Form 8-K

8-K — CAPRICOR THERAPEUTICS, INC.

Accession: 0001104659-26-057221

Filed: 2026-05-07

Period: 2026-05-07

CIK: 0001133869

SIC: 2834 (PHARMACEUTICAL PREPARATIONS)

Item: Regulation FD Disclosure

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — capr-20260507x8k.htm (Primary)

EX-99.1 (capr-20260507xex99d1.htm)

EX-99.2 (capr-20260507xex99d2.htm)

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8-K

8-K (Primary)

Filename: capr-20260507x8k.htm · Sequence: 1

CAPRICOR THERAPEUTICS, INC._May 7, 2026

0001133869false00011338692026-05-072026-05-07

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 7, 2026

CAPRICOR THERAPEUTICS, INC.

(Exact name of Registrant as Specified in its Charter)

Delaware

001-34058

88-0363465

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

10865 Road to the Cure, Suite 150, San Diego, California

(Address of principal executive offices)

92121

(Zip Code)

(858) 727-1755

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which

Registered

Common Stock, par value $0.001 per share

CAPR

The Nasdaq Global Select Market

Item 7.01

Regulation FD Disclosure.

On May 7, 2026, Capricor Therapeutics, Inc. (the “Company” or “Capricor”) announced that it has filed a Complaint for Equitable Relief (the “Complaint”) and Application for Preliminary Injunction (collectively, the “Lawsuit”) in the Superior Court of New Jersey, Chancery Division, Bergen County.

A copy of the press release has been attached as Exhibit 99.1 hereto and is incorporated herein by reference. A copy of the Complaint has been attached as Exhibit 99.2 hereto and is incorporated by reference.

The information under Item 7.01 of this Current Report on Form 8-K, Exhibit 99.1 attached hereto is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 8.01

Other Events.

On May 7, 2026, Capricor announced that it has filed a Complaint for Equitable Relief and Application for Preliminary Injunction in the Superior Court of New Jersey, Chancery Division, Bergen County (the “Lawsuit”). The Lawsuit alleges a fundamental pricing flaw in the Commercialization and Distribution Agreement dated January 24, 2022, between the Company and Nippon Shinyaku Co., Ltd. (the “U.S. Distribution Agreement”). The Lawsuit also seeks relief from Nippon Shinyaku Co. Ltd.’s U.S. subsidiary, NS Pharma (collectively “NS”). The Lawsuit alleges that NS have failed to adequately prepare for the commercial launch of the Company’s product Deramiocel in the United States and have otherwise materially breached the terms of the U.S. Distribution Agreement. The Company seeks rescission of the U.S. Distribution Agreement, declaratory judgment that the Company has the right to distribute Deramiocel directly or through distributors other than NS, preliminary injunctive relief, and other equitable remedies.

This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, any statements relating to the Complaint or the potential outcome thereof. Forward-looking statements are based on management’s current expectations, beliefs and assumptions and on information currently available to the Company. Such statements are neither promises nor guarantees, and involve a number of known and unknown risks, uncertainties and assumptions. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, without limitation, risks and uncertainties associated with the Complaint and other risks identified from time to time in the reports the Company files with the Securities and Exchange Commission (the “SEC”), including the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as such factors may be updated from time to time in its other filings with the SEC, accessible on the SEC’s website at www.sec.gov. The forward-looking statements in this Current Report on Form 8-K speak only as of the date of this Current Report on Form 8-K, and the Company undertakes no obligation to update or revise any of the statements. The Company’s business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

99.1

Press Release, titled “Capricor Therapeutics Takes Legal Action to Protect Patient Access to Deramiocel for Duchenne Muscular Dystrophy”, dated May 7, 2026.

99.2

Complaint for Equitable Relief, filed May 7, 2026.

104

Cover Page Interactive Data File (formatted as inline XBRL).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

CAPRICOR THERAPEUTICS, INC.

Date: May 7, 2026

By:

/s/ Linda Marbán, Ph.D.

Linda Marbán, Ph.D.

Chief Executive Officer

EX-99.1

Filename: capr-20260507xex99d1.htm · Sequence: 2

Exhibit 99.1

Capricor Therapeutics Takes Legal Action to Protect Patient Access to Deramiocel for Duchenne Muscular Dystrophy

-Complaint outlines its distribution partner’s failure to prepare for launch of DMD therapy; Capricor seeks to rescind the agreement while advancing plans to ensure treatment reaches patients-

SAN DIEGO, May 7, 2026 -- Capricor Therapeutics, Inc. (NASDAQ: CAPR), a biotechnology company developing transformative cell and exosome-based therapeutics for rare diseases, today announced that it has filed a lawsuit against Nippon Shinyaku Co., Ltd. and its U.S. subsidiary, NS Pharma, Inc., over the parties’ U.S. distribution agreement for Deramiocel, Capricor’s investigational cell therapy for the treatment of Duchenne muscular dystrophy (DMD).

DMD is a fatal genetic disorder affecting approximately 15,000 people in the United States, most of them boys and young men. Deramiocel represents one of the most significant therapeutic advances for DMD, addressing both its skeletal and cardiac manifestations. NS Pharma’s inaction may now jeopardize patients’ access to this life-changing treatment.

Capricor’s complaint details how a fundamental pricing flaw in the Commercialization and Distribution Agreement with NS Pharma will prevent patients covered by Medicare, Medicaid, or private insurance from accessing the therapy. Capricor has sought to work in good faith to fix this pricing mechanism with NS Pharma, but NS Pharma has refused to compromise. NS Pharma also has failed to adequately prepare for commercial launch of Deramiocel, and Capricor is now taking legal action to ensure there is a path for Deramiocel to reach the patients who urgently need it.

“I have spent nearly two decades building Capricor with one goal in mind: making Deramiocel available to treat these boys,” said Dr. Linda Marbán, CEO of Capricor. “I know what every additional month of delay costs them, because I know what is happening inside their muscles when they cannot be treated. There is no version of this case in which I am willing to watch NS Pharma’s inaction take that away from them.”

DMD is a progressive disease. For the thousands of families of children with DMD, every month of delay in receiving Deramiocel means irreversible loss—muscle destroyed, cardiac function permanently diminished, independence taken that may never be returned. Capricor’s complaint, and corresponding motion for preliminary injunction, seeks to preserve the ability of Capricor to distribute Deramiocel to patients who need it, pending FDA approval.

Capricor is building commercial readiness in support of a responsible and effective launch of Deramiocel, if approved by the FDA. The Company anticipates a distribution timeline guided by established industry practices and scaled to align with manufacturing capacity, patient needs, and provider and payer processes.

The U.S. Food and Drug Administration has granted Deramiocel Priority Review, with a target PDUFA action date of August 22, 2026. The FDA review process and expected timing remain unchanged.

About Duchenne Muscular Dystrophy

Duchenne Muscular Dystrophy (DMD) is a severe, X-linked genetic disorder characterized by progressive muscle degeneration affecting the skeletal, respiratory, and cardiac muscles. It is caused by the absence of functional dystrophin, a key structural protein in muscle cells. DMD affects approximately 15,000 individuals in the United States and primarily impacts boys. Over time, deterioration of the heart muscle leads to cardiomyopathy and heart failure, which is the leading cause of death in DMD. There is no cure, and treatment options remain limited.

About Deramiocel

Deramiocel (CAP-1002) consists of allogeneic cardiosphere-derived cells (CDCs), a rare population of cardiac cells that have been shown in preclinical and clinical studies to exert potent immunomodulatory and anti-fibrotic actions in the preservation of cardiac and skeletal muscle function in muscular dystrophies such as DMD. CDCs act by secreting extracellular vesicles known as exosomes, which target macrophages and alter their expression profile to adopt a healing rather than pro-inflammatory phenotype. CDCs have been investigated in more than 250 peer-reviewed scientific publications and administered to over 250 human subjects across multiple clinical trials.

Deramiocel has received Orphan Drug Designation for the treatment of DMD from both the U.S. FDA and the European Medicines Agency (EMA). In addition, it has been granted Regenerative Medicine Advanced Therapy (RMAT) designation in the U.S., Advanced Therapy Medicinal Product (ATMP) designation in Europe, and Rare Pediatric Disease Designation from the FDA, which may qualify Capricor for a Priority Review Voucher upon approval.

About Capricor Therapeutics

Capricor Therapeutics (Nasdaq: CAPR) is a biotechnology company dedicated to advancing transformative cell and exosome-based therapeutics to redefine the treatment landscape for rare diseases. At the forefront of our innovation is our lead product candidate, Deramiocel, an allogeneic cardiac-derived cell therapy that is currently in late-stage development for the treatment of Duchenne muscular dystrophy (DMD). Extensive preclinical and clinical data have demonstrated Deramiocel’s potent immunomodulatory and anti-fibrotic effects in helping to preserve cardiac and skeletal muscle function in DMD. Capricor is also leveraging the power of its exosome technology, using its proprietary StealthX™ platform in preclinical development focused on vaccinology and the targeted delivery of oligonucleotides, proteins, and small-molecule therapeutics, with the potential to treat and prevent a wide range of diseases. At Capricor, we are committed to pushing the boundaries of possibility and forging a path toward transformative treatments for those in need. For more information, visit capricor.com, and follow Capricor on Facebook, Instagram and X.

Cautionary Note Regarding Forward-Looking Statements

Statements in this press release regarding the efficacy, safety, and intended utilization of Capricor’s product candidates; the initiation, conduct, size, timing and results of clinical trials; the pace of enrollment of clinical trials; plans regarding regulatory filings, future research and clinical trials; regulatory developments involving products, including future interactions with regulatory authorities and the ability to obtain regulatory approvals or otherwise bring products to market; manufacturing capabilities; dates for regulatory meetings; the potential that required regulatory inspections may be delayed or not be successful which would delay or prevent product approval; the ability to achieve product milestones and to receive milestone payments from commercial partners; and any other statements about Capricor’s management team’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “could,” “anticipates,” “expects,” “estimates,” “should,” “target,” “will,” “would” and similar expressions) should also be considered to be forward-looking statements. 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 Capricor’s business is set forth in Capricor’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on March 17, 2026. All forward-looking statements in this press release are based on information available to Capricor as of the date hereof, and Capricor assumes no obligation to update these forward-looking statements.

Deramiocel and the StealthX™ vaccine are investigational candidates and have not been approved for commercial use in any indication.

For more information, please contact:

Capricor Media Contact:

Caitlin Kasunich

KCSA Strategic Communications

ckasunich@kcsa.com

212.896.1241

Capricor Company Contact:

AJ Bergmann, Chief Financial Officer

abergmann@capricor.com

858.727.1755

EX-99.2

Filename: capr-20260507xex99d2.htm · Sequence: 3

Exhibit 99.2

medicine and to find a way to make people’s lives better and longer. She earned her Ph.D. in

physiology from Case Western Reserve University, then went to Johns Hopkins University as a

postdoctoral fellow in cardiovascular physiology, where she studied what causes heart disease

and how it might be better treated.

4. While at Johns Hopkins, Dr. Marbán was recruited to a gene therapy startup

where she learned how to build a biotech company from the ground up. That experience laid the

foundation for what would become Capricor. In 2005, Dr. Marbán co-founded Capricor. Dr.

Marbán and her colleagues set out with a mission to develop biological therapeutics with an aim

to change the trajectory of diseases like DMD.

5. Capricor has spent two decades developing Deramiocel, a first-in-class cell

therapy that represents one of the most significant therapeutic advances for DMD. In a rigorous

Phase 3 clinical trial, Deramiocel slowed the progression of skeletal muscle deterioration by

approximately 54% and slowed cardiac decline by approximately 91% compared to placebo—

both with statistical significance. Deramiocel does not cure DMD; no therapy does. But it slows

the relentless destruction that defines the disease, preserving function that, once lost, is gone

forever. To put it simply, Deramiocel aims to give DMD patients a longer lifespan and better

quality of life.

6. The patients are waiting: The FDA has granted Deramiocel Priority Review, with

a target action date of August 22, 2026 (the “PDUFA Date”1

). The FDA grants Priority Review

to applications for medicines that, if approved, provide significant improvements in the safety or

PDUFA stands for the Prescription Drug User Fee Act. It is a U.S. law that requires pharmaceutical companies to

pay fees to the FDA when submitting drug applications, which funds the FDA’s drug review process. In practice,

it establishes a target deadline (called a “PDUFA Date”) by which the FDA aims to complete its review and

make an approval decision on a new drug. The FDA can and sometimes does approve a drug before its PDUFA

date, particularly if the review is straightforward, the drug received “Priority Review” or “Breakthrough

Therapy” designation, or the agency simply completes its work early.

effectiveness of the treatment of a serious condition. So, approval for Deramiocel could come

even sooner than the target PDUFA Date.

7. Capricor brings this action because, absent intervention by the Court, the

Deramiocel launch will be delayed and disrupted by Defendants NS Pharma and Nippon

Shinyaku. And Deramiocel will likely become unavailable to help desperate patients in need due

to the Distribution Agreement’s pricing structure which renders commercialization nonviable.

8. In January 2022, Capricor entered into the Distribution Agreement with Nippon

Shinyaku (the “Distribution Agreement”), granting it and its U.S. subsidiary, NS Pharma, the

exclusive right to distribute Deramiocel in the United States . Nippon Shinyaku also

agreed that NS Pharma, which upon information and belief it has appointed as Subdistributor, is

responsible for Nippon Shinyaku’s acts or omissions and vice versa. Distribution

Agreement § 4.2. Thus, unless otherwise stated, all subsequent references to “Distributor” refer

to both NS Pharma and Nippon Shinyaku.

9. The Distribution Agreement contains a fatal flaw. The parties agreed on a pricing

structure for distributing Deramiocel in Exhibit A to the Distribution Agreement, but upon

information and belief, neither party understood at the time that the agreed-upon structure was

not viable. Upon information and belief, the parties’ mutual mistake was that the interaction

between the Distribution Agreement’s pricing formula and the federal Medicare reimbursement

framework ensures that, in a very short time, neither party can afford to manufacture, distribute,

sell, or administer Deramiocel to patients covered by Medicare, and healthcare providers will not

be able to afford Deramiocel for administration to their patients in need.

10. Because the federal Medicare program has a strong influence in setting prices that

state Medicaid programs and private insurers pay for drugs, this flawed pricing structure will

also make it economically impracticable to distribute Deramiocel to patients covered by

Medicaid or private insurance.

11. Simply put, neither Capricor nor the Distributor can afford to sell the medicine at

a price much lower than the costs of making and distributing it.

12. Upon information and belief,

. The Distributor neglected the key elements

for a successful launch: it did not complete an acceptable gross-to-net revenue model based on

the Distribution Agreement, and to this day, still has not shared one with Capricor. It has not

established a realistic wholesale price. To Capricor’s knowledge, the Distributor has not

conducted a single mock launch exercise. It has also arranged to enter into subdistribution

agreements with third parties—essentially farming out contractual duties—without Capricor’s

written consent as agreed upon.

13. The Distributor has even declined to

. Upon information and belief, public records suggest

that the Distributor .

14. Over a period of roughly one year, through a series of detailed written requests

and meetings, including direct engagement with NS Pharma’s and Nippon Shinyaku’s most

senior leadership, Capricor has asked the Distributor to show that it could fulfill its distribution

obligations for Deramiocel. But the Distributor’s sporadic and incomplete answers only

confirmed Capricor’s concerns. The Distributor was not adequately preparing for commercial

launch, and was not being transparent with Capricor. The Distributor’s actions and omissions

constitute breaches of its obligations under the Distribution Agreement, under which the

Distributor assumed certain contractual obligations to prepare for and execute a successful

Deramiocel launch and commercialization in exchange for exclusivity over this transformative

cell therapy.

15. On March 10, 2026, the FDA established a new PDUFA target action date of

August 22, 2026. With commercial approval now potentially within reach, Capricor’s need for a

competent, responsive, and motivated distributor became urgent.

16. Meanwhile, the Distributor proposed a possible alternative to the Distribution

Agreement. But it did not negotiate a workable solution in good faith; it attempted to seize

control of Deramiocel. It demanded that

. The Distributor’s unreasonable demand, coupled with its failure to prepare for

Deramiocel’s launch, confirmed that the Distributor cannot be a responsible steward for

Deramiocel. The Distributor improperly attempted to turn its own lack of readiness to distribute

Deramiocel into leverage over Capricor.

17. On March 27, 2026, the Distributor drew a red line. Nippon Shinyaku’s CEO, Mr.

Toru Nakai, met with Capricor’s CEO, Dr. Linda Marbán. At that meeting,

. It told Capricor that a “

” (the “PLD structure”) was “ ” for the

Distributor’s distribution of Deramiocel in the United States. Under the PLD structure,

18. On April 1, 2026, Dr. Marbán wrote to NS Pharma’s Vice President of Business

Development, , confirming her understanding of the Distributor’s position:

“

.” Mr. Kimura responded the same day,

confirming that Dr. Marbán had “ ” and that the Distributor was

19. The Distributor confirmed its position:

20. NS Pharma followed up with a written PLD amendment to the Distribution

Agreement on April 10, 2026. The amendment required complete surrender of Deramiocel to the

Distributor. On May 6, 2026, Capricor notified the Distributor that it rejected the PLD

amendment and accepted the Distributor’s repudiation of the Distribution Agreement.

21. Distribution of a potentially life-saving therapy is tied to an exclusive distribution

agreement that does not work for either party. Equity must intervene.

22. For the thousands of families of children with DMD, every month of delay means

irreversible loss—muscle destroyed, cardiac function permanently diminished, independence

taken that may never be returned. This Court should not permit a flawed contract and an

obstructive distributor to stand between those families and the medicine that could change their

lives.

II. THE PARTIES

23. Capricor is a biotechnology company incorporated under the laws of the State of

Delaware, with principal offices located at 10865 Road to the Cure, Suite 150, San Diego,

California 92121. Capricor is a publicly-traded company listed on the Nasdaq Global Select

Market. Capricor is the developer and manufacturer of Deramiocel (CAP-1002), an

investigational allogeneic cell therapy for the treatment of DMD.

24. Defendant NS Pharma is a Delaware corporation with its principal place of

business at 140 East Ridgewood Avenue, Suite 280S, Borough of Paramus, New Jersey 07652.

NS Pharma is a wholly-owned subsidiary of Nippon Shinyaku. Upon information and belief,

Nippon Shinyaku has appointed NS Pharma as its subdistributor for Deramiocel in the United

States under Article 4.2 of the Distribution Agreement.

25. Defendant Nippon Shinyaku is a Japanese corporation with its principal office in

Kyoto, Japan. Nippon Shinyaku is the parent company of NS Pharma and party to the

Distribution Agreement at issue in this action. Under the Distribution Agreement, Nippon

Shinyaku is “at all times [] fully liable for the acts or omissions of [NS Pharma] as if such act or

omission was undertaken directly by” Nippon Shinyaku, and “any action or claim by Capricor in

respect of any breach, act, error or omission by” Nippon Shinyaku “may be brought against” NS

Pharma.

III. JURISDICTION AND VENUE

26. This Court has jurisdiction over this action under N.J.S.A. 2A:16-50 et seq.

(Declaratory Judgments Act) and the inherent equitable jurisdiction of the Chancery Division.

27. This Court has personal jurisdiction over NS Pharma because NS Pharma

maintains its principal place of business in Paramus, Bergen County, New Jersey, and conducts

continuous and systematic business activities within the State of New Jersey sufficient to confer

general jurisdiction.

28. This Court has personal jurisdiction over Nippon Shinyaku. Nippon Shinyaku has

purposefully availed itself of the privilege of conducting business in New Jersey by, among other

things, establishing and maintaining a wholly owned U.S. subsidiary, NS Pharma, with its

principal place of business in Paramus, Bergen County, New Jersey; directing the commercial

activities of NS Pharma in New Jersey, including activities relating to the distribution of

pharmaceutical products, including Deramiocel, in the United States; entering into the

Distribution Agreement that contemplated performance in New Jersey through NS Pharma; and

dispatching its CEO, Mr. Toru Nakai, to participate directly in negotiations concerning the

Distribution Agreement and the distribution of Deramiocel in the United States. Further, upon

information and belief Nippon Shinyaku has appointed NS Pharma as Subdistributor. Nippon

Shinyaku has therefore further agreed, under Article 4.2 of the Distribution Agreement, that it is

fully liable for NS Pharma’s acts and omissions in New Jersey, and that any breach-related claim

by Capricor may be brought against NS Pharma. Nippon Shinyaku has thus affirmatively

subjected itself to the adjudicative authority of New Jersey courts for disputes arising from the

Distribution Agreement.

29. Venue is proper in Bergen County under R. 4:3-2 because NS Pharma maintains

its principal place of business in the Borough of Paramus, Bergen County, and a substantial part

of the events and omissions giving rise to this action occurred in Bergen County.

30. Capricor brings this action in the Chancery Division, General Equity Part,

because it seeks equitable relief—including injunctive relief and rescission—that is within the

traditional jurisdiction of equity courts. The Distribution Agreement between the parties contains

an arbitration clause (Article 18), but expressly preserves each party’s right to seek injunctive or

other equitable relief in a court of competent jurisdiction where such relief is necessary to

prevent serious and irreparable injury. Id. §18.3.3 (“Nothing contained in this Article 18 shall

prevent either Party from resorting to judicial process if injunctive or other equitable relief

from a court is necessary to prevent serious and irreparable injury to one Party or to others.”)

(emphasis supplied). Capricor’s claims fall squarely within this contractual carve-out.

31. Absent immediate equitable intervention, Capricor and the patients it serves will

suffer irreparable harm for which no adequate remedy at law exists. The existing disruption and

further expected disruption to the commercialization and distribution of Deramiocel caused by

the Distributor will deprive these patients of access to a treatment they cannot obtain from any

other source, causing suffering and disease progression that no amount of money damages can

undo.

IV. FACTUAL BACKGROUND

A. The Parties, Their Relationship, and the Distribution Agreement

32. Capricor is a clinical-stage biotechnology company that, together with its

subsidiary, Capricor, Inc., develops a cell therapy for DMD. Over the course of nearly two

decades, Capricor has devoted hundreds of millions of dollars to developing Deramiocel,

shepherding it through preclinical research, Phase 1 studies, Phase 2 and Phase 3 clinical trials,

and the FDA regulatory process. Capricor manufactures Deramiocel at two facilities: one at

Cedars-Sinai Medical Center in Los Angeles, California, and a second in San Diego, California,

where it has invested approximately $35 - $40 million for expanded manufacturing capacity in

anticipation of commercial launch.

33. Reaching this stage has required extraordinary scientific, clinical, regulatory,

manufacturing, financial and operational execution in one of the most technically complex areas

of drug development. Unlike traditional small molecules, biologics (such as cell therapies)

involve living biological material and require the development of highly specialized

manufacturing processes, rigorous quality control systems, careful product characterization,

validated potency assays and close regulatory coordination to support consistency, safety,

scalability and reproducibility. In a rare, fatal pediatric disease such as DMD, these challenges

are compounded by small patient populations, progressive and heterogeneous disease biology,

long development timelines, and the need to generate meaningful clinical evidence in a

vulnerable population with limited therapeutic options. Simply put, reaching this point required

Capricor to do far more than develop a drug—it required building the scientific, clinical,

manufacturing and regulatory foundation necessary to advance a living cell therapy in one of the

most devastating pediatric diseases.

34. NS Pharma markets Viltepso (viltolarsen), an exon-skipping therapy for a

genetically defined subset of DMD patients. As of November 2024, NS Pharma represented that

Viltepso is the only product NS Pharma currently distributes in the United States.

35. Capricor and Nippon Shinyaku began discussing a potential distribution

relationship in 2021. In December 2021, Nippon Shinyaku delivered a detailed capability

presentation to Capricor titled “

” (the “Capability Presentation”). In that presentation, the Distributor

represented

. The Distributor touted that it

had “ ” and highlighted

. The Distributor also

. The Distributor presented

. The

Distributor also represented that it had the capability to

. These

representations were material to Capricor’s decision to enter into the Distribution Agreement. As

set forth below, they proved to be false.

36. The Capability Presentation also included the Distributor’s financial projections

for Deramiocel. These projections reflected both parties’ shared understanding at the time: that

Deramiocel could be priced and sold at levels that would generate commercially viable margins

for manufacture, distribution, and administration. As more fully described below, this shared

assumption was fundamentally mistaken, because neither party understood at the time how the

Distribution Agreement’s pricing formula would interact with the federal Medicare

reimbursement framework to make the distribution of Deramiocel economically unviable.

37. In January 2022, Capricor and Nippon Shinyaku entered into the Distribution

Agreement granting Nippon Shinyaku the exclusive right to distribute Deramiocel in the United

States through NS Pharma. As set forth above, because Nippon Shinyaku appointed NS Pharma

as Subdistributor, Article 4.2 of the Distribution Agreement makes Nippon Shinyaku fully liable

for NS Pharma’s acts and omissions and authorizes Capricor to bring any breach-related claim

against NS Pharma directly.

38. The Distribution Agreement grants the Distributor the exclusive right to

“promote, market, sell and distribute” Deramiocel in the United States, including Puerto Rico,

through . Distribution Agreement §§ 2.1, 15.1.

39. In exchange for that exclusivity, the Distributor assumed extensive obligations to

prepare for and execute a successful commercial launch. Among other things, the Distributor is

required to use “Commercially Reasonable Efforts,” as defined in the Distribution Agreement, to

promote, market, sell, and distribute Deramiocel in the Territory. Distribution Agreement § 5.4.

The Distributor’s specific obligations include developing and maintaining a commercial team

with sufficient experience and resources to fulfill its obligations (§ 5.5.5); establishing

distribution infrastructure, including warehousing and logistics (§ 5.5.6); and ensuring

compliance with all applicable laws, including state distribution licensing requirements (§ 5.18).

The parties left no doubt about the Distributor’s obligations: the Distributor must “vigorously

promote the sale” of Deramiocel, with no reservations (§ 5.4). The Distributor has violated each

of these contractual obligations. Taken together, its failures amount to a wholesale refusal to

perform its core function under the Distribution Agreement: bringing Deramiocel to market.

40. The successful commercialization and distribution of a complex cell therapy like

Deramiocel requires, among other things, mapping the patient journey, developing and testing

the target product profile, creating the marketing strategy, establishing pricing, market access

and reimbursement strategies, building trained sales and medical affairs teams, implementing

HUB and patient support services and establishing the required distribution infrastructure. For a

complex therapy, this work also includes federal and state reimbursement planning, securing

state-level distribution licenses, and conducting mock-launch exercises to test commercial

readiness. These activities are standard and well understood in the pharmaceutical industry, were

known to both parties at the time of contracting, and typically begin several years before launch

based on the clinical, regulatory, manufacturing, market access and distribution work required to

support a successful launch.

41. The Distribution Agreement also requires Nippon Shinyaku to obtain Capricor’s

prior written consent before appointing any sub-distributors or agents to distribute Deramiocel.

Distribution Agreement § 4.2. The sole exception to this requirement is for NS Pharma itself,

which, upon information and belief, Nippon Shinyaku has designated as a permitted

subdistributor. No exception exists for any third-party logistics provider, specialty pharmacy, or

distribution entity.

42. Upon information and belief, the Distributor has

—entities that will interact directly with

providers, patients, and caregivers in the distribution chain—without first obtaining Capricor’s

prior written consent, in direct violation of Article 4.2 of the Distribution Agreement. To the

extent that other arrangements with likewise constitute

subdistribution within the meaning of Article 4.2 rather than purely third-party logistics, those

arrangements too were entered into without the required written consent. The Distributor

disclosed the existence of at joint committee

meetings when it reported that

) but the

Distributor never sought Capricor’s Article 4.2 consent for any of those candidates. Indeed,

Capricor expressly rejected the Distributor’s proposal to

43. The pricing structure is set forth in Exhibit A to the Distribution Agreement. As

more fully described below, per Exhibit A,

. Distribution

Agreement Ex. A.

44. The Distribution Agreement provides for a tiered dispute resolution process

(Distribution Agreement §§ 18.1–18.3), but expressly preserves each party’s right to seek

injunctive or other equitable relief from court “if injunctive or other equitable relief from a court

is necessary to prevent serious and irreparable injury to one Party or to others.” (Id. § 18.3.3.)

45. The Distribution Agreement provides that Capricor may distribute Deramiocel

through or with others “if and to the extent Distributor is unable to so distribute the Products due

to (a) regulatory requirements; (b) Distributor’s failure to meet its Minimum Sales Requirements,

subject to Article 5.2; or (c) Distributor being otherwise prohibited or prevented from selling

and/or distributing the Products or refusing or being unable to sell and/or distribute the Products

to any Customer or class of Customers other than by Customer decision.” Distribution

Agreement § 4.1.2(a).

46. The Joint Steering Committee was required to establish Minimum Sales

Requirements within ninety days before anticipated BLA approval. (Id. § 5.2.1.) No Minimum

Sales Requirements were established ninety days before the original PDUFA date of August 31,

2025.

B. Deramiocel, the HOPE-3 Clinical Trial, and the DMD Patient Population

47. DMD is caused by the absence of dystrophin, a protein that stabilizes muscle cell

membranes. Without it, muscle fibers are damaged with every use and progressively replaced by

scar tissue and fat.

48. Cardiomyopathy, the progressive scarring and weakening of the heart muscle, is

the leading cause of death in DMD patients. No approved therapy addresses both the skeletal and

cardiac dimensions of the disease.

49. Deramiocel is an investigational cell therapy developed by Capricor over nearly

two decades of research and development. It comprises cardiosphere-derived cells, a population

of cardiac-derived stromal cells isolated from qualified donated human hearts. Deramiocel is

designed to slow disease progression through the immunomodulatory, anti-inflammatory and

anti-fibrotic activities of cardiosphere-derived cells. These effects are mediated in part by

exosomes secreted by these cells that contain bioactive molecules, including microRNAs and

other signaling factors, which may influence gene expression and cellular pathways involved in

inflammation, fibrosis, and tissue repair. It is administered intravenously every three months and

does not require genetic matching; it is an off-the-shelf therapy that can be given to any eligible

patient. Deramiocel has received Orphan Drug, Regenerative Medicine Advanced Therapy, and

Rare Pediatric Disease designations from the FDA. These designations reflect the FDA’s

recognition that Deramiocel addresses a serious, life-threatening condition affecting a small

patient population with significant unmet medical need; that it employs a novel cell-based

therapeutic approach with the potential to address that need; and that it targets a disease affecting

fewer than 200,000 individuals in the United States.

C. The Distribution Agreement’s Broken Price Structure

50. Deramiocel faces a fundamental commercial barrier. The Distributor realized as

much in or around March 2025. This is not a problem of execution. It is a problem of contract

design, and one that neither party foresaw.

51. The pricing structure, at a high level, provides that:

B. Next, the Distributor will sell to doctors or hospitals (“Customers,” as defined in

Article 1.7 of the Distribution Agreement) at some higher price. The Distributor

would

C. Providers then administer Deramiocel, and payors (often Medicare, Medicaid, or

the patient’s insurance) reimburse the providers for Deramiocel’s price, plus a

small margin.

52. The value chain the parties believed they were agreeing to contemplated that both

parties would profit from the sale of Deramiocel, or at least potentially recover the enormous

investment made to develop Deramiocel. They contemplated that it would cost Capricor some

amount to manufacture a dose of Deramiocel. Capricor would then

Both parties would make

money on the transaction that they could use to defray their expenses (e.g., Capricor’s hundreds

of millions of dollars in research and development and its ongoing expenses, and the

Distributor’s costs to distribute Deramiocel). The health care provider would be reimbursed by

the payor (Medicare, Medicaid, private insurance, or similar) for the price at which it acquired

Deramiocel plus, typically, a small margin to cover the provider’s costs.

53. A distributor can set prices high enough to cover its costs and earn a profit. So in

the abstract, the general pricing model in the Distribution Agreement works. But in reality, it

does not. For physician-administered therapies like Deramiocel, federal law dictates a Medicare

reimbursement ceiling that neither the manufacturer nor the distributor can exceed. That

Medicare ceiling, in turn, cascades through the rest of the healthcare system: state Medicaid

programs and private insurers routinely tie their own reimbursement rates to Medicare’s. This

means that one federal formula effectively guides what every payor in the country will pay for

Deramiocel.

54. Under federal law, Medicare Part B reimburses physician-administered drugs and

biologicals—including Deramiocel, once it is approved—at 106% of the “manufacturer’s

average sales price” (“ASP”). 42 U.S.C. § 1395w-3a(b)(1)(B); 42 C.F.R. § 414.904(a)(2).

55. The ASP for Part B drugs is calculated by taking a manufacturer’s total sales

revenue for a drug divided by the total units sold, minus certain price concessions like discounts

and rebates. It is based only on sales data reported by the manufacturers themselves, not third-party sources. The manufacturer reports this data quarterly to Centers for Medicare and Medicaid

Services (“CMS”), which then uses it to set the reimbursement rate (typically ASP + 6%, as

mentioned above).

56. Here, Medicare’s ASP formula produces a devastating result. Because the

Distributor is Capricor’s sole U.S. purchaser, Capricor’s only sales are to the Distributor. And

. The

reimbursement ceiling that flows from that calculation leaves no room for either party to earn a

viable return.

57. No one in this value chain, as structured in the Distribution Agreement, has an

economic incentive to produce, distribute, or sell Deramiocel where Medicare is the payor. Each

unit sold (a “dose”) is an economic loss. Returning to the example above,

But the

Distributor cannot sell that dose to a provider at because, per federal law, the

provider cannot be reimbursed at more than cost plus 6%.

. Consequently, each dose sold is at a loss.

58. Upon information and belief, the vast majority of individuals with DMD who live

to be 20 years old are Medicare beneficiaries. Because of the severity of the disease, most DMD

patients qualify for Supplemental Security Income and Medicaid as children. Upon reaching

adulthood, these individuals—who may become unable to work due to their disability—become

entitled to Social Security Disability Insurance benefits as disabled adult children under a

parent’s Social Security record. After a mandatory 24-month waiting period, see 42 U.S.C. §

426(b), these individuals become entitled to Medicare benefits. As a result, Medicare is the

primary payor for medical care for most adult DMD patients in the United States.

59. Unfortunately, this problem is not confined to Medicare patients. Upon

information and belief, the Medicare reimbursement rate, in turn, directly influences what state

Medicaid programs pay for the same drugs. The majority of states have adopted fee schedules

that expressly benchmark to Medicare’s ASP-based pricing, typically reimbursing at ASP plus a

specified percentage. What is more, private insurers often reference Medicare pricing and

similarly adjust their reimbursement rates downward. The pricing spiral therefore progressively

renders the sale of Deramiocel uneconomical for all patient populations except those paying out

of pocket. Over a short period after launch, several quarters at most, no provider in the United

States would have an economic incentive to administer Deramiocel to the vast majority of the

patient population.

60. There is a brief window before the ceiling closes. When a drug first enters the

market, there is no sales history from which to calculate an ASP, so Medicare reimburses based

on the wholesale acquisition cost for the first two quarters. During that initial period, the

Distributor could potentially price Deramiocel at a level that generates a return. But beginning in

the third quarter, once the ASP is calculated from Capricor’s actual sales to the Distributor

, the reimbursement ceiling drops to 106% of that cost and remains there

permanently. The pricing structure does not merely fail over time. By the third quarter, providers

face a choice: continue administering Deramiocel at a loss, or stop prescribing it altogether. The

Distribution Agreement’s pricing structure thus guarantees a cliff: two quarters of apparent

viability followed by an indefinite period in which no party can economically make, distribute,

or administer Deramiocel. Even before that cliff arrives, the certainty of imminent failure

depresses present-day investment in the launch: no rational party will commit the substantial pre-launch capital, personnel, and infrastructure that a successful launch requires when those

investments are known to be stranded once the ASP-based reimbursement ceiling takes effect.

The harm is therefore occurring now, not at some indeterminate future point.

61. At the time they entered into the Distribution Agreement, the parties erroneously

believed that their pricing arrangement would permit them to distribute and sell Deramiocel at a

price that generated adequate margins for manufacture, distribution, and administration, and that

it would be economically rational for healthcare providers to administer Deramiocel, including to

patients covered by Medicare. They were wrong.

62. Because the only patients for whom the distribution arrangement remains

theoretically economically viable are those wealthy enough to pay out-of-pocket—a population

that, for a rare pediatric disease like DMD, is vanishingly small, the Distribution Agreement’s

broken pricing structure at best limits access to a potentially life-saving therapy based upon

wealth, with the sickest and poorest patients locked out first.

63. The Distributor’s own failure to finalize an acceptable gross-to-net model based

on the Distribution Agreement, establish a realistic wholesale price, or complete a demand

forecast—all foundational to launch economics—evidences a wholesale failure to prepare for the

commercial launch of Deramiocel.

64. The harm to Capricor and to patients is real. The unavoidable consequences of the

Distribution Agreement’s pricing structure will be fully realized on a schedule dictated by

federal reimbursement law: Medicare patients lose access after the first two quarters, as the ASP

calculation takes effect. Medicaid follows Medicare. Private insurers follow Medicaid and

Medicare. The circle tightens until the only patients who can access Deramiocel are those

wealthy enough to pay the full cost themselves.

D. The Distributor Institutes an Indefinite “Pencils Down” Period on Launch

Preparations

65. Capricor had submitted a formal application for FDA approval (called a Biologics

License Application, or “BLA”) that was completed by January 2025. In March 2025, the FDA

accepted Capricor’s application for review, granted it Priority Review (a designation that

shortens the FDA’s review timeline for therapies that offer significant advances over existing

treatments), and set a target decision PDUFA date of August 31, 2025. At the mid-cycle review

in May 2025 (a scheduled checkpoint where the FDA evaluates whether the application is

progressing without major issues) the agency reported no significant deficiencies and confirmed

the review was on track.

66. In May 2025, the FDA conducted and successfully completed a pre-approval

inspection of Capricor’s San Diego manufacturing facility, a step the FDA takes to verify that a

company can reliably produce its product to the required standards before granting approval. As

part of that inspection, the FDA issued a 483 notification, identifying 5 areas of concern.

Capricor addressed those concerns and later received a letter from FDA confirming that all such

matters had been reviewed and found acceptable. 483 notifications are quite common in PLI

inspections and if corrected, as Capricor did, are not a roadblock to FDA approval. In July 2025,

the FDA changed course, issuing a Complete Response Letter (“CRL”) stating it could not

approve the application without additional clinical data—notwithstanding its earlier guidance to

the contrary, the absence of deficiencies at mid-cycle review, and more than 50 information

requests the FDA had issued and Capricor had answered during the review. Notably, the CRL

was issued amid significant leadership changes at the FDA and a widely reported shift toward

stricter requirements for rare-disease therapies that resulted in at least 22 Complete Response

Letters issued to other companies relating to rare-disease treatments.

67. The Distributor, having already been lagging in its launch preparations, took the

CRL as an invalid excuse to go “pencils down” (indefinitely). Initial launch planning that had

been underway, however inadequate and incomplete, was paused. Upon information and belief,

the Distributor’s work on market access, pricing, distribution infrastructure, and payor

engagement completely stopped.

68. The Distributor’s directive was sweeping. On July 15, 2025, an employee of the

Distributor reported to Capricor’s Director of Commercial, Mr. Matt Stange, that “

”—confirming that the instruction had come from the top of the

organization.

. The

directive extended beyond the Distributor’s own organization: Capricor personnel learned from

69. On July 28, 2025, Capricor’s CEO, Dr. Linda Marbán, sent an email to the

Distributor objecting to the pause in the Distributor’s commercial preparation activity. As she

explained in that email, Capricor was not slowing down. Dr. Marbán offered to meet with the

Distributor immediately to discuss this concerning situation.

70. On July 29, 2025, the Distributor confirmed it “

71. The Distributor treated the CRL as a license to defer the preparation obligations it

had already been neglecting.

The Distributor’s own July 29, 2025 email acknowledged as

much, stating that “ ” were being utilized

.” Any progress made on distribution infrastructure was

lost.

72. In October 2025, Capricor’s CEO, Dr. Linda Marbán, sent a detailed email to the

Distributor requesting information on the Distributor’s progress on

—including the status of its state distribution licenses. The Distributor refused to

provide a substantive response.

73. On November 6, 2025, the Distributor’s General Counsel, ,

responded to Capricor’s inquiries by email, asserting that the Distributor is

. That statement is inconsistent with the Distributor’s obligations under Article

5.4 of the Distribution Agreement which requires the Distributor to use Commercially

Reasonable Efforts to prepare for the commercial launch of Deramiocel.

74. On January 5, 2026, Dr. Marbán again wrote to the Distributor, requesting a

current launch plan, an updated organizational chart with named personnel, market access

details, and market research updates. She reiterated the unanswered October 2025 requests and

asked that the parties’ joint planning meeting be moved up from February 2026. On January 23,

2026, the Distributor’s Vice President of Business Development, , responded by

deflecting—claiming that the Distributor’s launch planning

, and

referring back to Mr. Dunham’s November email.

75. In late January 2026, Dr. Marbán responded, again noting the Distributor’s lack of

a meaningful response about its pre-launch activities. She noted that the Distributor had not

confirmed that it had been issued state distribution licenses; had not provided a Deramiocel-specific launch plan (only a generic template); had not finalized a Target Product Profile;2

and

had refused when asked to share a populated organizational chart demonstrating that the

Distributor had established a marketing team as required by Article 5.5.5 of the Distribution

Agreement. She rejected the Distributor’s continued insistence on a private-label distributor

model that Capricor had repeatedly refused. She expressed “great concern” about the

Distributor’s readiness to distribute Deramiocel.

76. Although it was evident that the Distributor had written off Deramiocel, Capricor

had not lost hope. In December 2025, Capricor announced the results of its Phase 3 HOPE-3

clinical trial. A Phase 3 trial is a large-scale clinical study intended to test whether a drug is

actually safe and effective compared to existing treatments or a placebo.

77. The Phase 3 HOPE-3 trial was a randomized, double-blind, placebo-controlled

clinical study of 106 DMD patients conducted in the United States. The results were striking:

2 A TPP is the document that defines the drug’s key commercial attributes: indication, dosing, administration route,

target patient population, efficacy/safety profile, and positioning relative to competing therapies. The TPP is a

foundational document for pricing strategy, payer value messaging, the AMCP dossier, sales training materials, and

reimbursement coding.

Deramiocel slowed skeletal muscle deterioration by approximately 54% and slowed cardiac

decline by approximately 91%, both with statistical significance. Deramiocel also significantly

reduced the progression of myocardial scarring. Additionally, the study showed statistical

significance in all type 1 error controlled secondary endpoints. Furthermore, Deramiocel

maintained a safety and tolerability profile consistent with prior clinical experience. These

results built on years of prior clinical data, including a Phase 2 trial published in The Lancet and

an open-label extension demonstrating durable benefits sustained up to four years.

78. Following the positive HOPE-3 results, Capricor submitted data to the FDA. On

March 10, 2026, the FDA lifted the Complete Response Letter and resumed its review of the

BLA, establishing a new “PDUFA” target action date of August 22, 2026. Capricor expects that

FDA approval may issue by or before that date. Upon information and belief, the Distributor’s

launch preparations have not caught up and are seriously and irremediably delinquent, destroying

the prospects of a successful launch. The months lost to inaction cannot be recovered, especially

because the Distributor still has not devoted sufficient attention to Deramiocel, and will not do so

until and unless Capricor agrees to its demand to cede control of Deramiocel to the Distributor.

E. The Distributor’s Failures to Perform for the Deramiocel Launch

79. The Distributor’s failures to prepare for the commercial launch of Deramiocel are

extensive, well-documented, and span virtually every critical dimension of its contractual

obligations. Capricor has repeatedly raised these deficiencies with the Distributor, beginning no

later than March 2025 and continuing through the present. The Distributor has either failed to

respond satisfactorily or has affirmatively disclaimed its obligations.

80. At the , the state

and scope of the Distributor’s unreadiness became fully apparent. Upon information and belief,

revealed, among other

things, the following deficiencies:

A. Launch Planning: The Distributor has no comprehensive plan to launch

Deramiocel. It has not developed an integrated launch playbook. To Capricor’s

knowledge, the Distributor has not conducted a single mock launch exercise. Its

gross-to-net revenue model is not acceptable and, by NS Pharma’s own Head of

Commercial’s admission, “ .” The

, is stale and has no timeline for revision. And there is no non-branded

disease education website to build awareness among patients, caregivers, or

clinicians. All of these tasks are commercially reasonable tasks that are required

for a successful launch.

B. Target Product Profile (“TPP”): The TPP is the single document on which

pricing strategy, payer engagement, value messaging, and the AMCP dossier all

depend. It is also used for sales forecasting, because projected adoption rates are

multiplied by price to generate sales projections. It can also be used by patient

advocacy and for a variety of other purposes. The TPP has not been finalized,

more than four years after the Distribution Agreement was signed. NS Pharma’s

own Head of Commercial called it “ ,” yet it

remains incomplete.

. The consequences of

the TPP’s ongoing incompleteness fall on the commercial launch, and the

commercial launch is the Distributor’s obligation.

C. Distribution Infrastructure: The Distributor purports to have entered into

arrangements with

, but without obtaining Capricor’s prior written consent. To the extent

those arrangements establish a subdistributor relationship, the Distributor should

have obtained Capricor’s prior written consent pursuant to Article 4.2 of the

Distribution Agreement. The Distributor has also given Capricor inconsistent

representations about its state-level distribution licensing: at times representing

. The

Distributor never disclosed that to Capricor during

contracting, never sought Capricor’s written consent under Article 4.2, and,

despite Capricor’s repeated requests, has refused to produce any documentation

identifying the state licenses on which the Distributor proposes to rely or the

terms of its arrangement with Cardinal.

D. Market Access and Pricing:

. The need to be

updated. And

even though the Distribution Agreement mandates that they be established within

ninety days of anticipated BLA approval—a deadline the Distributor did not meet

ninety days ahead of the original PDUFA date of August 31, 2025.

81. The Distributor’s persistent pattern of nonperformance spans launch planning,

pricing, distribution infrastructure, personnel, subdistributor consent, and minimum sales

requirements.

82. It also demonstrates that the Distributor’s breaches are not isolated lapses but,

upon information and belief, an intentional, systematic failure to discharge the obligations in

exchange for which the Distribution Agreement afforded exclusive distribution rights.

F. The Distributor’s Repudiation

83. Upon information and belief, the Distributor chose to disregard its launch

obligations rather than adequately invest in a commercial infrastructure. It then waited until

Capricor had no time left (with potential FDA approval foreseeable and no alternative distributor

in place) to press for a complete restructuring of the deal.

84. On March 27, 2026, Nippon Shinyaku’s CEO, Mr. Toru Nakai, met with

Capricor’s CEO, Dr. Linda Marbán. At that meeting, Mr. Nakai informed Capricor that a

was for Deramiocel in the United States.

Under the proposed PLD model, the

. This was not the bargain the parties had struck.

85. On April 1, 2026, Dr. Marbán wrote to Mr. Kimura of NS Pharma, confirming her

understanding of the Distributor’s repudiation: “

.”

86. Kimura responded the same day: “

.”

87.

. The PLD Proposal would make

the Distributor—not Capricor—the “ ” for purposes of federal

reimbursement calculations.

88. The Distributor’s proposal was unacceptable. The proposal required Capricor to

. It contemplated transferring that control to a

distributor that had failed to meet its existing contractual obligations.

89. On May 6, 2026, Capricor informed the Distributor that it would not agree to the

PLD arrangement, and that it accepted the repudiation.

G. Irreparable Harm to DMD Patients and Capricor

90. DMD is a disease of irreversible, progressive destruction. Deramiocel does not

cure DMD and does not reverse existing damage. What it does is slow the rate at which damage

accumulates—preserving muscle function, cardiac function, and independence that, once lost,

can never be restored. This distinction is critical: because Deramiocel has been clinically shown

to preserve existing function but not to measurably restore lost function, every month of delay in

making the therapy available to patients can result in permanent, quantifiable harm that cannot

be undone even if Deramiocel is eventually administered. And if the distribution of Deramiocel

fails to launch or is halted because of the flawed, repudiated Distribution Agreement, every

month the therapy is unavailable is another month during which disease progression continues

unchecked—adding to the already irreversible toll.

91. In concrete terms, a fifteen-year-old boy with DMD who can currently lift a cup

to his mouth may, within months and without effective treatment, lose the ability to do so. Once

lost, that function will not return. Similarly, a seventeen-year-old whose cardiac ejection

fraction—a measure of how strongly the heart pumps blood—is 40% may, without treatment,

decline further toward heart failure. The underlying cardiac muscle may continue to scar and

weaken, and that damage is irreversible. For non-ambulatory teenagers with DMD, upper-limb

function is often the last remaining source of independence—the ability to eat, use the bathroom,

communicate, operate a wheelchair or device, and participate in daily life with some measure of

control. For these patients, every percentage point of preserved function can mean the difference

between retaining self-sufficiency and becoming entirely dependent on others. There is no

substitute for Deramiocel. No other approved therapy addresses both the skeletal and cardiac

manifestations of DMD. No other therapy has demonstrated the Phase 3 clinical efficacy

described above. If Deramiocel is not distributed to patients in a timely manner following FDA

approval, there is no alternative therapy patients can turn to. Every day of delay is a day of

irreversible disease progression.

92. Without equitable relief, Capricor also suffers irreparable harm. It has invested

hundreds of millions of dollars and devoted nearly two decades to the research necessary to bring

Deramiocel to market. It has built its own manufacturing capacity, hired personnel, and retained

numerous experts to assist it in preparing for commercial launch, all at great cost to Capricor.

The inaction and failures of the Distributor left Capricor with no viable alternative. It cannot risk

failure. Capricor cannot fulfill its mission to help patients in need—or recoup its investment—if

its exclusive distributor is unable or unwilling to distribute.

93. The substantial harm to Capricor’s business, reputation, and relationships with the

clinical and patient communities cannot be adequately remedied through an award of money

damages. An approved therapy that never reaches patients not only damages Capricor’s

commercial prospects; it undermines the credibility that is essential to Capricor’s ability to

attract future research partnerships, clinical trial participation, and investor confidence. These are

harms that continue to compound over time, cannot be readily quantified, and cannot be

reversed.

94. Capricor has unsuccessfully spent months attempting to find a way to move

forward productively and to address with the Distributor its failure to perform as agreed, at all

times stressing the desire and hope for a successful collaboration. Only when those efforts had

been exhausted and FDA approval had become a near-term possibility did the Distributor’s

inaction turn a problem into a matter of urgency.

95. The public interest strongly favors ensuring that Deramiocel reaches patients

without further delay. Approximately 15,000 individuals are living with DMD in the United

States. The families of these patients—parents who have watched their sons lose the ability to

walk, to use their arms, to breathe independently—have waited decades for a therapy that can

meaningfully change the trajectory of this disease and to provide these patients the quality of life

they so deserve. Deramiocel is that therapy.

96. This Court should not permit a flawed contract and a recalcitrant distributor to

stand between those families and the medicine that could preserve their children’s remaining

function and extend their lives.

COUNT ONE

(Rescission Based on Mutual Mistake)

97. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as if set forth fully herein.

98. At the time the parties entered the Distribution Agreement, both Capricor and

Nippon Shinyaku shared a mistaken assumption that the pricing structure set forth in Exhibit A

would generate commercially viable margins for the manufacture, distribution, and

administration of Deramiocel. Both parties entered into the Distribution Agreement with the

understanding that it would permit them to price and sell Deramiocel at commercially viable

profit levels. They were wrong.

99. This mutual mistake goes to a basic assumption on which the Distribution

Agreement was made. Its purpose—the successful commercialization and distribution of

Deramiocel to DMD patients—cannot be achieved under its terms and the failure of that purpose

cannot be avoided even under a fair and reasonable interpretation of its terms. The mistake has a

material effect on the agreed exchange of performances that is adverse to both parties.

100. Accordingly, Capricor is entitled to rescission of the Distribution Agreement

based upon mutual mistake and the parties should be restored to the positions they occupied

before its execution.

COUNT TWO

(Alternatively, Rescission Based on Unilateral Mistake)

101. Plaintiff repeats and realleges the allegations contained in the preceding

paragraphs as if set forth fully herein. In the alternative to Count One, Capricor alleges that the

mistake regarding the Distribution Agreement’s pricing structure was Capricor’s alone.

102. In the alternative to its mutual mistake claim, Capricor alleges that when the

Distribution Agreement was executed in January 2022, Capricor mistakenly believed that the

pricing structure set forth in Exhibit A would generate commercially viable margins for the

manufacture, distribution, and administration of Deramiocel. This belief was reinforced by the

Distributor’s own December 2021 Capability Presentation. Capricor did not understand at the

time of contracting that the interaction between the Distribution Agreement’s pricing formula

and the Medicare Part B ASP-based reimbursement framework would render the distribution of

Deramiocel economically unviable.

103. Upon information and belief, the Distributor knew or should have known of the

mistake at the time the Distribution Agreement was executed. Nippon Shinyaku’s U.S.

subsidiary, NS Pharma, already distributed Viltepso in the United States and had direct

experience with payor reimbursement structures, including the Medicare Part B ASP framework.

NS Pharma was therefore in a position to understand—or, with the exercise of reasonable

diligence, to have understood—that the Distribution Agreement’s pricing formula would produce

an ASP so low as to render provider reimbursement inadequate.

104. In the alternative, even if the Distributor did not know of the mistake,

enforcement of the Distribution Agreement against Capricor under its current pricing terms

would be unconscionable. Demand will be nonexistent given the flaw in reimbursement. And

even if there were demand, the Distribution Agreement’s pricing structure ensures that Capricor

receives, at most, the marginal cost of manufacturing each dose of Deramiocel—generating no

return on nearly two decades and hundreds of millions of dollars of research and development—

while simultaneously preventing Capricor from distributing Deramiocel through any alternative

channel that could yield viable economics. No reasonable party would have agreed to such terms

had the consequences been understood.

105. Capricor is entitled to rescission of the Distribution Agreement based on its

unilateral mistake.

COUNT THREE

(Rescission Based on Frustration of Purpose)

106. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as though set forth in full herein.

107. The principal purpose of the Distribution Agreement was the successful

commercialization and distribution of Deramiocel to patients with DMD in the United States.

Both parties understood this at the time of contracting, and the Distribution Agreement’s

structure—exclusivity, milestone payments, launch preparation obligations, and sales-based

payments—was designed to achieve that purpose.

108. That purpose has been substantially frustrated. The Distribution Agreement’s

pricing structure, as applied to a cell therapy reimbursed primarily through Medicare Part B,

makes it commercially impossible to sustain a viable distribution of Deramiocel. The Distributor

lacks both the economic incentive and the demonstrated capability to launch the product. The

frustration of purpose was not reasonably foreseeable at the time of contracting and is not

attributable to the fault of either party.

109. As a result of the frustration of the principal purpose of the Distribution

Agreement, Capricor is entitled to rescission.

COUNT FOUR

(Declaratory Judgment — Right to Distribute Deramiocel)

110. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as if set forth fully herein.

111. An actual and justiciable controversy exists between the parties regarding

whether, given the commercially impracticable pricing structure, the Distributor’s material

breaches, and the Distributor’s anticipatory repudiation of the Distribution Agreement, the

Distribution Agreement’s exclusivity provisions bar Capricor from distributing Deramiocel to

DMD patients through channels other than the Distributor.

112. Capricor is entitled to a declaratory judgment under N.J.S.A. 2A:16-50 et seq.

declaring that Capricor has the right to distribute Deramiocel, directly or through distributors

other than the Distributor, and the Distribution Agreement’s exclusivity provisions do not bar

such distribution. The Distribution Agreement itself authorizes Capricor to distribute Deramiocel

if the Distributor cannot.

COUNT FIVE

(Breach of Contract — Failure to Perform Against Defendants)

113. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as if set forth fully herein.

114. The Distribution Agreement required the Distributor to prepare for and execute

the commercial launch of Deramiocel, including obligations related to launch planning and

commercial readiness (§ 5.4), personnel and field deployment (§ 5.5.5), distribution

infrastructure (§ 5.5.6), market access and pricing (§§ 5.4, 5.8), state distribution licensing (§

5.18), subdistributor consent (§ 4.2), establishment of Minimum Sales Requirements (§ 5.2.1),

and fulfillment of all other Commercially Reasonable Efforts.

115. The Distributor has materially breached the Distribution Agreement by, among

other things: failing to develop an integrated launch plan for Deramiocel; failing to finalize an

acceptable gross-to-net revenue model or establish a realistic wholesale price; failing, to

Capricor’s knowledge, to conduct mock launch exercises;

, without Capricor’s prior written consent as required by Article 4.2; entering into an

undisclosed

, without obtaining Capricor’s written consent, and refusing despite repeated

requests to produce documentation identifying the licenses on which the Distributor proposes to

rely; redirecting its commercial personnel to market and sell its Viltepso product rather than

maintaining a dedicated Deramiocel team; and failing to establish Minimum Sales Requirements.

116. The Distributor’s breaches are material.

117. As a direct and proximate result of the Distributor’s breaches, Capricor has

suffered and continues to suffer harm, including impairment of its ability to commercialize

Deramiocel and delay in the launch of a potentially life-saving therapy.

COUNT SIX

(Breach of Contract — Anticipatory Repudiation Against Defendants)

118. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as if set forth fully herein.

119. The Distributor has repudiated its obligations under the Distribution Agreement

through its words and conduct. NS Pharma’s General Counsel affirmatively disclaimed the

company’s pre-launch obligations, asserting that the Distributor is

120. The Distributor’s repudiation was expressed again on March 27, 2026, when its

parent company’s CEO informed Capricor in a face-to-face meeting that a

” was “ ” for the Distributor’s distribution of

Deramiocel in the United States. On April 1, 2026, the Distributor confirmed this position in

writing. The Distributor’s statement that a new agreement is “ ” is a definite

and unequivocal manifestation of its intention not to perform under the existing Distribution

Agreement. The Distributor did not say that performance under the Distribution Agreement

would be difficult, or that the parties should discuss modifications. It said

. That constitutes repudiation.

121. Capricor treated the Distributor’s repudiation as such. After considering the

Distributor’s PLD proposal, Capricor informed the Distributor that the proposal was

unacceptable.

122. As a direct and proximate result of the Distributor’s anticipatory repudiation,

Capricor has suffered and continues to suffer harm, including but not limited to the inability to

commercialize Deramiocel through alternative distribution channels, ongoing expenditures to

maintain manufacturing readiness without corresponding revenue, and the continued

deterioration of the DMD patient community’s access to Deramiocel.

COUNT SEVEN

(Breach of the Implied Covenant of Good Faith and Fair Dealing Against

Defendants)

123. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as if set forth fully herein.

124. Under the implied covenant of good faith and fair dealing, a party to an agreement

cannot do anything that will have the effect of destroying or injuring the right of the other party

to receive the fruits of the contract.

125. The Distributor has breached the implied covenant of good faith and fair dealing

by, among other things: failing to adequately communicate with Capricor concerning its

readiness and distribution preparations; disclaiming its pre-launch preparation obligations while

simultaneously asserting its exclusive rights; and treating the CRL as license to abandon launch

preparations while maintaining its contractual control over Deramiocel’s U.S. distribution.

126. The Distributor’s conduct has had the effect of destroying Capricor’s right to

receive the intended benefit of the Distribution Agreement—the successful distribution of

Deramiocel to patients with DMD.

127. As a direct and proximate result of the Distributor’s breach of the implied

covenant of good faith and fair dealing, Capricor has suffered and continues to suffer harm,

including Capricor’s inability to distribute Deramiocel through alternative channels while the

Distributor clings to exclusive rights it will not exercise.

COUNT EIGHT

(Unjust Enrichment Against Defendants)

128. Plaintiff repeats and incorporates by reference the allegations contained in the

preceding paragraphs as if set forth fully herein.

129. In the alternative, and to the extent the Distribution Agreement is rescinded or

held unenforceable, the Distributor has been unjustly enriched at Capricor’s expense. The

Distributor has received substantial benefits under the Distribution Agreement, including

exclusive distribution rights over a potentially transformative cellular therapy, access to

Capricor’s proprietary data, and the reputational and commercial benefits of being the named

U.S. distributor of Deramiocel.

130. The Distributor has failed to provide the consideration for which those benefits

were exchanged—namely, a commercially ready distribution infrastructure capable of bringing

Deramiocel to patients upon FDA approval. It would be unjust and inequitable to permit the

Distributor to retain these benefits without performing its obligations.

131. Capricor is entitled to restitution and disgorgement of the benefits conferred upon

the Distributor.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff Capricor demands judgment against Defendants Nippon

Shinyaku and NS Pharma as follows:

A. Rescinding the Distribution Agreement and restoring the parties to their pre-Distribution Agreement positions;

B. Entering a preliminary and permanent injunction enjoining the Distributor from

interfering with Capricor’s efforts to distribute Deramiocel, and from holding

itself out as the exclusive distributor of Deramiocel in the United States;

C. In the alternative, declaring that Capricor has the right to distribute Deramiocel,

directly or through distributors other than the Distributor, to DMD patients, and

that the Distribution Agreement’s exclusivity provisions do not bar such

distribution;

D. Declaring that the Distributor has materially breached, and anticipatorily

repudiated, the Distribution Agreement;

E. Awarding Capricor restitution and disgorgement of benefits unjustly conferred

upon the Distributor;

F. Awarding Capricor its costs of suit and reasonable attorneys’ fees to the extent

permitted by law or contract; and

G. Awarding such other and further relief as this Court deems just and equitable.

SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP

Attorneys for Plaintiff Capricor Therapeutics, Inc.

By: /s/Andrew Muscato

Dated: May 7, 2026 Andrew Muscato

R. 4:5-1 CERTIFICATION

To the best of my knowledge, information and belief, the matter in controversy is not

presently the subject of any other court proceeding or arbitration, pending or contemplated, and

no other parties need to be joined at this time.

SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP

Attorneys for Plaintiff Capricor Therapeutics, Inc.

By: /s/Andrew Muscato

Dated: May 7, 2026 Andrew Muscato

R. 1:38-7(b) CERTIFICATION

I certify that confidential personal identifiers have been redacted from the documents

now submitted to the Court and will be redacted from all documents submitted to the Court in

the future in accordance with R. 1:38-7(b).

SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP

Attorneys for Plaintiff Capricor Therapeutics, Inc.

By: /s/Andrew Muscato

Dated: May 7, 2026 Andrew Muscato

VERIFICATION

A.J. Bergmann, being of full age hereby verifies as follows:

1. I am the Chief Financial Officer of Capricor Therapeutics, Inc., the Plaintiff in the

foregoing Verified Complaint.

2. I have read the Verified Complaint and verify that the allegations contained therein are

true to the best of my knowledge, unless indicated, as set forth therein, as based upon

information and belief, or unless they set forth statements about future events. To the

extent any allegation is based upon information not within my personal knowledge, I

have made reasonable inquiry of Capricor’s officers, employees, advisors, and counsel

and believe such allegations to be true.

I certify that the foregoing statements made by me are true. I am aware that if any of the

foregoing statements made by me are willfully false, I am subject to punishment.

Dated: _________________ 5/6/26

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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

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