10:31 AM EDT, 09/17/2024 (MT Newswires) -- Capricor Therapeutics ( CAPR ) said Tuesday it signed a binding term sheet with Japanese pharmaceutical firm Nippon Shinyaku to commercialize and distribute Capricor's Duchenne muscular dystrophy treatment deramiocel in Europe.

Capricor said the potential deal that the term sheet covers is similar to the existing commercialization and distribution agreements with Nippon Shinyaku in the US and Japan with an opportunity to include other parts of the world.

A definitive agreement is expected to be finalized in Q4, Capricor said.

The company said it will be responsible for the development and manufacturing of deramiocel for potential approval in the EU, the UK and some other countries in the region, while Nippon Shinyaku will be responsible for sales and distribution.

Capricor said it will also receive a $20 million upfront payment subject to the signing of the definitive agreement, with the company receiving a double-digit share of product revenue and potentially receiving additional development and sales-based milestone payments of up to $715 million.

The company said that concurrently with the term sheet, Nippon Shinyaku has also agreed to buy about $15 million of its common stock at a 20% premium to the 60-day volume-weighted average price.

Capricor said the offering is expected to close around Friday and plans to use the proceeds mainly to support product development and general, administrative and corporate purposes.

Capricor shares were up 5% in recent trading.

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