On March 5, 2020 Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT) ("Rocket"), a clinical-stage company advancing an integrated and sustainable pipeline of genetic therapies for rare childhood disorders, reported financial results for the year ended December 31, 2019, and provides an update on the Company’s recent pipeline developments, as well as upcoming milestones (Press release, Rocket Pharmaceuticals, MAR 5, 2020, View Source [SID1234555234]).
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"2019 was a pivotal year for Rocket marked by multiple clinical and regulatory achievements across the pipeline," said Gaurav Shah, M.D., Chief Executive Officer and President of Rocket. "We now have four gene therapy programs in the clinic, have established proof of concept for our lenti pipeline utilizing our commercial-grade ‘Process B’ manufacturing in both FA and LAD-I and have treated the first three patients in our Phase 1 trial for Danon Disease."
Dr. Shah continued, "We are excited to build upon the momentum by bringing our fifth program to the clinic, advancing FA and LAD-I with BLA/MAA filings commencing in the next two to three years and completing our R&D and manufacturing facility. In addition to reporting progress from our FA and LAD-I programs, we’re looking forward to presenting initial proof of concept data from PKD and Danon this year. With these anticipated milestones by year end, we are even closer to making our gene therapies available to patients and families with rare disease."
Full Year 2019 and Recent Pipeline Developments
Rocket expands footprint in Cranbury, New Jersey. Rocket’s Research & Development (R&D) and Chemistry, Manufacturing and Controls (CMC) operations will be housed in a new 103,720 square foot facility, of which 50,000 square feet will be dedicated to adeno-associated virus (AAV) Current Good Manufacturing Practice (cGMP) manufacturing. The manufacturing facility will result in a one-time additional spend of $30 million in the first half of 2020. With construction underway, Rocket has secured adequate supply of cGMP AAV9 to commercialization in partnership with a contract manufacturing organization (CMO) and established an agreed path forward with the Agency using the current process. Occupancy is anticipated in the first half of 2020, with first cGMP clinical product release expected in 2021.
Four gene therapy programs have entered the clinic. With the initiation of the global Phase 1 trial of RP-L301 for Pyruvate Kinase Deficiency (PKD) in the fourth quarter, Rocket has advanced four gene therapy candidates into the clinic. In December, the Company announced treatment of the first patient in the global registrational Phase 2 study of RP-L102 "Process B" for Fanconi Anemia (FA), representing the launch of the Company’s first Phase 2 trial. A Phase 1/2 trial of RP-L201 for Leukocyte Adhesion Deficiency-I (LAD-I) and a Phase 1 trial of RP-A501 for Danon Disease are ongoing. Data updates from each of these programs as well as for PKD are expected throughout 2020.
Proof of concept for the lenti pipeline established using "Process B". "Process B" is an optimized manufacturing method which incorporates a modified stem cell enrichment process, transduction enhancers, as well as commercial-grade vector and final drug product. Preliminary Phase 1 data highlight the potential of RP-L102 "Process B" in treating FA. "Process B" allows for consistent drug product across patients and a vector copy number (VCN) two to three-fold higher than that administered to optimally-treated "Process A" patients. These patients also demonstrated early signs of engraftment and bone marrow restoration. Results from the Phase 1/2 trial of LAD-I also establish the potential of this manufacturing process, with preliminary data from the first patient treated showing drug product VCN of 3.8, a 3-month post-treatment myeloid VCN of 1.5 and a 3-month post-treatment CD18 expression level of 45%, a clear increase as compared to the pre-treatment level of < 1%.
Global registrational Phase 2 trial of RP-L102 for FA is underway. The first patient has been treated in the global registrational Phase 2 trial of RP-L102 for FA and enrollment continues. The study initiation follows alignment from the European Medicines Agency (EMA) and U.S. Food and Drug Administration (FDA) on trial design and the primary endpoint of resistance to mitomycin-C (MMC), a measure of bone marrow cell correction. The global trial will enroll 10 patients from the U.S. and EU. Patients will receive a single intravenous infusion of RP-L102 that utilizes fresh cells and "Process B". The primary endpoint of improved MMC-resistance may also serve as a surrogate endpoint for accelerated approval. Preliminary data are expected in the second half of 2020.
Enrollment continues in Phase 1 trial of RP-L301 for PKD. The global, open-label, single-arm clinical trial will enroll six adult and pediatric transfusion-dependent PKD patients in the U.S. and Europe. The trial is designed to assess the safety, tolerability and preliminary efficacy of RP-L301. Preliminary data are anticipated in the second half of 2020.
Three patients have been treated in the low dose cohort in the Phase 1 clinical trial of RP-A501 for Danon Disease. No major safety concerns have been observed in any of the three patients treated. Phase 1 data are expected in the second half of 2020.
Three regulatory designations were awarded across the pipeline, including PRIME, Fast Track and Rare Pediatric Disease. RP-L102 for FA received EMA PRIority MEdicines (PRIME) eligibility, RP-L301 for PKD received Fast Track designation from the FDA and RP-L401 for Infantile Malignant Osteopetrosis (IMO) received Rare Pediatric Disease designation from the FDA. Each designation provides numerous incentives to support the development of Rocket’s programs, including increased access to regulatory authorities and expedited development and review timelines.
Company expands research and development collaborations for LAD-I. Rocket announced a partnership with the University of California, Los Angeles (UCLA) to lead U.S. clinical development efforts for LAD-I. The Company also received a $6.5 million grant from the California Institute for Regenerative Medicine (CIRM) to support the Phase 1/2 registrational clinical trial of RP-L201 for LAD-I.
Rocket strengthens its balance sheet by extending the maturity of the existing convertible notes and securing ~$188 million in two public equity offerings. Rocket extended the maturity of the 5.75% convertible notes due August 2021. The Company conducted an exchange offering and successfully exchanged $39.35 million of the outstanding $52 million convertible notes. The new notes will mature on August 1, 2022 and have an interest payment of 6.25% per annum. The remainder of the notes will retain the existing maturity date and interest payment. Additionally, in 2019 the Company closed two oversubscribed underwritten public offerings of common stock for gross proceeds of approximately $188 million.
Anticipated Milestones
FA (RP-L102)
Additional data update (2Q)
Preliminary Phase 2 data (2H)
Danon Disease (RP-A501)
Danon Disease day (1Q)
Cohort 1 complete (1Q)
Advancing to next cohort (2Q)
Phase 1 data (2H)
LAD-I (RP-L201)
Phase 1 data update (2H)
Initiate Phase 2 study (2H)
PKD (RP-L301)
First patient treatment (2Q)
Preliminary Phase 1 data (2H)
IMO (RP-L401)
Initiation of clinical study (2H)
Upcoming Investor Conferences
Annual Barclays Global Healthcare Conference—March 11, 2020 in Miami, F.L.
Oppenheimer’s 30th Annual Healthcare Conference—March 18, 2020 in New York, N.Y.
2nd Annual Guggenheim Genomic Medicines and Rare Disease Day—April 3, 2020 in New York, N.Y.
Fourth Quarter and Full Year 2019 Financial Results
Cash position. Cash, cash equivalents and investments as of December 31, 2019, were $304.1 million.
Debt. Our balance sheet includes $52.0 million of fully convertible notes.
R&D expenses. Research and development expenses were $14.7 million and $58.6 million for the three and twelve months ended December 31, 2019, compared to $23.7 million and $53.3 million for the three and twelve months ended December 31, 2018. The increase in research and development expenses for the twelve months ended December 31, 2019, was primarily driven by an increase in clinical trial expenses and an increase in compensation expense due to increased headcount. The decrease in research and development expenses for the three months ended December 31, 2019 was primarily due to a one time license fee payment made in the three months ended December 31, 2018.
G&A expenses. General and administrative expenses were $5.0 million and $17.5 million for the three and twelve months ended December 31, 2019, compared to $2.9 million and $17.9 million for the three and twelve months ended December 31, 2018. The increase in general and administrative expenses for three months ended December 31, 2019, was primarily driven by an increase in compensation expense and non-cash stock-based compensation expense due to increased headcount.
Net loss. Net loss was $19.9 million and $77.3 million or $0.39 and $1.58 per share (basic and diluted) for the three and twelve months ended December 31, 2019, compared to $27.3 million and $74.5 million or $0.66 and $1.89 per share (basic and diluted) for the three and twelve months ended December 31, 2018.
Shares outstanding. 54,773,061 shares of common stock were outstanding as of December 31, 2019.
Financial Guidance
Cash position. As of December 31, 2019, we had cash, cash equivalents and investments of $304.1 million. Rocket expects such resources will be sufficient to fund its operations into 2022.