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

Okay. Good afternoon. I'm Eric Joseph, senior biotech analyst with JPMorgan. And our next presenting company is Rocket Pharmaceuticals. It's my pleasure to welcome and introduce CEO, Gaurav Shah, to take us through the story. There will be a Q&A in the room after the presentation. There will be mics circulating. And also feel free to submit any questions via the web portal for folks that are tuning in online. Okay, with that...

Thanks, Eric. Thanks to JPMorgan for having us this year. Happy New Year. So let's start with this, how many folks in the room or who are listening online know somebody or know of somebody with a rare disease. The thing is that each rare disease may be rare, but rare disease is not rare. And I think 2023 is going to be a transformative year for gene therapy in rare disease and for Rocket Pharma. There's 3 things that we'll focus on today. One is our clinical pipeline is growing by leaps and bounds. About an hour ago, we just announced a new cardiovascular gene therapy asset. We like to call it Pegasus, but it's PKP2 arrhythmogenic cardiomyopathy. And that sits on top of Danon disease, which is moving forward into pivotal trials in the second quarter of this year and on top of BAG3, which we acquired through a merger with Renovacor last year. So point number one is clinical. Point number 2 is that this is the year that we will be transitioning from a clinical to a commercial stage company with our 2 regulatory filings in the hematology portfolio, LAD-1 in Q2 and Fanconi anemia in Q4. And third, I'm very happy that after 6 or so years, we have the perfect team and resources cash-wise to really execute on these goals confidently. Some of them are sitting here. Thank you and here. I will be making some forward-looking statements, take them as you may. Our values are aspirational and really what anchors us and what we do day-to-day, trust, curiosity, generosity and elevate. The word gene and generosity have the same Proto-Indo-European route from thousands of years ago. So jeans and generosity flow together as one, they're integrated. You can't do gene therapy without generously sharing our knowledge and our experiences with one another. The point of this busy slide is that we have more than $400 million in cash and cash equivalents now, and that's going to actually now get us through the end of 2024, a little bit of a further extension of our cash runway to execute on the goals that we're going to talk about today. here it is, the new pipeline, 6 clinical and soon-to-be clinical assets. And now we can actually divide them up into the hematology franchise at the top and the cardiovascular franchise at the bottom. Hematology franchise is led by fanconi anemia and LAD-1, like I said, which will be filed this year and help us become commercial, soon to be followed by our pyruvate kinase deficiency. The cardiovascular franchise is powered primarily by Danon disease with PKP2 now, a newcomer moving in the clinic in just a few months and BAG3 dilated cardiomyopathy in the next year or so. We also have Wave 2, which is still undisclosed and more programs in development as we speak, just like PKP2 was for the last 2 years. The in vivo platform supports cardiology and future therapeutic areas and the ex vivo lenti programs supports our hematology bone marrow-derived diseases. So I'll go through this in a little bit of detail because it's going to be of interest for folks in the room and on the line this year. We have a catalyst-rich 2023. I'm very proud to announce that we just completed our first 2 batches of GMP manufacturing in our Cranbury, New Jersey facility, and that will be used to support the Phase 2 Danon program. In the second quarter, a lot of things going on. One, our Danon Phase 2 study will start. Two, we will file our first program in LAD-1. Three, the PKP2 ACM program, we will file an IND in the second quarter. In the third quarter, we will move Danon into Europe, and we've identified several sites in countries that are highly interested and see a lot of Danon patients in Europe to expand our portfolio there. Fourth quarter, another super busy time. Fanconi anemia will be filed. We will start our PKD pivotal trial. We'll start a Danon female trial, which has been of great interest in the recent years. We'll also expand LAD-1 into moderate patients. And then next year will be another continuation of the expansion story with BAF3 going into clinic, expansion into life cycle management for our lenti portfolio and additional programs in Wave 2 being announced. So Danon disease is really the ideal disease to evaluate in cardiovascular gene therapy, cardiovascular gene therapy is really blossoming now. And I think we're going to see it continue to blossom. Danon disease is so severe that it is a disease in which we believe we can demonstrate benefit relatively rapidly as we have, especially in boys who unfortunately pass away by the age of 20. It's an X-linked disease of autophagy. And the total prevalence here is -- has been the largest to date out of our programs, but not anymore, 15,000 to 30,000 individuals afflicted by this disease in the U.S. and in Europe. And this is the only cardiac gene therapy with proof-of-concept in the clinic so far, more to come. Our Phase 1 study is now complete. We treated 7 patients between the age of 12 and 21, and I want to emphasize that this is an IV formulation with full transgene replacement. It's not partial. It's a full transgene replacement, and that's important as we discuss expression as an endpoint with the FDA. As far as safety, we've really taken the time to learn patient by patient during our Phase 1 and iterate on our learnings so that by the time we started the pediatric cohort, we came up with the ideal immune modulation regimen, which is a combination of pretreatment rituximab, sirolimus and a rapid steroid taper. And with this new protocol, we've seen minimal complement activation and no drug product-related SAEs, and we do intend to use the same exact protocol moving forward into our pivotal program. This is new and a key slide, it's an update and one that we just shared with the FDA, and we'll go through this in some detail. This is the outcomes, the efficacy outcomes for the Phase I trial so far out to 2 to 3 years. The bright green represents improvements. light green represents stabilization. First thing to note is that there's no red here. These are patients who rapidly progress who have Danon disease, but no one has deteriorated in the study so far. And let's go through each one. Troponin, in the first column, you see dropping massively from beginning of study to current. BNP likewise drops massively. And in a couple of cases where it ticks up, I'll come back to that in a couple of slides. Left ventricular mass, Danon disease is a disease of large hearts, massive hearts. The mass has decreased in every single patient. This is updated from HFSA and from AHA. The left ventricular max wall thickness also follow suit. NYHA Class, which is a measure of how a patient functions and feels has improved from Class 2 to 1 in every patient who is closely monitored for immune suppression and the one patient who wasn't closely monitored even that patient had stabilization. Kansas City cardiomyopathy score, which is a quality of life measure in the last column has now improved in every single patient. And what's remarkable here is that in drugs that are approved for heart failure, they're associated with KCCQ score improvements of 5 points or less, the median here is about 15 points with a couple of patients being above 25 points. So we're seeing all 6 measured parameters stabilizing or in most cases, improving. This is another way to look at BNP and troponin, BNP, as a lot of folks will know, is a direct objective measure of heart failure while troponin is a measure of cardiac injury. And you see both of these parameters dropping to normal or near normal levels. And in fact, to clarify, there were questions on this last time with BNP, even though there was a little bit of an uptick in a couple of patients, you can see that those patients were normal or near normal to begin with. So the uptick was not clinically meaningful. So both BNP and troponin, which are highly predictive of outcomes in cardiomyopathy, we see improvements here. Now this is in stark contrast to a prospective natural history series that we've started, and this is the first time that we're reporting on this. These are age and disease characteristic matched controls compared with the gene therapy patients on the left. Left is gene therapy, right is controls. And you can see that even the patients who started high in the control arm move up in BNP over time, and those who started low move up as well, whereas the gene therapy-treated patients normalized or nearly normalized universally and uniformly. Similarly, we've looked at NYHA Class through a small prospective series and also the gene therapy-treated patients all improve, one stabilized, and that one patient who's stabilized again was one who was not appropriately monitored for immunosuppression. And the patients who are not treated with gene therapy at best are stable, but in many cases, unfortunately worsened toward an exorable heart failure and, in some cases, death. So this is a little bit more, and I'll leave this for a second. I won't read through this, but this is -- these are anecdotes in 4 patients treated with the therapy. And in a disease and at a time when these patients should be deteriorating and moving toward heart failure and/or death, these patients are now going to college. They're going to work. They're walking a 10-K, 1 boy last year during Halloween had to be driven around in a wagon for pumpkin picking. That's Halloween, right, pumpkins. And now this year was able to walk and spent 2 hours running around collecting pumpkins. This doesn't happen naturally in Danon disease. It only happens with an intervention that truly works, I think, at the DNA level. So there's been some discussion here about the pivotal trial design as we're discussing with the FDA. And in December, we received notes and feedback from the FDA. And every time that happens, we're required to share it publicly, which we did. But today, I'm happy to provide some more color and commentary around this feedback. So there were some key agreements reached with the FDA and these are important to note. We agreed on a nonrandomized trial on a single-arm open-label trial in which we would use a biomarker composite endpoint, biomarker-based composite endpoint to seek accelerated approval and a natural history would serve as an appropriate comparator. We also talked about clinical outcomes like 6-minute walk test and CPET that are traditionally used in cardiology, but we determined that these are not relevant in Danon disease with FDA agreement. There are some components that are still in discussion, including the details of the composite endpoint, which will include LAMP-2 expression as part of it, trial duration and time to end point. I want to note also that for the Phase I trial, we had to have staggered enrollment. So some patients had to be enrolled 3 months apart, and that took a while. The Phase 2, most of the patients will not have staggered enrollment, and we anticipate relatively rapid enrollment. We've already identified more than enough patients for the Phase 2 trial. We'll also have a 2-patient run-in for pediatrics. And otherwise, the study criteria will be similar to the Phase I, we'll exclude patients with extensive fibrosis and advanced disease, and we will enroll patients who are 8 years and older. This will be supported by a natural history series of more than 200 patients, including a prospective natural history study expanding on what I just showed earlier, and a U.S. and an EU retrospective natural history series totaling totaled more than 200 patients. I think I'm going to go back, I think one slide with skip to your Slide 11. The LAMP2 expression for these patients has been durable for all patients treated so far, and it's been supported by positive vector copy numbers. And I want to make a clarification on the vector copy number. These are reported as vectors per diploid nucleus. And you can see that the numbers are meaningful and associated with protein expression. Cardiomyocytes are often multinucleated so you can have diploid, you can have tetraploid, you can have octoploid, and you can have [ decaexiploid ], which is 16N in Greek. Some cardiomyocytes have a lot of nuclei. And therefore, I would say that, for example, for patient 1008 at 16, the 0.5 VCN is really a 1 to 2 vectors per cardiomyocyte. So on the manufacturing side, we're thrilled to announce the completion of 2 GMP batches that will be utilized for the Phase 2 trial. And the material that we're producing in-house is actually superior to the Phase 1 material that came in through a CDMO. We have 3x the number of patients that will be treated per batch produced. We have improved full versus empty viral particles, and that this will allow for a full transgene dosing with lower total viral particle count. Products are comparable and FDA has agreed and aligned on our potency assay as well as comparability approach to start the Phase 2. Our Cranberry facility at some point, we're going to open our doors and have folks do a tour in this year actually. It's a 100,000 square foot facility in Cranberry, New Jersey, half of it is geared toward manufacturing, but like for the new program, Pegasus, we're able to discover the vector in-house, develop small-scale production, develop top scale production, clinical production and soon commercial production in this facility. So Rocket is really moving forward towards being an integrated company from discovery through manufacturing through commercialization. Our global registrational Phase 2 study in Danon disease will start soon. And once everything is finalized, we will share this publicly. And I want to iterate and reiterate that we will have a cadence of readouts over the next few years as the study reads out. It's not going to be one endpoint a few -- a couple of years down the road where the study reads out, we'll have a cadence of readouts during medical meetings, just like we always do for other programs. Moving to Fanconi anemia. This is a special program for us. And to quote the words of the mother here, the mother of the child here with Fanconi anemia on the left, she asked, why not try gene therapy in Fanconi anemia, just recently, she asked this. And the reason is that gene therapy in Fanconi Anemia does not require conditioning. This is an ex vivo lenti approach with no conditioning. Why no conditioning? Because the gene-corrected cells in the renewed bone marrow after gene therapy have a selective advantage over the diseased cells in the bone marrow. And because of the selective advantage, you don't need to wipe out the old disease cells, which normally lead to bone marrow failure, leukemia and head and neck cancer inevitably in these patients. This is a disease with a prevalence of 5,500 to 7,000 individuals in the U.S. and Europe. We've already shown these results, but to reiterate these results, we've seen progressive increased genetic correction in the Fanconi anemia patients in 7 out of 10 patients who were followed for 1 year or more in both the blood and the bone marrow. And this was associated with increasing mitomycin C resistance of 20% or greater in 6 of these 10 patients, and the 7th patient has now also turned positive after 3 years of therapy. Of note, what we agreed with the FDA was that we would only need 5 patients to have a positive trial. So we announced a positive trial in Fanconi Anemia last year, and we moved rapidly toward filing in Q4. This filing and launch could be associated with the PRV just as it is potentially for LAD-1. This is -- LAD-1 is one of the most devastating rare diseases out there. It's a disease of neutrophils in which CD18 expression is missing on the surface. So these patients have recurrent infections that are often fatal, very few children survive past the low single-digit years, really a devastating disease. Using an ex-vivo lenti approach here as well, we've restored CD18 expression in 9 out of 9 patients to between 20% and 87% of normal. And when gene therapy works, it really works, and this is a perfect example of that with 100% survival out to 2 years and a massive reduction in the incidence of hospitalizations. The development plan for LAD-1, this is the most advanced program in many ways, we'll be filing our BLA in the second quarter, a lot of work coming up ahead and also associated with the PRB. This, along with Fanconi, again, will help transition us from a clinical-stage company to a commercial stage company. And the last in the hematology portfolio is pyruvate kinase efficiency. This is our dark horse. No one really ever talks or asked about it, but it is the largest lenti opportunity, and it's going to follow shortly on the heels of Fanconi anemia and LAD-1. And here also, when gene therapy works, it really works, we see a doubling of hemoglobin from 7 to 13 to 14 in 2 adult patients who have now been followed out to 2 years, and these patients are now transfusion independent and resuming normal or normal lives. Pyruvate kinase deficiency program will also move into pivotal Phase 2 trial at the end of this year. We're in the process of completing our Phase 1. So the future, this is all things that I think people already know the future. We continue to build our pipeline based on our philosophical tenets of asset selection, which includes trying to be first, best and where possible only in class on target mechanism of action with clear clinical endpoints like we've demonstrated in the prior programs. And we're looking for sizable markets, increasing in size over time so that we can build a business that treats hundreds and thousands of patients. So far, we've disclosed 2 therapeutic areas, cardiovascular and hematology, and we are also developing a third, which is undisclosed so far and will be down the road. First, to reiterate the importance and excitement that we have around BAG 3 dilated cardiomyopathy, BAG3 is a protein that regulates the functions -- several functions inside of cardiomyocytes, some of which are shown here, and this was inherited through our exciting acquisition and merger with Renovacor. A haploinsufficient mouse model from Tempe University demonstrated that we could preserve ejection fraction in appropriately treated mice and pretty remarkably so versus control mice. This is important because dilated cardiomyopathy is a disease of systolic dysfunction. So ejection fraction could be a very relevant clinical endpoint to measure in our trials, and we anticipate moving this forward into the clinic over the next 1 year. Going back to the Greeks. The Ancient Greeks loved curiosity. And they looked up at the night sky and they had a sense of wonder. Normally, we look up on the summer sky and you see this square, stars that are 4 stars in a box around the Star Vega. And you just think it's a box or a square in the sky, but the Greek saw Pegasus. Pegasus is a winged horse a mythological figure. We called our new program, PKP2.Wecalled it Pegasus until this very moment now that people even inside the company know what Pegasus stands for its PKP2-ACM. PKP2-ACM, also known as ARVC is caused by mutations in PKP 2, the component of the gap junction and these patients present in their 30s. It really affects adults in the prime of their life. Patients with symptoms have 100% risk of lifetime ventricular arrhythmias and also other longer-term ventricular abnormalities. The standard of care does not modify disease progression at all. So a DNA-based gene therapy approach is going to be pretty promising. I want to note something about the prevalence here. We use a conservative methodology of determining prevalence for all of our programs. If you add up the population of U.S. and Europe, conservatively, it's about $750 million. The prevalence of ACM is between 1,000 and 1 in 5,000. So divide $750 million by 5,000 MIT. And the answer is about 150,000, 150,000 cases of ACM and 1/3 of those are described clearly and widely in the literature to be caused by PKP2. So 50,000 patients with PKP 2 ACM at least in the U.S. and Europe. And if you actually incorporate the less conservative prevalence, it could be well over 100,000. We've now been working well over 2 years with a group from NYU, Dr. Delmar and Dr. Saroni using a translationally relevant mouse model is a conditional knockout model. And during this time, we've been able to select a lead vector, and I'm happy to announce today that the lead vector is based on a serotype of Rh74 using a cardio-selective promoter. The mouse model itself is very well characterized with published animal-based studies, inducing an inducible -- using an inducible pre-lock system, the induction is done through tamoxifen. And the phenotype does recapitulate the hallmarks of ACM, including arrhythmias and also showing ventricular dysfunction uniformly. So here, we show that the mice who are knockout mice have reduced survival, every -- all the mice die by about 50 days. They have reduced left ventricular ejection fraction, and they have massively increased right ventricular area. So these are the preclinical results that are supporting our IND, and we work with 2 models, a 7-day model and a 14-day model. So in other words, the 7-day model administers gene therapy 7 days after tamoxifen induction of knockout in the 14 days, it's 14 days after the 14-day model, as you can understand, is going to represent a more advanced disease. So on the top left, we see survival increases in a treated mice versus knockout mice. Knockout mice die by day 50, treated mice or all alive out to 5 months and longer now. On the upper right, we've also measured LVEF and RV area. And at both 28 days and at 5 months, we see preservation of ejection fraction and preservation of right ventricular area. The top curves and graphs are using a low dose of 6.7e13 vector genomes per kilogram, which is a dose that moving forward in Danon disease as well as you know. On the bottom right, we tested isoproterenol induced arrhythmia comparison between knockout mice and gene therapy treated mice, and we see a massive reduction in PVC and other arrhythmias here. And this is important because PVCs in this disease predict life-threatening ventricular arrhythmias uniformly. This -- all these results have been demonstrated using both the low dose of 6.7E13 and a high dose that's about 3x higher. We'll move forward closer to the lower dose into the clinic. And we've also done toxicology work that is IND enabling up to 3 E14 vector genomes per kilogram. And so far, we've seen no safety concerns supporting the IND movement soon. So in summary, we feel that this is the optimal [ capsid ] and the optimal gene therapy for PKP2-ACM. And we anticipate that we could be first and best-in-class with IND filing in second quarter of this year. The Rh74, as a reminder, is the serotype that's been associated with the favorable safety profile in Duchenne and other diseases and therefore, has the potential for safe administration at optimal doses even in the E14 range if needed, for adult ACM patients. The development plan here, we've completed our GMP drug product manufacturing. It's ready to go. We've completed our pharmacology and toxicology studies. We've completed a potency assay development. We're putting together a scientific advisory board to fine-tune the final clinical trial, and we anticipate IND submission, like I said in the second quarter. The study will be supported by natural history study, which is already starting in parallel as well. So in summary, coming back to the 3 key points. We're moving in with leaps and bounds into the clinic, expanding our pipeline now with Danon going to Pivotal and PKP2 going into the clinic. We're transitioning from a clinical stage to a commercial stage company, and we believe we have the right resources, certainly the right team and the right cash to conduct these therapies and bring them to patients effectively. So going back to the ancient Greeks and the sense of wonder, near Pegasus, the winged horse in the Northern Sky is another star and the star is called Polaris, the North Star, and patients are our North Star. Just like the whole sky revolves around Polaris around the North Star, all the work that we do revolves around the betterment of patients. So here's to bringing a sense of magic into the real world through gene therapy. Thank you very much. We have Jonathan and Kinnari as well to help support any Q&A. I think we have 12 -- 11, 12 minutes.

Thanks, Gaurav. I mean, so many places to add where directions could be -- sorry, questions could be directed. That being said, I think I might still start with Danon's disease, really just kind of picking up on the regulatory update that you provided towards the end of last year. And really just trying to put a finer point on the composite biomarker endpoint that you discussed with the agency. Is it -- I guess can you just sort of clarify which measures in addition to Lenti expression is -- which should support an accelerated approval, not only identity but also sort of the magnitude of benefit and -- sorry, the magnitude of change in LAMP-2expression, perhaps also BMP?

So this is in discussion. I would say that the composite endpoint, we have several to choose from. And as we demonstrated on a prior slide, every single parameter is moving in the right direction. So in some ways, we have an issue of too many options. But having said that, we've selected the ones that we think will make for the leanest trial design that is the most derisked and likely to succeed. Expression is definitely part of it. And I think we'll hold off on disclosing the full composite until we have the FDA final alignment.

Maybe just one follow-up on expression, however, just given the variability of LAMP-2 distribution in the cardiomyocytes. I guess, any additional sort of refinements in how biopsies are going to be collected in the pivotal program and sort of what the agency is looking for in terms of consistency of expression across tissue?

Jonathan?

When we've seen LAMP-2 expression in the Phase I patients, for the most part, it's been fairly diffuse and well distributed, especially when one is assessing at time points beyond 6 months after therapy. So our concern has not been that we see sporadic or inconsistent expression for the most part. Obviously, anytime you're taking a very small piece of heart tissue from a septum, you have some potential to miss or just get a nonrepresentative area. And that's why having sequential assessments is so important, and that's why we did it at 3 months, 6 months, 12 months, 24 months in the Phase 1 study to make sure that we were guarding against any sort of apparent assessments that didn't really reflect what was going on in the heart. Although, I think we'll likely be a little bit more selective in terms of the timing of the assessments in Phase 2. We'll continue to do these endomyocardial biopsies of the septum. And by and large, much of the data that we've seen to date has been replicable.

Several questions come to mind related to Pegasus and the ACM program. First, I guess, really just in terms of the epidemiology of the disease. I guess is there any variability -- variation in the severity of disease by genotype, the type of dominant negative PKP2 mutations that emerge?

So this is something that we'll study extensively through our natural history as well as in our Phase 1 study that will inform our selection of end points -- and there are, for example, the homozygous patients tend to have very severe disease and may not be the first population that we go for. We may start with the heterozygous patients and some of them who are advanced enough where we can show improvements, but also not so far advanced just like in Danon disease that is probably too late. So TBD and more details to come.

And in terms of how you're going to do with the intervening rather with the gene therapy, you're -- I mean you're not sort of augmenting the underlying sort of mis-expressed, dominant negative protein, right? So I guess, how do you circumvent any suppression, I guess, from the existing dominant negative mutation?

Well, it's autosomal dominant and which is -- I don't know if you want to -- sort of...

Right. So I think your question is that, in other words, there'll still be a parent protein, but -- and whether or not the presence of the correct protein will ameliorate that. Certainly, the preclinical model that we've seen so far suggests that should not be an issue. And that preclinical model is actually a more aggressive model than what we see in most patients. Certainly, this is why having good transduction will be important. So that there's not a lot of competitive pressure. Additionally, many of these mutations may in fact result in protein or RNA that just can't translate into protein or a very short-lived protein. So I don't think it's going to be necessarily a question of too much structure that's going to be abnormal that can't be rectified by the presence of a correct protein. These are very dynamic systems so that once there is a correct protein in the intercalated disc that's helping all these cardiomyocytes communicate with one another and function as a unit, that's likely to remain in place, whereas the apparent protein is probably not going to do so.