Rocket Pharmaceuticals, Inc. (RCKT) Earnings Call Transcript

All right. Good afternoon. I'm Eric Joseph, Senior Biotech Analyst for JPMorgan. And our next presenting company is Rocket Pharma. Presenting on behalf of the company is CEO, Gaurav Shah. And there's a Q&A after the presentation. So if you got a question, we'll bring a mic over to you and folks tuning in via the webcast can also submit questions there. So Gaurav, thanks for joining us today.

Hi, everyone. Welcome. Thank you, Eric. Thank you JPMorgan for having us. So I'm going to start with a quote from T.S. Eliot. "In order to arrive where you are, you must go by a way wherein there is no ecstasy." We can probably agree -- let me say it again, "In order to arrive where you are, you must go by a way wherein there is no ecstasy." We can probably all agree that last year was challenging. Certainly, few of us were ecstatic last year. But we've gone by that way already and we're arriving in 2025 with great optimism. And I believe this year holds really great promise for patients treated with gene therapy, especially those with rare devastating diseases, and I'm especially excited about Rocket's pipeline, just get to the bottom line, key messages for this year. We have a host of milestones -- potential milestones coming up in the first half, later in the year and into early 2026. First of all, in the first half of this year, we will have a program update on Danon disease that has 3 prongs. The first is a general trial update for the pivotal Phase II trial. The second is a trial design update, in other words, statistical plans, et cetera, moving into the top line. And the third update is going to be a patient-finding update that is both bottom up and top down. So that's first half. We will also have preliminary early data from PKP2, which we call Pegasus. We've completed the low dose cohort as far as enrollment and we'll have at least safety, if not additional information in the first half of this year. We will be filing our BAG3 IND in the first half. In either the second half or at some point this year, we expect an LAD PDUFA. We expect the Fanconi submission will be completed, and we'll start launch planning for Fanconi, and we will resume PKD enrollment. So that's the panoply of 6 programs for this year. In early 2026, we will have Danon top line data. And I'm very excited to announce potential additional indications in cardiac gene therapy that are cooking in the background right now. So I will try to be pretty concise and move directly to some of the disease characteristics and clinical data that make 2025 exciting and the future very promising. So Danon disease is a disease of autophagy. Autophagy is like the vacuum cleaner of a cell. The underlying myocardium is -- has beautiful designs like the carpet here. Autophagy is needed to take trash out. Without autophagy, the carpet becomes muddied and you can't see the designs over time. Turning on autophagy, which is what we do with gene therapy, allows the true structure of the myocardium to work so that the cardiomyocytes can contract together and have solid cardiac output. Danon disease is an X-linked condition with impaired autophagy. Unfortunately, these are boys mostly, but also females later in their life who have a lot of vacuoles building up inside the heart. Unfortunately, the boys die or need a transplant by the age of 19 or 20. The females live longer because they have some protein already there. LAMP2 is the protein involved. And what we do with AAV9-based gene therapy is replace their genetically mutated LAMP2 protein. Danon disease has a prevalence of 15,000 to 30,000 in the U.S. and Europe. We're going to talk more about that in a program update later. I was going to say this semester, but later this half. These slides are new from November from AHA, and some of them are even updated since then. Protein expression using AAV9 gene therapy, LAMP2 gene therapy for Danon disease, is durable and robust out to 5 years. This is the first time, I believe, that in the history of any gene therapy for a muscular-related disease, we've shown persistent, robust, durable protein expression here between 50% and 75% in the first patient out to 5 years, and in all patients between 2 and 4 years. You can see more of that on the right. Those are representative IHC images. We're on Slide 12 for those who are following the webcast. On slide 13, Danon disease is a disease, like I said, of impaired autophagy, and these vacuoles build up inside the cardiomyocytes. You can see that on the left side as these -- on the top left as the large white blobs. Over time, you can see they get reduced in number quite a bit. You can see that on electron microscopy on the bottom slides as well. So you can see histologic changes that mimic and follow the protein expression. So this is one of our favorite slides at Rocket Pharma. And I can't believe that we live in an era where most of this slide is green when it should be red. If we did nothing, every cell here would turn red between 1 year and 5 years after treatment. Everything is green or at least light green. These are patients who were treated on the Phase I study. These results were published in the New England Journal of Medicine in November. And you can see that at -- in a disease where the median age of survival is 19 or 20 for boys, first of all, several of these boys are over 20. One of them just celebrated his 25th birthday a few weeks ago and is healthy, going back to work, and happy with his family. So that's the age itself. It's already -- we've already bucked the trend here. The LV Mass Index, which increases in Danon patients -- that's why they have big hearts. Danon disease is a disease of big hearts and the heart doesn't start big, it starts normal. So obviously, it gets bigger and bigger as these boys grow up. But to see a reduction in LV Mass Index in all 6 of 6 treated and followed patients is not expected, except with the power of gene therapy. Moving to the right, we see similar changes in BNP which is a marker of heart failure. Massive, profound reductions in troponin which is a marker of cardiac injury. And remarkably, every single patient, 6 of 6, improved their NYHA class from Class II to Class I. That means they went from symptomatic to asymptomatic. KCCQ scores, even quality of life scores that increased by 5 points or more have been associated with approved cardiac therapies. Here, the median is around 20 something with as high as a 52-point increase in how these patients function and feel. So again, we live in an era where we see green here and not red. This is the LV Mass Index over time in those patients -- in all of those patients. You can see, first of all, that there's a sustained reduction over time compared with untreated patients' natural history where these LV Mass Index should increase. So it's like an alligator mouth, the bigger the difference, the more profound the impact. Now what's interesting here is that at month 12, everyone has reduced by 10% or more and they also have protein expression which means that if this were a pivotal Phase II trial, the response rate would be a 100%. But it was just the Phase I. We're starting the -- we're almost done with the Phase II now. This is another way. This is a new slide, not shown before, of Danon disease patients who were treated on the far right. You see an ongoing and durable, robust reduction in LV Mass Index over time at 4 years on average 47%. Other recent drugs that were approved for Fabry disease, amyloid and mavacamten for HCM, shows some decreases as well, but not as profound and durable over time. Similar slide as the previous one, but this is just looking at the low dose patients. Low dose is the one that we are moving forward into the Phase II pivotal study and -- which we've done enrolling. But you can see again a profound decrease over time versus what would happen untreated and even versus other agents that are out there on the market. This is troponin which is a key secondary endpoint. You see a drop in troponin to normal levels for almost all patients or near normal levels for all patients. And troponin is a marker of cardiac injury, and again, it should not decrease once this disease has started, but it does with gene therapy. These patients, like I said, are doing well. There are cases where one sibling who was not treated with gene therapy, but was treated with transplant has unfortunately become more frail over time, and the gene therapy-treated patient actually takes care of him and their mother. These are examples that are real and over time are going to be the basis of acceptance, I believe, in the community globally for a Danon disease. The Phase II trial is ongoing. We've completed enrollment as of a few months ago. We're finishing dosing as fast as possible. Again, the key endpoints here are going to be a combination of protein expression and LV Mass Index. Again, drawing from Phase I. If we see even a partial response of Phase I, this could be a positive trial. More on that in the first half program update. The manufacturing for Danon disease is in-house. And why does that matter? It matters because we can control the cost of goods in a pretty profound way with high margins at the end commercially. And also, because we control our timelines, we're not dependent on others to get the work done. And we have enough manufacturing capacity in our plant in Cranbury, New Jersey to supply the entire Danon market. This is an expense that we took early in the -- in Rocket's history when maybe capital was easier to raise, I must say. And I'm happy we did that, because it's going to translate into Danon disease but also help with PKP2, BAG3 and other indications to come down the road. PKP2. Now there are several types of cardiomyopathy. There's hypertrophic cardiomyopathy, there's arrhythmogenic cardiomyopathy, and there's dilated cardiomyopathy. And I'm thrilled to say that Rocket has a hand in each of those, right? So Danon addresses hypertrophic, PKP2 addresses arrhythmogenic and BAG3 is going to address dilated cardiomyopathy. Let's talk for a second about rare disease. While each of these rare disease with diseases may be somewhat rare, although 50,000 is not that rare, when you add them together, these are common diseases, right? So just these 3 alone add up to 100,000 patients in the U.S. and Europe. And you add on the other 3 that are coming down the pike, and we'll talk more about hopefully next year, and you're at 200,000. That's no longer an orphan disease using one platform. PKP2 ACM is a disease of desmosomes in which PKP2 is missing or defective. Actually, these patients are heterozygotes so they have reduced PKP2, not zeroed PKP2 unlike Danon disease. But these are patients who have sudden cardiac death, palpitations, especially with exercise, and it's one of the most common causes of sudden cardiac death. So athletes who are playing sports, basketball, track, and they suddenly fall down or they faint or they could pass away. Many of these patients have ICDs in place to prevent these sudden cardiac, fatal arrhythmias. This is a disease that's probably twice, if not more, prevalent than Danon disease. So at some point Rocket will be a PKP2 and Danon and BAG3 company not just a Danon company. So that's the future that's coming. 50,000 patients in the U.S. and Europe. There are others in this field. And in fact, one of the others in this field has quoted a number of 140,000. We tend to be pretty conservative not just for PKP2 but for Danon as well. So in our preclinical model that was a conditional knockout model out of NYU, we showed a reduction in arrhythmias very early on after treatment with AAV.rh74-based replacement of PKP2. We also saw a reduction in RV area. These are the 2 most important measures of cardiac progression in patients with PKP2 ACM. Now we believe that rh74 is the best capsid for this disease. Why? Because first of all, rh74 has a lot of experience. We have a lot of experience with rh74 in the clinic, in the commercial world with the Duchenne programs. Patients take mid-e14 range doses and there's a pretty strong, positive safety profile. This is a heterozygous disease. We don't know how far we have to go, how high we have to go. So we believe that having a capsid with the most experience in the world in the e14 range is the way to go. If I were to do this again, we'd repick the exact same capsid. We're also starting at a dose 8e13 which is potentially positive based on the preclinical data that I just showed. So we're not starting -- this is not really a dose-escalation Phase I. It's a Phase I to potentially validate the dose that we think will work. So this program we finished the low dose enrollment already. This is Slide 29. And we will have an update in the first half of 2025. Our style and our plan has always been to move toward pivotal trials as rapidly as possible. We have an excellent iterative dialogue with the FDA going already, not just for Danon but for these other programs, and we hope to move them forward as soon as we have an understanding of the right dose to move forward. BAG3 is a very important DCM, dilated cardiomyopathy that we inherited from Renovacor. And BAG3, unlike LAMP2, which is associated with one function which is autophagy, BAG3 regulates several functions in cardiomyocytes including autophagy, but also including contractility, structural support and apoptosis. And we have not provided a preclinical update here in some time and we will as we move forward. But dilated cardiomyopathy is actually much more common than hypertrophic cardiomyopathy. There are more patient communities and advocacy groups that address DCM that we work very closely with. BAG3 is likely more common than Danon disease, somewhere in the PKP2 range, more on the epidemiology as we move toward IND submission. IND submission is anticipated in the first half of 2025 as I mentioned. So 3 programs, 3 pearls and more cardiac programs to come. Rocket started with a program called Fanconi Anemia. And Fanconi Anemia is a cause of bone marrow dysfunction. These are patients in which DNA repair is damaged. And when DNA repair is damaged, well, when you have a hit to your DNA, your own DNA can't repair it. This especially affects stem cells in the bone marrow, but it affects all cells throughout the body. The standard of care for patients with Fanconi Anemia is allogeneic transplant, but the problem with allotransplant is that it's highly toxic. It comes with chemotherapy. You have to give chemotherapy to these patients who already have frail bodies and it's very hard to recover from. Also, while allotransplant can be potentially curative of the hematologic aspects of Fanconi Anemia, it actually worsens the risk of cancer, solid tumors in these patients, which ultimately prove to be fatal. So patients who have been treated with allotransplant in Fanconi Anemia are sitting and waiting for the cancer to arrive. So we need another option, and that is gene therapy. We showed that without any conditioning, we were able to increase vector copy numbers in the peripheral blood and bone marrow over the course of time out to almost 5 years without any conditioning whatsoever. And why is that? That's because there's something called the selective or proliferative advantage that's present. If you think about it, when you get your first DNA hit in a stem cell, the stem cell goes awry and it doesn't work. But a second hit could rectify the first hit, and the second hit can't be cured either, right? So now you have a stem cell that works and survives. So we took this and put it -- and applied it to gene therapy. What if we gave these patients millions of cells with no chemotherapy, could they then take over the bone marrow and just allow the other cells that are going to die anyway to die out over time? It was a thesis, it was a theory, but it worked. Most of the patients treated in this trial have had improvements in what we call MMC resistance which is the hallmark of Fanconi Anemia diagnosis. The patients you see here some are late bloomers as late as 3 years, but all these patients have increased in MMC resistance with no conditioning whatsoever. This is a Phase II pivotal trial that's done. We've started a rolling BLA submission with the FDA. We've also submitted to the MAA, and that's under review as well. Most of the patients did have improved MMC resistance, normalization or stabilization and in some cases improvement of blood counts. And given the risk-benefit profile, the patients and community who are dealing with Fanconi Anemia are asking, why not? If you have a therapy with minimal risk, there's only one Grade 2 AE in the whole trial, but you can cure potentially the hematologic components of disease and not increase the risk of cancer that chemotherapy gives, why not? So we're very excited about launching this program likely in 2026. LAD-I. Someone asked, both Jonathan and Kinnari today what their favorite program was and it's unfortunate that I present this as #5 right now. But it's actually one of the reasons why we go to work, seeing the results we see in LAD patients. These are patients who have CD18 that's absent or reduced in their neutrophils, and these patients can't fight their own infections. They often pass away of pneumonias and fungal infections and have gingivitis and other debilitating conditions. But most patients in the world pass away by the age of 2. So when we talk about devastating, this is devastating and it's also severe. So severe LAD-I, we did a trial, we completed a Phase I/II trial that was pivotal in this population, restored CD18 expression -- this is Slide 37 -- in all patients who were treated with just 9 patients treated. And this Kaplan-Meier curve says it all. It's what academic physicians and practicing physicians and drug developers like us aspire to our whole lives. 100% survival in all patients and also a massive reduction in infections and infection-related hospitalizations after the gene therapy treatment. This one patient that came to our -- one of our rare disease programs, and at the time, she had a -- she was a single-digit age when she came. And she said that my dream in life was always to ride in a van across the country or drive in a van across country the day I turned 16. And she never thought that it could actually happen. Well, she's almost 16 now, and she may be 96, right? So this is a devastating disease. I think you can only get those sorts of results with gene therapy that's why I'm optimistic about this year. This program is with the FDA. We're tweaking some stability and sterility issues and hoping to resolve them this year for an approval. Last but definitely not least, when gene therapy works, it works. PKD, pyruvate kinase deficiency, this is the most common lenti program that we have, and we've prioritized some of the others. So we have not started enrolling the pivotal Phase II here. We do anticipate that we would start and resume that program later this year as LAD and Fanconi get up and running. But in this program, 4 out of 4 patients in Phase I either normalized or massively increased their hemoglobins. And these patients were transfusion-dependent, after splenectomies and had debilitating existences and quality of life and, we're very, very happy to see how well they've been doing and we'll move this into Phase II as soon as possible. There's a picture of where we go to work most days. For me, it's about 3 days a week, but for some people it's 4 or 5 here. And it's in Cranbury, New Jersey, near Princeton. It's 30,000 square feet that are dedicated to Danon, PKP2 and in the future BAG3 as well. Again, this control allows for great cost of goods, but also control of timelines and the ability to negotiate quickly with regulatory agencies. Now this little tip of the iceberg that you see, it really and continues to be above the surface. There's the larger iceberg underneath. And I think, first of all, we have at least 2 or 3 other cardiac gene therapies that are on the docket. We anticipate and hope that we are first and best-in-class. We can't always be only in class given that these are exciting indications, and gene therapy could be for everybody, but we hope to be first and best-in-class for all these programs. We've cracked the door open here for gene therapy. And I think once we've mastered monogenic diseases, we may move to biogenic, trigenic, multi-diseases and complex diseases. I think there are 3 buckets again by which mortality happens for all of us. It's accidents -- it's accidents or injuries. It's infections and almost everything else can be genetically modulated. So cracking this door open is a big step forward for Rocket and for the human species. Thank you very much. I'll take questions here.

Great. If there are questions, just wait for the microphone. And -- but let me get -- just by way of getting started with Q&A. You kind of teased a series of updates coming for the Danon disease pivotal program. So Gaurav, I might ask you to just sort of unpack the setup here a little for us, right, which is -- I mean, one is probably pretty straightforward in terms of either enrollment or treatment update, right? The trickier one is perhaps the trial design update with some statistical considerations. What is encompassed within that perhaps, right? And to what extent are we thinking about sizing of this study or changing the size of the trial as a result?

Yes. So there's -- to be clear, there's no change to the trial design itself. It's just clarity on the statistical analysis plan. So a lot of folks have asked, this is a responder analysis. Is it or not? Yes, it is. How many responders do you need? It's those sorts of questions that we'll be able to answer.

Okay. Great. And perhaps on the -- call it natural history or prevalence population patient ID side, right? I guess, part of that would be patients identified maybe as part of the screening process, but as part of a measure of sort of priming the market to some extent went to commercial, maybe just probably orient us around that a little bit. And then how would that sort of also inform your sort of top-down estimate when thinking about the overall size of the prevalence population that you think Danon's disease is, the ability to sort of refine that? And then also, like, you know, how your experience here is going to inform or make the ID process -- patient identification process, perhaps a little more efficient as a commercial stage company?

Kinnari will answer.

So couple of things. What we've done is, we've done top-down 3 different methodology analysis to look at 15,000 to 30,000. And we've come to that more conservatively. It might be greater. But as part of the effort that we've had in identifying patients for commercial success as well as clinical trials, we've done 2 things specifically. One, we put an ICD-10 code in place last year. So having ICD-10 code allows for physicians that are diagnosing Danon patients to really reference them, so over time, we'll have a better idea where these patients are actually coming through. But the second thing, which is really powerful, is genetic testing. So we are making genetic testing available for free for these patients, not just for Danon, but it could actually be a platform that could be applied for PKP2 and BAG3. Why is this important? Well, a lot of the times, unfortunately, in rare diseases, especially in these types of diseases, it's too late by the time they get diagnosed. A lot of times what we find out from patients and families is, family members passed away, and they never knew why. And now they're starting to realize that, oh, a grandson has Danon disease and find out when they test multiple family members, many of them, male and female, have Danon disease. So what we want to do is have a bottoms-up analysis of these patients and where they reside, what are the demographics and how many patients are impacted by this, and understand their natural history. So in an effort to do that across U.S. and Europe, we've come up with numbers, center by center. So we're going to have that information be available. And that will just get us ready to launch this product, and make sure that patients have access as soon as the therapy is approved and know where to get the therapy. So that's really the key to success for us, genetic testing, having the foundation, but also working with patient advocacy so they can understand the benefit risk of this disease and gene therapy and the different options they have available. And the third thing that's really important is working with cardiology centers, not just the heart failure centers of excellence around the world, but also cardiologists that are working with pediatric population to see if we can increase the diagnosis based on symptoms they see early on.

Another just to add also on the natural history. As we've started the natural history program, sometimes when we look at other family members of the person who's actually enrolled in the trial, we find that 2, 4, in one case 13 other family members also have Danon disease but just didn't know it. So the natural history efforts are also unraveling a lot of the commercial sort of pool out there that I think will could be addressed with this gene therapy.

There's both the market sizing consideration related to that and also patient identification for the purposes of building the market, but also, those data sort of might inform -- incrementally inform the natural history of disease, the course of disease out there. I guess is that sort of an expectation and sort of will your update kind of speak to that -- any change or thinking around the level of unmet need in the -- particularly male Danon disease population?

Yes. I think that as part of the update we -- and ahead of top line. The updated -- the program update is basically geared toward a better understanding of the disease, the patient journey and also the epidemiology ahead of top line, right? And I think the patient journey part of this will be key and critical, and we will be able to share more about that. I think we separate that from the actual natural history efforts which are more of a BLA filing requirement. Understanding the patient journey will also uncover the addressable market, which males are severe, which can -- who should be addressed first, who will come later. Is there a population that we'll never be able to address in males and then we'll do the same thing for females. That will be part of this program update as well.

Got it. Just on PKP2, I think you've kind of touched on perhaps one of the challenges and certainly one of the things that we're thinking about in terms of the initial readout from this program, which is what the target level expression is or that you need to achieve in this patient population, right, just given the fact that it's a heterozygous genotype?

Jonathan?