Summary
- Rocket Pharmaceuticals, Inc. performed beautifully for me in the last half year.
- They have a number of catalysts in the next few months.
- Rocket has strong upside from here.
I covered Rocket Pharmaceuticals, Inc. ( RCKT ) 6 months ago, and also took a position. I am happy to report that the stock more than doubled in these few months, and I expect more upside.
Rocket Pharma is a gene therapy developer for rare diseases. It has four programs in clinical trials - RP-L102 (Fanconi anemia), RP-L201 (leukocyte adhesion deficiency-I), RP-301 (pyruvate kinase deficiency) and RP-A501 (Danon Disease). The first three programs use a lentiviral vector for their gene therapy, while the last one uses an AAV vector. The phase 2 FA program and the phase 1/2 LAD-I program are in registration-enabling studies.
In my previous RCKT article , I discussed data from 2018 for the FA program, 2020 data from the Danon program, 2022 LAD-I program data, and a toxicity issue in the Danon program that first led to a clinical hold, which was lifted, and then a crash in the stock after the company removed a higher dose cohort due to toxicity concerns. Two of these programs, FA and LAD-I, may have NDAs this year.
Here’s a quick summary of Rocket’s pipeline:
Rocket's pipeline | ||||
Project | Indication | Description | Latest clinical data | Status |
RP-L201 | Leukocyte adhesion deficiency-I | Ex vivo ITGB2 gene therapy, lentiviral vector | 100% overall survival at 12mth (9/9 pts) per ASGCT 2022 | Filing due H1 2023 |
RP-L102 | Fanconi anaemia | Ex vivo Fanca gene therapy, lentiviral vector | 6 of 10 pts showed increased MMC resistance at 12mth, Ash 2022 | Filing due H2 2023 |
RP-A501 | Danon disease | In vivo Lamp2B gene therapy, AAV9 vector | Increases in Lamp2B expression seen in ph1 | Ph2 pivotal study to start H1 2023 |
RP-L301 | Pyruvate kinase deficiency | Ex vivo PKLR gene therapy, lentiviral vector | 2 adult pts: Hb 13.2 & 14.7g/dl at 24 mth (from 7.4 & 7.0g/dl), Ash 2022 | Ph2 pivotal study to start 2023 |
REN-001 (via Renovacor) | BAG3-associated dilated cardiomyopathy | BAG3 gene therapy, AAV9 vector | N/A | Ph1 to start 2023 |
Source - Co presentations, through Evaluate.
In September, Rocket acquired heart disease gene therapy developer Renovacor in an all-stock deal. REN-001, their most advanced program, is an AAV-based gene therapy targeting BAG3-associated dilated cardiomyopathy ((DCM)), a type of heart failure.
In September, also, Rocket’s Danon Disease program produced further data which showed that the drug was safe and tolerable and showed clinical benefit in two children and four adults in a phase 1 trial. Other key data include:
The company said early pediatric efficacy data were consistent with initial improvements seen in adult patients at a similar timeframe of up to nine months follow-up and sustained clinical benefit across biomarker, clinical and functional parameters in currently enrolled adult patients at 24 to 36 months of follow-up.
In the pediatric group, LAMP2B gene expression by immunohistochemistry was 21.1% in the first patient (1008) at six months and 34.7% in the second patient (1009) at three months.
This is a solid achievement, because a number of other programs in cardiac gene therapy have met with failure because of: a) lack of knowledge of the underlying mechanism; and b) unreliable protein expression in heart tissue. Rocket’s early data has impressed analysts because RP-501 has been able to induce the relevant protein expression in heart tissue. The company plans to start a single arm, open label pivotal trial in H1 2023, and the trial will have a natural history comparator and a biomarker-based composite endpoint, the former because of the rarity of the disease, and lack of any other relevant molecule to compare with. The molecule comes with an RMAT tag in this indication.
Financials
RCKT has a market cap of $1.48bn and a cash reserve of $306mn. Research and development expenses were $43.4 million for the three months ended September 30, 2022, while general and administrative expenses were $15.1 million. At that rate, the company has enough cash for 4-5 quarters. Also in September, the company raised $108mn through a successful secondary offering. This increases its cash runway by another two quarters.
Rocket’s major weakness, some analysts have said, is lack of near-term major catalysts. However, this is hardly true. In 2023, they will be filing two NDAs and they will begin a third pivotal trial. By 2024, they should have one or two drugs approved for these rare diseases, which will start a nice little revenue stream. The company has some slick marketing ideas here - lighting up tall buildings with rare disease slogans and so on. I think, given time, and some well-needed funds, Rocket is going to go much higher than where it is now. Many analysts have strong ratings on the stock.
Bottom Line
Rocket Pharmaceuticals, Inc. is doing a lot of rare disease therapy development with a very strong set of data. It has been relatively successful both with its lentiviral program after bluebird’s earlier fiasco, and also with the cardiac gene therapy space which has seen many failures. Rocket Pharmaceuticals stock is up a lot in 6 months, which isn’t such a bad thing if you realize the potential of its programs. All in all, I am a buyer on any weakness.
For further details see:
Rocket Pharmaceuticals Has A Lot More Upside