The Capricor lawsuit against NS Pharma is a breach of contract action Capricor Therapeutics filed on May 7, 2026, seeking to tear up the 2022 agreement that gave NS Pharma and its parent Nippon Shinyaku the exclusive right to sell Capricor’s Duchenne muscular dystrophy cell therapy, deramiocel, in the United States. Capricor alleges its partner failed to prepare for launch and that a pricing formula in the contract collides with Medicare reimbursement rules in a way that makes the drug economically unworkable. The case is now in federal court in New Jersey, with jurisdictional and arbitration motions pending.1Capricor Therapeutics. Capricor Therapeutics 8-K Filing
What Capricor Is Alleging
Capricor filed its complaint for equitable relief in the Superior Court of New Jersey, Chancery Division, Bergen County, naming both Nippon Shinyaku Co., Ltd. and its U.S. subsidiary NS Pharma, Inc. The target is the Commercialization and Distribution Agreement the parties signed on January 24, 2022, which handed the defendants exclusive U.S. rights to promote, market, sell, and distribute deramiocel.2SEC. Capricor Therapeutics Exhibit 99.2
The complaint alleges NS Pharma failed to use “commercially reasonable efforts” to prepare for a U.S. launch, neglecting core tasks including completing an acceptable revenue model, setting a realistic wholesale price, and running mock launch exercises. It also alleges NS Pharma entered subdistribution agreements with third parties without the written consent the contract requires.2SEC. Capricor Therapeutics Exhibit 99.2 According to Fierce Pharma, Capricor claims NS Pharma essentially stopped all launch preparations after the FDA issued a complete response letter rejecting the drug’s initial application in July 2025.3Fierce Pharma. Capricor Files Breach of Contract Lawsuit Against U.S. Partner NS Pharma
The Pricing Flaw at the Center of the Dispute
The heart of the case is what Capricor calls a “fundamental pricing flaw” in the 2022 agreement. Medicare caps drug reimbursement at 106% of the Average Sales Price. Capricor argues that under the payment structure between the two companies, neither side could afford to manufacture, distribute, and sell deramiocel while staying within that ceiling. Because Medicare pricing also drives what Medicaid and private insurers pay, the complaint says the flaw makes distribution economically unworkable across all major payer categories.2SEC. Capricor Therapeutics Exhibit 99.2
Capricor frames this as a mutual mistake. Neither party, the complaint asserts, understood how the pricing formula would interact with reimbursement rules when they signed the deal. Capricor says it tried to negotiate a fix, but NS Pharma refused to compromise.4Capricor Therapeutics. Capricor Therapeutics Takes Legal Action to Protect Patient Access Instead, according to the complaint, NS Pharma tried to use its own lack of readiness as leverage to demand a new “private-label distribution” arrangement that would have required Capricor to hand over control of deramiocel entirely. Capricor rejected that proposal and treated it as a repudiation of the original agreement.2SEC. Capricor Therapeutics Exhibit 99.2
What Capricor Wants From the Court
Capricor is seeking rescission of the distribution agreement, a declaratory judgment confirming its right to distribute deramiocel directly or through other partners, and a preliminary injunction to preserve its ability to get the drug to patients if the FDA approves it.1Capricor Therapeutics. Capricor Therapeutics 8-K Filing CEO Dr. Linda Marbán has stressed urgency, saying that because DMD is progressive and fatal, “every month of delay” leads to “irreversible loss” of muscle function in patients.4Capricor Therapeutics. Capricor Therapeutics Takes Legal Action to Protect Patient Access
Nippon Shinyaku’s Response
Nippon Shinyaku responded the day after the filing with a press release stating that “Capricor’s claims lack merit.” The company said it and NS Pharma had “responded appropriately and sincerely” regarding U.S. launch preparations and that they “remain open to discussions with Capricor to maximize the value of CAP-1002 (deramiocel).”5Nippon Shinyaku. Nippon Shinyaku Response to Capricor Lawsuit As of mid-June 2026, no counterclaim from NS Pharma had appeared on the federal court docket.6PACER Monitor. Capricor Therapeutics Inc v. Nippon Shinyaku Co Ltd et al
Where the Case Stands
The case has already moved through a jurisdictional tug-of-war. On May 20, 2026, NS Pharma removed it from state court to the U.S. District Court for the District of New Jersey, where it was assigned case number 2:26-cv-05788.7GovInfo. Capricor Therapeutics Inc v. Nippon Shinyaku Co Ltd et al Five days later, NS Pharma moved to transfer the case to a federal court in New York. Capricor countered with a motion to remand back to state court, arguing the federal court lacks jurisdiction. On June 8, 2026, NS Pharma also moved to compel arbitration.6PACER Monitor. Capricor Therapeutics Inc v. Nippon Shinyaku Co Ltd et al
Judge Julien Xavier Neals set oral argument on the remand question for June 17, 2026, with the transfer motion and arbitration motion scheduled for July 6, 2026. On the preliminary injunction, NS Pharma’s opposition was due June 26 and Capricor’s reply July 6. No hearing date has been set for the injunction itself.6PACER Monitor. Capricor Therapeutics Inc v. Nippon Shinyaku Co Ltd et al
Why the Timing Matters
The urgency comes from the FDA calendar. Capricor’s initial application, backed largely by Phase 2 HOPE-2 data, drew a complete response letter in July 2025. The company then resubmitted with results from the Phase 3 HOPE-3 trial announced in December 2025, which met its primary and key secondary endpoints, slowing decline in upper-limb function by 54% and cardiac decline by 91% compared to placebo.8Capricor Therapeutics. Capricor Therapeutics Announces Positive Topline Results From Phase 3 HOPE-3 Trial The FDA accepted the resubmission as a Class 2 review with a target action date of August 22, 2026.9Capricor Therapeutics. 10Guru Focus. Capricor Therapeutics Faces Legal Setback, Shares Drop 11% The company reported a first-quarter 2026 net loss of $33.9 million, up from $24.4 million a year earlier, and held roughly $278.6 million in cash and securities as of March 31, 2026, which management said would fund operations through late 2027.11Capricor Therapeutics. Capricor Therapeutics Reports First Quarter 2026 Financial Results
In its 10-Q filing, Capricor listed the outcome of the NS Pharma litigation and its “ability to market and sell Deramiocel itself or through distribution channels other than NS” among its risk factors.12StreetInsider. Form 10-Q Capricor Therapeutics, For Mar 31 The company also disclosed that it expects a new Chief Commercial Officer with direct DMD experience to join within weeks, a hire consistent with preparing for a self-managed launch.11Capricor Therapeutics. Capricor Therapeutics Reports First Quarter 2026 Financial Results
A separate securities fraud class action, filed by shareholders in 2025 over statements made before the FDA’s initial rejection, is proceeding independently of the NS Pharma dispute.