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Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) is a great biotech to look into, because it is using gene therapy to treat patients with rare genetic diseases. It has a pipeline full of targets, 4 targets of which are in either phase 1 or above. The two indications that completed phase 2 clinical testing are LV RP-L102 for Fanconi Anemia and then LV RP-L201 for Leukocyte Adhesion Deficiency-I.
The reason why I specifically brought up these two indications is because they are close to approval. Rocket Pharmaceuticals expects to file regulatory applications to the FDA seeking marketing approvals for LV RP-L201 and LV RP-L102. Regulatory filings for LV RP-L201 for Leukocyte Adhesion Deficiency-I and LV RP-L102 for Fanconi Anemia are being done in the 1st half and 2nd half of 2023 respectively. Rocket Pharmaceuticals also expects to present clinical data across these two gene therapies and a few others at the upcoming 64th American Society of Hematology (ASH) Annual Meeting and Exposition being held December 10-13, 2022.
The last item to note is that Rocket Pharmaceuticals acquired Renovacor, which is another gene therapy pharmaceutical company. The reason for doing so was because it allowed Rocket Pharmaceuticals to obtain a gene therapy AAV pipeline for rare cardiac genetic diseases. This will further extend the pipeline should this program be advanced forward as well.
RP-L201 Gene Therapy First On Deck For 2023 Regulatory Filing
The next program to go over involves the use of RP-L201 gene therapy for the treatment of patients with Leukocyte Adhesion Deficiency-I (LAD-I). Leukocyte Adhesion Deficiency is a rare genetic disease, which affects the immune system. It is caused specifically by a defective gene known as ITGB2, which in turn causes a deficiency in CD18. What’s a problem with having a deficiency in CD18? Well, white blood cells (primarily composed of neutrophils) are not able to leave the blood stream to reach the site of infection it must conquer. This causes another chain of a negative event in which the infection becomes life threatening for LAD-I patients, thus persisting for an extended period of time. Without a successful bone marrow transplant, severe LAD-I is frequently fata during the first 2 years of life. LAD type I can be very fatal, even within the first few weeks of life. However, there are some symptoms that these patients experience first, which are as follows:
- Inflammation of the tissues surrounding the teeth (also known as periodontitis)
- Inflammation of the gums (gingivitis)
- Wounds from surgery are slow to heal
- Sores around the wounds due to delayed healing
The way that RP-L201 works is that this gene therapy provides a functional copy of the ITGB2 gene. Again, the purpose of this is to boost levels of CD18, which is what is missing from these patients. The restoration of CD18 thus then allows patients to be able to fight off infections once again. The way that this gene therapy is built is that it contains autologous (meaning cells taken from the patient to be treated) hematopoietic stem cells (HSCS) which have been genetically modified with a lentiviral vector containing a functioning copy of the ITGB2 gene.
This program is in great shape thus far, and the reason why I say that is because Rocket Pharmaceuticals is already nearing the regulatory filing of RP-L201 for the treatment of patients with LAD-I. More about that below, but the key point is that this biotech has already been able to show efficacy of this gene therapy for this particular rare genetic disease. Such positive data was released at the American Society of Gene & Cell Therapy (ASGCT) medical Conference in May of 2022. It was noted that in the ongoing phase 2 pivotal study all 9 LAD-I patients who were given RP-L201 achieved sustained restoration and expression of the CD18 protein.
Remember above? Where I stated that restoration of CD18 was important so that the patient could start fighting off infections again? Well, this is why such a mechanism of action for this gene therapy is crucial. The clinical data itself is beyond positive and it isn’t just because the company stated that it restored some levels of CD18. To better understand the magnitude of these results, I have to show you exactly why these results are superb. It is because what Dr. Shah has stated on what percentage of CD18 levels are needed for a patient to be able to live for a long time. It was stated that only 4% of CD18 levels are needed to predict long-term lifespan for these LAD-I patients. Well, in the phase 2 study all 9 patients sustained CD18 expression with an average of 56% at 3 to 24 months of follow-up. Even further real world evidence was provided.
What do I mean by that? All of the patients saw a decrease in both severe infections and the need to be hospitalized. This brings up a major catalyst opportunity for traders/investors of Rocket Pharmaceuticals. It believes that it will be able to file a regulatory filing in the 1st half of 2023 of RP-L201 for LAD-I.
Financials
According to the 10-Q SEC Filing, Rocket Pharmaceuticals had cash, cash equivalents and investments of $306.5 million as of September 30, 2022. It sold a total of 3.3 million shares of common stock under its at-the-market (ATM) facility for total net gross proceeds of $46.6 million through this third quarter ending September 30, 2022. In addition, it raised additional cash back in October of this year. That is, on October 3, 2022, it sold a total of 6,800,000 shares of its common stock at a public offering price of $14.75 per share. In total, it raised approximately $108.2 million from this offering. This means it should be good on cash for quite some time now. With the ATM facility it did this past quarter, plus the closing of the recent cash raise through the sale of its common stock, Rocket believes it has enough cash to fund its operations into the 2nd half of 2024. This includes enough cash to build its AAV cGMP manufacturing facility and to fund all the programs in the pipeline.
The only way I believe that it may choose to raise cash earlier than necessary is if it files its regulatory applications in 2023. At that point, it may choose to raise cash again sooner, in case it needs to start developing a plan to commercialize its gene therapies. Of course, that is if they are ultimately approved by the FDA for marketing in the United States.
Risks To Business
There are several risk factors that investors should be aware of before investing in Rocket Pharmaceuticals. The first risk to consider would be with respect to the filing of LV RP-L201 for Leukocyte Adhesion Deficiency-I expected in the 1st half of 2023. There is no guarantee that the filing will be accepted by the FDA and even if it is, there is no assurance that it will be approved for marketing in the United States. Both of these risks can also be considered for the filing of LV RP-L102 for Fanconi Anemia, which is expected in the 2nd half of 2023.
Another risk to consider is the slew of data anticipated at the upcoming 64th ASH Annual Meeting. Data to be presented will be LV RP-L201 for Leukocyte Adhesion Deficiency and LV RP-L102 for Fanconi Anemia. In addition, an update on two adult patients receiving RP-L301 gene therapy for Pyruvate Kinase Deficiency (PKD) is also expected at this medical conference. There is no assurance that any of this updated data will cause the stock price to trade higher.
Conclusion
The final conclusion is that Rocket Pharmaceuticals is a great speculative biotech play to look into. For starters, it has the two potential regulatory filings of LV RP-L201 for Leukocyte Adhesion Deficiency and LV RP-L102 for Fanconi Anemia. Expected filing dates for each are expected 1st half and 2nd half of 2023 respectively. Investors also have a closer catalyst to capitalize on, which is the release of updated results from both of these indications noted, plus an update on RP-L301 gene therapy for PKD as well at the upcoming 64th ASH Annual Meeting, which is expected December 10th – 13th of 2022.
This biotech doesn’t only have the candidates listed above with huge potential. It is gearing up to initiate a pivotal study using RP-A501 in treating patients with Danon Disease in 2023. It has already established proof of concept in using this gene therapy to treat this patient population. It is also expected to acquire another biotech by the name of Renovacor. It did so in an all-stock transaction for approximately $2.60 per share. The acquisition of this company is expected to close by Q1 of 2023. It adds additional AAV gene therapies in the pipeline, in particular an AAV targeting BAG3-associated dilated cardiomyopathy. This has a lot to do with the ongoing programs for Rocket, because this particular indication is near equivalent to the Danon Disease population I described above.
With two regulatory filings of two gene therapies expected in 2023, plus near-term data updates at the 64th ASH Annual Meeting, these are the reasons why I believe that Rocket Pharmaceuticals is a great speculative biotech play to look into.
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