Many Wall Street analysts reiterated their bullish views on Gene therapy company Rocket Pharmaceuticals ( NASDAQ: RCKT ) on Thursday, even after its shares fell ~17% in reaction to an update on its candidate for Danon Disease RP-A501.
After an end-of-Phase 1 meeting, the company announced its plans to use a natural history comparator and a biomarker-based composite endpoint in a pivotal study for RP-A501 in Danon disease, expected to initiate in H1 2023.
Noting that the update was "well within our expectations for a pivotal study design," Needham reiterated the Buy rating and $60 per share target on Rocket ( RCKT ).
"We expect RCKT to be under pressure today, given expectations of greater clarity at this release," the analysts led by Gil Blum wrote, noting that "they would be buyers on weakness."
UBS analyst Colin Bristow and the team offered similar views citing the lack of catalysts in 2023 as an additional reason for today's weakness. Maintaining the Buy rating and $60 per share target on RCKT, UBS argued that the press release lacked specifics on the trial size and endpoints as the FDA has yet to sign off its protocol.
Meanwhile, citing the company management, JPMorgan said Rocket ( RCKT ) intends to submit a finalized trial protocol to the agency in early 2023 and expects to post the trial details to a federal registry in H1 2023.
"Bigger picture, with the Danon Disease registrational path becoming increasingly solidified, we continue to view RCKT as a differentiated gene therapy player, backed by a mature clinical pipeline," JPMorgan analysts led by Eric Joseph wrote.
The team maintained the Overweight rating on the stock, noting that the current weakness offers a compelling long-term entry point.
Despite the sharp decline in the biotech space, Rocket ( RCKT ) has outperformed the broader market this year, as indicated in this graph.
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Rocket defended after update on Danone Disease candidate