Linda Marbán - CEO AJ Bergmann - VP Finance.

Reni Benjamin - H.C. Wainwright.

Good afternoon and welcome to the Capricor Therapeutics 2015 First Quarter Conference Call. At this time all lines are in a listen-only and the floor will be open for questions and comments following the presentation. [Operator Instructions].

As a reminder, this presentation contains forward-looking statements and information that are based on the beliefs of the management of Capricor Therapeutics Inc. as well as assumptions made by and information currently available to Capricor.

All statements other than statements of historical fact included in this presentation are forward-looking statements, including but not limited to statements identified by the words anticipates, believes, estimates, and expects and similar expressions.

Such forward-looking statements also include any expectation of or dates for commencement of the clinical trials, IND filings, similar plans or projections and other matters that do not relate strictly to historical facts.

These statements reflect Capricor’s current views with respect to future events, based on what we believe are reasonable assumptions; however, the statements are subject to a number of risks, uncertainties and assumptions.

There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements.

More information about these and other risks that may impact our business are set forth in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on March 16, 2015, and in our Registration Statement on Form S-1 as filed with the Securities and Exchange commission on March 06, 2015.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those in the forward-looking statements. Further, Capricor’s management does not intend to update these forward-looking statements and information after the date of this presentation.

If you do not have a copy of the press release issued earlier today, it is available on the Capricor's website at www.capricor.com.

The call is expected to last approximately 30 minutes for the benefit of those who maybe listening to the replay, this call was held and recorded on May 12, 2015, since then, Capricor may have made announcements related to the topics discussed, so please reference the company's most recent SEC filings and press releases.

It is now my pleasure to introduce your host Dr. Linda Marbán, CEO of Capricor Therapeutics, and AJ Bergmann Vice President of Finance..

Good afternoon and thank you for joining the Capricor Therapeutics first quarter update. This quarter was a very active and productive one for us.

As you all know we raised $17 million in the first quarter in two pipe transactions and we're therefore able to show up our balance sheet and provide the resources for the execution of our clinical trials and business strategy. On March 9th, we were pleased to begin trading on the NASDAQ capital market.

For today's call we'll focus on our therapeutic products, pipeline and clinical developments. I am pleased to report Cenderitide, a Natriuretic Peptide lead compound and Exosomes and we are fully enrolled and completed a 14 patient dose escalation trial and patients with stable chronic.

As you know Cenderitide is the only dual receptor agonist that has been in the clinic and it is a product that we acquired in the merger with therapeutic in 2013. Now product primarily in the setting of - and deliver intravenous. In the Capricor trial, the drivers delivered by the Insulet OmniPod patch pump delivery system.

The process of this 14 patient file was to evaluate the ability of the OmniPod system to deliver Cenderitide as well as to determine the pharmacokinetic and the pharmacodynamics results achieved from sustained Cenderitide administration.

We are currently and evaluating all the results that will be available to us for more complete allowances over the next several weeks. We had to present this date at a scientific meeting later this year.

The intent to use this data is to develop further clinical development strategy by Natriuretic Peptide product and we look further to sharing the strategy with you as they evolve. Today I am also very excited to provide more color on our rapidly developing Exosomes program.

We believe that Exosomes was the potential for the broad therapeutic platform that maybe applicable for a number of inflammatory and/or fibrotic diseases. For those of you who are not familiar with Exosomes let me state that these cell derived nanoparticles that attract microRNA peptide growth factors as well as small components of RNA.

Exosomes release from cells and because the nanoparticles are composed of a lipid by layer which is just like a cell membrane they buy and deliver their content to neighboring cell. As such they are critical link in cell to cell communication and signals.

We have previously demonstrated that Exosomes deliver directly into a rodent part and inceptively re-perpetuate the effect of our CDC cell product, indeed we believe that many cell therapy products including those that we are developing exert their mechanism of actions in large part through local release of Exosomes.

We believe there has been an increased interest in the application of Exosomes our platform technology has potential therapeutic agents I am proud that we are at the forefront of this scientific development.

Recently at the International Society of Extracellular vesicles, a most effective form Capricor presented data where we demonstrated that Exosomes have even less immunogenic than allergenic cells.

Additionally data were shown using our Exosomes that we're pre-dosing reproduce of the effect of one dose in mice with Duchenne muscular dystrophy interesting that the Exosomes can be used to derive the benefit originally if used with one dose.

In our past updates we have emphasize that this program is not ready for the clinic, but due to recent advances by our research and development team we now believe that an IND will be forthcoming in 2016 nearly a year ahead of our previous projection.

We are currently developing product development and clinical strategies and reviewing a number of potential indication for the use of the Exosomes including several outside of the cardiovascular space.

At the very end of December we initiated with first phase of the dynamic clinical trial which is a 14 patient trial using triple vessel intracoronary infusion about the 75 million cell in patients with Class 3 or ambulatory Class 4 heart failure.

The trial was designed primarily the safety trail in the six group of patients we believe that this cohort of patients with advanced clinical heart failure will ultimately represent an important patient population for the CDT therapeutic.

The first portion of the dynamic trail was fully enrolled and completed in approximately 14 weeks and the follow up in ongoing we should have initial six months results from this trails towards the end of this year. I am pleased to announce that thus far there has been no significant safety issues in the 14 treated patients.

I now like to turn your attention to the ALLSTAR trail as you recall ALLSTAR is our Phase II clinical trial in patients who have suffered a large heart attack, the primary endpoint of that trail is the magnitude of the scar reductions in the infer territory at 12 months.

To remind you the trial structure we have two simultaneously enrolling cohort the first involve patients who are one to three months follow their heart attack the second group of patients who are three months to one year post infarction the purpose of this trail is not for registration but rather to re-perpetuate extend and validate the results of our original CADUCEUS trail which is autologous CDC in this exact patient population.

The only difference is that ALLSTAR is using our current allogeneic product CDC product. The trail design calls for up to 260 randomized patients as well as exploratory cohort of 40 patients that will not include in the primary data analysis.

At present we have 21 sites in the United States - patients and we have 18 sites that have enrolled patients in the trails. So as the trail is actively screening and enrolling patients we are now somehow behind our original projected rate of enrollment.

This now withstanding we remain confident that we can provide data and a timeline similar to the one that originally projected the company intend to conduct an interim analysis comparing the scar size reduction result between the two cohorts that is similar - to combine the early in the cohort until one single group or valuation of the primary endpoint.

I remind you that in the Phase I portion of the ALLSTAR trial we did indeed the equivalent of scar reduction in both early and late post MI patient.

Therefore, once we ascertain the equivalents of the - we can then combined the cohorts into one without compromising either the validity of the trial or sacrificing any of the statistical power and thereby reduce the trial side.

Although, we are confident the interim analysis will allow us to reduce the trial side, we are nevertheless in profit of implementing and number of measures to increase the rate of enrollment including additional five within the United States and possibly in Canada.

At the interim announcement plan has been developing in conjunction with the Bio statisticians, Johnson [ph] Pharmaceuticals and the Johnson Group is fully in support of this methodology. This plan is subject to concurrent from the interested parties including the Food and Drug Administration.

And in another note, I am also happy to announce later on May 1st Capricor filed IMG with the FDA for its clinical trial using CDCs which is the cardiomyopathy associated with Duchenne muscular dystrophy using.

As we have previously presented Capricor in preclinical models including the naturally occurring model the MDF - the CDCs deliver to the hard are capable of improving cardiac function, exercise performance and even reversing at the soluble and bio-chemical levels and number of the abnormalities that are characteristic at the Duchenne muscular dystrophy most notably the cardiomyopathy.

There are approximately 20,000 to 25,000 in the United States with Duchenne muscular dystrophy and approximately 275,000 others around the world. Unfortunately, each of develop cardiomyopathy which is now the number one cause of death in Duchenne.

Capricor is helpful that the CDC therapeutic will improve the cardiac performance and certain outcome to these [indiscernible]. Earlier this quarter, the FDA granted Capricor and CDCs orphan drugs set of course establish to regulatory review in interval we were hopeful that we will begin to initiate our muscular dystrophy US trial later this year.

We are also pleased to announce for the first time that Dr. John Geoffrey of Cincinnati Children Hospital and Dr. Subha Raman of nationwide at the University have greet to investigators for the HOPE-DUCHENNE trial. Both of these positions are known for their work and defining the importance of side in the progression of DMD associated cardiomyopathy.

Results point to note that we believe that our CDC therapeutics may be able to use in conjunction with number of other therapies as all of our other companies for the - muscle topology of Duchenne muscular dystrophy with that effect in effective and treating the cardiomyopathy.

As such we believe that our product is proved clinically successful will be part of a multi-drug approach to the treatment of muscular dystrophy. We are very excited about the confidence initiating the HOPE-DUCHENNE cardiomyopathy trial and we look forward to having update for you in the upcoming months.

In summary, Capricor has had a very busy first quarter and has delivered on the milestone reset out switching most notably initiating and completing this in there kind clinical trials, completing the first arm of the dynamic clinical trial and filing IND for DMD associated cardiomyopathy.

In addition, we raise more than $70 million and we are encouraged to its continued need our milestones throughout 2015. And now we'll ask A.J. Bergmann, our VP of Finance to provide a brief update to you on our financial picture..

Ladies and gentlemen please remain on the line, we’re experiencing minor technical difficulties. One moment please. Gentlemen we are now reconnected with AJ Bergmann. Sir, please go ahead..

Thank you and I apologize for the disconnection. I would go from the beginning and my remarks will be brief. As Linda mentioned a few minutes ago, we are very pleased to have completed two financing in the first quarter of this year securing 17 million in additional capital.

This financing include participation from Broadfin Capital, Sabby Capital, CureDuchenne Ventures and Cedars-Sinai Medical Center among others. Certainly after these financings were completed, they were uplifted to begin trading our common stock on the NASDAQ Capital Market.

For the first quarter of 2015, the company reported a net loss of approximately 3.5 million or $0.23 per share compared to a net loss of approximately 1.2 million or $0.10 per share for the same period in the prior year.

Research and development expenses increased to approximately 3.8 million in the quarter ended March 31, 2015, compared to approximately 1.4 million for the same period in the prior year.

The increase was primarily due to the initiation of clinical trials, including the DYNAMIC trial, the Cenderitide trial as well as the ongoing ALLSTAR Phase II clinical trial.

General and administrative expenses increased to approximately 1.4 million in the quarter ended March 31, 2015, compared to approximately $900,000 million for the same period in the prior year. The increase was primarily due to increases in compensation expenses related to increased headcount and noncash stock-based compensation cost.

At quarter end, we had over 22 million in cash and marketable securities available. In addition, there is approximately 11 million that has yet to be disbursed to us under the terms of our CIRM loan award which will be attributable to expenses incurred in the ongoing Phase II ALLSTAR trial.

We believe this cash will be sufficient to take up to the fall 2015. And with that, I will turn it back over to Linda..

Thank you, AJ. I'd like to finish up this call by just calling your attention to some of our upcoming 2015 milestones.

First we expect to initiate the HOPE-DUCHENNE trial project for regulatory approval, we expect to put our initial DYNAMIC clinical trial results, our initial Cenderitide results the as well we plan to now follow a clinical development program for the Natriuretic Peptide and we plan to now first indicate into our platform technology.

Lastly, Capricor was presenting a two upcoming conferences this quarter let me just say to all the adjusters well the HealthCare Conference in the New York on June 1 my presentation start at 11:00 a.m. and we will be stay at the Healthcare Conference again in New York City on June 23rd our presentation started again at 12:00 p.m.

Thank you very much for your time and attention this afternoon let me just say I didn't participate it but I am disconnecting and nonetheless I will now open up the line and look forward to your questions..

Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from the line of Reni Benjamin with H.C. Wainwright. Your line is now open. You may proceed with your question..

Hi, good afternoon guys and thanks for taking the questions and congratulations on all the progress.

Just a couple of quick questions, maybe starting off with the Exosomes platform, can you talk a little bit about maybe the preclinical data that you’ve generated and I guess we're kind of glad what models you use to give us a sense of what indications you may actually go into given that your R&D you know has now been advanced by about a year?.

Yeah. Well thanks for the question Reni I am very, very excited about the Exosomes. The preclinical models that we have made our initial observations in are of course the cardiac model that we've presented at public rates.

The other work we haven’t yet talked about presented in a public forum so suffice to say that those announcements will be coming and we are looking very much forward to taking this platform technology outside the cardiovascular space..

Got it and just moving on to the dynamic study the initial 14 patients enrolled extremely quickly you mentioned that this is the first arm can you talk about the next arm and when we might see the data from that arm?.

So the next arm actually is under review right now we were very pleased with how quickly that trail enrolled 14 patients in 13 weeks, thus far the triple vessel infusion looks to be safe we haven’t had any reported safety events which is also very exciting allows us to be the harden cells the post just going after the one inarticulate - which is what necessary post MI study excess function.

Because this is such an important therapeutic avenue for Capricor after the patients with the events are - we are taking our time and carefully reviewing the data and thinking about what the next best clinical trial is. So again stay tuned..

Okay.

Regarding the interim analysis for the ALLSTAR study can you talk a little bit about sort of what are the outcomes that can happen here for example is there a utility analysis built in you mentioned the potential to combine the two cohorts and potentially speed up enrollment but can you could there also be an outcome whereby you are increasing the size of each of the cohort? Maybe just some color on that interim.

And I guess one other question is can J&J with that data opt in based on your option agreement?.

So thank you for that question.

In terms of the interim analysis yes it’s a very fluid tool that we are excited about being able to take advantage of and are very probably had the biostatisticians specially the ones with J&J help us build this plan, what it allows us to do is look at the data as it’s come in and in subset of patients approximately two thirds of the patients and then what we can do is decide whether we can pull the group until one the two cohorts becoming one trail we also are going to be doing a utility analysis just to make sure that it’s not working across the board and also there will be a futility analysis on in each of the two cohorts so the recent and or the chronic.

So it allow us to finish the trail with the most likelihood of hitting our endpoint which is the 15% scar reduction at one year post therapy..

And regarding J&J’s ability to….

I think it was the second part of it in terms of J&J’s decision to opt J&J is looking for the data they are looking for proof of concept which is exactly how this trial was designed they reviewed all of our data when they did their due diligence and decided along with us that also was a good trail and wish to prove the - reduction in scar size using the allergenic cell which is something that was very important to J&J we have an off the shelf product when we have data hits that point which is the reduction in scar to the level that we had described they will make the decision as to whether or not to opt in..

Got it, okay.

And just one final question from me on the IND for the DMD study can you just give us a sense as to the trial design of that study?.

As much as I would really like to do because I am very excited about this trail we are waiting for comments from the FDA we don’t want to either A; jinx this or B; - some things that we know what we are doing we’ll let them adjudicate that and then as soon as we have color on that trial we’ll be announcing it..

Terrific, thank you and good luck going forward..

Thank you. [Operator Instructions] At this time there are no question to take over the phone. I would like to turn the floor back to management for any closing remarks or internet based questions that they may have received..

Thank you very much for your time. We look forward to providing an update on the next quarter when we will have the second quarter earnings call to update you on..

Thank you. Ladies and gentlemen this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you very much for your participation and have a wonderful day..