Linda Marban, CEO of Capricor Therapeutics Inc. called a new collaboration between Capricor and Janssen Biotech Inc. a “potentially game-changing validation” of the company’s technology – an allogeneic adult stem cell therapy for heart disease.

Capricor signed a collaboration agreement with Janssen, a division of Johnson & Johnson, for development of the product, CAP-1002 for myocardial infarction. The deal is worth $12.5 million up front for Capricor, and gives Janssen the right to license CAP-1002 exclusively after follow-up results from a Phase II trial are available. If Janssen takes that option, Capricor will be eligible for up to $325 million in additional payments.

Janssen can exercise its option any time up to 60 days after Capricor delivers those results. In addition to the hefty milestone package, Capricor is eligible for double-digit royalties on sales of the product.

CAP-1002 is an allogeneic cardiosphere-derived cell therapeutic (CDC). The cells are derived from donor tissue, which, according to Capricor, offers the advantage of being an off-the-shelf therapy. That means the patient does not need an invasive procedure to harvest tissue and quality control is highly reproducible.

The therapy is delivered through an intramyocardial injection catheter into an artery, guided by an electronic map of the heart.

Capricor execs contended that its cells are better able to activate the heart’s innate restorative ability than stem cells derived from other tissues, such as bone marrow.

The Los Angeles-based company reported in December that the Phase I portion of its ALLSTAR Phase I/II trial met safety endpoints, and that it was cleared to begin the Phase II portion of the trial, testing CAP-1002 cells for reduction of infarct size in patients who have suffered heart attacks.

In the Phase I CADUCEUS study, patients treated with CDCs experienced a reduction of infarct size to 12 percent, from a starting size of 24 percent, moving the patients from a high-risk group to a low-risk group. Patients in the control group had no change in infarct size.

Marban said that development of CAP-1002 has been supported by a $19.8 million loan from the California Institute of Regenerative Medicine, which is repayable only on commercialization. Capricor will funnel the $12.5 million up-front payment from Janssen into scaling up its manufacturing capabilities for the cells.

“What we have is a very adequate, very well-developed manufacturing paradigm,” Marban said, “But when you go from making 100 to 200 doses to 1,000 to 2,000 doses, it requires a scaling up and scaling out.”

Capricor was founded in 2006 as a spinout of Johns Hopkins University School of Medicine by Eduardo Marban, then the chief of cardiology at Johns Hopkins, who along with Italian collaborators discovered stem cells in the heart. Marban then developed a method for growing those stem cells. (See BioWorld Today, Dec. 11, 2008.)

Capricor licensed the rights to the technology from Johns Hopkins and the University of Rome and began developing an autologous stem cell product aimed at treating myocardial infarction and chronic heart failure.

Those autologous cells showed good results in animal studies, protecting the heart significantly better from progressive degeneration after a heart attack compared to purified cardiac stem cells or heart-derived mesenchymal-like progenitor cells.

In July 2013, the company, previously known as Capricor Inc., signed a merger agreement with Nile Therapeutics Inc., of San Mateo, Calif., making Capricor a wholly owned subsidiary. The new company was named Capricor Therapeutics Inc., operating under the original Capricor management team, with a focus on developing regenerative medicines for heart disease.

Marban said the “takeaway message” for the agreement with Janssen is that it “gives Capricor essentially $39.5 million of nondilutive capital,” including $27 million in grants plus the $12.5 million up-front payment from Janssen. The funds will allow the company to complete Phase II studies and pipeline development activities.

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