Capricor Therapeutics Inc (NASDAQ:CAPR) Is Just Getting Started

Back on September 20, we published this piece on Capricor Therapeutics Inc (NASDAQ:CAPR). The company had run to around $2.50 a share a day earlier but had dipped back down to less than $1 subsequent to highs.We put forward three reasons why we felt that this dip was nothing more than a temporary correction and, in turn, suggested that it might be a great opportunity to pick up some cheap shares ahead of a longer term recovery.Right now (midmorning US session), Capricor trades for $3.62 – a 262% increase on the price at which we said buy the dip. That's a neat return in just a few days.So what's driving the move?This one is a biotechnology company that's trying to get a treatment to market that can help patients that are suffering from Duchenne muscular dystrophy, or DMD. For those not familiar with this condition, it's a genetic disorder characterized by progressive muscle degeneration and weakness. There's only one treatment on the market right now, called Eteplirsen and marketed by Sarepta Therapeutics Inc (NASDAQ:SRPT), but the drug is questionable in terms of efficacy and, while it's the only option these patients have, it isn’t a cure-all by any stretch of the imagination. CAPR Daily ChartSo, Capricor is trying to give this population an improved option and, to date, the development program for the drug in question (which is called CAP-1002) has been a bit of a rollercoaster. Data hit press earlier this year and it was pretty strong. Markets overlooked it, however, and in many instances misinterpreted it all together (we actually highlighted it as one to watch back then, with our thesis rooted in said misinterpretation), and the company has sort of limped into the second half of the year on relatively low volume and not much by way of shareholder communication.Operationally, however, things have been progressing well and the recent run we are seeing from Capricor is rooted in the markets rebalancing their interpretation of how much Capricor is worth in line with this operational development.So what comes next?This is a crucial period for Capricor as the company is about to move into a phase II trial for the above-discussed CAP-1002 and, if the trial is a success, it's going to be the precursor to trial that underpins a registration application in the US. As such, while the stock is substantially higher now that it was just a few weeks ago, we expect that action will continue to push Capricor higher during the coming months as the pivotal trial initiates and as markets load up in anticipation of a successful outcome.As far as catalysts are concerned, then, we're looking to said initiation as a major volume draw when it kicks off. Management just put out this press release outlining the expected trial protocol and naming the principal investigator and – in line with this information – reported expectations of a study initiation at some point during the first quarter of 2018.So the story here, then, is that we're expecting the stock to run higher over the coming months as speculative volume flows into Capricor and then, once the trial kicks off, the company's ability to pump out positive data is going to be the key to maintaining the revised upside revaluation.We might see a near-term raise because the company needs cash to complete the trial, so that's a near-term risk that should be considered ahead of picking up an exposure. If things complete as planned, however, the downside impact of any raise will quickly be negated by the upside we see on data day.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on CAPR, sign up below!Image courtesy of Strange Biology via FlickrDisclosure: We have no position in CAPR and have not been compensated for this article.