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

All right. Good afternoon. Thanks, everybody, for joining us for the Annual JPMorgan Healthcare Conference. I'm Eric Joseph, Senior Biotech Analyst at the firm. Our next presenting company this afternoon is Rocket Pharmaceuticals, and it's my pleasure to welcome CEO, Gaurav Shah, to talk to us a bit about the company. Just a note before I hand it over, there is a Q&A session after the presentation. Do feel free to submit questions that I can ask on your behalf by clicking the ask-a-question icon. Just to the top right of the webcast. With that, Gaurav, thanks again for joining us. Take it away.

Thanks, Eric. Happy New Year to everybody. It's really great to be here again at JPMorgan. So according to the Gregorian calendar, which is the calendar that most people in the world use now. 2021 is actually the start of this decade. We're so excited to be a part of this decade, which again is the roaring 20s of curative gene therapy. And I'm also happy today to announce our core values at Rocket that serve as our north star in this journey, in this decade, trust, generosity, curiosity and elevate. By harnessing are in they trust for one another. Our generosity and curiosity, we aim to ultimately elevate the lives of patients, the whole field, and in the end, also make ourselves better. Let's start with Slide #3. So about Rocket. We're a multi-platform or a platform-agnostic company. We have a pipeline of 5 clinical stage programs that are built on the key tenets of #1 being only in class; number two, having direct on-target mechanism of action; and number three, having achievable clinical endpoints. These 5 clinical programs are moving forward rapidly. And at the end of last year, we were very happy to reveal that 4 out of 4 with clinical data demonstrated clinical proof of concept. And in fact, we had new data in 2 of them, Danon disease as well as Pyruvate Kinase Deficiency. And longer duration data in Fanconi Anemia and LAD-I which are now in registration-enabling trials. Infantile malignant osteopetrosis to fit program enters clinic this year. And in the coming months and years, we will build out our R&D as well as AAV manufacturing facility and capabilities, we will plan to start GMP production in this year in 2021. We will continue to expand our pipeline and initiate filing activities starting with Fanconi Anemia and LAD. I should also note that pediatric review vouchers were extended, and we intend to continue to pursue them for all programs. So again, the take homes for today: One, to demonstrate the clinical data supporting proof-of-concept in 4 indications; two, to show how we're gearing up for launch and manufacturing readiness; and three, to reiterate that we're building and beginning this journey of being an integrated, sustainable company long term. Move to Slide 4, and I think everyone here is able to follow directly. So Slide 4 shows our growing leadership team. This leadership team is comprised of experienced drug developers with 15 to 20 drug approvals under their belt as well as launches and also a global focus. Move to Slide 6. Let's start with Fanconi Anemia. Fanconi Anemia is a bone marrow-derived disorder of stem cells. And in this disease, DNA repair is damaged. And this damage leads almost inexorably to bone marrow failure, leukemia, head and neck cancer and early mortality. Now allogeneic transplant can be curative for bone marrow -- for the bone marrow, but not for the head and neck and other manifestations of the disease. Interestingly, in this disease, unlike almost any other bone marrow-derived disease, the bone marrow conditions itself over time, thus obviating the need for cytotoxic or genotoxic conditioning. By avoiding bone marrow transplant, and potentially by using gene therapy, we also reduced the risk of head and neck cancer because the risk of head and neck cancer is magnified manyfold in patients who have bone marrow transplant, especially those with GVHD. Our Phase I Process A trial that came out of the NIH of Spain, which is called CMAT, demonstrated that 6 out of 6 patients who had adequate ex vivo lenti drug product with Fanconi Anemia have had engraftment. And in fact, in the cases who were followed for the longest, we also saw stabilization and clear improvement in blood counts. That was what we built our Process B registration trial on, and which I'll show you in just a second. And of note, I do want to state that we have obtained, both RMAT and prime designations for Fanconi Anemia to help us with the regulatory path moving forward. We'll now go to Slide 8. So as you can see, we have treated 7 patients in Fanconi Anemia for whom full drug product metric information is available. We treated a total of 9 and 7 have both available drug product metrics as well as some short or long-term follow-up. And several years ago, we have started this program with the goal of achieving reproducible vector copy numbers of one, at least, and a cell dose of at least 1 million CD34+ cells per kilogram, which is really remarkable in patients with Fanconi Anemia who have very -- disease bone marrows to begin with. As you can see here, we're now starting to achieve these numbers in most patients, especially the ones that are recently treated. Slide 10, and I'll stick to the highlights for each of these diseases and take questions after that. 4 patients -- out of these 9 patients, 7 have been followed for at least short-term, but also long-term. 3 have been followed for at least 12 months. 2 out of 3 of these long-term patients are engrafting. And in fact, they're engrafting as well or better than the best Process A patients with regard to mitomycin C resistance as well as peripheral and bone marrow VCNs. Go to Slide 13. Sorry. Actually, we'll go to Slide 11, first. So you can see in the blue, in -- at the bottom, these are from FANCOLEN-I which is the Process A trial, patient 2002 and 2006 on the Process A trial. At one year after therapy, these patients had a bone marrow vector copy number of 0.07 and about 0.15, respectively. These were associated with mitomycin C resistance numbers that were very similar. In the Process B trial in the red, you can see that the bone marrow VCNs are 0.15 and 0.22, as good or better than the best of the Process A patients. And in at least one patient, this is confirmed with a mitomycin C resistance value in patient 2004 of 31%, which is far better than what we've seen in any patient to date. The other patients' MMC resistance is still pending, but is expected to track similar to the bone marrow VCN. Now on Slide 13. Overall, looking at this trial, out of the 7 patients who have been followed and have some degree of follow-up, 5 of these 7 have engraftment. And in fact, a sixth patient may still engraft, we just don't know it's because it's too early. 2 of 3 are more than 12 months, and 3 of 4 are just out 2 months, so a total of 5 or 7. And in fact, in the 3 patients who are engrafting, but only at 2 months, this engraftment in the peripheral blood is associated with VCNs of 0.1 -- 0.01 to 0.02, again, this is better than what we see even in the earlier patients on this trial and Process A patients in the original Phase I. So all in all, the patients are engrafting, as or better than expected. Now on Slide 14. This is where we are as a snapshot. The primary endpoint of this trial is 10% mitomycin C resistance between 1 and 3 years and it should be noted that we only need to see this level of mitomycin C resistance in 5 out of 12 total patients in order to meet the primary endpoint and achieve statistical significance. Here, we've already seen that at least 5 patients are showing engraftment that hopefully tracks long term. And we expect to follow these patients longer, enroll more patients and move toward BLA filings as soon as possible. We'll now move to Danon disease on Slide 15. This is the AAV program that we're deep into at the moment. Danon is the biggest opportunity from a prevalence viewpoint. There are approximately 15,000 to 30,000 Danon patients in the U.S. plus EU and this is now validated by a third party partner, namely IQVIA. Danon disease is an X-linked dominant disorder of autophagy, resulting from mutations in LAMP2. Autophagy is like the recycling center or the vacuum cleaner of cells. And mostly, it affects the heart. That's where the main mortality is, but it can also affect other organs, including skeletal muscle and CNS. Now Danon disease almost always leads to cardiomyopathy and death in both males and females. And cardiomyopathy is more severe in boys who unfortunately pass away around the age of 20 or they need a cardiac transplant. And cardiac transplant can be curative for the heart, but is associated with about a 50% failure rate at the 10-year mark. Now in our gene therapy trial, as per agreement with agency, we started the Phase I in adolescent males who are aged 15 or higher, with the goal of ultimately moving earlier in a patient's life for a true cure and a true prevention. Move to Slide 16. The main point here of this slide is that we're starting the first trial in males, and we're exploring 2 doses. The low dose is 6.7e13 vector genomes per kilogram, and the higher dose is 1.1e14 vector genomes per kilogram. Slide 17. We're putting together a comprehensive 3-pronged approach to natural history. Number one is literature review; number two is a retrospective chart review; and number three is a prospective natural history study to better understand what our control arm will ultimately look like. Now while patients who are eligible for our Phase I often have a normal ejection fraction, they may all still have elevated transaminases, high CK, CK-MB BNP. And they could also have impaired cardiac output and strain despite a normal ejection fraction. And these markers that I just mentioned and noted on this slide, could all be early harbingers of disease progression toward the march to heart failure in all of these patients. Slide 18 shows a biopsy in a female Danon patient. And we have only anecdotes of these specimens. And it seems that females have patchy expression at most 50%, but in some cases, less as this slide suggests in this patient. In any case, we believe that homogeneous reconstitution in both males and females could confer long-term clinical benefit. Slide 19 shows the characteristics of the patients who have been treated and the Phase I trial to date 5 patients have been treated between age 17 and 21 with other parameters noted here. Slide 20 discusses safety at the low dose. The therapy was generally well tolerated with a manageable safety profile. There were some transient and reversible decline in platelets as well as transient and reversible transaminase elevations. In the higher dose of 1.1e14 vector genomes per kilogram, one patient did experience a drug-related serious adverse event related to complement activation. A couple of points to note here is that this patient had a high weight, also a total vector dose was, therefore, high. This patient also had pre-existing AAV immunity, which may have placed the patient at higher risk. Patient ended up having an atypical hemolytic uremic syndrome that resulted in reversible thrombocytopenia and acute kidney injury, and this requires supportive care, including the use of Soliris and transient hemodialysis. Baseline kidney function -- in fact, even better than baseline kidney function is what we see even as early as 2 or 3 weeks out after this patient suffered the acute kidney injury. All patients have fully recovered from immune-related sequelae at this point. And we'll now jump into the efficacy results for Danon, which we disclosed in December. So Slide 21, I do want to note that of the 3 patients in Phase I that we followed for 9 months to 1 year, the first patient appeared to be steroid 9 compliant, and thus, did not really receive the fully intended gene therapy that we had set up. The vector copy numbers here, as you can see, range between 1 and 3.5. But in patients who are steroid compliant, they are 3 or higher long term. Slide #22. Two things to note here on immunohistochemistry, which is a real measure of how widely the protein is being distributed. Number one, that you see more than 50% expression at 9 to 12 months. And number two, it also seems to increase over time. The protein expression increases over time. Slide 23 is the picture, the pictorial version of this, as you can see at the bottom, patient 1005 at month 9 looks not that different from what a normal heart looks like in a normal person. Move to Slide #24. So a couple of things to note here. In the patient 1005, we see 61% by Western blot at 9 months. And this is comparable to a 92% immunohistochemistry for the same patient at the same time point. We do have some gaps, and these are largely due to COVID, and we will fill these in as the trial progresses. Slide 25. I think this is a key slide when it comes to thinking about endpoints that could garner further dialogue with a Phase II. BNP is known to worsen during the course of Danon disease. This is based on our emerging natural history analysis. This stabilized for patient number one, even though that patient was likely nonsteroid compliant. And as you can see, improved pretty substantially for patient 2 and for patient 3. We'll move to Slide 26. This is the slide that stopped us in our tracks when we first found a preclinical program. On the left side, you can see the baseline heart tissue, which has lots of vacuoles and no underlying tissue architecture. And on the slides -- even at short-term follow-up, but certainly, at long-term follow-up, we see this clear emergence of the underlying tissue architecture and resolution of vacuoles, very similar to what we saw in the preclinical studies. Slide 27 represents a key clinical biomarker for this program, which is cardiac output. And remarkably, and to our pleasant surprise, there is improvement in cardiac output for the 2 patients who are known to be steroid compliant, namely, patient 1002 and 1005, you see a 35% to 62% increase in cardiac output. This is also associated with an increase in calculated stroke value. So in general, this therapy in Danon disease appears to be -- to have -- be associated with the manageable safety profile. We see robust LAMP2B gene expression based on cardiac biopsy, we see positive trends with regard to both key biomarker and efficacy endpoints, including improvement in pathology, vacuoles, improvement in circulating enzymes, such as BNP and improvements in cardiac output. We're now moving forward with a higher dose at 1.1e14, with a clear path to manageable safety with some mild refinements to the design of the guidelines. I'm going to sort of speed forward here to LAD-I. So on Slide 29, LAD-I is a disorder of neutrophils. CD18 is disrupted in these patients leading to recurrent and frequent infections and early mortality. Patients with severe LAD-I often pass away by the age of 2. In fact, in 2/3 of cases, that is true. So truly an unmet need and a devastating disease. I'm going to move to Slide 33. We've now treated -- we've treated and followed 3 patients with LAD-I. And I'll get to the protein expression in just a second, but a picture is -- says quite a bit. This was patient #1 who had an ulcerative lesion that was non resolving despite therapies for many years. And you can see this on this left side pretreatment. Over the course of the first year, you see resolution of this lesion. And so there is clear clinical benefit in this patient. Other patients also have benefited similarly and patients have come off of prophylactic antibiotics. Slide 37 shows the key outcomes of this trial with regard to protein expression. Patient #1 had durable CD18 expression of about 40% associated with peripheral blood VCNs of one or higher and complete resolution of skin lesions; patient #2 had a CD18 expression of 23%, 6 months after treatment with VCN similar to the first patient; and patient #3, 2 months after treatment had a CD18 expression of approximately 76%. The trial continues, and we anticipate enrollment and treatment completion in first half of 2020. I also want to note in the severe LAD-I, a CD18 expression of less than 2% is defining for the disease and even CD18 expressions of 4%, but certainly 10% or higher are associated with long-term survival and clinical benefits. So these numbers certainly fall within that bar -- above that bar. And now the largest lentiviral opportunity and certainly not the least one is Pyruvate Kinase Deficiency. This is a disorder of hemolysis that arises from a Pyruvate Kinase Deficiency, and this leads to red cell destruction, chronic transfusion dependence. Allogeneic transplant can work, but splenectomy is the mainstay of treatment. And -- but even splenectomy only improves hemoglobin on average by 1.5. This trial is now in the clinic in Phase I. We've treated 2 older patients, and we have some follow-up in one of those patients. As you can see on Slide 41. There is a near doubling of hemoglobin in this first patient treated from a pre-treatment average of 7.4 and really averaged over 2 years prior to therapy to 14.3, 3 months after treatment. So a nearly 7 point increase, of course, it's early, and we'll need to see this data in many more patients. On the next slide, on Slide 42, you also see other markers of hemolysis normalizing and improving substantively. So Slide 43, hemoglobin normalized in the first patient treated with PKD. The safety profile is -- appears favorable. And the second cohort, which will enroll older pediatric patients, younger than 18 years old, is expected to be initiated very soon. Slide 44, osteopetrosis. This is really a disease that's near and dear to my heart. It truly defines the work devastating. These are children like patients with LAD-I who have early mortality, but also have the added issues with deafness and blindness very early in life. Bone marrow transplant can be curative, but is often not available. So Slide 46 is the study design. We will start enrolling soon and we'll be treating patients this year. So Slide 47. This morning, we officially announced this manufacturing facility. That is shown on Slide 47. And there's 2 parts of this facility. One side is dedicated to AAV manufacturing. The other side is dedicated to R&D as well as CMC analytics and internal quality control activities. This is important, first of all, so that we can own and control our own manufacturing, but also to serve as dual sourcing for Danon and commercial supply. The R&D side also gives us the ability and capability to design our own pipeline as we move forward. A couple of pictures are shown here. Slide 48, Slide 49 as well with the outside of the clean rooms in the upper left. And I want to leave the group with our near and long-term value drivers on the last Slide 50. In the first half of 2021, we anticipated updated Process B data with Fanconi Anemia. We also anticipate initial Phase II data with LAD-I. In the second half of this year, we anticipate Phase I data update in Pyruvate Kinase Deficiency as well as osteopetrosis for the first time and, of course, updated Phase I data. Our goal is always to present whatever we have and as we've always done in the past. So thank you for your time and for your attention, and we're very excited at the top of this decade, literally, and see you next time. Back to you, Eric.

Great. Well, thanks, Gaurav, for that presentation and overview. Couple of questions from me to start. I think we would -- I'll come back to Fanconi Anemia. And a lot of pretty promising -- it's a promise that you made in that indication with that program. I guess just looking at that -- or thinking about the bar for approval, you highlighted 5 of the 12 patients showing evidence of engraftment by MMC resistance. I guess, is there a -- can you speak to whether there's a durability requirement that engraftment needs to be maintained consistently over some time period or needed to move forward with a BLA submission or approval? And perhaps whether there's signs from the natural history or patients that experience mosaicism that sort of might predict the likelihood of durable engraftment longer term?

Yes, both excellent questions. So the time point that we've agreed to, with both FDA and EMA, is between 1 and 3 years. So really, we have up to 3 years to demonstrate that engraftment. As we've shown in the Process B patients who are followed for at least 12 months, we're starting to see that already in the 12 to 18-month time frame as expected. Now in terms of how somatic mosaic data may inform our thinking about how these patients can do long term, many somatic mosaic patients, in fact, most of those who achieved 10% mitomycin C resistance or greater seem to have long-term clinical benefit, as characterized by much reduced inevitable progression to bone marrow failure #1 and also no cases of leukemia. Now of course, that's a small data set. And we'll have to follow-up patients for decades to see if that holds. But certainly, the data to date suggests that somatic mosaics, who have 10% mitomycin C resistance or greater have long-term clinical benefit. That's what we're also trying to pursue here.

Okay. Got it. And I guess, looking across the sort of the number of -- for all the lenti bio programs, I guess, the commonality here is we're talking a bit, primarily bone marrow hematologic indications. As you kind of look to commercialization of those products, potentially 3, in the next 3 to 4 years. I guess, can you sort of give us a snapshot on what sort of the commercialization effort might look like? Is it a go alone or do along strategy? Do you need to bring in a partner? And I guess, to what extent is there overlap in the treating -- physician treating community across these indications.

Yes. Two great questions as well. We have been establishing deep relationships with what we consider future centers of excellence. In fact, the trials that are currently enrolling and treating patients are centers of excellence in and of themselves. We have advisers around the table as well who are very much bought into the gene therapy approach for Fanconi Anemia and may serve as future centers of excellence in both the U.S. as well as Europe. So unless there is a very compelling reason, we intend to build our commercial efforts ourselves. We've set up our manufacturing agreements toward that end as well as our early medical affairs strategy, which is both active in the U.S. and EU. So we intend to go all the way with this as an integrated and sustainable company. And I'm sorry, the second question, I should have written it down, Eric.

Whether there's any overlap really in the...

Yes, there absolutely is. For example, Stanford is involved in both our FA and PKD trial. UCLA is involved in both LAD and osteopetrosis, and CMAT is involved in Fanconi, PKD and LAD, right? So there's certainly going to be overlap in synergies. And I think hands-on experience from these hematologists is going to be very important. And we have an eye toward that moving forward.

A couple of questions on Danon disease. I guess, given the magnitude of LAMP2 expression that we're seeing early on here and sort of the wealth of natural history that helps you understand sort of what the threshold is for functional benefit. I guess, how are -- what's your latest thinking on sort of the need to further additionally dose escalate, I guess, what are the benefits from kind of going higher up that you might anticipate? And -- yes, and sort of how that might translate into additional clinical benefit?

Yes. First of all, I want to note that the agency has suggested that benefit in cardiac is the most important benefit to demonstrate and as you know, we have suggestions toward that with the low dose already. We didn't know these data when we started the high dose, right? So they matured at a time before we started the high dose. However, we intend to move forward and continue to explore this higher dose anyway because we want to affect the whole spectrum of disease, not just cardiac. It's a one-and-done treatment. We want to give these patients a full chance to have a total cure. So in line with the traditional Phase I design, we pushed the safety as high as we can without compromising safety and -- but while maintaining efficacy. That's the traditional Phase I approach that we intend to do. But I think that it's not just cardiac skeletal muscle and CNS as well. So that's why we are continuing the higher dose. Whether we go higher from here or not remains to be seen, but certainly, not planned if we see what we want to see at the current doses.

Yes. Just -- maybe just remind me, how are you collecting -- or are you collecting skeletal muscle biopsies and tracking LAMP2 expression in subjects across some of these protocol or in higher dose cohorts?

Yes. We are collecting skeletal muscle, and we'll be presenting those results in the second half of this year as well across cohorts.

Okay. Great, great, great. And I guess just on the -- following on the -- some of the cardio output data that you're looking at, I guess, one question is related to sort of the inter patient variable -- intrapatient variability that might be observed on that endpoint. Can you just speak to sort of the amount of baseline testing that's being done and the potential for how do you minimize, I guess, some of that either interpatient or intrapatient variability on cardio pulmonary function, right, sort of derisk that functional measure longer term?

Right. So these cardiac output measures that you see on Slide 27 were obtained via invasive hemodynamics. We're doing heart biopsies. So invasive hemodynamics is not a difficult add on to the protocol. And first of all, you can see here that some of these patients are already within normal range. For example, patient #1 starts at normal range, which tends to be, say, 5 to 6 on average for patients. The second 2 patients are slightly lower than normal range, and they improve over time. When patients are about to be transplanted, a cardiac output tends to be around 2 to 2.5. So these patients are not that far along. In terms of heterogeneity, intra and interpatient, that's hard to control for. The only thing we can do is to make sure we have the same reader, the same person looking at the hemodynamic data, and that should apply also to the imaging data, to the CMAT and to everything else we're looking at. So that's very important to reduce any variability we see both interpatient and intrapatient. Obviously, over time, patients will be followed at multiple centers. And to get around that, we've centralized our testing as much as possible. Everything we're presenting here is from a centralized source and thus pretty objective.

I guess from the purposes of a clinical study operational, you might want to -- the exploring in patients that have a certain amount of baseline function. But from a commercial standpoint, I'm wondering whether there might be any limits to the -- what it might be -- you go -- beyond the scope of the parameters of patients that were seen the clinical trial. Would you anticipate them to benefit meaningfully from A501? Or could regulators kind of quit, potentially kind of define the range of additional patient population, I guess, based on what studied in the pivotal trial?

Yes. I mean what you enroll, in general, in the field development, enrollment and the entry criteria in the pivotal and supported trials helps define the final label, but doesn't fully define it. There's always room for expansion and we've seen that time and time again across multiple programs. Now in terms of what kind of patients are likely to benefit in our discussions with the agency, we were asked to start at a higher age. And although we wanted to start in the lower age group, there was a certain silver lining to that because we were able to demonstrate that these patients can actually improve with regard to cardiac output and other measures like we've said. In younger patients, we might not have seen that because they might have normal values to begin with. They have -- it takes a while for the heart to develop cardiomyopathy. So if we had started earlier, we might not have seen that. I think the fact that we're seeing real reversal of phenotype at a higher dose is something that has rarely been seen in the cardiac field, certainly, in CHF. You can stop progression, but reversing heart failure is pretty novel. And if we see it in the older patients, we anticipate that at the very least in younger patients, we can consider this a preventative approach as long as we have durable long-term expression. So I think we've treated the toughest patients that exist with Danon patients. And hopefully, that opens up the dialogue for a much broader patient population down the road.

Got it. And just where is the, I guess, physician awareness of Danon's disease, I guess, how well-defined is the diagnostic algorithm? And I guess, are there -- how do you see that sort of perceiving or developing alongside the development of A501? I guess, is there a fair amount of work to be done there in sort of building, defining and building out that market?

Yes, there is definitely a lot of work to be done. We're very aware of the gap that exists between known Danon cases and the true prevalence, and we will fill it over time through awareness, education as well as availability of a viable therapy. In terms of the, how patients are diagnosed, there's no clear algorithm right now. Patients are seen by pediatricians, by cardiologists. They're often misdiagnosed. Remember, this is a relatively newly identified disease, who was first described in 1981, the gene was put together with the trial of Danon disease in -- really in the 2000s. And LAMP2 wasn't even a normal genetic profile on sequencing until recently. So one, most heart failure patients don't even get a genetic test to see if there's an underlying cause of the heart failure. And even that gene test hasn't included LAMP2 until recently. So we are seeing increasing awareness pretty exponentially just in the last couple of years, and that will grow, but yes, there's a lot of work to be done to bridge the gap between known and real cases of Danon disease. And we're building capabilities to get there.

Okay. Great. Great. Well, Gaurav, thanks again for your time this afternoon. Thanks, everybody, for joining this session, thanks a lot. Everybody...

It's a pleasure.

Yes.

Happy new year.

Bye, bye.