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

All right. Good afternoon, and welcome again to the 40th 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 Gaurav Shah, CEO, to talk to us a little bit about the company. There is a Q&A session after the presentation. [Operator Instructions] So with that, Gaurav, thanks for sharing some of your time with us today.

Eric, happy New Year to you and to everybody, and thanks for joining us today. I'm going to call out the slide numbers as we go to keep it pretty simple. So Slide 1 for now. Rocket is a clinical stage gene therapy company. Our vision is seeking gene therapy cures, very simple. The bottom line today is that we're very excited about this year for Rocket. We have multiple milestones, some readouts that could set us up for a transformative 2022. And for those who want me to be efficient, I'll just tell you the 3 key messages upfront. Number one, we anticipate data in Phase II activities to start by the end of this year, and that will be supported by emerging data on the natural history of disease in untreated patients as well as what appears to be right now a safe start to the pediatric cohort so far. Number 2, lentiviral therapies work when applied well. We anticipate that for Fanconi Anemia and LAD-1 we'll be reading out top line this coming year. Also excitingly, for LAD-1, we'll have an update, which is that the ninth patient has now engrafted with regard to CD18. This is new data post-ASH. Number 3, we're poised to grow the pipeline from here on out, and that will be inclusive of in-house manufacturing for AAV, which is already this year. Slide 2. Of course, we'll make some forward-looking statements, and these represent our best opinions only in many cases. Slide 3. So here's Rocket at a glance and what we think are differentiating factors. First, on the pipeline, 4 out of 4 programs with any clinical follow-up data show compelling proof of concept and in these Rocket is first, best and only in class. And again, we're just at the start of the pipeline. The manufacturing, we have in-house AAV manufacturing capability now. On commercial, we anticipate value-based pricing that's anchored by more toxic transplant benchmarks as well as recent gene therapy analogs. And finally, on the team, we have a lean, but passionate team, more than 150 people now committed to the pipeline. We plan to increase substantively, and our leadership team alone has participated in more than 20 drug approvals and launches to date in both biotech and pharma. We plan to do it again at Rocket. Slide 4. So the pipeline is multi-platform. And the programs that we've talked about so far, we're now calling them Wave 1, which is 4 programs with potentially a total prevalence of 30,000 to 45,000 patients. Let's talk about infantile malignant osteopetrosis, or IMO for short, for a minute, which as you know, has been in development under Rocket's sponsorship for the past couple of years. And while we continue to believe in the prospect of gene therapy for IMO patients and families and fully support the gene therapy thesis, especially after the recent IVSMC clearance of an updated protocol, we have made the difficult decision to move sponsorship of IMO back to our academic partners. We thank Johan Richter in Lund University, Axel Schambach, Don Kohn and other partners for their tremendous support over the years. And instead, we've decided to reallocate time, people at about $25 million of financial resources primarily to jump-start the Wave 2 pipeline, which will be built on a similar thesis of clear mechanism of action and endpoints, first-in-class and a larger and larger number of patients impacted, perhaps more similar to that and moving forward. So Wave 2 ultimately could be larger than Wave 1 in terms of number of addressable patients. Slide 5. So now to the programs themselves, Danon disease, as you know, is an X-linked monogenic heart failure syndrome and it's caused by mutations of LAMP2. LAMP2 as I've mentioned previously, is like the on-switch of the cell's recycling center. Without turning the cell switch on or this recycling switch on, debris builds up in the cell and derails cardiac function pretty rapidly, especially in boys, leading to early mortality with an age of death of 19 in males on average. The prevalence here is the largest of our current programs at 15,000 to 30,000. Slide 6. AAV9 has strong cardiac tropism and in fact, in most studies, it's about 10x higher than for skeletal muscle or CNS, potentiating lower dosage in the E13 range versus other muscle and CNS disorders. Rocket's gene therapy basically delivers a corrected version of LAMP2B to the heart and potentially to other tissues. And of note, cardiac cells have minimal turnover, so we do anticipate long-term expression for this reason. Slide 7. So this is an overview of Danon patients treated to date. So we're completing one pediatric cohort. We plan to move into a Phase II study, which we anticipate will use the low dose in all patients 8 years of age and older. In the most recent, the first pediatric patient who was treated recently was 12 years old. An enhanced and brief immunosuppression regimen has evolved in close dialogue with the FDA and now incorporates rituximab, steroids with a more rapid taper and sirolimus. Slide 8. So in addition to this immunosuppression optimization, which has mitigated toxicity and potentially maximized efficacy, here is the summary with regard to Danon efficacy so far. In those patients with closely monitored immunosuppression, we see improvements in multiple parameters, and these include improved ventricular wall thickness, improved NYHA class, improved BNP, stable 6-minute walk test, stable cardiac output as measured by stroke volume and also as measured by diastolic stabilization as measured by wedge pressure. These are all supported by more than 50% LAMP2 expression in those patients who are treated with appropriate immunosuppression. If you look on the right side of this slide, you see a Kaplan-Meier curve of natural history in boys who, again, have a median survival to 19. The clinical picture so far of gene therapy-treated patients who are now aged 19 to 22 shows that they're actually improving instead of declining or heading to transplant or unfortunate mortality. This diverges from the natural history at a high level. In fact, one of the boys is now going to work full time, and another is now applying to college, and that's something that's truly rare for boys with Danon disease. Slide 9. So this slide has new information on it and an update with regard to the pediatric cohort that was just started. We've learned from patient to patient, and we've worked with agency to come up with really optimized safety measures. As seen with the first pediatric patient who has had a favorable safety profile so far. He's had no drops in platelets. Platelets have remained relatively close to baseline the whole time, no drop in hemoglobin, no drop in complement, as you see on the graph on the right, and also no exacerbations of myopathy now with a more rapid steroid taper. The next patient is being enrolled and is on track. Slide 10. Here, we show previously presented improvements in NYHA class, BNP and stable 6-minute walk test in closely monitored patients. To reiterate the main thesis, we would expect these measures to worsen for patients of this age. Slide 11. So immunohistochemistry, we believe, is the best indicator of the breadth of LAMP2 expression. And we see widespread and homogeneous restitution of LAMP2B including in a patient from who we now have explanted heart tissue at 5 months. The Western Blot results on the right support expression levels in these same patients as well. Slide 12 shows the same immunohistochemistry and pictures on the top right looks like nearly normal restoration, if you compare it with the normal control in the far upper left. And this is associated, as you can see, with disappearance of vacuoles and restoration of underlying tissue architecture, which is needed for the heart to function properly. That's based on electron microscopy. Again, this links the protein expression to pathophysiology to mechanistic improvements in Danon disease. So speaking of the pathophysiology of Danon disease, this begins with thickened wall. Thickened wall or hypertrophy is in reaction to increased vacuoles, and this leads ultimately to diastolic dysfunction as measured by wedge pressures as well as early mortality. The whole idea with the gene therapy approach is to reduce wall thickening and mechanically reverse the disease course through cardiac remodeling. We've already seen decrease in vacuoles in a previous slide. Slide 14 shows an echo of one of our patients on the right side versus a normal person. The Danon patient on the right has thickened posterior wall diameter and LV septal diameter, as you can see in the arrows. Slide 15. Now many of us have been talking about the most relevant endpoints for Danon disease and related to that natural history. So while we continue to develop a comprehensive natural history data set, we do have new emerging info to share today that we believe will be relevant for our thesis. And here, we see a population-based analysis in 31 Danon patients with at least one time point measuring posterior wall diameter. Here, we see that on the left, untreated patients have increasing posterior wall diameter over time. It increases on average by 0.74 millimeters per year plus or minus 0.12 millimeters with a strong correlation coefficient. In sharp contrast, in our adult patients on the right, you can see stabilization to decreases over the first year that continue into the second year as well, especially in patients who are closely monitored for immunosuppression. In fact, patient 1002's wall thickness at 18 months decreased from a pretreatment thickness of 22 millimeters to 12 millimeters, 10 millimeter change and is now near the upper limit of normal. On Slide 16, we see similar emerging natural history in septal wall thickness with increases of 0.92 millimeters per year on average plus or minus 0.15 with the correlation coefficient that is also high around -- at 0.74. Patient 1002 in a similar time reduced the septal thickness from 28 millimeters to 18 millimeters. Slide 17. So this population-based assessment is further corroborated by longitudinal data in a smaller subset of 10 pediatric patients, age 8 to 14, similar to our current pediatric cohort age range. Here, we see a mean increase of 1.4 millimeters per year and a median increase of 1.2 millimeters per year. Again, this demonstrates that even stabilization and certainly improvements against this backdrop may be meaningful since Danon disease is a disease of thickened walls. We've also mapped similar trends in BNP, ejection fraction and other parameters, and we'll continue to develop these and share this as the program develops this year. Tying this all together back to the endpoints discussion that many of us have been having. We started designing a potential Phase II trial. And while we cannot solve this today without more data and without agency input, we are becoming increasingly confident about a modestly sized trial, perhaps similar to other analogs and gene therapy for fatal diseases, given this delta that we're starting to see between treated and untreated patients. And I think posterior wall diameter is an example of a primary endpoint that could make sense specifically for Danon disease. Slide 18. So in summary, we've shown the potential to alter the natural course of Danon disease, and we've linked together protein expression to reduction in vacuoles to restoration of tissue architecture to reduced wall thickness, improved lab markers such as BNP and improved clinical outcomes, including NYHA class. So the story of gene therapy for Danon disease is becoming more and more clear with time. We believe that earlier treatment is best and hence our move forward into pediatrics now, where we see so far supportive safety in the E13 range with our modified guidelines. Slide 19 shows our development plans for Danon moving forward. Complete the pediatric low-dose cohort. Continue to develop natural history in parallel, including the U.S. and EU. At the end of the day, we anticipate a pool of about 200 patients from which we can draw endpoints from. Three, an end of Phase I meeting with the FDA. Four, manufacture a product from Cranbury in parallel. And the bottom line today for Danon disease is that we plan to initiate Phase II activities by the end of the year. Now to lenti. PKD. Today, we're going to start with PKD because it does represent the largest long-term LV opportunity in terms of prevalence. And we usually start with FA and LAD, which are moving into top line. So we thought we would switch it up this time. PKD is a monogenic red cell disorder. It's a hemolytic anemia, leading to low hemoglobin and transfusion dependence. Because it's an enzymopathy, it has less demanding treatment paradigm than other structural protein disorders. Slide 21. The Phase I study is ongoing. So far, 2 patients have been treated. And really based on the strength of the data we saw in the first 2 patients, we're now in discussions with the agency to move directly to the younger pediatric cohort, which we believe is the most relevant population to target for patients with severe disease. As we've shown, in 2 patients, we've seen hemoglobin improvements, on Slide 22, of 6 to 7 points, so near doubling from baseline, which is unprecedented in our experience. And we believe this is only possible by addressing the root cause of disease at the DNA level. The second patient here, of note, as disclosed by the PI at ASH had not responded to mitapivat. This is also accompanied by sustained and durable peripheral vector copy numbers in the 1 to 3 range and normalization of hemolysis markers. Slide 23. So these numbers are small so far, obviously. But we do see that, so far, PKD has demonstrated favorable safety and unprecedented efficacy. On Slide 24, for development plans for PKD for Phase II, we anticipate the endpoints would be hemoglobin increase and transfusion independence or reduction of dependence. This will be anchored by an established natural history. The bottom line today for PKD is that we anticipate start of Phase II activities by the end of the year. Now for Fanconi Anemia, which is a monogenic disorder of impaired DNA repair and stem cells, patients move to bone marrow failure by the age of 10 in 80% of cases and unfortunately, battle a lifelong course of hematologic and solid tumor malignancies. Slide 26, the big picture for Fanconi right now is that we've completed FANCOLEN-I with Process A that showed early proof of concept. We're now in a Phase II registration-enabling trial with improved process B, and this includes transduction enhancers and modified cell enrichment. The primary efficacy endpoint for this trial, which is a global U.S. EU study is for 5 patients to meet 10% increase in MMC resistance at 2 consecutive time points between 12 and 36 months in conjunction with stabilization of blood counts. Slide 27. Somatic mosaicism sets us up to approach Fanconi gene therapy without conditioning because of a proliferative advantage of the gene-corrected cells versus disease cells that are weak and die out on their own. The gene therapy approach can be preventative for bone marrow failure and leukemia, may also reduce the risk of solid tumors versus allogeneic transplant, where there is an increase in risk of solid tumors. And in fact, if a patient who had an allo transplant has chronic GVHD, we see 100% incidence of solid tumors, which can be fatal. Slide 28. In the absence of conditioning, Fanconi Anemia treatment with gene therapy basically consists of an apheresis and what's been so far an uneventful single infusion. Not surprisingly, a Fanconi Anemia gene therapy has so far had a highly favorable safety profile. We presented at ASH also that we've seen activity based on MMC resistance and clinical stabilization of blood counts. In fact, in some patients, the MMC resistance is approaching normal. And since Fanconi Anemia is diagnosed by impaired cell resistance to DNA damaging agents, some of these patients with higher MMC resistance are no longer even clearly identifiable Fanconi Anemia patients. So gene therapy has the potential to fix the root cause by which a disease is diagnosed. Slide 29. We see that 11 patients have been treated to date, and the drug product, liquid culture VCNs have largely been in the target range of greater than 1, which is something that we have set out to do at the beginning. Slide 30, of 8 of these patients who have at least 1-year follow-up, 3 of them are more recent. 6 of those 8 have met at least one time point of MMC resistance. And this has been accompanied by increasing peripheral vector copy number, as you see on the left side here. Slide 31. Along with MMC resistance, we now also see clinical stabilization in at least 5 patients. And of note, the sixth one who had the lowest MMC resistance, patient 1001, at 16% also now appears to be stabilizing with regard to blood counts more recently. Slide 32. So the bottom line for Fanconi is that we'll have top line data in Q3 followed by potential filing activities that will be harmonized between the U.S. and EU. In the long term, we'll also expand into FANCC and G and look for other ways to accelerate engraftment as part of the post launch life cycle. Slide 33. Last but for sure not least, is LAD. And in fact this may end up being the first program we move forward into commercialization. LAD-1 is a disorder of neutrophils that lack CD18, patients have a severe devastating illness. Slide 34, this illness is characterized by recurrent infections. And unfortunately, most patients pass away by the age of 2. Allotransplant is highly toxic. Actually, it's more toxic than for other hematologic disorders and even 10% CD18 expression can prolong life for many decades based on preclinical models and a comprehensive literature review as shown here. Slide 35. As mentioned for LAD-1, all 9 patients in this pivotal trial have now been treated. They've had drug product VCNs between 2 and 4 and the cell dose in the multimillion range. Slide 36. So this is an update, new information post ASH is that patient #9 now has a CD18 count of 61% 3 months after treatment. Slide 37. So we see 100% preliminary activity in these patients with CD18 into potentially curative territory. Slide 38. Survival has already been agreed upon as an endpoint for full approval in the U.S. and EU and we're moving toward top line data in Q2 and potential submission activities to follow. The bottom line today for LAD-1 is that this is what gene therapy was made to do when applied in the right way to the right disease. We'll also include and expand to a moderate population with updates later this year. Slide 39. So Wave 1, these 4 programs is just the tip of the iceberg and right at the top there. And we'll continue to develop Wave 2, which is the larger iceberg underneath. Again, the 3 key tenets of asset selection are important on-target mechanism of action with clear endpoints, first, best and only in class and sizable market opportunities. With our Wave 2, we're further consolidating the company as truly multi-platform. Slide 40. So this is -- these are updated milestones in a more granular fashion quarter-by-quarter. In the second quarter, for LAD-1, as I mentioned, we'll have top line data. We'll also have in-house AAV manufacturing producing drug product. In the third quarter, we will have top line for Fanconi and we'll also have pediatric data in Danon along with longer-term follow-up from the older cohorts. In the fourth quarter, we anticipate initiation of our Phase II pivotal study activities for both Danon disease and for PKD. And in 2023 and 2024, we anticipate approvals and launches in our first 2 lenti programs. We anticipate Wave 2 pipeline will enter the clinic and label expansions for all the current Wave programs, as we've discussed. And I'll finish with Slide 41. Trust, generosity, curiosity and elevate are our values at Rocket. If you go back a couple of thousand years in time, the word gene and generosity have the same origin, the same root word, a sharing of knowledge generously with our partners and with our larger family of colleagues, other companies and investors is critical for moving this field of gene therapy forward. We're very grateful to all of them, all of you as we continue to move deeper into the roaring '20s of gene therapy and of medicine. And we're going to have a great year. Good to see you, Eric, and hope to see everybody else soon.

Okay. Great. Well, thanks for that presentation and overview, Gaurav. Maybe just picking up a little bit on this last slide. So second to last slide here and thinking about Wave 2. What does that portend, I guess, I mean, of course, we'll expect to learn a little bit more there. But I guess, how should we be thinking about delivering modalities. So far the pipeline has been focused on AAV and also lentiviral modes. Should we -- is it way too focused more in one direction versus the other? And similarly there, is there anything you can say in terms of types of indications or affected organs that we should be thinking about their -- relative to Wave 1?

Yes. So we remain agnostic overall between lenti and AAV, we've explored and are exploring opportunities in both. In general, there are probably more organs that can be targeted with AAV. And I think the number of opportunities there is greater, but we remain agnostic. Obviously, we're building our in-house manufacturing capabilities to support AAV in the future and more on that when it comes. In terms of therapeutic areas, we don't want to be too diluted. We don't want to be expert in too many fields. We have bone marrow right now. We have cardiac. We may add one more and probably stop there. We're not going to come to a diluted over time.

Okay. Got it. On Danon's 501, a little more color in terms of what you think a Phase II or registrational program could look like, in particular, around endpoint selection or primary endpoint selection? The 2 questions there are, when would you anticipate being able to get feedback on that proposed endpoint, the use of that endpoint? And secondly, in terms of sizing, you kind of tiptoed around it a little bit. I guess, are there analogous programs that you would point investors to in terms of how to think about sizing in a pivotal study? And also within that, the kind of balance you might need to strike between adolescent, adults versus pediatric patients?

Yes. So it's a great question. It's an evolving dialogue. Anything that we say before agency input and agreement is obviously speculative. But with that caveat, there have been smaller trials dedicated to heart failure in recent times. And they've used biomarkers. BNP has been used, PVO2 has been used and NYHA class as a clinical parameter has also been used. We believe that we'll be able to justify a relatively modest trial. I think the analogues and other -- from other companies, from other gene therapies are probably the most relevant, especially those with rapidly fatal diseases. So I don't want to put a number on it at the moment, but other, I would say, AAV gene therapy companies are perhaps where we can find the best analog here moving forward given the rapidly fatal nature of Danon disease. And in terms of other ways to differentiate pediatric from older patients, we're selecting the pediatric patients in the same way we're selecting patients who are 15 and older. So just because a patient is 12 years old, doesn't mean that they're somehow less progressed in disease. The way we select patients is that they need to be somewhat advanced in disease, obviously, not the end stage like we've discussed last year. So what we apply to the adolescents, we believe will apply to pediatrics. And in fact, if you look at the early data, and obviously, this is early and emerging that we've just shared today on natural history, Danon pediatric patients actually have a steeper increase in wall thickness year-by-year versus adolescent. So in some ways, if we can stabilize or improve the wall thickness, it's even easier in the pediatric setting than in the older setting. So all of that -- more on that this year. You asked when will we know more. We anticipate an agency dialogue in the second half, as we've stated before, that will lead to a Phase II initiation once the pediatric cohort is readout appropriately.

Is there much -- any color or more you can say about the baseline characteristics of those pediatric subjects that you've enrolled so far? You're using similar screening criteria, but I'm curious to know whether there is additional detail in terms of functional class, BNP or wall thickness, you can sort of provide context around particularly how they might compare to contrast with the adolescent -- the adult population reported on today.

Yes. So we're requiring NHY class to be 2 or higher. And other markers appear similar to the adolescent patients that we've treated. We haven't outlined specific patient baseline characteristics yet, but that will be part of the update in third quarter.

Okay. Submitted question here related to conduct of the planned Phase II study, you're noting that it will be conducted globally -- or sorry, the question is, will the trial be conducted globally? Your slides indicate start of sites in Europe for the Phase II, but you plan to incorporate U.S. sites as well.

Yes. I -- U.S. for sure, maybe there's potential misinterpretation there or miscommunication. Yes, U.S. will definitely be part of the Phase II as well as Europe. It will be a global trial. And in terms of number of sites, in the past we speculated about 5 per continent, 5 in the U.S. and 5 in the EU. And we think that that will allow us to enroll the trial relatively rapidly. I can also say that even now, there's a lot of inbound interest in the Phase I trial itself, just that the couple of centers in the U.S. with no outreach, really no major outreach so far. So by the time we have Phase II started, we believe the trial should enroll relatively rapidly with U.S. and EU sites.

The [ pivotal ] study that will be conducted with your GMP manufactured products, correct? Is that a…

Yes, that's correct.

I guess is there any clinical bridging work that would need to be done going from -- or the Phase 1 product with that today to or perhaps maybe that's exactly the purpose of the Phase II. I guess is there any other -- I guess, how do you -- maybe just kind of speak to a little bit sort of the equivalency analysis going in from the research grade materials to the GMP and pivotal [indiscernible] product?

So that's a great question and obviously very relevant given how gene therapy is progressing around the globe. We don't anticipate any clinical bridging between the Phase I and the Phase II. It's the same process that we are bringing in-house. If there are any modifications, we believe they'll be addressed through potentially in vitro comparability, if at all. So we don't anticipate clinical bridging here. It's not a new process, it's not a new cell line, et cetera.

Okay. The natural history data is really interesting. And so far unpublished, I guess, how to think about updates to that data set and would it might be kind of available to a wider audience via publication, first question?

Yes. So we're going on the educational journey of Danon together with everybody, right? We're learning collectively sort of. So as we learn, we're sharing. And we want people, including ourselves, certainly investors, but also physicians, patients and other providers to look at this and start understanding it together. So as it emerges, we will share it as a company. In terms of a publication, once we have a comprehensive data set put together, and that's a combination of a literature review, number one, a retrospective data set in both the U.S. and EU and a prospective data set, which is also in progress. Once we have all of that together, we'll definitely put it out in a more peer-reviewed publication or a conference.

Yes. As you're on this journey with the natural history study, particularly the prospective component of it, any sort of read-through implications in terms of the prevalence of Danon, right, versus what's sort of reported out there in the literature right now of where there isn't -- it hasn't been sort of updated recently? Anywhere -- yes, does anything sort of change your thinking about the prevalence again and sort of how it -- and also sort of what other forms of cardiomyopathy sort of might be confused with that might enhance the identification of patients as you look to the commercial market?

Yes. So as we've worked up the Danon epidemiology further since our first estimate. If anything, it's been validated or we think it's somewhat conservative. And there is a gap between the known diagnosed Danon cases and the true prevalence. And that's going to take time to bridge that gap. We've started, we're pretty far along in a top-down analysis, and that's been validated by 2 independent sort of partners at this point. We're also doing a bottoms-up analysis. And what we're finding is that there are pockets around the world where there are a lot of Danon patients. Some physicians individually are seeing 10 to 20 patients, and they're not all being seen at the big centers of excellence. So more on this as we move the program forward. But this is also reflected in the number of patients that we have inbound interest from even just in the Phase I trial just based on the results that we've disclosed over the last 18 months or so.

Okay. Great. All right. Well, I think we'll have to leave it -- leave questions there for the sake of time. So Gaurav, I want to thank you again for joining us this afternoon. I really appreciate it. And thanks, everybody, for tuning in. Have a great conference.

Thank you, Eric. Happy New Year.