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

Welcome to the Rocket Pharmaceuticals Inc. Investor Conference Call. My name is Vanessa, and I will be your operator for today's call. [Operator Instructions]. I will now turn the call over to your host, Mayur Kasetty, Director of Business Development and Operations.

Thank you, Vanessa. Good afternoon, everyone. This is Mayur Kasetty, Director of Business Development and Operations and Investor Relations Lead at Rocket Pharmaceuticals. Thank you for joining us. The purpose of this call is to share and discuss key updates on our clinical programs. Before we begin, I would like to briefly discuss the use of forward-looking statements on this conference call. Statements we make on this call may include statements which are not historical facts and are considered forward-looking within the meaning of the securities laws and which are usually identified by the use of words such as anticipates, believes, estimates, expects, intends, may, plans, projects, seeks, should, will and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects, as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, those set forth in our earnings release issued earlier today and in Item 1A, Risk Factors of our annual report on Form 10-K for the year ended December 31, 2020, and as updated by our subsequently filed quarterly reports on Form 10-Q and our other SEC filings. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Participating on today's call on behalf of Rocket are Dr. Gaurav Shah, Chief Executive Officer; Dr. Jonathan Schwartz, Chief Medical Officer and Clinical Development Senior Vice President; Dr. Gayatri Rao, Chief Development Officer and Head of Regulatory Policy; Carlos Garcia, Chief Financial Officer; and Claudine Prowse, Senior Vice President of Strategy and Corporate Development. There will be a question-and-answer session at the end of this call in which we will all participate. I will now turn the call over to Gaurav.

Thank you, Mayur. And thank you, everyone, for joining us today. We have several updates to take you through. Let me highlight the 4 key take-homes for today. First, regarding the Danon clinical hold, we are reiterating our previous guidance that based on our most recent FDA interactions and exercising the best of our judgment and estimation, we continue to anticipate resuming the trial this quarter, Q3. Second, for Danon, the low dose is demonstrating increasing and durable benefit. We will go over key data points, including some new ones in a minute. Third, for Danon, we are removing the high dose from future dosing plans. Fourth, Fanconi Anemia, LAD-I and PKD remain on track, and we will provide further clinical updates in Q4. Those are the key takeaways. We will now get to some more details. Starting with Danon. We've been working very closely with the FDA over the last several weeks. And through our discussions, we have agreed to modify our immune suppression and complement inhibition protocols with bolster safety guard rails. In addition to these protocol updates, we've had a chance to review updated low-dose data sets with the FDA that Rocket believes is supportive of its potential as a viable Phase II dose. Notably, photographic evidence for all 3 low-dose patients show improvements, meaning decrease in autophagic vacuoles, a hallmark of Danon disease pathology as assessed by electron microscopy of cardiac tissue via endomyocardial biopsy. Additionally, 2 of the 3 low-dose patients with closely monitored immunosuppressive regimen compliance demonstrated improvements in New York Heart Association Class from 2 to 1, which translates to no comparative dysfunction. These patients also demonstrated substantial improvement of a key marker of heart failure, BNP, which decreased by 75% and 79% versus baseline levels as well as improvements in cardiac output by 35% to 62% compared to baseline as measured by invasive hemodynamics. All 3 treated low-dose patients continue to demonstrate stabilization or improvements in BNP 6-minute walk test as well as New York Heart Association Class. Given the activity observed in patients in the low-dose cohort and importantly, to mitigate associated safety concerns in the E14 range, we have decided to forego pursuit of the higher doses, meaning 1.1e14 vector genomes per kilogram or higher. This is a decision that was made in agreement with the FDA and allows us to focus fully on the low dose moving forward, the 6.7e13, also reduces the total number of patients needed in our Phase I study and potentially allows for more rapid progression to Phase II. Now as disclosed in December 2020, one patient in the high-dose cohort who is the heaviest patient treated to date and has highly advanced disease developed complement-mediated thrombotic microangiopathy, which resolved fully with transient hemodialysis. This patient continued to have progressive disease considered unrelated to gene therapy by the trial investigator as well as transplant cardiologist and successfully went on to receive a heart transplant. The patient is currently doing well clinically and, of course, resolution of this baseline myopathy that was present prior to treatment. Analysis of the explanted part demonstrates fibrosis that was consistent with end-stage Danon disease. Our belief has always been that the onset of fibrosis in the year or so prior to transplant could diminish the efficacy of gene therapy, and this patient exemplifies the importance of earlier intervention in this disorder. We, at Rocket, do not consider this a safety issue, and it is not considered related to the hold. We believe it does highlight the importance of the right timing in order for gene therapy to be fully effective. In discussions with the FDA on this case, we have refined our eligibility criteria to focus on patients earlier in disease. Now importantly, as of this past week, we have submitted all requested changes to FDA and have confirmation that we have agreement on the updated program. As mentioned, we expect that we can resume a trial in Q3 with the revised eligibility criteria in place and refined safety measures in place. Moving forward, we have inbound interest for more than 20 patients for participation in the trial, and we look forward to progressing rapidly towards Phase I completion and the Phase II registration trial. One final point on Danon. Throughout the duration of this hold, we have had an exceptionally collaborative discussion and dialogue with the agency. And with our confidence in the low dose and modifications to our clinical trial protocol, we are truly excited about the prospects of our Danon program and look forward to presenting longer-term data on both the low- and higher-dose patients in the fourth quarter of this year. Now turning to our lentiviral programs. We provided updates at ASGCT for our Fanconi Anemia, LAD-I and PKD programs and continue our momentum towards regulatory filings. For our final lenti program, we are deeply saddened that the first patient treated in our infatile malignant osteopetrosis Phase I trial has passed away from likely non-gene therapy-related pulmonary complications with autopsy-confirmed evidence of pulmonary hemorrhage that was very likely related to thrombocytopenia following conditioning therapy and also related to underlying osteopetrosis. Of note, pulmonary complications occur more commonly in osteopetrosis patients relative to many other nonmalignant immunologic diseases, especially in those patients who are undergoing a transplant. Consistent with the protocol, we have paused enrollment pending a comprehensive evaluation in collaboration with an independent data monitoring committee. We look forward to providing updates on all of our programs in the fourth quarter of 2021. And finally, as many of you may know, Claudine Prowse will be transitioning out of Rocket to take on the CFO role at another company. Claudine has been with Rocket for 3.5 years and has been an integral part of our growth story from the days of Inotek for those who were there then, we were private to a mid-cap public company. While we are and I personally am sad to see Claudine leave us, we are tremendously excited for her and sincerely thank her for her contributions here at Rocket. Now I'll pass it to Claudine.

Thank you, Gaurav. Looking back, Rocket has had extraordinary growth since going public. The company has already delivered a lot of value to shareholders. And I look forward to seeing Rocket's continued success in the future over the long term. I am so truly grateful to be part of this journey. Mayur?

Thank you, Claudine. This concludes our prepared remarks. The Rocket executive team is now happy to address any questions on this update. I'll turn the call back over to the operator for Q&A.

[Operator Instructions] Our first question is from Greg Harrison with Bank of America.

This is [Ashton] on for Greg. So it seems like you're pretty much aligned with FDA at this point for resuming Danon. I guess is there anything else that needs to be done before getting that study started? And just kind of tack on to that a little bit. With this upcoming AAV gene therapy AdCom [indiscernible] running, is there any chance that's a gating factor? And if not, just what are your general expectations for that AdCom?

Gaurav here. Thanks for the question. So as of last week, we have confirmation of no further clinical comments in the protocol. We respect the FDA process, and we're waiting for the FDA to complete this full review. And that's what we can say at the moment. With regard to the upcoming advisory committee meeting, I will actually pass this over to Dr. Gayatri Rao, who is one of the Rocket executive team members and who actually may know Head of the Office of Orphan Drug Products for 7 years at the FDA and now working with us. Gayatri?

Thanks, Gaurav. This is Gayatri Rao. To answer the specific question related to the Advisory Committee meeting, as far as we know, we -- the -- we really have no reason to believe that there's any sort of relationship between this clinical hold and the timing or the advisory committee meeting, and it's certainly inconsistent with all the communications that we've had with the agency to date. With respect to the meeting itself, we're looking forward to engaging in the meeting and listening and learning from the discussion there.

Our next question is from Dae Gon Ha with Stifel.

Great. On the thrombotic microangiography, are you able to discuss the details behind the reclassification of SUSAR? And I guess, does that have anything to do with -- or has that been reflected in the mitigation strategy as you submitted it last week? And I guess a follow-up to that is, in the May call, you talked about 2 buckets as it pertains to the resumption of the trial, that being risk mitigation and eligibility criteria. So has anything changed in your view? Or anything in that proposal changed since that May update?

Absolutely. So the SUSAR reclassification was based on recent guidance that we planned for the agency, and it is reflected in certain protocol changes that will, in the future, define such events as SUSAR. So I think that's the bottom line. So it's really part of the tightening of protocol measures and safety monitoring. And with regards to what we have said in May, it's the same thing. We have defined these monitoring parameters more closely. We've defined handling of SAEs. We've timed some of the safety guardrails around immunosuppression and complement inhibition and slightly refined eligibility criteria to focus slightly earlier treatment and avoid end-stage disease patients. Those are the same points that we had anticipated in May based on the initial FDA call and they remain the exact same.

Our next question is from Gil Blum with Needham & Company.

Just about the death that happened on the IMO study, is there really any significant differences between the conditioning regimen seeing in transplant in these patients versus the gene therapy?

You mean versus other gene therapies?

No, just versus the hematopoietic stem cell transplant, which is sometimes viewed as the standard of care.

Got it. Is there any difference between the conditioning used in osteopetrosis gene therapy versus osteopetrosis transplant? That's what you're asking? Correct?

Yes.

Right. I'll pass that over to Dr. Jonathan Schwartz.

This is Jonathan Schwartz. The conditioning regimen that's used in the osteopetrosis gene therapy study is myeloablative busulfan that's governed by pharmacokinetic guidance or TDM therapeutic drug monitoring. In general, this is a less extensive myelosuppressive and less extensive immunomodulatory regimen that would be utilized in an allogeneic transplant for this condition, typically your allogeneic transplant regimens will utilize combinations of myeloablative therapy. Sometimes that's busulfan and cyclophosphamide or total [indiscernible] and different chemotherapy regimens. And then they also utilize an immunosuppressive or lymphosuppressive therapies as well. So this is a less extensive but nonetheless myeloablative conditioning regimen that's part of our gene therapy program.

Our next question is from Yaron Werber with Cowen.

Gaurav, I have maybe 2 questions. The first one is when you did your echos, did you see any left ventricular ejection fraction benefits or -- where patient is essentially sort of normal at baseline? And what about stroke volume because it's obviously related to cardiac output? And then any update on 6-minute walk testing with longer follow-up? And with all of that in mind, based on what do you're saying, what do you think might be a primary endpoint for pivotal?

So on the echo for ejection fraction, many patients, if not most patients, have preserved ejection fraction until they reach end-stage disease. This was true for most of the patients that had been enrolled in the trial. We have disclosed previously that the exception here was that last patient who did, as I mentioned earlier, move on to have transplant, that patient was starting to lose cardiac function. More on that as we update our criterion. And -- sorry, you have to ask the second one again. There was a couple in there.

Yes. The second one, what about stroke volume because that's obviously a determinant of cardiac output and the 6-minute walk testing?

Stroke volume and then we'll get to 6-minute walk endpoints. So on cardiac output, the data that was revealed in December, there is the current data set that we're working on that we've also shared with the agency. Some of these patients do start having worsening cardiac output even before there's a loss of ejection fraction. And in 2 of the 3 patients I've mentioned, we have started to see increases in cardiac output as measured by the patient's hemodynamics. In terms of 6-minute backcast, we now, and this is new information from before, have demonstrated 6-minute walk test stabilization or improvement in all 3 of the low-dose patients, and that's alongside stabilization or improvements in BNP as well as New York Heart Association Class. So that's new information. And the endpoint, we have cast a wide net in terms of capturing appropriate endpoints to help us guide towards Phase II. These include biomarkers and the kind that we've discussed, BNP, even vacuole clearance and as well as imaging endpoints such as ejection fraction, clinical functional endpoints such as 6-minute walk test or even quality of life endpoints such as NYHA Class. So any of these could be part of the endpoints. We can't speculate on what that -- what those will be until we have an end of Phase I discussion with the FDA. I think the -- there's been about a quarter delay here on the trial right now. At the same time, we've had a collaborative discussion with the FDA. Sometimes you don't have these discussions about endpoints until later in development. And we're hopeful that potentially we could expedite the trial based on the conversations we're having right now with the agency.

And Gaurav, just want to make sure I got that right. The 6-minute walk test -- I'm sorry, if I missed it. You mentioned you saw an improvement in 6-minute walk and New York Heart Class and -- I'm sorry, in BNP and New York Heart Class, but did you also say 6-minute walk, it was stabilized or improved?

Yes. So I'll go through detail. All 3 patients have stabilization or improvement in BNP, 6-minute walk test and cardiac output. And -- sorry, BNP, 6-minute walk test and heart class. All 3 patients have stabilization or improvement. The 2 patients who had monitored immunosuppression regimen that is closely monitored, those 2 patients specifically had drops in BNP from 75% to 79% versus Phase I. And also, they had improvements in New York Heart Association Class. Those are the 2 patients who had the monitored immunosuppression. But all 3 patients have stabilization across all parameters. 6-minute walk test specifically, we haven't revealed those data, we will in fourth quarter, but it's been stable or improved in all 3 of those patients as well at this point.

Our next question is from Mani Foroohar with SVB Leerink.

My first question is, are there any changes to the protocol for Danon disease that could potentially change the proportion of patients that would be eligible for the trial? Then I have a follow-up.

Mani, we are identifying patients that we would consider end-stage disease. We've always said that, in the last year or so prior to transplant, the onset of fibrosis is such that gene therapy probably would not be effective. Those patients were never considered to be part of the treatable population. So overall, the answer is it does not change the treatable or addressable market here.

Great. You said you're looking forward to meeting and listening and learning of the September AdCom. Can you confirm whether or not you're invited or will be participating in [indiscernible] yourself?

Yes. We have had no discussions with the FDA about the AdCom. To date, we have not been invited, and -- but we'll certainly be listening.

Our next question is from Raju Prasad with William Blair.

With the agreement with the FDA for not going to the high dose, what should we expect for the clinical progression of this program? Is it the lower dose with more adult patients and then going into a pediatric population? Or do you plan on kind of advancing into the pediatric population once you can reenroll patients into the trial? And then I have a question on the -- in the special regimen.