Rocket Pharmaceuticals, Inc. (RCKT) Earnings Call Transcript
September 17, 2020
Earnings Call Speaker Segments
Hello. This is Dave Lebowitz welcoming you to -- welcoming you again to the Morgan Stanley 18th Annual Global Healthcare Conference. I'm one of the biotech technology analysts here. Before I get going, let me just run through the requisite disclosures. Please note that this webcast is from Morgan Stanley clients and appropriate Morgan Stanley employees only. This webcast is not for members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at www.com/researchdisclosures (sic) [ www.morganstanley.com/researchdisclosures ]. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'm happy to welcome into the next session from Rocket Pharmaceuticals, President and CEO, Gaurav Shah. Rocket is a development stage gene therapy company that's developing therapies for rare and devastating inherited diseases. And with that, Gaurav, if you could just start by giving us a top-level overview of Rocket, its approach to gene therapy as well as the company's mission.
Absolutely. Thanks for having me, and it's great to chat again. So Rocket Pharma is a gene therapy company. We're a multi-platform or platform-agnostic gene therapy company, whichever way we like to think about it. Multi-platform in the sense that we focus on both in vivo AAV gene therapy as well as ex vivo antiviral gene therapy. And we're also open to other platforms in the future, so truly a multi-platform approach or platform-agnostic approach. Our thesis in selection of disease types, disease organs and disease areas and specific diseases is that there are a large number of rare diseases, of course, in the world, and many of those rare disease have a very clear, on-target mechanism of action. And the mechanism of action here for all these diseases centers around a particular protein where a little protein could go a long way. And we try to target the cell of interest, in that sense that, for example, in Danon disease, the cardiomyocyte is a primary cell of interest and the protein that's targeted there is LAMP2. Targeting LAMP2 inside of cardiomyocytes can potentially correct the full spectrum of disease. So that's the general philosophy. We start with the disease first and then find the appropriate platform amongst a multitude of platforms to apply to. It's a little bit of a different approach to a platform-based approach. We have 5 programs in the clinic...
Go ahead.
Go ahead. Go ahead.
Yes. Sorry, with that in mind, how many other companies out there that take the multi-platform approach?
I know one, a very, very, very big company, Novartis has both AAV and lenti, but there are others. And I think the medium- to long-term goals here are to tackle diseases and not necessarily a science platform. So I think there are really 2 approaches in the gene therapy industry. One is a robust and growing scientific platform, example of that might be a CRISPR-based editing company. Or in the case of Bluebird, a while ago, a lentiviral-based ex vivo gene therapy company that expanded from there. Our approach has just been coming from the other side, which is -- I'm a physician myself. The company was started by folks with a clinical mindset. The other approach is to start with a clinical disease stage first and then find the right platform. I also want to say that we try to focus on platforms with enabled technologies. In other words, that are tried and true and proven now, so that there is not just long-term value but medium-term value as well.
That makes sense. So you were talking about 5 overall programs that you have to this point?
Correct. So I mentioned Danon disease. That's our in vivo AAV program. Danon disease is a multi-organ disease, but the primary cause of mortality here is heart failure. It's a cardiac-focused disease. That's our one in vivo AAV program. We also have 4 ex vivo lenti programs. The lead program there is Fanconi Anemia. It's a disorder of the bone marrow that leads to bone marrow failure in the first 10 years of life and leukemia and other malignancies if not addressed with bone marrow transplant. The next lenti program is LAD-1, which is a disorder of neutrophils that leads to recurrent infections and early mortality without a bone marrow transplant. The next is pyruvate kinase deficiency. This is a red cell disorder. It's a hemolytic anemia with high morbidity, especially in the severe disease form with multiple transfusions throughout life and need for splenectomy and other procedures down in the long term. And the final program is osteopetrosis, which is a disorder of osteoclasts. So bone can be made but not resorbed. And this is one of the most devastating illnesses out there with early mortality as well. So we have 5 clinical programs. Rocket has been around for 5 years, and I'm so excited to see that all 5 programs are now in the clinic. And in fact, 2 of them, Fanconi Anemia and LAD-1, are in registration-enabling trials.
Excellent. That's nice to hear. There's been a lot of talk in gene therapy lately about recent news from CRL for -- and hemophilia for BioMarin to some adverse events and other trials. Could you speak to how these events have affected investors' view of gene therapy? How these events are relevant to the various players out there? And where -- what do you think it means for Rocket?
Absolutely. So without necessarily having a view, a specific viewpoint or commenting on other programs, what I can say is that our approach is that we go after diseases where there's a true unmet need and where the diseases are truly severe, and also where there are no other mainstays of treatment. So when there are no other approved therapies for a disease, whether it's Danon or Fanconi Anemia, the threshold for showing benefit/risk changes, right, because if there's nothing else out there at all and gene therapy is the only viable approach outside of either a bone marrow or cardiac transplant, that does facilitate discussion of clinical end points. And it does sort of accentuate the utility of things like accelerated approval pathways using surrogate endpoints. So our disease selection is because we're trying to be first, best in the lean class, but also going into disease areas where gene therapy might be the only hope in that disease. Some of the issues where there are other mainstays of treatment may not apply to the same extent. The second point about toxicities -- yes, look, we learn from our peers, our colleagues. We have the great fortune of having learned a lot. And I think this industry is moving toward a lot more open data sharing because in reality, what happens with one gene therapy platform or program should and can be applied to another program. And I think other companies and programs have been very generous with helping to understand. So we've learned from other toxicities with other programs. We've tried to incorporate into our protocol for Danon, ways to address those things upfront and head-on. And we hope to see a clear benefit/risk coming out of them at some point.
Let's go on to RP-L102. First of all, can you tell us about the disease Fanconi Anemia? What is its natural history? And how could this therapy actually benefit?
Yes. Fanconi Anemia is a disorder of the bone marrow. It's a disorder of stem cells, and specifically, stem cells don't have the ability to repair their own DNA. So when DNA gets damaged by oxidated stress or any other mechanism, it cannot repair itself. This leads to the stem cells fizzling out over the first decade or so of life. It also affects every other cell in the body, not just the stem cells but the primary morbidity for these patients untreated is stem cells in the bone marrow. So these are patients -- the natural history is such that patients -- 80% of patients get marrow failure by the age of 10. Those who don't get transplanted also often go on to develop leukemia or MDS. Patients who survive that phase of life, which is usually in the 20s and get into the 30s, often get head and neck cancer. Patients who are transplanted with another person's bone marrow, those patients have the ability to restore their marrow, the hematologic components of the disease, to normal. The transplant actually increases by at least 3 to 5x the risk of head and neck cancer. And in fact, patients who got bone marrow transplanted and had GVHD specifically have dozens of times increased risk of head of neck cancer. So all in all, bone marrow transplant works for the hematologic components but worsens head and neck cancer. So ultimately these are patients whose median life span still tends to be in their late 30s at best. The prospect of gene therapy is that in Fanconi Anemia, because the stem cells fizzle out on their own over time, by the nature of the disease, we don't need to use conditioning. Cytotoxic chemotherapy conditioning is not required for gene therapy. This we've proven through our Phase I program with CIEMAT. And we're evaluating the same with our Process B registration-enabling trial now at Stanford CIEMAT and at UCL. And the proposition is that even without conditioning, we can restore normal function of the bone marrow over time with corrected gene -- with cell -- sorry, gene-corrected cells that are infused via gene therapy. So the beauty of this approach is that you don't increase the risk of head and neck cancer above baseline. And if patients get head and neck cancer down the road, they can still use potentially curative chemo RT at that time, which you can't use if you've already undergone chemo in earlier life. So the proposition of gene therapy has gained a lot of momentum in the Fanconi Anemia specifically because of the lack of need for chemotherapy here.
Now if you could run us through the path to market for RP-L102 and what Process A is versus Process B? And how that ultimately -- how important that ultimately is for approval?
Right. So we completed the registration-enabling Phase I trial with 2 patients treated at Stanford last year. We continue into our Phase II, which is a global study. And Phase 2 will enroll a total of 10 patients. So including Phase I and Phase II is 12 patients. We've had discussions with both FDA and EMA in this regard and have agreement on a proposed primary endpoint, which is mitomycin C resistance in the bone marrow, which basically tells us that these patients are being converted to look like non-Fanconi patients. They have -- they're going to have a mosaic marrow that confers better long time marrow health as well as leukemia-free survival. So that endpoint has been discussed and agreed to. So the registration path is ongoing. Process A was the process that we inherited and worked with CIEMAT around. It was an academic process. We know it works. 6 out of 6 patients treated with that process who received an adequate dose of gene therapy, all are showing evidence of engraftment. That was presented at ASGCT earlier this year. Process B is Process A but made more reproducible and more robust through a commercial-grade vector. So you have a more pure vector, number one. Number two, through the use of transduction enhancers, which helps us get the vector copy numbers higher than without enhancers. And three, through some modified cell enrichment methodology that helps the gene-corrected stem cells and graft better into the bone marrow. So those are the 3 main changes from Process A to Process B. Ultimately, Process B is potentially a commercial-ready process. And we hope that after this trial, we'll have enough data to file a BLA and MAA in Europe.
When might we see data from Process B?
So we have some additional Process B data in Q4 this year that we've guided to and we continue to guide to. I would say, the true, mature longer-term data will start being presented next year as we get closer to BLA filing. We've -- in Fanconi Anemia, without conditioning, it takes time for these patients to show adequate engraftment. We've shown that in CIEMAT's data with Process A. We expect similar results in Process B. So we're going to show a snapshot of whatever we have this year. And as the data matures toward BLA, we'll show more data into next year.
Excellent. Let's move on to RP-A501 for Danon. If you could start by giving a top level of what Danon disease is and how RP-A501 works?
Sure. So Danon disease is a disorder of autophagy. Autophagy is like the recycling center of the cell. Autophagy removes organelles, mitochondria and other debris inside the cell. Without autophagy, this debris would build up and potentially disrupt the normal activities of these cells and that becomes most pronounced in Danon disease in 3 organs: one is the heart, one is the skeletal muscle and one is the CNS. So traditionally, it's a disease defined by that triad of organ dysfunction. It's an X-linked disorder. It's X-linked dominant. It affects boys and girls, but it affects boys more severely. The mortality for boys tends to be in their late teens or early 20s. [Audio Gap] and the cardiac transplant of course only addresses the cardiac component of the disease, not the skeletal muscle and CNS components. And cardiac transplant is associated with about a 50% 10-year mortality rate. So these patients who are discovered to have Danon disease in time are candidates for transplant but it's not the ideal procedure. The 501 therapy is an in vivo AAV9 approach where a normal -- a corrected version of the gene is introduced into the body through its given IV. There's tropism for AAV9, especially for the heart. AAV9 loves the heart. In fact, numerous literature papers and publications have shown that the tropism of AAV9 for heart is higher than that of muscle or CNS, by many folds. So that's why we selected AAV9, and we are now completed -- completing a Phase I -- in the midst of a Phase I. We completed with the low dose adult cohort for that, and we anticipate having preliminary data at the end of this year as well in Q4.
Could you, I guess, conceptualize what exactly we should expect from the RP-A501 data later this year?
The first 3 patients with low dose were treated last year -- 2 last year and then 1 in January, which we have announced at JPMorgan earlier this year. The higher -- the first higher dose patient was just recently treated. We had a press release go out. So we will have more data certainly from low dose. I anticipate we'll have a combination of long-term safety data and whatever biomarker data we have in time for Q4, for the low dose. For the high dose, I anticipate safety data at this point, given that we're so close to the end of the year already and it takes time to process these biopsy samples and other biomarkers. So I anticipate biomarkers -- sorry, safety data only, but we'll see what we have by the end of the year. And next year, we'll have a lot longer-term follow-up for the clinical outcomes that I think will be more sort of a better signal of the ultimate benefit with complete therapy.
That's very helpful. Given that you're using AAV9, are there any extra thoughts you have about that, given some of the safety issues that have occurred lately?
Yes. So certainly, there have been safety issues reported. I would say that the 2 kinds of safety issues reported include early complement activation leading to various dysfunctions, platelet reduction, renal failure, and the other is some liver toxicity that may or may not be related to immunogenicity but it's hard to know. And like I said before, we've studied these situations very carefully. We've thought long and hard about how to get ahead of any potential toxicity, such as those to our protocol designs. Protocol was designed in very close conjunction with both FDA and our IDMC, whose -- the IDMC has recruited experienced in the conduct of AAV9 studies as well. So we think we've built a protocol that addresses some of these concerns, but of course we'll discover this alongside everybody else.
Clearly. Let's move on to RP-L201. Could you tell us about leukocyte adhesion deficiency? And how this is amenable to ex vivo approach?
It's sort of neutrophils, the CD18 protein that's expressed on the surface of neutrophils is deranged in these patients. Without CD18, the neutrophils cannot extravasate to sites of infection. So these are patients who have recurrent pneumonias, fungal infection. And in fact, without a bone marrow transplant, about 2/3 of the patients who have severe LAD-1, meaning that CD18 is less than 2%, they pass away by the age of 2. Bone marrow transplant, of course, can be curative but is often associated with a high 1-year mortality rate and high GVHD rates and other toxicities. So again, not an ideal way to move forward and address LAD-1. So the current program is an ex vivo lenti approach, and it's a corrected version of CD18, the [ teen ] for CD18 into the cells, and the cells are reinfused into the patient. We have now completed our Phase I of 2 patients at UCLA under the care of Don Kohn -- Dr. Don Kohn. And we're moving forward with Phase II. The Phase II is registration-enabling. We had discussions with both FDA and EMA to go to global Phase II study. The total Phase I, Phase II is 9 patients, so the Phase II has 7 additional patients. And we've agreed on an endpoint, just a basic survival endpoint. Because if patients survive beyond the age of 2 and at least 1 year after therapy, that's different from the natural history of the disease. And we'll also be looking at other surrogate markers of response before them as well. So we'll have a -- this is not preliminary. This is a little bit more mature readout. We had a preliminary snapshot at the end of last year. We'll have some updates from these 2 patients at the end of this year. And any other patients that we've treated will at least have drug product metrics on those. That will be Q4.
Excellent, excellent. If we move on to RP-L301, could you tell us a little bit of pyruvate kinase deficiency and how A501 works there -- or A301?
Sorry, I failed to mentioned one final point in LAD-1 and then I'll move to PKD. Last year, we had shown good CD18 expressions well above what's needed. The 2% that I said on the severe population, if those patients have as low as 4% but certainly 10%, those patients can live normal life spans and no longer look like severe patients. So the threshold was relatively low, it's around 10% or so for LAD-1, just to put that out there. On PKD, the disorder is a hemolytic anemia, it's a red cell disorder. It's most reminiscent in some ways of gene therapy for beta thalassemia. This gene therapy basically is converting the pyruvate kinase pathway to normal function, which prevents the hemolytic anemia. It's also an ex vivo lenti approach. PKD is interesting in 2 ways. One, there's a clear precedent for how red cell disorders can be viewed sort of in the general development landscape and also by the agencies. Transfusion independence or reduction in transfusion requirements is an accepted, in fact, an approved path based on the beta thalassemia, excellent work that Bluebird has done. So it creates a very straightforward template in some ways. In a lot of ex vivo lenti disorders if there is adequate vector copy numbers per nucleus and an adequate cell dose, it should be a relatively straightforward path. And so PKD is in the clinic now. We've treated one patient over the summer, and we'll have some preliminary look in safety efficacy in that one patient in the fourth quarter. And we continue to treat patients with PKD as well. So the second important or interesting point on PKD is that it's actually our biggest lenti opportunity. The total prevalence of patients here is between 3,000 and 8,000, which is higher than Fanconi Anemia. So it does move into the top spot in terms of the prevalence numbers as we develop data in the coming 18 months or so.
What data should we expect when you release it in the fourth quarter?
So certainly, safety. And I would say, this is not a disorder in which it's very straightforward to measure protein expression or whether it's a clear functional outcome. So we'll be looking at blood counts and other measures of potential engraftment as well as DCM. So that's what we'll have. We'll have an early look on the data for that one patient by the end of the year. And I can't tell you exactly if it's 2 or 3 months or more, but that's what [indiscernible].
Could you tell us about L401 and malignant osteopetrosis?
It's the one disease that really defines -- redefines the word devastating. As I mentioned before, these are patients who have a [ diffractive ] osteoclast. So they can lay bone down, they can resorb it. What happens in the first couple of years of life for many of these patients is that the skull becomes deformed and there's bony outgrowth within the skull. So a lot of these kids have deafness and blindness early in life without intervention. They're also going to bone marrow failure similar to Fanconi Anemia in the first few years of life. And mortality is also in the single-digit range, just like with LAD-1. Our approach is an ex vivo lenti approach, just like with Fanconi, LAD and PKD. And again, we have cleared the IND here. We're going to start the trial by Q4 and anticipate some data readouts probably next year on our patients.
Excellent. I guess for the last question here, if you could just give us here the company's current cash position and runway?
Sure. End of last quarter, we had $250 million on the balance sheet. And our guidance right now is cash into second quarter of 2020.
Thank you. With that, I appreciate you attending the conference and being in this session. And look forward to chatting you -- with you again in the future.
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