Janssen not to exercise option on CAP-1002

Janssen Biotech, a unit of US healthcare giant Johnson & Johnson (NYSE: JNJ), has decided not to exercise its option to exclusively license on CAP-1002 (allogeneic cardiosphere-derived cells) for development and commercialization in the field of cardiology.

The decision follows very disappointing clinical results announced in May with CAP-1002, for which Janssen took an option from Capricor Therapeutics (Nasdaq: CAPR) in 2014. That news saw Capricor’s shares plunge 62% and a further 6.2% to $0.76 by close of trading yesterday.

In connection with this decision, the agreement and license option between Capricor and Janssen has been terminated. As a result, Capricor shall retain all rights to develop and commercialize CAP-1002 for any indication, either independently or in collaboration with third parties. Capricor will also have an irrevocable, fully paid-up non-exclusive license under patents controlled by Janssen utilized in the production of the clinical trial materials manufactured pursuant to the Chemistry, Manufacturing, and Controls (CMC) development plan between Capricor and Janssen and a non-exclusive perpetual license to publish, disclose and use the information of Janssen that was utilized in the production of the clinical trial materials manufactured pursuant to the CMC development plan. No payments between Capricor and Janssen are required to be made in relation to this decision.