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

I cover SMID Cap biotech and spec pharma. And this is the last session of the day. So I'll say, this is the only thing between us and the cocktail hour so I'll try to keep it crisp and to the point. And so with us, like we have Rocket Pharmaceuticals' Gaurav Shah, who is the CEO. Really excited for you to join the conference. Very happy with the story. I guess, Gaurav, maybe it will be helpful to just like sort of orient the audience in terms of like giving a quick, brief remark on like what's the focus of the platform, the different programs, where do you think most investors are looking at, and then we can sort of dive into more questions after that.

Thanks, Ash, for having us here in the beautiful West Coast at UBS. It's great to be here. So we're a gene therapy company. We have 2 platforms. We have an ex vivo lenti platform, and we have an in vivo AAV platform. The lenti platform is focused on hematology indications. The AAV is focused on cardiac, although we may expand beyond that in the future. And the company is built around the thesis that gene therapy is most appropriate for rare, devastating diseases that can be fatal, especially in childhood or adolescents. And I think that's where the real value of gene therapy, which can be curative, is unlocked. We select our indications by a couple of different philosophical tenets, which include we want to target genes, FLASH proteins, in the cell of interest that directly affect the full spectrum of disease. So we're not looking for chaperone or proteins that are 1 or 2 steps removed and 1 or 2 cells removed, we want to target the protein in the right cells. It's on target. That's very important because that's not always how gene therapy is developed. Secondly, we want to look at indications where we have a relatively quick path to clinic, and regulatory approval doesn't take too many years. Hopefully, within 1 or 2 years, you can get to an endpoint. And third, we want to look for larger and larger indications as we create the company's value. So in this regard, we put together 6 programs, 3 hematology, 3 cardiac, each increasing in size over the years.

Great. Excellent start. So maybe I know like Danon disease is a big focus area for you, but I'll come to that. Let's kind of like save the best for the last. So I guess the recent updates that we have seen, right, like one is just on like the KRESLADI. So I know that you had received like a CRL. You're working with the FDA to try to do all that. They had requested some CMC information. And -- but no clinical information, right? So where are the -- where are you in that process? Like do you feel confident that you're marching towards like a potential approval?

Yes. So we're working with the FDA to clarify really what I consider relatively minor issues on -- around stability and sterility and validating sterility and stability. These are not product related. They're not process related. They're really crossing the Ts, dotting the Is, but they have to be done, right, for the therapy to become a drug product. And so we're in the process of that. We anticipate an approval sometime in the coming year for sure. And I think overall, yes, it was a CRL. It is a learning -- it's a little bit of a stumble, but LAD is a very small indication. Out of the 6, it's the smallest one. There's only 3 transplants a year for LAD in the United States. So we're not looking for big volume here. It is a PRV opportunity that will be important next year. But it's a great way for us to learn what to do and what not to do to solve this -- develop the muscle memory that every company needs to develop to really learn how to turn this into a pipeline and sort of a plug-and-play scenario. And that plug-and-play scenario can then be applied to Fanconi Anemia, PKD and then the cardiac indications as well. So I think sometimes you go a little slower to go a lot faster, and I think this is that situation here.

Got it. Okay. And then like for Fanconi Anemia, so you are in the process of like this rolling BLA submission. Do you believe that this is some time, like in 2026, like you will be able to launch that just...

Yes.

Anything to outline in terms of like what's the regulatory path? And what are you expecting there?

Yes. So we've submitted some of the modules. Some of the -- really, one is outstanding. We're drawing from the LAD learning to make sure that we get it right with no hiccups. And then I think both of these products will become products on the market in the next '25/'26.

Yes. So this would be like sort of like catapult the drug, the company into a commercial stage biotech. And just in terms of like anything that you can mention, where is the -- like the TAM going to be? Or what have you done in terms of like patient identification initiatives?

So for these 2, LAD, the TAM is really not very large. There's only 400 known cases of LAD described in the literature. There are maybe 25 to 50 cases that we can treat for both severe and moderate LAD over time in a peak year. With severe LAD, it's going to be a very small number. You can probably -- single-digit number that we treat in any given year. So the TAM there is relatively modest. Again, the PRV opportunity there is important as well as the opportunity to develop the infrastructure of qualified treatment centers, the supply chain, distribution and get experience with pricing and access, right? So all of that is LAD. Fanconi is where we start seeing more significant, addressable market. There are 6,000 cases of Fanconi Anemia that we estimate between the complement groups that we're going after, which are A, C and G. All of Fanconi is probably closer to 7,000, 8,000, but we're going to be able to target about 6,000. Half of those are already diagnosed. And the median age there is somewhere in the 30s, so you can estimate the per-year treatment that we can get to. So then it starts becoming significant, especially when you assume the price analogs of other ex-vivo lenti gene therapies that are out there.

Yes. All right. Great. So yes, let's focus on Danon. I mean, for this RP-A501, just kind of if you can like remind us like this Phase II potentially pivotal trial, like what's the design? Why are you focusing on these co-primary endpoints, LAMP-2 and LV mass reduction, just to sort of give the rationale for that.

Danon disease is a disease of big hearts in a sense that the largest heart ever on record in a human being is -- was a Danon heart. So these are massive hearts where autophagy is impaired, and these patients have vacuoles built up. Their heart becomes thick, heavy and eventually fibrosed and eventually lead to these patients' death. So it only makes sense that an endpoint like LV mass index makes sense for Danon, specifically, combined with protein expression. Their combination shows that you're getting protein expression, and the protein expression is responsible for the shrinkage of the heart at a time when it's usually increasing in size. We showed that, over the course of male patients' growth, the Danon heart increases in size by a certain percentage every year. So showing a difference from there is pretty meaningful, especially when combined with protein expression and other secondary endpoints like troponin, NYHA class, et cetera. So we've set up the trial very thoughtfully and with a lot of dialogue with the FDA. It took a while, but I think we got to the right endpoint. It's a 12-month endpoint in 12 patients total. And that trial is now fully enrolled. We're in the process of dosing, and we are dosing patients. We haven't given exact guidance on when the readout is. But we'll start seeing some incremental data internally, certainly in 2025. I think we wait for the final disclosure until the whole data set is done because it is a pivotal trial design, and just to respect the confidentiality of the FDA dialogues there. Now I do want to point out also that next Monday, we are going to have a late-breaking abstract, our presentation at AHA. That's accompanied also with an investor call. We just announced that earlier today. So we're very excited about that. That's in the long-term Phase I data, and some of those patients are out almost 5 years. The last update was in 2022. So this is the first meaningful data update in Danon in a long time, and we're very excited about it.

That's good. So how many patients is that? And just like what therapy? Is it like similar endpoint like LV mass reduction that we will be able to take a look at?

So it's 6 patients that are followed long term. They were -- there was a seventh patient who was treated, but that patient was too far gone, too far progressed in their heart failure with low ejection fractions. So that patient would not be eligible and was not evaluated long term because they got a transplant early. So 6 of these patients have been followed for a few years. The endpoints there, of course, is Phase I. So safety was the endpoint. We looked at all of these efficacy endpoints, including protein, including LV mass, including troponin, BNP, NYHA class and other parameters. And 2 years ago when we presented the update then, those were trending favorably. And I think it's interesting to see how gene therapy works in the heart long term and to see whether or not we see continued expression and improved biomarkers over time. That's an important question that's outstanding in the field, and we'll have data on that next week.

Got it. That's great. And then I guess the -- in this type of a setting, I think patient age has a meaningful impact on sort of like the magnitude and the rapidity of how quickly you can start to see the benefit on LV mass improvement. I mean, if you can talk about like so what was sort of those metrics, what have you seen in like Phase I and for Phase II, like if there is any different in terms of like the baseline age or all those sort of nuances to think about?

Historically, I would have said that pediatric and younger patients tend to do better with gene therapy. I think what we've seen in our trials, at least, is that if it's the right therapy for the right disease and if it's age-agnostic, some of the patients who benefited in Danon disease, for example, were older and they're around the age 20 or so. We've even seen that in PKD. So I think that, that was an assumption for a long time: The right therapy for the right disease that should be age-agnostic.

Got it. So going back to the status of the study. So you mentioned that you have completed the enrollment of these 12 patients by September. And then -- so you have dosed some of them, not all of them, just like what's the cadence of like how long does it take to get to that dosing?

So there's a 3-month run-in for troponin that the FDA mandated so we can have sort of a more longitudinal comparison of pre versus post. So not all those patients would have gone through that. There's other pretreatment work up like cardiac biopsy. So we haven't given exact guidance, but it's ongoing, and we're going to get it done as rapidly as possible.

Okay. But when did you -- when did you initiate -- when did you start enrolling the first patient? Or when do you dose the first patient? Have you talked about that?

We haven't, but the enrollment basically happened between July and September.

I see.

So for the post-pediatric follow-ups, so 2 patients were treated earlier, followed for a certain time, discussed with FDA and IDMC, and then we started the broader trial really from July to September. So enrollment would have been done. And so there's getting everyone dosed just takes some time.

And these are like new patients versus what you had in Phase I, sort of like no, sort of, reusing of patients, I'm assuming.

New patients, similar demographics and disease characteristics as the Phase I, but new patients, yes.

Sites-wise, like seeing similar or...

Yes. I mean I think that the Phase II has more pediatric patients, right, because we've opened it to the pediatrics now so that's the difference.

Okay. All right. So yes, I guess one question that I get from investors on this is that, I think, in the last 1 year, sort of people have been expecting some sort of like an interim update on the study. And this is really sort of, you're looking at the instant or a delayed gratification on the story, right? Like that's what it comes down to. So when you think about that, like, is there like a single data update that you would get for like the 12-month endpoint? Or is there some breadcrumbs along the way that you might drop which might be useful?

Best things come to those who wait. There's an old commercial, right? I think that we're very -- we feel good about what we've seen in the Phase I that we've disclosed to date. And we want to make sure that we get this right and that we do all the analysis at the same time consistently and not in a piecemeal fashion, so we can present a cohesive data set that's BLA-ready. So I would rather wait until we have that. But obviously, we'll see how the trial progresses.

Yes. I'm sure you get a lot of questions on sort of the curve of enrollment as well and when does that start to like enroll there. And sort of like 12 months out, is it like is it most of the 12 months out, is it going to happen in like second half '25 or...

We don't have exact guidance, but I would say a couple of things, which is that top line in this trial, it's an analysis of a certain number of patients have to reach the end point, not necessarily all 12. So when we're ready to announce the top line, we'll announce it. Now if everyone is dosed at a very -- in a relatively short amount of time, they may all read out at the same time anyway, right? So I think the guidance here is really to get the whole trial read out at 12 months and which would coincide hopefully with the top line data set.

Right. And so this is for sort of like an accelerated approval, right? Like for the full approval, what level of understanding do you have with the FDA? Yes. Like how much of a follow-up would that require? Is it the same endpoint? Any focus on like LAMP-2 versus the LV mass reduction?

So we deliberately took some time to work out the accelerated approval pack because the FDA gave us a carrot to also discuss the full approval package at the same time with the same trials. It's the same 12 patients followed for longer, up to 5 years. And the endpoints here are more clinical, and we're capturing all of them, which includes NYHA class, includes quality-of-life scores, even some 6-minute walk test results, et cetera. So all that is already part of the trial, and those then become the primary endpoints for the full approval.

Got it. Is there a scenario in which like, let's say, if the data coming out from this Phase I is really good on certain aspects that you might not need to show like a longer follow up on your pivotal study?

Yes. I think that the Phase I, right -- the long-term follow-up for Phase I, hopefully, is definitely supportive for the actual phase, the pivotal trial as well. And the whole data set would include efficacies in Phase I plus the Phase II with all the years of follow up. So yes, I think that's accurate. It is the same dose and same process. So that's helpful.

And these trials are like have you disclosed how these trials power, like from an endpoint? Like what is the -- effectively like the delta that you are trying to show?

So they're well powered. We haven't disclosed the [ SAP ] yet. We will. But it's well powered, greater than 90% powered. And it's engineered to show a difference in treated patients versus the same patient pretreatment, right? So you want to show a protein expression and improvement to grade 1 or more. It means just there was no protein, now there's protein. And in the LV mass, you want to show an improvement of 10% or greater versus a natural history where it's actually getting 10% approximately or worse year-over-year. So we want to -- that's the delta that we're showing. And because it's a big delta, nothing versus 1 and plus 10 versus minus 10, we're able to design a small trial that's still pretty well powered.

Is the natural history, the data here, like fairly tight? Or is there like a lot of noise there that it would be like well accepted?

Great question. It's not completely homogeneous but it's directionally consistent and consistent enough that when the FDA looks at it, that they agree that, look, these patients don't get a big heart because they're born with a big heart, they get a big heart because it grows in size. And if you shrink it, it's almost common sense that something is happening.

Yes. And like does that sort of relationship it stays within a tight range as the age of the patient? What I'm trying to get at is like is it like the sort of the patient age demographic that you have in your trial, is that like well comparable to the natural history cohort?

It is. First of all, it's comparable overall. And then also, we're trying to enroll patients in natural history that are matched for age and disease characteristics with treated patients, right? So we're going to get a reasonably good comparison. Now everyone's heart grows faster when the body is growing faster, right? So in between age 8 and 15 or 16, there's a great increase in heart size, even if you don't have Danon disease, and that's why you used LV mass index, which corrects for that body mass and weight and height instead of just LV mass. So that's all correct for.

So the natural history data, like when can we see that? I guess it's going to be before or after the Phase II?

At the same time, I would say.

Got it. Okay. So we'll have a clarity on that. All right. Anything else in Danon before we talk about like a couple of other things on your pipeline?

No. I think we're excited about the -- taking a look at the long-term Phase I data. The trial is enrolled. We're dosing, and we're never been more excited.

Yes. That's great. Yes. Looking forward to it. So maybe just like switching gears and like talking about some of the -- like the ACM program, right, this -- the PKP2 like that you were talking about earlier, 601. So yes, just if you can quickly give some thoughts around like the market opportunity, like where do you expect the Phase I update, like what should we look forward to that, and just in terms of like a clinical development path, like how can that look like in this program?

Yes. So PKP2 ACM, first of all, I should say, is double Danon in terms of epidemiology. It's at least 50,000 patients in the U.S. and Europe. We're very happy to state in our recent Q that the low-dose cohort is fully enrolled. And so we're also happy to state that we'll have a first look at that in the first half of 2025. Now the clinical development plan here is contingent on what that first look is, what are the endpoints that are meaningful. I think that it's going to be a combination of protein expression and a biomarker, just like we have in Danon disease. What is that biomarker? I can't predict now, just like I couldn't predict an early Danon disease, but LV mass index would be that biomarker. But we have a range of buckets to lift from. One is labs, like we did for Danon, troponin, BNP, others. A second one is arrhythmias. We know that arrhythmias, like PVCs, NSVTs, T-wave inversions, can -- well, T-wave inversions is an EKG finding, but arrhythmias like PVC and NSBTs can predict fatal arrhythmias. So that's another option. Another bucket is imaging and looking at right ventricular size and thickness. And of course, the last bucket is how a patient is doing clinically and how a patient is feeling, function and quality of life, right? So all of those are possible second buckets in addition to protein expression. And within protein expression, there's nuances there because this is the disease of intracardiac junctions and desmosomes, and we're also developing some tools to look at those more closely mechanistically. So we're going to look at all of this as a first look. I wouldn't expect -- I would not expect major remodeling and a complete change of the heart. Arrhythmia-wise, in the first 3 to 6 months, I think that takes a little bit longer. Just like in Danon disease, it takes about 9 to 12 months to see meaningful shrinkage in heart size. I think in all the cardiac gene therapies, it's going to take around that long to see meaningful clinical biomarkers and clinical benefit. But the first look will give us a sneak peek at what to expect.

Yes. I mean as you think about like these indications, right, like this is pretty unchartered waters that we are in, and not a lot of work has been done in this. So like great opportunity. But I guess like when you think about like sort of these like biomarkers and what actually like makes a difference, what gives you conviction that you have some sort of like a unique insight into this, that the hypothesis that you're working with is actually like the right way versus trying to -- how do you get there faster, basically?

Yes. I mean I would say that casting a wide net, spending the time in the Phase I to look at everything you thought about. And it does make for an onerous trial sometimes. There's a burden of testing on patients and physicians and hospitals, but we have to go through this for the greater good long term. The second thing is just voraciously understanding the disease by reading literature, talking to patients and their families, understanding their perspective, getting advice from physicians and those who treat patients, health care providers. And really being curious and humble enough to know that where you end up might not be where you started. And eventually, I think that replacing a faulty gene with a correct gene in a fatal disease is going to do something, right? And it's just a question of finding out how to identify the marker that predicts that.

Got it. Great. Excellent. So yes, I mean I guess for PKP2, is there any sort of like a read across do you see to Danon or vice versa? Like one approach works, what implication does it have for the other?

Well, I think what Danon taught us is that the agency and treating physicians are open to a biomarker-based approach because these are -- Danon disease is a fatal disease of child. Now PKP2 patients tend to be a little bit older, but it's also a fatal disease if untreated. And I think we can rest assured that there's going to be openness to a biomarker-based approach for sort of cardiac gene therapies. And then also, understanding how to process cells to look at DNA, look at RNA, look at protein and how to sort of hone in on those markers so that we really understand what's going on mechanistically, that's important. And the other important piece is just knowing where natural history makes sense and how to really dig deep on what happens if you don't treat a disease, so then you can understand the difference from the treated patients, right? So the natural history peat is also applicable across all cardiac gene therapies. So doing the natural history study right is just as important as doing the trial right. And I think developing a company where we're looking at 1, 2, 3, and now there's a couple of other diseases that are following on after BAG3 and applying both the biomarker, the agency and then thirdly, also the natural history knowledge across them, create the platform.

That's great. So just as we look at like the Phase I update for this, in first half '25, just curious, anything that you would outline in terms of specifics? Like how much follow up? How many patients? What sort of like endpoint to just like look at more objectively than the others?

I would go out on a limb if I gave any particular endpoint or highlighted any particular endpoint just because I don't know, I don't know what the data look like. I won't know until right before the release. But we'll be curious and we'll be curious. We're going to approach this with voracious curiosity to figure out what the endpoints are. Now in terms of how many patients and how long we're following up, it's a low-dose cohort. We haven't disclosed a number of patients, but it's between 3 and 6, right, because that's the cohort size that's defined. And obviously, those patients are -- we've been processed for some time. But I would not expect like a 9- to 12-month endpoint because they just haven't been followed that long, but before that.

Got it. Okay. All right. That's great. So I guess -- so we talked about sort of like 4 programs, right, LAD-I, Fanconi, Danon and ACM. Just if you can like talk about the remaining 2, just to see like where we are.

So to complete the lenti portfolio of pyruvate kinase deficiency, we're starting a Phase II there. It's agreed upon between the U.S. and EMA to be 10 patients single-arm trial versus natural history. And we're going after severe disease, meaning transfusion-dependent patients who are post-splenectomy and still need transfusion. So really an area of severe unmet need. More to come on that in the next year as far as the progress of that Phase II. That is a lenti opportunity that's about the size, if not bigger than Fanconi Anemia. So we're very excited about it. And we've shown in Phase I that all these patients improve the hemoglobin, in some case, double it, and that's sustainable over time. So that's to come. Now the third cardiac program is BAG3 dilated cardiomyopathy. That's the program that we inherited through our acquisition of Renovacor. And DCM is actually a bigger patient population than even HCM. It's more common. These are patients who, over time, develop dilation of their heart, and they reduce their ejection fraction. So ejection fraction is commonly seen as a biomarker of efficacy there. It could be a potential biomarker along with protein there as well. BAG3, like PKP2, is bigger than Danon, probably double the Danon market. So again, going toward that thesis of increasing disease size as we move forward. And BAG3, we'll be submitting an IND in the first half of '25 as well.

Good.

Big year, next year.

Yes. Lots of progress on the pipeline. Looking forward to the updates. I mean, I guess like just to close it off, like I'll ask a question to you about like regulatory landscape. I know there's been lots here and discussed on this. And I get the impression like across my coverage as well, I see there are a lot of like actions by the FDA in the last like 1 or 2 years, seem to suggest that the agency was getting more and more flexible, like more adopting like this natural history cohort, like endpoints that are sort of like biomarker-driven. Do you anticipate any kind of like a meaningful change? Or like you're running a business which is very sort of like tied to the -- with what the agency thinks and does, right, so what is your underlying assumption in terms of what might happen in the next administration?

Yes. I mean that's -- it's a [ laced ] question. But I think that with Dr. Peter Marks and Dr. Nicole Verdun doing running CEBR now, we have seen significant progress in flexibility around trial design, relying more on natural history, more openness, single-arm trials, and really being thoughtful about endpoints that don't take years, but take maybe 1 to 2 years, because I think they recognize that part of safety is preventing fatal diseases, right? Safety is not just about keeping therapy safe, but it's about keeping people safe, right? And if there is a therapy out there that's curative for a fatal disease, well, that's part of safety. Safety and efficacy are integrated, and I think that mindset is really making its way through the agency and also influencing the EMA as well. How that changes next year, I don't know, but I would also say that with Peter Marks, who's been there for -- through a couple of administrations, through the change administration, there's been some consistency in how they approach rare diseases. So I don't expect it to change that much.

Good. Good. That's a good positive note to end our session in. Thank you so much for taking the time. Thanks for joining our conference. And good luck with all these programs. You have a lot going on. So good luck with 2025.

Thanks for having us here.

Yes. Thanks. Sure.