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

I'm Joshua Schimmer from the Cantor Biotech Equity Research Team. I'm very pleased to introduce from Rocket Pharmaceuticals, Gaurav Shah, Chief Executive Officer.

Gaurav, welcome. Great to see you as always. Why don't you start by setting the stage for Rocket, where the company is now and where we're headed.

Josh, thanks for having me, having us. Rocket is a gene therapy company. We are focused on rare genetic cardiomyopathies. We have 3 in the clinic, one representing each of the big buckets of genetic cardiomyopathies, which are hypertrophic represented by Danon disease; arrhythmogenic demonstrated by PKP2; and dilated demonstrated by BAG3. We try to find assets that have a very clear mechanism of action, where we target the protein of interest in the cell of interest in which there's a high unmet need and where we believe that we can see clinical results in a time frame that makes sense for regulatory reasons. That's been our philosophy since day 1, we actually started the company as an ex vivo lenti company, and we still have those programs, including the recently approved KRESLADI for severe LAD-I, Fanconi anemia program and a PKD program. We've shifted our focus to cardiomyopathies in the last few years to really be able to prioritize and use our resources most wisely, but we continue to seek opportunities to partner out the LV assets. We will be launching KRESLADI in the fourth quarter of this year for those patients who want access to it. In general, we have a pipeline underneath these 6 programs that's deep and equally exciting. We're very excited about the next 9 to 12 months as there are numerous catalysts coming up.

And then quickly on KRESLADI with the upcoming launch, how are you contemplating price?

Well, we don't want to be the most expensive out there. But the reality, the truth is that the cost of nontherapy is pretty vast and pretty large. And even the numbers that are out there for other approved gene therapy products are lower than the actual cost of treating an LAD patient over the course of a lifetime. So we'll be announcing that at some point in the coming months, but [ inexpectant ] in line with other gene therapies on the lenti side.

Okay. On the cardiology franchise, as we think about the unmet need between Danon, PKP2 and BAG3, how might you kind of rank order? Because we certainly, when we talk to specialists, hear about really the devastating prognosis for Danon in particular, perhaps a little less so for the other indications.

Yes. There's almost an inverse correlation between the patient -- number of patients out there and the devastatingness of a disease, right? So, yes, Danon is very devastating. It's probably one of the most aggressive cardiomyopathies out there, also the one where we can demonstrate clean, clear benefit in the single-arm trial, which we're working on right now for a pivotal trial. Danon, I would say, we continue to say at least 15,000 patients in the U.S. and Europe. The next most devastating is likely BAG3, which is dilated cardiomyopathy. It's a bigger market. We haven't come out with the actual numbers or epidemiology in that. And PKP2 is, of course -- can be fatal with sudden cardiac deaths. There are more than 50,000 patients with PKP2 in the U.S. and Europe, but that's a disease that's heterogeneous and where we need to be very smart about trial design so we can win if it works.

Okay. So, I guess, one of the key investor active debates is your ability to really get the right balance of safety and efficacy with AAV gene therapy, recognizing that there can be some safety concerns with it. What gives you now the confidence that you've been able to hone in on the right dose, not just for Danon, but the general portfolio?

Yes. So unfortunately, for AAV, there are no preclinical models that mimic the safety we see in humans. There's just no TMA model. There's not even platelets and LFTs in mice and [ HPs ] and pigs tend to not fluctuate too much with AAV. So we have to learn this in the real world and sometimes the hard way, right? In terms of the dose, we have now treated 3 patients with the revised regimen and the recalibrated dose of 3.8E13 vector genomes per kilogram, successfully, safely, these patients tolerated the therapy well. We -- it's been a journey, right? Last several years, we learned so much from each patient. Even in Phase I when we begun -- when we first started with patient 1001, he got some steroids, but nothing else and he wouldn't take his steroids, and it took a while to sort of stabilize and he did not have TMA. But I can say even that patient who is 7 years out is working full time and he's living a normal life in his mid-20s, which would be unexpected with anything else, right? So wherever we are in Danon, I think that the long-term path to success is about the positive benefit risk. I think on the safety side, I feel we've solved it with this recalibrated dose in this regimen. Obviously, we'll need to treat more patients to see for sure. I think that with AAVs for heart, this mid- to low upper E13 range seems like the Goldilocks zone. We're in the same place with PKP2. We have not announced our BAG3 dose, but you can understand it's in that range as well. And that gets around some of the more common TMA and liver issues that are seen in the E14 range.

What kind of -- or maybe frame the totality of data that gives you that confidence that kind of low mid-E13 dosing can avoid some of the safety pitfalls that -- and obviously, there's going to be a dose effect dynamic, but specifically for this dose, had we kind of aggregate data and information and apply it here to say 3.8, we're good.

Yes. So the only time we have seen TMA in the setting of Danon disease was in Phase I, where we were well above 1E14 in 1 patient. In Danon at this dose in a couple of patients, one of them had another complement activating mutation called CUL4B. So we don't know exactly what happened there. And another patient got sort of the higher end of the dose and also had recent prior infections. So it could be that all 3 of those patients had issues that we're not going to -- we're going to screen out anyway with new patients. Having said that, the dose range in which we saw clear efficacy in Phase I was anywhere between around 4E13 up to 1.1E14. So this dose around 4E13 is at the lower end of the range of demonstrated efficacy, has a great safety profile, both in Phase I and in so far in our Phase II. And also in our Phase I patients who got around this dose, at least out to 3 years, which is as long as we've been able to follow them in the trial, they've had the most profound reductions in LV mass index and some of the most florid staining for LAMP2. So that gives us a lot of confidence. Obviously, we'll see what happens with how the trial resumes and how those patients do on efficacy-wise. But on the safety, I feel pretty good about it. One nuance here is that you don't want to see nothing after you treat these patients, right, just from a scientific side. You don't want to see no changes in labs. You want to see something because that gives us confidence that we're actually transducing cells, whether in the heart or liver or wherever. And the fingerprint of the labs in the days following the most recent patient's treatment are highly reassuring.

Is the risk of TMA with various AAV subtypes dependent on the underlying disease in any way? Are certain diseases more prone to complication? Or is that not even a factor as we -- because we'll have to extrapolate and aggregate information across disease settings as we think about each dose and vector.

I think it's -- I would say that we've seen TMA for the most part with AAV9, perhaps of the AAV8. And it's not always dependent on the dose also. Sometimes it's idiosyncratic. I think there are predisposing factors. One has to be very careful about screening those sorts of patients out, anyone with a complement-activating mutation or recent infections. So I don't -- we've seen TMA across several disease types, and we also see it in the transplant setting, solid organ transplant setting. So the body is primed to activate complement, especially when you get a torrential rain of virus in the body. So yes, I don't think it's disease specific. I also don't think, by the way, Josh, that there's going to be a long-term zero risk of TMA. I think that's not reasonable to expect. However, even the patients in our trial, and we hope there's zero long term, obviously, and certainly this trial, I don't know until it happens. But even the patients who had TMA in our trials early on, they've recovered fully from TMA, and I'm hoping that they also benefit from the gene therapy itself in the heart.

I was surprised this many years into AAV, recognizing some of the challenges of the administration and we've not really made progress with nonviral vector type administration. Do you see anything in the field that's encouraging or promising? And if not, why do you think that is?

There are some pockets of encouragement without naming companies. I used to sit on the board of a nonviral gene therapy company. It's hard to get around the early NHP toxicity that the field is seeing. I think that there will be room for growth in nonviral. I would say it's at least 5 years away to really see something impact on the clinic. Meanwhile, if we have a safe therapy with AAV, traditional in vivo gene therapy, traditional gene replacement, in addition to these 3 programs, we have at least 3 others that are equally exciting that we can apply this technology pretty rapidly.

What I found really interesting is talking to cardiology specialists around Danon and their enthusiasm for your program despite some of the safety considerations you've had to navigate through is exceptionally high. I thought we might have heard a little bit of caution. Well, let's kind of see how -- but I guess, perhaps reflecting just the dire nature of the condition and not necessarily feeling like there is time to wait and see how it goes. Your sense from the broader community, is that an accurate reflection of what you're hearing as well?

Yes, that's an accurate description. So what we know anecdotally from the patient community is just that there's overwhelming excitement and enthusiasm for us to continue to develop this. We've had a number of community calls cohosted with the Danon Foundation by which patients, caregivers and these families can come forward and demonstrate their support. In addition to the patient community coming forward, we have a number of HCPs that have participated as well. And so your sentiment that you captured is extraordinarily accurate. And so that's what has us exciting and motivated when we're out in the field, and we're encouraging folks to actively use the ICD-10 code that's been in place for 29 months now. And when we're talking to geneticists as well to actively encourage use of genetic testing, to genetically confirm these Danon patients. So Rocket has stood up Mission: Genome, which is a no-cost genetic testing effort, and that is a way for these patients and HCPs to partner and sort of take the administrative burden of getting an accurate genetic diagnosis sooner. And so we're encouraged by this and the HCP community certainly seems to understand that.

Let's come back to that because that's really important. Maybe first, though, 3 patients dosed successfully, what happens now on your path to continuing enrollment and ultimately to a potential BLA filing?

We're in discussions with FDA with this new data set of patients tolerable, good safety profiles, and we will announce when we know what the rest of the trial looks like. There's been no indication that there's going to be a change to study design. I don't know if FDA asks us to treat more patients than the 12 total they've agreed to given the safety issue. But if they do, that's not necessarily a bad thing because as we had more payer discussions even for LAD-I, I'm personally realizing that the bigger the data set, the better for the commercial launch. So a few more patients is totally fine as long as the study design remains intact and we're in those active discussions now.

And when can we expect data updates from the patients treated?

Sure. Before we move on to data expectations, it's also important to note that what we put out in our earnings in August, a couple of weeks ago, is that in addition to dosing safely these 3 patients at this recalibrated dose, we've enrolled over 50 patients in the natural history study. And so as Gaurav was mentioning, having a more robust data package with perhaps a few additional Danon patients treated in this pivotal study can be a positive thing. We've been working very actively behind the scenes. So trying to look graceful like a duck on top but pedaling very actively underneath to make sure that we have a robust patient population that we can tap into. So of the patients that were previously enrolled in the pivotal Phase II study, to our knowledge, none of those patients have dropped out. So we're in the process of screening those to ensure that all of those remaining patients are eligible to participate in the pivotal study. We've identified even more than that. So in the event that there's a greater number of patients that the agency wants to see, we can tap into that. But we also have the ability to tap into this patient population through this natural history study in the event that even more patients are needed. So we've been hard at work to make sure from an operations and execution standpoint, we're ready to go.

As we're thinking about the profile of the program and the risk we're trying to rule out by adding more patients, is there a sense of like we're trying to rule out events that could occur north of 1% of patients, north of 5%, again, like recognizing because you have to put it in the context of the severity of the disease, do you have a sense of where we're trying to aim for to rule out a risk?

I think that -- look, if we saw 50%, 70% TMA, that's a different product. We saw 10%, 20% and those TMAs recover and those patients never need a heart transplant, that's a different, right? So it's sort of like CRS in CAR-T, which I participated in at Novartis. CRS was pretty common, yet the drug got approved because otherwise, it's a fatal disease and there's no alternatives, right? Similar for Danon. I think in the oncology world, people are willing to take risks like CRS or TMA in the gene therapy world, they're just not. And I think people should be ready to take risk because ultimately, you'd rather have TMA stay in the hospital for a month or 2, recover but then live a normal life. And just to go back to the data question, I don't think we've provided guidance on that just yet, but we will as soon as we can.

Okay. Let's come back then to the patient identification efforts because it sounds like you've been very busy. Beyond the 50 patients you've enrolled in the natural history study, what are you able to comment on kind of beyond that for patient identification efforts? And when are we likely to learn more?

So last year, we had said that we'd be providing a comprehensive program update for Danon. Unfortunately, we had the safety issues. So it's basically delayed a year. Now we're going to do it this year, both a top-down analysis that will give a lot more light and color on to what the true prevalence of Danon is, and we've done a much more sophisticated analysis of those numbers. And also a bottom-up analysis of patients that are reported in the field. We haven't obviously put a lot of commercial efforts into patient finding, but informal efforts have been -- have led to some pretty good results there. So we'll be able to share both the top-down and bottom-up alongside a program update in the second half of this year.

Maybe elaborate a little bit on introducing an ICD code. So what -- like, how does that translate from, okay, there's a code to now we have a better sense of where patients are?

Takes time. So the code has been in place for 29 months, which means you have to be actively in the field with your geneticists, your MSLs and talking to the HCP community as to why you use it, when to implement it and then an accurate diagnosis matters. So it's not just the ICD-10 code, it's also about encouraging an accurate genetic testing confirmation so that we can verify that these are Danon patients. So it's in partnership. So we've been tracking the usage and uptake of the ICD-10 code over the last 29 months, which has been positive and in line with other rare diseases by which an ICD-10 code has been recently introduced. So from that front, it's fine. But it's not just pursuing that. You have to be in the community talking to these HCPs because don't forget, Danon is an indication where there are multiple forms of symptoms that emerge. And sometimes the cardiovascular symptoms are the last to emerge or the last to get identified in these young boys. So you actively have to be out there in the community, educating on the health care benefits of looking at all of the symptoms involved.

So these are patients who I imagine will primarily be followed by pediatric cardiologists.

It's interesting because it depends on how they present. A lot of times, there's a subtle learning disability. There are some psychocognitive issues even in the single-digit years. Later, patients might have muscle pain or muscle weakness. So it's not really a cardiology issue, right, early on. They often present to neurologists, to pediatricians, to psychiatrists, to musculoskeletal experts. And by the time they have a heart symptom, a lot of them get written off as something else, that's not heart. And once the symptoms of heart come on, it's pretty rapid and it's fatal in 2 or 3 years. So unfortunately, pediatric cardiologists are not seeing them in patients as much as they should. So our educational campaigns between now and launch focus on getting not just the pediatric cardiologists, but the other contributors there as well.

Roughly, how many pediatric cardiologists are there in the U.S.? Do you have any rough estimate?