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

Thank you for joining us this afternoon for our third day of our Annual Bank of America Healthcare Conference. My name is Cameron Bozdog, and I'm part of Jason Zemansky SMID-Cap biotech team here. I'm pleased to have with me today Rocket's Chief Medical and Gene Therapy Officer, 5 Jonathan Schwartz. Thank you so much for joining us today.

It's great to be here.

Perfect. Well, maybe let's just dive right into it. And to start broadly, could you briefly describe your platform, especially for those -- for those who may not be as familiar in the audience?

Absolutely. And I think it's important to emphasize that Rocket is not a platform-based company. We really consider ourselves more of a disease-focused company with a focus on very high unmet need diseases for which there is a viable means for gene therapy to be either transformative or curative. And so really, the focus is on the disease. And then we have employed both lentiviral as well as adeno-associated viral AAV technologies based on the needs of the particular diseases. And really, the focus is much more about finding diseases where there's a very plausible means of correcting with gene therapy. You can get the gene of interest into the right population of cells at sufficient quantities before there is irreversible damage to affect a very profound reversal of the disease phenotype. Our focus has also been really on trying to sort of be best-in-class, first-in-class, frequently only in class. And we try to identify indications that -- allow that to happen and indications in which there are quantifiable endpoints. So there's a path forward both for health authority approval as well as value demonstration. At present, we have 5 clinical stage programs, 3 of which are lentiviral in hematology and immunology diseases and 2 AAV clinical stage programs, both in cardiac disorders as well as 1 disclosed preclinical program in another cardiac disorder. And just for those that are not familiar with the story, this year, we have a PDUFA date coming up at the end of June for Leukocyte Adhesion Deficiency-I, LAD-I. We are on track to submit a BLA in the first half of this year for Fanconi Anemia and have already submitted the European equivalent. The Danon pivotal Phase II study is underway and we are currently activating the pivotal study in Pyruvate Kinase Deficiency as well as have initiated a Phase I study in PKP2-arrhythmogenic cardiomyopathy. So that's Rocket in a nutshell.

Perfect. And maybe to kind of focus here on what differentiates you from other developers of gene therapies? Is it maybe the indications you're targeting something else from your platform that differentiates you?

I think the differentiation has very much been several fold in part, it's the sort of platform-agnostic approach, what's going to be best for a given disease as opposed to hear something that came out of so and so's lab or this Nobel laureate shop, and now let's figure out how to make it work in the clinic. I think that's a very important distinguishing feature. It really starts with the diseases and how we can make a difference. I think another really important distinction is that we have a culture of working leadership, although we've continued to expand the company are now almost 300 employees with any number of people at leadership levels, the 3 original C-level leaders, Gaurav Shah, our CEO; Kinnari Patel, our COO and President; and myself have been with the company now, each of us more than 8 years. And we continue to get into the weeds on a daily and weekly basis, really trying to set an example for the rest of the team that if you don't do it, if we don't do it, nobody else is going to do it, although, obviously, as any biotech we have to outsource. We try to retain as much activity in-house as possible because no one cares more than us. And obviously, a relentless focus on the patient. That is something that I think probably many companies say, I'd like to think we actually do that and have delivered on it. I spent a long part of my career, taking care of people with horrific diseases before coming to the industry. So those are most of the distinguishing features.

Great. And then a perfect segue into my next question. Could you maybe comment on your manufacturing capabilities and why this has become such a critical piece for gene therapy developers?

Yes. Well, it's critical because it's hard, and there's a lot of ways to go wrong and you can burn through a lot of money and resources very quickly without necessarily getting what you need. And that's probably another distinguishing feature of Rocket is that we've been pretty judicious stewards of both human as well as financial capital. And I think that's enabled us to survive some very rough waters with respect to the past several years when the XBI has been taking and beating. But with respect to the manufacturing, we've had a very thoughtful staged approach to manufacturing, which combines both external, carefully chosen partners, especially for lentiviral work as well as then building up an in-house capability for our own AAV manufacturing. We understood at a very early stage that manufacturing could easily make or break even the most well thought-out clinical program. And so we put significant investment into it. That started with lenti where we -- for each of the 3 late-stage lenti programs that we have, we started off with commercial-grade vector, commercial-grade cell processing, even as we just did first in human trials so that we wouldn't have to worry about a potential transition later on. On the AAV side with Danon, we started with some very really terrific contract partners. But as we recognize clinical proof of concept, we realized that we wanted to develop our own capabilities. And so we made the commitment once we had sufficient proof of concept to build the facility that we have in Cranbury, New Jersey, which has 50,000 square feet of AAV manufacturing capability. The products that -- we're using product from Cranbury both in the Phase I PKP2 study as well as the pivotal Danon study, and the metrics of that product in the Danon program, have been superior to what we were able to use in Phase I, which will hopefully translate as the trial progresses into enhanced safety as well as ultimately lower cost of goods.

Perfect. You're currently advancing programs, specifically in cardiology and hematology -- no, what makes these specific indications attractive when you're looking at them from a mechanistic standpoint and maybe from a commercial standpoint as well?

Yes. So I mean, we've tried to find indications where gene therapy could make a profound difference. And as I said a few minutes ago, where we could be first best or only in class. And that's true for the existing late-stage programs as well as some of the preclinical programs that we're working on behind the scenes. Across this spectrum, we select indications where we and our partners have a profound understanding of the underlying biology. There's a strong scientific rationale and end points that are quantifiable and achievable and likely to resonate with health authorities and payers, very, very importantly, or indications, whether they be on the heme -- immunology side or on the cardiac side are ones where gene therapy is not a nice to have. It's essential and transformative. And I think that, that segues into a very good position as we approach commercial stage because we want to be developing therapies where the importance of a therapy, filling a high unmet need, the magnitude of benefit is relatively easily explainable and really then justifies a strong commercial proposition.

Great. Maybe shifting gears here to your commercial stage. We're coming up on your first PDUFA on June 30. Can you talk about your preclinical efforts? And what elements you're hoping to have in place at this time?

Sure. So the KRESLADI PDUFA is June 30, and that's for Leukocyte Adhesion Deficiency-I, LAD-I. The plans are to launch the product as soon as possible after an approval, and we'll be able to provide more specifics on that over the coming weeks. I think it's important to emphasize that LAD is an ultrarare disease, newly diagnosed patients are going to get referred to expert centers, and most of our commercial preparation activities have really been about, say, establishing site readiness for our qualified treatment centers. This is the kind of disease where there's limited need for a large number of MSLs or sales force or any sort of extensive commercial infrastructure. Most of the primary immunodeficiency expert community is aware of our data and aware of the differences relative to allogeneic transplant and are excited to be able to refer patients. As far as the commercial opportunity, this approval and launch is going to be able to enable us to show a validation of our CMC and regulatory capabilities and enable us to kind of demonstrate execution at a relatively modest scale. And we'll have a limited number of qualified centers probably on both ends of the country. And then that launch will hopefully then enable us to further scale up as we get into the bigger indications with approvals in Fanconi Anemia and then the successively larger 1 in Danon disease to follow. So hopefully, we'll be able to demonstrate the ability to execute on a sort of mature commercial level, and obviously, having a PRV as well is added upside both for LAD-I and then subsequently for Fanconi.

And then kind of focusing here on what you think investors should expect as far as the initial pace of uptake? Any chance you can start this process immediately. And then more broadly kind of where you expect the biggest near-term hurdles to be?

Near-term?

Hurdles, challenges?

I think the near-term challenges in LAD-I are going to be relatively modest. We haven't really disclosed any projections in terms of patient numbers or sales numbers. I think it's important to emphasize that the pricing conversations that we've had with payers are underway. Those conversations have been positive and productive so far in part, because this first one is a relatively rare disease, but predominantly because from a value-based perspective, this is an appealing high-value proposition. You're talking about severe variance of LAD-I, which is uniformly fatal in childhood, predominantly in early childhood, allogeneic transplant is effective and potentially curative, but even in the most recent series with all the different improvements in the allogeneic field because of the complexities of this disease comes with significant complications, high rates of graft failure, high rates of graft versus host disease, not complete -- incomplete survival. And really, we're able to take kids with this brutally lethal immunodeficiency and give them what looks like potentially a full ride, a full lease on life.