Rocket Pharmaceuticals, Inc. ($RCKT)

Good day, and welcome to the Rocket Pharmaceuticals Investor Conference Call to discuss the FDA approval of KRESLADI, RP-L201, a lentiviral vector-based gene therapy for patients with severe leukocyte adhesion efficiency type 1 or LAD-1. As a reminder, today's call is being recorded. I'd now like to turn the call over to Meg Dodge, Senior Vice President of External Affairs. Meg, please begin.

Thank you, operator, and hello to everyone who joined today's call. Earlier, Rocket Pharmaceuticals announced that the U.S. Food and Drug Administration has granted accelerated approval to KRESLADI, a gene therapy for the treatment of pediatric patients with severe leukocyte adhesion deficiency Type 1. KRESLADI represents the first and only gene therapy approved for severe LAD-1, and this milestone marks the first commercial product approval in Rocket's history. On today's call, you will hear from Dr. Gaurav Shah, Chief Executive Officer; Dr. Jonathan Schwartz, Chief Science and Gene Therapy Officer; and Sarbani Chaudhuri, Chief Commercial Officer. Following prepared remarks, we will open the call for questions. And joining the Q&A will be Martin Wilson, Chief Corporate Officer and Principal Financial Officer. Before we begin, I would like to remind listeners that today's call will be making forward-looking statements and within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Forward-looking statements on this call may include, among other things, statements regarding the timing and execution of commercialization activities for KRESLADI, expected patient identification and treatment time lines, anticipated launch readiness, manufacturing and treatment center preparedness, projected financial runway, potential monetization of a rare pediatric disease priority review voucher and the continued development of our pipeline programs. Important factors that may affect future results are described in Rocket's filings with the U.S. Securities and Exchange Commission, including our most recent annual report on Form 10-K. These forward-looking statements speak only as of today's date, and Rocket undertakes no obligation to update them except as required by law. With that, I'll turn the call over to Gaurav.

Thank you, Meg. Today marks an important milestone for Rocket Pharmaceuticals and most importantly, for patients and families affected by severe leucocide-adhesion deficiency on I'm excited to share that the FDA has granted accelerated approval to KRESLADI, the first gene therapy approved for this devastating pediatric disease. This milestone is meaningful for 3 reasons: First, it addresses a devastating ultra-rare pediatric disease characterized by recurrent life-threatening infections and high early childhood mortality without definitive treatment. Second, demonstrates Rocket's ability to execute across the full continuum of gene therapy development from clinical research and complex manufacturing to regulatory approval. And third, the approval makes Rocket eligible for a rare pediatric disease priority review voucher, which represents a potential source of meaningful nondilutive capital to support advancement of our broader pipeline. Importantly, this approval also positions Rocket to leverage our gene therapy expertise across additional rare disease programs. Severe LAD-1 is an ultra rare inborn error of immunity, formerly known as primary immunodeficiency caused by mutations in the ITGB2 gene, that can pair normal immune function. The disease is characterized by an inability of white blood cells to effectively migrate from the bloodstream into tissues to fight infection and support wound healing. As a result, affected children experience recurrent severe bacterial and fungal infections beginning early in life, often requiring frequent and prolonged hospitalization. Despite supportive care, these infections and related complications can become life-threatening in the absence of definitive corrective therapy, severe LAD-1 is associated with a very high risk of mortality and early childhood. Historically, the standard definitive treatment option for severe LAD-1 as an allogeneic hematopoietic stem cell transplantation, a complex endeavor associated with frequent and clinically meaningful risks, including graft failure and graft versus host disease, which are documented even in the most recent medical literature. Allogeneic transplant is further limited by donor availability. Today's approval reflects the dedication of patients and families or clinical investigators, advocacy partners regulatory reviewers and the Rocket team. It also represents an important step in Rocket's evolution into a commercial-stage gene therapy company. With that, I will now turn the call over to Jonathan to review the clinical data supporting the approval. .

Thank you, Gaurav. KRESLADI is an autologous hematopoietic stem cell-based gene therapy indicated for the treatment of pediatric patients with severe LAD-1 due to biallelic variants in the ITGB2 gene, who do not have an available human leukocyte antigen matched sibling donor for allogeneic hematopoietic stem cell transplant. In LAD-1 ITGB2 mutations lead to deficient or absent expression of the CD18 protein on white blood cells. As a result, children with severe LAD-1 experienced recurrent and often life-threatening infections beginning early in life and historically face a higher risk of mortality in early childhood in the absence of definitive corrective therapy. Following treatment with KRESLADI, which is administered as a onetime intravenous infusion following myeloabolative conditioning functional copies of the ITGB2 gene, are introduced into autologous hematopoietic stem cells leading to expression of functional CD18 that forms CD18 CD11 heterodimers, enabling leukocyte adhesion to endothelial surfaces and extravization into tissues. This indication was approved under the FDA's accelerated approval pathway based on increases in neutrophil CD18 and CD 11a surface expression, biomarkers indicating restored beta-2 integrin activity and leukocyte function. The approval is supported by data from an open-label single-arm international clinical study evaluating a onetime infusion of gene modified autologous and hematopoietic stem cells in pediatric patients with severe LAD-1. The clinical study evaluated survival without allogeneic transplant and biomarker restoration of neutrophil CD18 and CD11 expression, which served as the basis for accelerated approval. Following infusion, neutrophil CD11 expression increased in all treated patients as did CD18 expression in all patients in whom it was severely reduced each exceeding prespecified response criteria and sustained over extended follow-up. All patients are alive and none have required an allogeneic transplant with follow-up of 3.6 to 5.7 years after treatment. Measures of gene marking, including vector copy number in peripheral blood cells have remained stable over time, supporting durable engraftment of gene-corrected hematopoietic stem cells. Supportive clinical observations during follow-up include substantial reductions in infection-related complications and hospitalizations relative to the pretreatment period. integration site analysis to date demonstrate highly polyclonal gene marking without evidence of clonal dominance, consistent with the expected safety profile of lentiviral gene therapy. As described in the prescribing information, key risks include serious infections, veno-occlusive disease delayed or failed engraftment, hypersensitivity reactions and the potential for lentiviral insertion oncogenesis requiring long-term monitoring. Consistent with the accelerated approval framework, continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory clinical trials. Rocket will continue long-term follow-up of treated patients and additional post-marketing data collection to further characterize long-term outcomes. With that, I will now turn the call over to Sarbani to discuss our commercialization approach. .

Thank you, Jonathan. The approval of KRESLADI represents an important milestone both for patients and for Rocket's evolution into a commercial stage organization. Our commercialization approach begins with the patient, severe LAD-1 is a devastating pediatric disease associated with high early childhood mortality and a substantial burden on families and health care systems. Severe LAD-1 is an ultra-rare condition. Approximately 25 children are estimated to be born with LED 1 each year in the U.S. with roughly 2/3 having the severe form of the disease. In practice treatment volumes influenced by factors such as diagnosis timing, [ Russel ] pathway draft plan data and the complexity of delivering an individualized ex-vivo gene therapy. As a result, we expect the number of patients treated annually to remain in the single-digit range, including in the years following launch. Accordingly, our approach emphasizes disciplined and dependable delivery, comprehensive patient support and step by scaling as we bring this therapy to market. The sequencing of our launch is deliberate and focused on execution excellence, consistent with the specialized requirements of ex-vivo gene therapy administration. We anticipate commercial availability and initiation of patient enrollment beginning in the fourth quarter of 2026. This time line reflects the operational requirements associated with delivering an ex-vivo gene therapy. Key large readiness activities include: ensuring product supply readiness with external manufacturing partners, establishing coordinated vein-to-vein treatment processes and onboarding a limited number of highly experienced qualified treatment centers. Given the complexity of treatment and the vulnerability of the speed retic patient population, KRESLADI will initially be available at a limited number of specialized centers to support operational excellence and patient safety during early commercialization. We are working closely with leading immunologists, transplant physicians, patient advocacy organizations and payer stakeholders to support early diagnosis [ russel ] pathways and access planning. We intend to provide guidance on pricing and access considerations as we approach commercial launch, consistent with the timing typically of [indiscernible] therapies addressing ultra-rare diseases. From stem cell collection to infusion, the treatment journey spans approximately 4 to 5 months. As a result, we expect first patient infusions and therefore, initial product revenue to occur in 2027. Our focus is to ensure that once a patient enters the treatment pathway, the entire vein-to-vein process is coordinated, predictable and optimize for successful outcomes. With that, I will now turn the call back to Gaurav.

As Sarbani outlined, our launch approach is deliberately phased to ensure operational excellence and patient safety. Our approach to launching KRESLADI is intentionally disciplined. Ex vivo gene therapy requires a coordinated ecosystem involving manufacturing partners, specialized treatment centers and payer processes. We made a deliberate decision to sequence certain commercialization investments following regulatory clarity and alignment on final commercial specifications. This approach ensures that when patients begin treatment, the full treatment pathway is operational, coordinated and reliable. Our focus is on building a highly reliable treatment ecosystem from the outset, which we believe is critical to long-term commercial success. Given the ultra-rare nature of severe LAD-1, KRESLADI is not expected to be a significant near-term revenue driver. However, the importance of this approval extends well beyond near-term revenue. We believe KRESLADI creates value for Rocket on several levels. First, it delivers the first approved gene therapy for children with severe LAD-1. Second, -- it demonstrates Rocket's ability to successfully execute complex gene therapy development across clinical, manufacturing, regulatory and commercial functions. And third, -- the approval makes Rocket eligible for a rare pediatric disease priority review voucher at PRV, representing a potential source of meaningful nondilutive capital to support advancement of a broader pipeline. As of December 31, 2025, Rocket reported cash, cash equivalents and investments of approximately $188.9 million. Based on our current plans, we expect this capital to fund operations into the second quarter of 2027 and potentially into 2028 with monetization of the PRV or other nondilutive sources of capital. And as stated in our earlier press release announcing this approval, we intend to evaluate strategic options for modernization of the voucher with the objective of enhancing financial flexibility and supporting advancement of our pipeline. As we move forward, key value drivers for Rocket will include commercial launch execution, continued clinical progress across our AAV programs and strategic capital management. We will provide further updates on commercialization progress and platform milestones in the quarters ahead. Before moving to questions, I want to again thank the patients and families who participated in the clinical trial, our investigators and advocacy partners, our regulatory and agency colleagues and the entire Rocket team. Their dedication made this milestone possible. Together, we are working towards delivering new treatment options for patients with serious and life-threatening rare diseases. Operator, please open the line for questions.

[Operator Instructions] And the first question this morning is coming from Andrew Tsai from Jefferies.

Congratulations on the execution and approval. It's exciting times. So you're planning to launch in Q4 maybe describe the gating steps you need to accomplish or address before you're ready to launch. And secondly, as we await your pricing disclosure, are there any kind of drug precedents or comps you'd mentioned and you are willing to assure any bookings could be interesting to hear. .

Andrew, thanks for the question. The critical requirements prior to patient enrollment to make sure that we deliver seamless treatment with something as complicated as ex vivo gene therapy requires a few steps. As you mentioned, first, product supply and readiness with external manufacturing partners. -- second, vein-to-vein operational infrastructure; and third, the onboarding of select few qualified treatment centers. We've also been engaging with payers to ensure reimbursement. So those are the steps that are in between now and access for patients. In terms of other analogs, as you mentioned, we're not providing pricing guidance just yet, but the other analogs with ex vivo monogenic diseases that are in the market are reasonable analogs and precedents.

And bigger picture, how does this approval maybe embolden you to pursue other rare diseases in a similar manner, single-arm pivotal Phase II type study and similar in size. You're kind of doing this for PKP2 BAG3 and maybe your other future programs.

Yes, thanks. So we are going to shift our focus in development. We have shifted our focus to monogenic cardiovascular conditions, many of which are rare like [ Dana ] and like PKP2, there will be more. This certainly helps us invest in those programs with a bold mindset as you mentioned, Also, [ Dan ] in itself comes with the PRB. So some of these diseases may also have their own PRVs. PRVs have been a great program to help companies like Rocket advance the broader pipeline.

Your next question is coming from Patrick Dolezal from LifeSci Capital.

Passing on my congratulations as well, and just on the point of the PRV received today, could you provide a little more implications -- a little more context for the implications to cash runway there? Is there sort of a certain go or no go amount that you're looking for? And I guess the second question is how might the cash burn be impacted by commercialization activities related to KRESLADI?

Great. So Thanks, Patrick. So the PRV sale with regard to PRV sale, we are in active discussions and engaging with external parties as we speak. So more on that as soon as we have more information. In terms of the cash runway without speculating on what the price will be, we anticipate the cash runway to be extended into early 2028. And in terms of KRESLADI commercial efforts, we are going to execute what we would call a minimal viable launch, meaning we will make the product available to patients and physicians who deem it something a good option for those patients. And we are not actively otherwise marketing or putting a lot of money in the commercial efforts for KRESLADI. We are instead going to focus those commercial efforts into expanding the Danon commercial setup and the other cardiovascular programs.

Your next question is coming from Josh Schimmer from Cantor.

Congrats on the approval. 3 quick ones. First, maybe semantics put -- Gaurav add. I would say indicated that KRESLADI is eligible for PRV. When do you actually get the PRV what actually has to happen to go from actual eligibility to [ ehnam, ] that's number one. Number two, and do you still plan on exploring perhaps less severe patients? I think you had indicated that at 1 point that might have been a consideration for KRESLADI and then number three, for the Cytotect listed on the package insert, just confirming that you did not see any of those in the clinical trial. Those are only theoretical based on mechanism of intervention?

Thanks, Josh. So I should clarify that with the approval, we have the PRV in hand. So that's an important clarification. Thanks for raising it. In terms of the moderate patient population, this may be part of our life cycle management, but right now, we are focused on severe LAD-1 patients and for the third question, I'll pass it to Jonathan.

Thanks for the question, Josh. Most of the serious adverse events that were identified in the pivotal study were infections, which occurred during the post conditioning neutropenia period and these are fully resolved. 1 patient did experience a veno-occlusive disease and then the full set of side effects are available in the prescribing information as well as in the New England Journal publication from 2025. I would emphasize that we did not identify any instances of engraftment failure nor did we identify any instances of delayed neutrophil or platelet engraftment. We did not observe any hypersensitivity reactions. And very importantly, there was no evidence for insertional oncogenesis. -- the integration site analysis at all time points for all patients indicated a very highly polyclonal integration site patterns.

Your next question is coming from Mani Foroohar from Leerink.

This is [indiscernible] on for Mani. Can you remind us the estimate size of the addressable market given the approval in patients with no actually much donor sibling. And additionally, you mentioned a patient journey of 4 to 5 months. What are the rate limiting steps to that? And how should we -- what should we expect this to look like at a steady state?

I will answer the addressable market question, and I'll pass the second part of your question to Sarbani. On the addressable market, so there are we estimate about 25 patients born with LED type 1 in the U.S. every year, 2/3 of them are severe. Half of them will get a transplant and about 1/4 would have an HLA-match sibling donor transplant. So you can see just from this math that we anticipate single-digit numbers even long term in terms of treatments, but we'll be able to provide more guidance as we get closer to the actual launch. In terms of the vein-to-vein time and aspects of that, I will ask Sarbani to address that.

Thank you, Gaurav. So to clarify, we have mentioned that our vein-to-vein time is around 4 to 5 months. It is in the range of what we would expect with an ex vivo gene therapy, and it's primarily driven by the individualized patient collection, manufacturing to infusion and the time it takes for our manufacturing to happen as well as the release of the final drug product. Of course, in the beginning, it is a little bit more unpredictable because we have to see about the time it takes for payer access. But over time, we expect this to be in the month range from the time a patient is enrolled to the time they actually get infused by drug.

Your next question is coming from Jason Zemansky from Bank of America.

Congrats on the milestone. Appreciate that most of the treatment will happen in the United States. So I'm curious about the pathway for non-U.S. patients simply because if we're talking about single-digit number of patients treated, what does the inflow from Europe or other markets look like?

Thanks, Jason. Our focus right now is the U.S. market -- and we have not made specific plans beyond that at the moment. And if we do, we'll update everybody. Thanks, Jason.

Your next question is coming from Tara Bancroft from TD Cowen.

So I'm curious, based on the FDA communications that you've had and received. What's your level of confidence that the long-term follow-up from this trial would suffice for this post-marketing requirement that's labeled by the language in the label? Or do you think there will be another confirmatory trial that would have to start? And if so, what would that look like and a potential time line?

Thanks, Tara. So the FDA guidance on the path to full approval is very clear with regard to the clinical program. It is further follow-up of the current ongoing clinical study as well as evaluation of a subset of patients in the post-marketing registry in other words, patients who are actually treated in the real world, a subset of those -- there is no new clinical trial required at all, and that's very clear in the post-marketing requirements.

Thank you. Your next question is coming from Yun Zhong from Wedbush Securities.

Congratulations on the approval. I understand that you're not going to actively market this product, but anything that you think that you could potentially win from [indiscernible] experience given that the lentiviral gene therapy launch and commercialization was maybe a little disappointing as compared to our expectation.

I'll ask Sarbani to address that.

Thank you, Gaurav Shah. So as we stated, we are operating already under the assumption that this is an ultra rare patient population at but and our go-to-market model and optimize for that. We are both being efficient in our commercialization approach as well as in our manufacturing approach. So we're starting with realistic expectations, and having realistic applications on how we get this to market as the most efficient.

Your next question is coming from Tessa Romero from JPMorgan.

This is [indiscernible] on for Tess. Congrats on the news. So just 1 question from us. What is the right way to think about the amount of data the FDA would want to see from treated patients in the ongoing clinical study and post-marketing registry to adjust accelerated approval to a traditional approval?

Jonathan? .

Thanks for the question. The level of data that the FDA will require from post-marketing patients. It's really data that's going to be available through what would be considered routine clinical management from our treating physicians and the primary immunodeficiency experts that would be referring patients into the study. And largely, this would include things like survival, transplant status and the flow cytometry results on the white blood cells indicating CD11 and CD18 levels, which is something that would be conducted in patients with severe LAD-1. So it's not some extraordinary requirement. It's very consistent with the way the expert immunodeficiency clinicians will manage the patients.

Okay. That's helpful. And if I may ask additional one. How is resumption of patient dosing and -- -- tracking timing-wise? Any updates on that?

Yes. Thanks for the question. I think you asked about [ Danon ] and I couldn't hear it quite clearly, but Danon patient tracking is on course to begin first half of '26.

Your next question is from Michael from Morgan Stanley.

And congratulations on the approval as well. Maybe just a quick 1 on the launch plans. Can you maybe give a little more color on the number of specialty centers you plan to target to have online maybe by the end of this year. And then how that could evolve as the launch progresses in the outer years?

Sarbani?

Thank you. As we mentioned earlier, we plan to activate a very small number of highly specialized treatment centers. And given that it's a ultra-rare disease. So at this point, we cannot give specific numbers, but our hope is we have a handful of them activated by the time we're ready for launch, which is in Q4 and then over time, we will evaluate if we need more centers. And then in terms of the question of where these patients are, the good part and why we feel we don't -- we can have a very efficient commercialization approach, is these patients are primarily in about the 40-plus PI DTC specialist centers across the country. And large I would say all the patients that will come to any qualified treatment center will be coming from these specialty centers, and they have very good peer-to-peer networks.

[Operator Instructions] There are no further questions in queue. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect, and have a great day.