2. Capricor Therapeutics Inc. (NASDAQ:CAPR)
Short Float: 20.87%
Market Cap: $1.65 Billion
Stock Upside Potential: 91.22%
Capricor Therapeutics, Inc. (NASDAQ: CAPR) ranks No. 2 with a short float of 20.87%, a market capitalization of $1.65 billion, and upside potential of 91.22%. This is one of the most dramatic setups on the list because Capricor is approaching a potential regulatory turning point for Deramiocel, its therapy for Duchenne muscular dystrophy. For investors searching for biotech stocks with FDA catalysts, DMD stocks, rare disease stocks, cell therapy stocks, heavily shorted mid-cap and small-cap stocks to buy today, and stocks with big upside potential, CAPR has become a stock worth watching closely.
On May 13, B. Riley reiterated a Buy rating on Capricor Therapeutics with a $63 price target. The positive stance came as the company entered a pivotal stage in the potential approval process for Deramiocel. The company is facing a possible FDA review of a Biologics License Application, with a PDUFA target set for August. In biotech, a PDUFA date can be a major event because it gives investors a clear calendar marker for a potential regulatory decision.
The FDA has already accepted Capricor’s Class 2 resubmission as complete, which is an important procedural step. The company’s GMP manufacturing facility in San Diego has also completed an FDA Pre-License Inspection, with all Form 483 observations addressed. That detail matters because approval is not only about clinical data. Manufacturing readiness, quality systems, facility inspections, and commercial launch preparation can all affect whether a biotech company is truly ready to bring a product to market.
Capricor’s facility is expected to support the initial commercial launch, and manufacturing expansion is now expected in the first half of 2027, earlier than the previous late-2027 timeline. That acceleration suggests the company is preparing for a more serious commercial phase if regulatory approval moves forward. For a clinical-stage biotechnology company, that transition from development to launch preparation can change the way investors value the business.
Capricor focuses on developing cell and exosome-based therapeutics for rare and serious diseases. Its primary focus is Duchenne muscular dystrophy through regenerative and anti-inflammatory medicine. Duchenne muscular dystrophy is one of the most closely followed rare disease markets because it affects muscle function, has serious long-term consequences, and remains an area where families, clinicians, regulators, and biotech investors are all looking for better treatment options.
Financial position is another key part of the bull case. Capricor reportedly remains in a solid financial position to cover anticipated expenses and capital requirements through Q4 2027, excluding any potential revenue from product sales. That is important because many small-cap biotech companies face funding pressure before they can reach commercialization. CAPR’s ability to fund operations through a key period gives the company more room to execute.
The bearish case still exists. A 20.87% short float means a meaningful portion of the market is skeptical. Biotech investors know that FDA decisions are never guaranteed, and even approval does not automatically mean a smooth commercial launch. Pricing, reimbursement, physician adoption, manufacturing scale-up, and competition can all affect the actual revenue opportunity.
But the upside is obvious. With 91.22% stock upside potential and 31 hedge fund holders, Capricor has one of the strongest risk-reward profiles in this ranking. It is heavily shorted, but it also has a near-term regulatory story, a rare disease focus, manufacturing preparation, and a clear clinical-commercial bridge. That is why CAPR earns the No. 2 spot among the most shorted mid-cap and small-cap stocks to buy now.
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