five years, and with over 100 patients in our collective open-label extension studies at the time. Deramycin offers the potential opportunity for functional stabilization and also a well-tolerated safety profile. Taken together, we believe deramycin will become an important and foundational therapy for the treatment of Duchenne muscular dystrophy. We believe the HOPE-3 results provide compelling evidence supporting deramycin'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 measures supports our view that deramycin 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 dataset in its entirety. The FDA classified the submission as a Class II resubmission and assigned 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 daratumumab. As these vouchers are transferable and can be monetized through sale, they represent a potential source of meaningful 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 six 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 to launch including patient support, market access, reimbursement planning, and physician education. Capricor Therapeutics, Inc. is at a transformational point, and as a result, we are not simply preparing for only the launch of deramycin for DMD, we are building 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 geromycel. In the fourth quarter of last year, we published a peer-reviewed paper in Biomedicine describing germany cells' anti-fibrotic and immunomodulatory mechanisms of action including the release of exosomes and soluble factors that suppress fibrotic gene expression. These findings were reproduced across more than 100 manufacturing labs 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 dystrophy while engaging with regulatory authorities in Europe and Japan with the goal of bringing deromyosil 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 remains underway. Preliminary results indicate the Stealth X 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 of the Stealth X COVID vaccine. Final results from the trial, the cellular response data, are expected in 2026. NIAID has requested exploration 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 Stealthex 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, small molecules. The platform is being applied across several therapeutic programs currently progressing toward IND-enabling studies with a target IND filing in 2027. From a financial perspective, we ended last year in a very strong position. As of 12/31/2025, our cash position was approximately $318,000,000. 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 healthcare-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 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 Therapeutics, Inc.’s common stock was approved for uplisting 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 Therapeutics, Inc. enters 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 geramycin, 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 dystrophy. 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 and marketable securities totaled approximately $3,181,000,000 as of 12/31/2025, compared to approximately $151,500,000 as of 12/31/2024. In December 2025, we completed a public offering resulting in net proceeds of $162,000,000, and in addition, the company drew down approximately $75,000,000 under our ATM program in December 2025. Revenue for 2025 was $0 compared to approximately $11,100,000 for 2024. Revenue for the full year ended 12/31/2025 was also $0 compared to approximately $22,300,000 for the full year ended 12/31/2024. 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 12/31/2024. Total operating expenses for 2025 were $29,200,000 compared to approximately $18,800,000 for 2024. Total operating expenses for the full year ended December 2025 were approximately $108,100,000 compared to approximately $64,800,000 for the full year ended 12/31/2024. 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 2025 is approximately $30,200,000 compared to a net loss of approximately $7,100,000 for 2024, and net loss for the full year ended December 2025 was approximately $105,000,000 compared to a net loss of approximately $40,500,000 for the full year ended December 2024. Based on our current operating plan, as Linda mentioned a moment ago, our financial resource—we believe our available cash, cash equivalents, and marketable securities—will be sufficient to fund anticipated operating expenses and capital expenditures into 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.

Thank you. We will now open for questions. Ladies and gentlemen, we will now begin the question-and-answer session. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. Our first question comes from the line of Ted Tenthoff from Piper Sandler. Your line is now open.

Hi, guys. Sorry about that. I was on mute. So firstly, congrats on all the really exciting progress, you know, this year, this week. Great to see you down at MDA, excited about some new data coming out of that, and, obviously, the BLA acceptance. Are you guys anticipating any AdCom, anything along those lines? And what commercial prep are you doing in preparation for potential deramycin approval? Thank—

Hi, 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 am very proud of what we are accomplishing together. Thank you so much for your years of good support. To answer your question, in terms of an AdCom, I have been getting a lot of questions about that. Certainly, they have not made any moves towards that at this point. I do not think anybody has had an AdCom in about a year. And I do not know if they are going to be putting one in place. I think with the departure of Vinay Prasad, it is a little bit up in the air as to what is happening within CBER and what their manifest will be. Either way, we will be prepared. Good news about the HOPE-3 data is it is so very strong. That I really would be delighted whether I presented at an AdCom or we directly to PDUFA without it. In terms of your second question, in terms of commercial readiness, look, deromyophil 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 is 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 deromyosil to this point.

That is 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 cardiomyopathy, DMD cardiomyopathy submission, or would this be now for DMD more broadly? Just appreciate any clarity on that. Thanks.

Thanks, Ted. So I think this, again, is the biggest question that we all have. We have broached this with FDA both in formal and informal meetings, really since the issuance of the CRL last July. They have been relatively noncommittal, saying that they will discuss it during labeling. We certainly believe that the data supports a label both for DMD in terms of some the skeletal muscle ramifications related primarily, I would guess, to upper limb loss, which starts very young, and/or to the treatments and attenuation of Duchenne cardiomyopathy. So that is our plan internally. Obviously, we will 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.

Great. Thanks. Well, either way, a big win. For the boys and for Capricor Therapeutics, Inc. Thanks so much.

Thanks, Ted.

Our next question comes from the line of Leland James Gershell from Oppenheimer. Your line is now open.

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

Well, thanks, Leland. Yeah, I have not thought about the two cohorts in a while, so the FDA has not mentioned it in any conversation since probably 2024 when we decided to, under their recommendation, file the biologic license application for the cardiomyopathy based on the HOPE-2, HOPE-2 OLE and natural history data. You know, they then agreed that we would pair Cohort A and Cohort B and consider them as one trial because of the nonclinical comparability of the product. So they have not talked about it, and we have not talked about it. They have all of the raw data now. The good news is, and what I feel very confident in 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. That would be the more important cohort to look at because that was what their question was originally—was that product comparable. It certainly is comparable in terms of its biologic activity. So we will keep everybody updated if there are any more questions on the cohorts, but as far as we know, they consider one clinical trial, one cohort, and the manufacturing facility here in San Diego passed PLI, so we are 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 academia is because time is not of essence. So, you know, the academic review is ongoing and we will keep the community updated as soon as it is ready to be published or published.

Great. Thanks very much.

Thanks, Leland.

Our next question comes from the line of Joseph Pantginis from H.C. Wainwright. Your line is now open.

Hey there. Thanks for taking the question. So two questions, if you do not mind, Linda. So first, I know you have not had labeling discussions yet, but 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 is easy. No. There is no way this would be a conditional approval. There would be no need for a confirmatory trial on a randomized, double-blind, placebo-controlled trial that has primary and key secondary and Type 1 error-controlled endpoints. I cannot imagine any scenario what 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 was actually right before we would have begun them. So we do not have clarity there. The only tea leaves I can read is that they knew that HOPE-3 was powered and primary efficacy endpoint was Performance of the Upper Limb. They knew that we had filed a cardiomyopathy BLA under the existing data. When they 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, you know, they can ask for anything. It is the FDA. And so we will keep the street informed as we get information ourselves. My current belief is that the data is very strong. It supports labeling for both cardiomyopathy and skeletal muscle myopathy, and that is what we are planning for internally at this point.

Appreciate the comments, and here is to the end of the potential FDA drama.

Our next question comes from the line of Kristen Brianne Kluska from Cantor. Your line is now open.

Hi, everyone. Thanks for taking the questions, and nice to spend time with the broad Capricor Therapeutics, Inc. 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 late-cycle review meetings, etc.? And then just on capacity, 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 is the same material, etc.? And then last question for me just on MDA. Obviously, a lot of doctors there. We talked to plenty 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. Thanks again.

Yeah. 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 pre-licensing inspection. All 483s were signed off on, and so we are good to go there. We anticipate there will 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 nonclinical and other aspects of the BLA have already been signed off on, so we do not 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. Yeah. 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, you know, 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, you know, there is general maintenance on manufacturing plants. So I am not anticipating a long run-in terms of getting approval of the site based on sort of those components or that situation. But we will obviously keep you updated as to how that goes. I know Marty Makari 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 three to one, 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 are going very fast and anticipate getting those doses out to commercial community as quickly as the FDA will allow us. Yeah, 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 patients and everybody could be together to learn about dirhamia cell. And you are 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. It is, you know, I have said now a few times, randomized, double-blind, placebo-controlled, hits primary endpoint, hits secondary endpoints, hits Duchenne video assessments, which went along with the Performance of the Upper Limb, as I said in prepared remarks. And so yes, I think physicians who before were hopeful are now convinced and looking forward to putting their patients on. We are getting a lot more questions about prescribing availability, launch than we ever have. So we are on fire here getting this product ready for approval and for launch.

Thanks, Linda.

Thanks, Kristen.

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

Hi, Linda and team. Congratulations on the data, and thanks for taking our question. Your partner has previously said that they expect to transition all clinical trial patients to commercial drug within one quarter of launch. So should we think of these, call it, 100 patients as kind of the base case for how many patients may be treated with deromyosil in 2026, assuming approval? And then to follow that, as you know, there are 7,000 to 8,000 DMD boys, maybe more, with cardiomyopathy, and just given the data we saw in this subgroup, you know, it is 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 2,500 capacity? Is that something 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. Thanks.

Yeah. 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 daratomycinol now. They all will be anxious to continue. We have 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 have not figured out a launch date yet, we just got the PDUFA date. So I do not want to give a year or a timeline as to when, but yes, we will transfer all of them over as seamlessly as possible. That is why we are focusing internally on 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 deramycin that did not qualify for our trials for whatever reason. And I am getting a lot of calls now from—so we will prioritize getting geromyosil to any and all of those that need or 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, 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 will be able to accommodate 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. So we are actively planning to expand manufacturing to accommodate the needs of any and all of those that would like to have it. At diromycin.

Got it. Thanks.

Thanks, Madison.

Our next question comes from the line of Catherine Clare Novack from Jones Trading. Your line is now open.

Hi. Good afternoon. Thanks for taking my question. 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-III that it is a benefit to treat, you know, even before the development of cardiomyopathy, thinking that, you know, since 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. You know, what in the application supports that? And then can you remind us of the status of the European rights deal with NSF?

Yeah. Thanks. You know, we, of course, are laser focusing on those younger kids and those earlier in the disease process. As we have said and sort of have been stating for a long time, it is very safe. The infusion protocol is really easy. Even a little guy could sustain it very well. And, yes, the data that we have 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. We are 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 scar, the cardiologists want to get them on deromyophil, 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 will be able to track their hearts and be able to ultimately—physicians will use it with skeletal muscle as well as cardiomuscle myopathy independent of progression of the disease. So we have been negotiating with NS Pharma for a while for rights to Europe. Honestly, we have not been focusing on it internally. There was clearly a lot going on here with the CRL and getting the HOPE-3 data ready and submitted. And now that we have a PDUFA date, and I feel like we are on a good pathway there, we 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 are going to start working with PMDA and getting that going in 2026. And then in terms of Europe, we are evaluating those now, and we will see sort of where the road map takes us. And we will provide updates as they become available.

Got it. Thank you. It was great seeing you and great hearing all these updates. Looking forward to the year.

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

Our next question comes from the line of Gubalan Pachayapan from ROTH Capital. Good afternoon, team, and thanks for taking our questions. So a couple from us. Your line is now open.

Firstly, you mentioned the Duchenne Video Assessment. Can you maybe tell us how many patients were included in the deramio cell arm 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 that it is rated by both caregivers and professionals. And then is there a reason why the sample size is low for the late gadolinium enhancement secondary endpoint? And maybe one last question from me. So the most recent PRV, as you probably know, was sold for a very high price of $205,000,000. And we are also aware that there is a new sunset date, which is 09/30/2029. But do you think because the new sunset date is a little longer than three years from now, this is going to ease up some pressure from the buyers—maybe that could impact the price that you will be selling your PRV for? Any thoughts on that? Thank you.

That is 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 in 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 is then delivered blinded to the company and ultimately treated like any other data set. So it really is 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 treatment and 50 in the placebo group. Yeah. 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 of young children, and could be a safety—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 has worked in MRI for many decades, I am really excited by this data as are the cardiologists. So it is only those in Cohort B that were eligible for the gadolinium enhancer, and then they also had to have certain levels of kidney function. So that is why those numbers are relatively small. But that dataset is small but mighty. Yeah. If I had a crystal ball, I would be a really wealthy woman. But all that being aside, I do not 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.

Alright. Congratulations. Thank you. Thanks.

Our next question comes from the line of Matthew J. Venezia from Alliance Global Partners. Your line is now open.

Hi, guys. Congrats on the progress, and thanks for my questions. First, I think I asked this question about six months ago, but how have the conversations at the FDA with you guys changed, if at all, since being—Prasad left the agency once again? 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. 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, you guys had four plus on their label. But is that something that you expect to be ironing out with the FDA in your labeling discussions? And just the final question, the StealthX platform—is there a specific time within second quarter when we can expect P1 trial results, or is that kind of just up to NIAID?

Thanks, Matthew. Good to talk to you. So far, nothing. We got our letter reopening the file, 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. Yeah. I do not know. We did not ever have a four plus. I do not know who that was. That was not us. Age is a possibility. We have treated down to age eight in our clinical trials. So we have not gone younger than that. We do not know, again. You know, I know everybody is hypothesizing about labeling discussions to build their models, and I certainly am doing the same myself. I do not know if there will be an age cutoff or a function cutoff. As soon as we have clarity, though, we will 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 eight. Yeah. It is—I was just going to say you take the words from my mouth. It is an NIAID situation, so that data trickles in really slowly. We are super anxious to see the cellular response. We are really interested to see if there is a T-cell response. COVID is kind of a crazy virus to try and get on top of these days because pretty much everybody is either had it or been vaccinated multiple times. And so we are looking forward to seeing that data to continue to work with NIAID. But most importantly, and I will 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, you know, load the exosomes, target the exosomes. And so while the vaccine program is important, it really was that learning experience that is now driving us towards a therapeutic exosome platform, and stay tuned for more information on that as we progress through 2026.

Alright. Wonderful. Thank you, guys. Again, and congrats on the progress.

Thanks.

I will now turn the call back to Capricor Therapeutics, Inc. 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 Therapeutics, Inc. at that event. I will say that it gave me incredible joy and pride to be at that event and see how prominently Capricor Therapeutics, Inc. 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 continue on 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.