The litigation centers on allegations that Capricor and its executives misled shareholders regarding the regulatory pathway and clinical trial results for Deramiocel, a candidate drug intended to treat Duchenne muscular dystrophy. While the company touted "strong and definitive" evidence of efficacy following its HOPE-3 study, the FDA later revealed that Capricor had altered its statistical analysis plan without prior regulatory agreement.

These undisclosed modifications surfaced in an FDA briefing report issued on July 27, 2026. The agency stated that the study failed to meet its primary and secondary endpoints, contradicting earlier company claims that had fueled a 370% surge in share price in December 2025. Following the FDA’s report, Capricor stock collapsed by 64% in a single session. Hagens Berman partner Reed Kathrein noted that the firm is currently investigating the full extent of management's characterization of these trial endpoints.