Rocket Pharmaceuticals, Inc. (RCKT) Earnings Call Transcript & Summary

Thank you, everyone. My name is Gena Wang. I'm SMid-Cap biotech analyst at Barclays. I first hope everyone stay healthy, and I would like to thank all the participants, the investors, companies and especially our event team and corporate access team, who made this virtual health care conference possible. With that, I would like to introduce our next speaker, Gaurav Shah, President and CEO from Rocket. Gaurav, I will hand over to you.

Hi, Gena. Thank you, and thank you for continuing to host this webcast despite the travel restrictions. And I also hope everyone stays healthy and safe in the days to come. So I will spend a few minutes talking through an overview of Rocket. And then, I think, Gena, you and I can go back and forth on Q&A. So this is the decade of gene therapy. We're very excited about the prospect of being a part of that evolving gene therapy story for curative medicines for really devastating diseases. And Rocket was started in 2015 with the idea that there were many diseases for which curative gene therapies could be relatively easily developed using existing enabled-technologies such as lentiviral, ex vivo and AAV in vivo therapies. We targeted areas of high unmet need, in which we could be, first, best and only in class where we could address diseases via a direct on-target mechanism of action, and where we could have clear clinical end points to achieve relatively rapid approvals for these diseases. For those of you who are looking at the webcast, I refer you to Slide 4. So as of today, we have 4 ex vivo lenti programs, which are Fanconi Anemia, Leukocyte Adhesion Deficiency-I, Pyruvate Kinase Deficiency and osteopetrosis, and we have now 1 in vivo AAV therapy, which is Danon disease. We have several near and medium-term milestones that we are excited to look forward to. First of all, all 5 of these programs will be in the clinic this year, including osteopetrosis. As we've discussed in previous meetings and conferences, 4 of these are already in clinic now, including 2 in registration-enabling Phase II programs, which are Fanconi Anemia and LAD-I. 2 more are in clinic, which include Danon disease and PKD, and we anticipate readouts in all 4 of these programs during 2020. In 2021 and 2022, we anticipate our first global submissions in both the U.S. and EU. And we also announced earlier this year that we are building in-house manufacturing capabilities, specifically and largely dedicated to the AAV programs near Princeton, New Jersey, but also to support QC and analytics development for the whole program. In fact, all the programs, all 5 programs. I also want to note that all of these programs are potentially eligible for pediatric priority review vouchers, which means that, especially in those that are already in registration phase, such as Fanconi Anemia and LAD-I, we do anticipate the possibility of getting a PRV for those programs. On Slide 5, our management team is built around drug development experience. Most of the people here that you see on Slide 5 have actually launched drugs in the past. We want to be a long-term sustainable, integrated company that's able to take programs from the discovery stage all the way through commercialization. And this is an extremely important year for us given all the upcoming data readouts across 4 of these programs. On Slide 6 is our pipeline, and I'll just spend maybe a couple of minutes on this slide and then we can move to Q&A. Our first disease that we've mentioned here on the Slide 6 is Danon disease, and this probably represents our biggest upside as it does represent the biggest patient population of 15,000 to 30,000 in the U.S. plus EU prevalence. Danon disease is a multi-organ disease that especially involves the heart and leads to early mortality, especially in boys who have this difficult disease. Heart transplant is an option for the heart, but does not address other organs affected, including skeletal muscle and CNS. An in vivo AAV approach here, AAV9 approach, has the potential to address all of these organs and what we think will be at relatively modest to moderate doses compared with those that might be needed to achieve efficacy in skeletal muscle and CNS. Fanconi Anemia is a bone marrow-derived disorder in which stem cells fizzle out in the bone marrow over the course of the first decade of life, and most patients enter bone marrow failure and later have leukemia and other malignancies. An ex vivo lenti approach in this program has the potential to aggregate that on-slot of bone marrow failure, and therefore, prevent bone marrow failure, leukemia and other malignancies, even without any conditioning whatsoever. I know this morning, we -- a lot of people might have seen the news about our collaboration with Forty Seven, which we're very excited about, and I'll come back to addressing that during the Q&A part. But that does represent a part of our life cycle management strategy and is not at all part of our initial registration trial, which, again, is going to be done with 0 conditioning in agreement with both FDA and EMA. LAD-I is a disorder of neutrophils in which patients have recurrent infections, including severe pneumonias and other similar infections that lead to early mortality. We showed data in LAD-I last year in which 1 patient had a reconstitution of protein expression from less than 1% to 45% CD18 expression on neutrophils, and was also associated with clear clinical benefit at 3 months in this patient. Pyruvate Kinase Deficiency is a program that is in the clinic now. It's a red cell hemolytic disorder and this -- we will talk about this more as well, but it does represent the biggest lenti opportunity of 3,000 to 8,000 patients in the U.S. plus EU. And we're very excited about starting that program and showing early data later this year. Osteopetrosis is the last program. It is a bone disorder, also a bone marrow disorder, in which osteoclasts are not functioning properly, so bone can be laid down but not resorbed, and this also leads to early mortality. So in essence, all these disorders are tied together by the possibility of transplant, whether it's bone marrow transplant or cardiac transplant, as being potentially curative but highly toxic and in which gene therapy may have a major role to play in this decade. Other catalysts this year is -- specifically related to the pipeline include: number one, additional Fanconi data in the first half; number two, mature registration level of Fanconi data using the trial with no conditioning in the second half of this year; number three, additional data in LAD-I on the registration-enabling trial; and number four, preliminary data in Danon disease; and number five, preliminary data in Pyruvate Kinase Deficiency in the second half of this year. So really, over the next 6 to 9 months, multiple data readouts to look forward to. In terms of our cash balance, we have -- we had north of $300 million ending last year, and we anticipate this will last us into the beginning of 2022. And this does incorporate the manufacturing build out as well as all the other news that you've seen recently. Thank you.

Thank you. So maybe I'll just start with Fanconi, since you just announced the partnership with Forty Seven. Could you give a little bit more color why you fund that partnership? And what additional strengths you can bring for this treatment?

Yes, absolutely. So this is a very exciting partnership for us and for Forty Seven. We've been working on it for quite some time. So first of all, I want to mention a few points about this. First of all, we remain highly confident in our current Fanconi Anemia registration strategy. Enrollment is going as planned, so no change to the prior guidance of approximately half of the patients in the registration trial needing to achieve 10% mitomycin C resistance between 1 and 3 years in order to be ready for a filing. And this is, again, in the absence of any conditioning, whether it's cytotoxic conditioning or non-genotoxic conditioning as we would do with Forty Seven. So number one, we remain confident in the current plan, no changes. Also related to that trial, we have in our hands enough vector supply to complete this trial to the end and also to complete that current LAD and PKD trials. So I want to point out that we're not currently dependent on any CDMOs to get these registration trials to completion. That's a question that's been asked in recent days. Thirdly, non-genotoxic conditioning has actually been a part of our long-term strategy since the beginning. We announced a collaboration with Stanford about 2 years ago in this regard, and today's news is essentially showing who the commercial collaborator would be. This particular collaboration with Forty Seven does not involve any exchange of IP, cash or economic rights to any programs. And we also thought that Fanconi Anemia would be the first place to apply the Forty Seven approach of combination CD117 and CD47 antibodies because for other programs, withholding myeloablation might be viewed as a negative upfront, while in Fanconi, we're not using any myeloablation anyway. So Fanconi seemed to be the appropriate place to achieve proof of concept. That said, this work may be especially relevant for PKD, LAD, osteopetrosis and other programs in which conditioning is part of the standard treatment, unlike Fanconi as a workaround from cytotoxic conditioning. This would be similar to the approach being used by bluebird. Now with regard to Fanconi Anemia, again, conditioning is not part of -- were necessary for the registration, as agreed with the agencies. But we've always thought about the pipeline and treating patients for the long term. We've always been a company that thinks about true benefits to patients, even beyond the initial approval that we're already going for as we move into commercialization. We want to make sure that we capture as large a population as possible. There may be patients who have gone too far down the road toward bone marrow failure, and in whom a touch of preconditioning using a non-genotoxic conditioning agent may be advantageous to get them to the same end points of MMC resistance. These are patients that are not currently in our trial and were also not captured in our current addressable market estimates. So if anything, the Forty Seven opportunity may represent an upside to the current addressable market estimates.

Okay. That's very helpful. So for your current program, can you elaborate a little bit the key differences of Process A and Process B? And what can we expect to see in patients treated with Process B?

Sure. So Process A was a process that we licensed in from our partners at CIEMAT. And while it was a process that led to definitive proof of concept in several patients, it was not a reproducible process that we can move forward to a regulatory pathway. The improvements in Process B over Process A include: number one, using a commercial-grade vector manufacturer, and that's important because it's important to have a pure vector. Vector purity is important for getting VCNs above 1. Secondly, we're using transduction enhancers to further support that vector copy number. Thirdly, we've modified the CD34 enrichment process to some extent so that we can capture what we think are higher-quality stem cells that could lead to better engraftment results. And also in Fanconi, we're using a fresh product, which is important because a frozen product might lead to cell loss, especially during the filing phase. So those are the key differences. In terms of what to expect moving forward with this program, it is not different from what we've guided to before. We can't necessarily accelerate the time it takes to engraftment because a lot of that time to engraftment is likely related to the patient's underlying bone marrow health. What we can do is ensure that more of these patients reach engraftment. While not everyone in the Phase I program at CIEMAT have yet reached engraftment, we think that the Process B ensures that more patients will reach that engraftment potential. And again, the Phase II registration program for Fanconi only requires half of them to reach engraftment of 10% mitomycin C resistance in order to meet the statistical end points.

Okay. So you mentioned that there will be fresh cycle. I'm just wondering how the -- logistically, would that cause any challenges? Or would it be limited to the certain sites and then time as well?

We're slowly increasing the stability. We're performing stability studies. So whereas before, we weren't sure how long fresh cells can be vital outside the body. We now know that it's long enough to allow transport really across the United States and also across Europe. So once we do the cell processing, we're in a position where we can do it at 1 facility and supply patients anywhere in the United States, and then 1 facility in Europe, where we can supply patients anywhere in Europe with no redundancy needed. So...

I see. How many days are we talking about?

We haven't disclosed that, but we will as we move forward with the program. But if you think about it, flight time plus travel time is accounted for within that stability time frame.

Okay. So I would think like from East Coast to West Coast, fly 5 hours. And EMA now, we're talking about 1 to 2 days?

We could estimate something like that. Yes.

Okay. Okay. So now I move to maybe Danon program, that's AAV9-based gene therapy. Just wondering if you could educate us a little bit about the disease, like which organs are affected besides heart and also what promoter was used in the program.

Yes, right. So other organs that are affected include skeletal muscle and CNS. These are patients who often present with peripheral muscle weakness as their first presentation, and then also sometimes learning disabilities as their CNS presentation before manifesting as heart failure. Those are the 3 big ones. The trifecta of Danon is heart, skeletal muscle and CNS. We're using a ubiquitous promoter because it does affect many organs. So we decided to shy away from either a cardiac or muscle-specific promoter. We're using a chimeric CAG promoter, which consists of the CMV enhancer and a chicken beta-actin promoter.

Okay. Could you remind us how many patients have been dosed so far?

Yes. So we've now dosed 3 patients. The most recent we had announced at JPMorgan, and we anticipate moving forward with additional cohorts. And we haven't announced the dose for the next cohort yet, but we will do so as it moves into the next cohort.

Okay. So for the first 3 patients, have you seen any -- what about safety signals? And also any biomarker you are looking for?

So we've commented on safety. We're not yet in the position to comment on any efficacy or biomarker signals. We have not seen major safety issues to date, such as those seen in other programs. We've also not have to use eculizumab to date. And as we move forward, I do want to also say that we've been very fortunate to learn from our colleagues and other partners in the field to figure out exactly how to get ahead of some of these issues before they happen. I know other programs have encountered issues with both complement activation and other immunogenicity. We've taken these into consideration and we have precautions in place in our current protocol and also are working with partners to ensure that we administer a safe AAV9 vector to these patients, and that we can dose escalate in order to achieve tropism for, not just heart but also for skeletal muscle and CNS.

So what is the average age of the patients, the first 3 patients that were enrolled?

The first 3 are 15 or older. We haven't disclosed the ages or the weights on any of these patients yet. And as we move forward, we do have an additional cohort in which we'll treat these patients at a higher dose. The low dose was 6.7^13. We'll go to a higher dose with these 15 and older patients and then a cohort will treat younger patients that are aged 8 to 14. Ultimately, I do want to say that the earlier we institute the treatment, the better because prevention is better than treatment. So right now, we'll be going down to age 8. And in the future, it may be below age 18.

Okay. And you did say you're putting a precaution, but did you see any sign of, say, complement activation or platelet count? Any sign of that in the first 3 patients?

We haven't had to use Soliris. We haven't seen major platelet drops of any kind that would make us nervous about the need to use Soliris. So we haven't used Soliris on actual lab values and things like that. I'm not able to comment at the moment. But when we present the comprehensive data update at the end of the year, that will be part of the presentation.

Okay. Okay. And then based on your animal data, is the first dose, 6.7^13, should that dose fall into the therapeutic window?

According to the preclinical work, if you look back at the data that Eric Adler presented at ACC and his group presented at ASGCT, we think that we're right on the low end of that dose response curve. And -- but essentially, this low dose is meant to be a safety-enabling dose. So we know that we have a safe vector before we dose escalate. So the expectation here is largely around figuring out safety. Like I said, we passed that particular major safety concern hurdle with the first 3 patients that are low dose. And on terms of efficacy, we're not going to comment or speculate on which dose will lead to efficacy, except to say a couple of points. One is that we want to address all 3 organs. So I'm glad you asked that question around which organs are affected. Even if we saw efficacy only in the heart, this is a multi-organ disease, so we want to get to a point where we're addressing all 3 major organs. And I also want to say that in -- nature has a good experiment here in terms of what amount of protein expression we need in the heart. And we don't have any definitive data on this yet, but females with Danon disease probably have about 30% -- 25% to 30% LAMP-2 expression. We know they have 50%, but there's a lot of X inactivation. So most experts agree in about 25% to 30% normal LAMP-2 expression in females. And that 25% to 30% seems to add about 25 years of life. While boys die in the -- unfortunately, in their early 20s, females are living into their 40 and 50s. So 25% to 30% might recapitulate a female phenotype, but even something like 10% to 25% might be enough to start showing some basic efficacy and clinical impact that could lead to an approval. So as we disclose data over time at both low and high doses, that's our best thinking based on the natural history of Danon disease that we have to date in terms of what amount of protein expression is going to be relevant.

Okay. So when you're referring to 25% to 30%, are these the same across the 3 organs, the heart, muscle, CNS?

Most likely, yes. Most likely, yes, based on what we know of -- from male patients as well.

Okay. So from your AAV9 program, did you do a comparison of the expression, or in the animal data, to show the expression level across the 3 organs? Are they pretty similar?

Yes, we did it. Yes. No, so cardiac tropism is definitely the highest in our mouse as well as nonhuman primate, where we know that the VCNs in heart are 10x higher than from muscle or for CNS. In fact, even we have some data in humans now because of an unfortunate infant who passed away with SMA-1, in which the cardiac VCN was also about 3 to 4x higher than it was for muscle or CNS in a real patient. So we know that cardiac tropism is higher. In nonhuman primate studies at ASGCT last year, we also showed that protein expression in the heart was higher than it was for muscle or CNS. So of course, this is preclinical work and real patient data with Danon disease will be later this year. And I also -- sorry, we are doing cardiac biopsies as well as skeletal muscle biopsies as part of our biomarker efforts.

I see. I see. So when you are -- like, let's say, you are aiming for certain percentage of your clinical benefit, so would that be only -- because it seems like you may show like -- let's say, you show 25% to 30% in the heart, but may only show 2% or 3% in muscle. How would you pick, like -- so what level will you choose? Like 25% to 30%, would that be at the muscle or would be at the heart?

No. So the 25%, 30% that I was talking about for females, which might translate to even clinical benefit as low as 10%. So even if you have -- let me clarify. So first of all, FDA has said that you need to focus on the heart. So approvability is really related to the clinical impact in the heart. However, for the sake of improving the patient's life and extending longevity and quality of life as long as possible, we're committed to going as high dose as possible safely in order to target heart, muscle and CNS, right? So that's an important point to make. The other point, though, if you're just focusing on the heart, the 25% to 30% in females I'm talking about relates to heart, which is the cause of mortality. But even if something as low as 10% could be enough theoretically because most approvals don't need a 20- to 30-year survival benefit. If we can prevent time to transplant only by a few years, we'd still think we have a viable path to approval. However, it's our duty, responsibility and also given our focus on the long-term viability of this program across all organs and across -- for many, many patients, we want to push the dose as high as possible safely to address all the organs.

Okay. Okay, that's very helpful. So if this -- focusing on heart, what kind of functional end point will you be thinking? Do you want to cover all 3 muscle -- sorry, all 3 organs or the functional end point will be mainly focusing on the heart?

The functional end point -- great question. The functional end point will be heart-based. And we don't know what those are yet. The Phase I is designed, in addition to safety, to figure out what those end points will be, including probably what will be a biomarker as well as what will be a clinically-relevant functional end point. So there's probably 4 buckets that we can put the readout into. One is circulating enzyme levels, which include troponin and CK, because many of these are elevated in Danon patients, and the level of elevation of these enzymes correlates with disease severity. So improvements in these enzymes may mean improvement in disease. The second is actual biopsy, which would include, of course, VCN and protein expression, as we've already discussed, but also histology and other measures. The third would be imaging, where we might look for end points, such as injection fraction or global longitudinal strain or other measures of direct impact to the heart. And the fourth would be more functional measures, such as 6-minute walk test or the like. So this protocol is set up to capture all of those. And I think a readout needs to take all of them into account, and that's going to help us figure out what the end point is for the Phase II registration trial.

Okay. That's very helpful. I think we are running over time. Thank you very much for giving us this opportunity, and...

Thank you.

Thank you. And thank you, everyone, for dialing. I think this concludes our call.