Rocket Pharmaceuticals Reports Third Quarter 2020 Financial Results and Highlights Recent Progress

Rhea-AI Summary

Rocket Pharmaceuticals (NASDAQ: RCKT) reported its Q3 2020 financial results, highlighting advancements across its gene therapy pipeline for rare childhood disorders. The company noted positive data from the RP-L201 trial for LAD-I and initiated a higher dose trial of RP-A501 for Danon Disease. Despite challenges posed by the pandemic, patient enrollment continued. Rocket's cash position stood at $228.7 million, expecting to fund operations through Q2 2022, yet reported a net loss of $29 million or $0.53 per share.

Positive

• Progress in clinical programs, including RP-L201 for LAD-I and RP-A501 for Danon Disease.
• Strong cash position of $228.7 million expected to last into Q2 2022.
• Fast Track Designation for RP-L401 and Rare Pediatric Disease Designation for RP-A501.

Negative

• Net loss increased to $29 million, up from $19.3 million year-over-year.
• R&D expenses rose significantly to $21.7 million, indicating escalating operational costs.

NEW YORK--(BUSINESS WIRE)--Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) (“Rocket”), a clinical-stage company advancing an integrated and sustainable pipeline of genetic therapies for rare childhood disorders, today reports financial results for the quarter that ended September 30, 2020, along with an update on the Company's key pipeline developments, business operations and upcoming milestones.

“We are incredibly pleased with the steady progress we made across all five of our clinical programs this quarter. The data from our RP-L201 trial for LAD-I demonstrated the potential for a very robust and attractive profile for our ‘Process B’ lentiviral gene therapy pipeline. We also treated our first higher dose patient in our Phase 1 study of RP-A501 for the treatment of Danon Disease, and presented compelling preclinical data in IMO,” said Gaurav Shah, M.D., President and Chief Executive Officer of Rocket. “In addition, I am proud that against the backdrop of a global pandemic, while there have been some delays in patient follow up and data collection, we continued to enroll and treat patients in our LVV and AAV gene therapy programs as well as expand our clinical trials internationally. Finally, we made strong progress in the build-out of Rocket’s AAV R&D and manufacturing facility, with the ability to produce GMP product anticipated in 2021.”

Dr. Shah continued, “We are looking forward to sharing additional updates as we enter the fourth quarter. These data announcements include an update on the Phase 1 and 2 trials for FA ‘Process B’, and for the first time, Phase 1 clinical data from our two largest indications: RP-L301 for PKD and RP-A501 for Danon Disease. We believe we are advancing closer to our goal of taking drug products from the discovery phase to BLA submission and launch so we may help improve the lives of patients facing these rare and devastating childhood diseases.”

Key Pipeline Developments and Operational Updates

• Positive clinical update for the Company’s Leukocyte Adhesion Deficiency Program (LAD-I) presented at the European Society for Immunodeficiencies (ESID) 2020 Meeting along with preclinical data from the Company’s Infantile Malignant Osteopetrosis (IMO) program.
  • An oral presentation provided positive longer-term follow-up data from the Phase 1/2 clinical trial of RP-L201 for LAD-I. The data presented in the oral presentation are from two pediatric patients with severe LAD-I, as defined by CD18 expression of less than 2%. Both patients were treated with RP-L201, Rocket’s ex-vivo lentiviral gene therapy candidate. Patient L201-003-1001 was 9 years of age at treatment and has been followed for 12 months and Patient L201-003-1004 was 3 years of age at treatment and has been followed for 4 months. Treatments were well tolerated, and no safety issues were reported with infusion or post-treatment. Both subjects achieved hematopoietic reconstitution in less than 4 weeks. Patient L201-003-1001 demonstrated durable CD18 expression of 40%, peripheral blood VCN levels of 1.3, visible signs of improvement in existing skin lesions and no new infections reported 12 months post-treatment. Patient L201-003-1004 demonstrated CD18 expression of 28% and early peripheral blood VCN trending similarly to the first patient, reported 4 months post-treatment.
  • An e-poster highlighted preclinical trial data on RP-L401 for IMO. Preclinical data on IMO indicate that a modest level of engraftment corrects the disease phenotype in vivo, with increased long-term survival, tooth eruption, weight gain and normalized bone resorption. Results support acceleration into clinical development for RP-L401.
• First patient treated in the higher dose cohort of the Phase 1 dose-escalation clinical trial of RP-A501 for the treatment of Danon Disease. The first patient was treated at the higher dose level of 1.1×10¹⁴ genome copies/kilogram after clearance from the U.S. Food and Drug Administration (FDA) and the Independent Data Safety Monitoring Committee (IDSMC) to move to the higher dose cohort of the study. Preliminary Phase 1 data are anticipated in December assuming no further delays in patient data collection due to COVID-19.
• Opened the Research & Development (R&D) and Chemistry, Manufacturing and Controls (CMC) facility in Cranbury, New Jersey. Approximately half of the newly constructed 103,720 square foot facility will be dedicated to adeno-associated virus (AAV) Current Good Manufacturing Practice (cGMP) manufacturing. As previously guided, the first cGMP clinical product release is expected in 2021.
• Received additional regulatory designations for IMO and Danon Disease programs from U.S. Food and Drug Administration. RP-L401 gene therapy for IMO received Fast Track Designation and RP-A501 for Danon Disease received Rare Pediatric Disease Designation. The FDA's Fast Track program facilitates the development of products intended to treat serious conditions that have the potential to address unmet medical needs. The designation enables greater access to the FDA for the purpose of expediting the product's development, review and potential approval. The FDA grants Rare Pediatric Disease Designation for serious and life-threatening diseases that primarily affect children ages 18 years or younger and fewer than 200,000 people in the U.S.
• Expanded clinical sites for Fanconi Anemia (FA), Danon, LAD-I and IMO trials, adding to global centers of excellence. The newly added centers, which include some of the leading gene therapy research programs in the world, include: Great Ormond Street Hospital (GOSH), Children’s Hospital of Philadelphia (CHOP), the University of Minnesota and the University of California, Los Angeles (UCLA). We anticipate these additional sites will expand patient access to Rocket’s clinical trials worldwide.
• Hosted third Pyruvate Kinase Deficiency (PKD) Day in October. Continuing its commitment to the patient communities it serves, Rocket facilitated the first virtual edition of PKD Day. The event, intended for patients with PKD and their families, gave attendees an introduction to PKD, gene therapy and Rocket’s clinical program and provided time for a Q&A session with experts in the field and Rocket team members.

Anticipated Milestones

• FA (RP-L102)
  • Preliminary “Process B” data (12/20)
  • Updated “Process B” data (1H21)
• Danon Disease (RP-A501)
  • Preliminary Phase 1 data (12/20)
  • Updated Phase 1 data (2H21)
• LAD-I (RP-L201)
  • Phase 2 data (1H21)
• PKD (RP-L301)
  • Preliminary Phase 1 data (12/20)
  • Phase 1 data update (2H21)
• IMO (RP-L401)
  • Phase 1 data (2H21)

Upcoming Investor Conferences

• Piper Sandler 32^nd Annual Healthcare Conference, December 1, 2020
• Evercore ISI 3^rd Annual HealthCONx Conference, December 2, 2020

Third Quarter Financial Results

• Cash position. Cash, cash equivalents and investments as of September 30, 2020 were $228.7 million.
• Debt. Our balance sheet includes $52.0 million of fully convertible notes.
• R&D expenses. Research and development expenses were $21.7 million for the three months ended September 30, 2020, compared to $14.8 million for the three months ended September 30, 2019, primarily due to increases in manufacturing and development costs, clinical trial expenses, license fees, and compensation and benefit expenses due to increased R&D headcount.
• G&A expenses. General and administrative expenses were $5.7 million for the three months ended September 30, 2020, compared to $4.3 million for the three months ended September 30, 2019, primarily due to increases in non-cash stock compensation expense and an increase in compensation and benefit expenses due to increased G&A headcount.
• Net loss. Net loss was $29.0 million or $0.53 per share (basic and diluted) for the three months ended September 30, 2020, compared to $19.3 million or $0.38 per share (basic and diluted) for the three months ended September 30, 2019.
• Shares outstanding. 55,204,127 shares of common stock were outstanding as of September 30, 2020.

Financial Guidance

• Cash position. As of September 30, 2020, we had cash, cash equivalents and investments of $228.7 million. Rocket expects such resources will be sufficient to fund its operations into the second quarter of 2022.

About Rocket Pharmaceuticals, Inc.

Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) (“Rocket”) is advancing an integrated and sustainable pipeline of genetic therapies that correct the root cause of complex and rare childhood disorders. The company’s platform-agnostic approach enables it to design the best therapy for each indication, creating potentially transformative options for patients afflicted with rare genetic diseases. Rocket's clinical programs using lentiviral vector (LVV)-based gene therapy are for the treatment of Fanconi Anemia (FA), a difficult to treat genetic disease that leads to bone marrow failure and potentially cancer, Leukocyte Adhesion Deficiency-I (LAD-I), a severe pediatric genetic disorder that causes recurrent and life-threatening infections which are frequently fatal, Pyruvate Kinase Deficiency (PKD) a rare, monogenic red blood cell disorder resulting in increased red cell destruction and mild to life-threatening anemia and Infantile Malignant Osteopetrosis (IMO), a bone marrow-derived disorder. Rocket’s first clinical program using adeno-associated virus (AAV)-based gene therapy is for Danon disease, a devastating, pediatric heart failure condition. For more information about Rocket, please visit www.rocketpharma.com.

Rocket Cautionary Statement Regarding Forward-Looking Statements

Various statements in this release concerning Rocket's future expectations, plans and prospects, including without limitation, Rocket's expectations regarding its guidance for 2020 in light of COVID-19, the safety, effectiveness and timing of product candidates that Rocket may develop, to treat Fanconi Anemia (FA), Leukocyte Adhesion Deficiency-I (LAD-I), Pyruvate Kinase Deficiency (PKD), Infantile Malignant Osteopetrosis (IMO) and Danon Disease, and the safety, effectiveness and timing of related pre-clinical studies and clinical trials, may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995 and other federal securities laws and are subject to substantial risks, uncertainties and assumptions. You should not place reliance on these forward-looking statements, which often include words such as "believe," "expect," "anticipate," "intend," "plan," "will give," "estimate," "seek," "will," "may," "suggest" or similar terms, variations of such terms or the negative of those terms. Although Rocket believes that the expectations reflected in the forward-looking statements are reasonable, Rocket cannot guarantee such outcomes. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including, without limitation, Rocket's ability to monitor the impact of COVID-19 on its business operations and take steps to ensure the safety of patients, families and employees, the interest from patients and families for participation in each of Rocket’s ongoing trials, our expectations regarding the delays and impact of COVID-19 on clinical sites, patient enrollment, trial timelines and data readouts, our expectations regarding our drug supply for our ongoing and anticipated trials, actions of regulatory agencies, which may affect the initiation, timing and progress of pre-clinical studies and clinical trials of its product candidates, Rocket's dependence on third parties for development, manufacture, marketing, sales and distribution of product candidates, the outcome of litigation, and unexpected expenditures, as well as those risks more fully discussed in the section entitled "Risk Factors" in Rocket's Annual Report on Form 10-Q for the quarter ended June 30, 2020, filed August 5, 2020 with the SEC. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and Rocket undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Selected Financial Information Operating Results: (amounts in thousands, except share and per share data)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Revenue		$	-			$	-			$	-			$	-
Operating expenses:
Research and development			21,657				14,829				55,345				43,955
General and administrative			5,730				4,336				19,720				12,547
Total operating expenses			27,387				19,165				75,065				56,502
Loss from operations			(27,387	)			(19,165	)			(75,065	)			(56,502	)
Research and development incentives			-				-				-				250
Interest expense			(1,967	)			(1,466	)			(5,326	)			(4,615	)
Interest and other income net			518				979				1,913				2,522
(Amortization of premium) accretion of discount on investments - net			(244	)			368				(306	)			930
Net loss		$	(29,080	)		$	(19,284	)		$	(78,784	)		$	(57,415	)
Net loss per share attributable to common shareholders - basic and diluted		$	(0.53	)		$	(0.38	)		$	(1.43	)		$	(1.19	)
Weighted-average common shares outstanding - basic and diluted			55,188,956				50,364,649				55,077,254				48,270,771
Selected Balance Sheet Information (amounts in thousands)
		September 30, 2020				December 31, 2019
Cash, cash equivalents and investments			228,690				304,115
Total assets			335,496				372,121
Total liabilities			93,655				64,824
Total stockholders' equity			241,841				307,297