Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Health Care Conference. I'm Mike Gold, one of the biotech analysts here, and it's my pleasure to introduce Gaurav Shah, CEO of Rocket Pharmaceuticals. Before we get started, I just need to read a quick disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Gaurav, thanks for joining us today. Maybe I'll just turn it over to you to provide a few introductory comments, you know, for people that might not be familiar with your story.
Thanks, Mike, for having us here and to Morgan Stanley. Rocket Pharmaceuticals, we're a gene therapy company. We're a dual platform company with both in vivo AAV-based cardiac programs in development, as well as ex vivo lentiviral-based hematology programs in development. We started with the hematology first and have migrated increasingly to the AAV portfolio as things have evolved. We have six total programs that are disclosed and additional to a new pipeline of cardiac assets that will be disclosed in the future. The three cardiac programs include Danon Disease, PKP2-arrhythmogenic cardiomyopathy, and BAG3-associated dilated cardiomyopathy. With these three programs, we're attacking a big bucket of cardiomyopathy. With Danon, we've got hypertrophic. With PKP2, we have arrhythmogenic. With BAG3, we are dilated. Those three together add up to at least 100,000 patients in the U.S. and Europe.
While each disease is rare, these rare diseases as a whole are not rare. The lentiviral portfolio has Leukocyte Adhesion Deficiency-I, which is hopefully approved next year, Fanconi Anemia, and Pyruvate Kinase Deficiency. Both Fanconi Anemia and Pyruvate Kinase Deficiency, we have now decided to pause new spend on those programs and siphon those resources, both from a people and cash viewpoint, into the AAV-based cardiac portfolio where we think we have the highest near and medium-term value. What brings these programs together is that we want to be first, best, and only in class where possible. We want to target diseases where we can target both the protein of interest in the cell of interest. No chaperone proteins. We want to hit the gene mutations directly, and the gene mutations affect the full spectrum of disease.
In all these programs, we're starting to see a total transformation for these patients. Thirdly, we want to go after diseases that have an increasing market size, like I just mentioned, for the AAV-based cardiac programs. We did decide this summer to do a workforce reduction across all functions and even on leadership. The purpose of that is to focus and prioritize on certain programs, increase our cash runway. We now have cash into Q2 2027 without a Priority Review Voucher for Leukocyte Adhesion Deficiency-I. With that Priority Review Voucher, it would be extended further. Our goal here is to execute and just get these programs going for patients.
Great, thanks for that introduction. Maybe we can start with Danon Disease. That's been the lead program. Maybe walk us through what happened earlier this year with the FDA and then your ability to correct that in a fairly quick turnaround time.
We were very proud of the phase one results. The phase one results that were published in the New England Journal of Medicine at the end of last year showed that in six out of six patients who were appropriately followed up for at least one year, we saw robust protein expression out to five years. We saw an improvement in every single biomarker we studied, including troponins, massive drops in troponins, in BNP, and LV mass index, which along with protein ended up being the primary endpoint for the pivotal phase two. We also saw improvements in how patients function and feel with massive improvements in KCCQ score in all patients converting from NYHA class II to I, sorry, symptomatic to asymptomatic.
I believe that you can only see these sorts of consistent results across biomarker and clinical endpoints through gene therapy, where you're fundamentally changing out a mutated gene for a corrected one. Those were great results. They led to the initiation of a pivotal phase two. What we did in the pivotal phase two is that we had improvements in the product, including improved full empty ratio. Everything else was comparable. In the process of that phase two, we discovered early on that we were seeing some increased risk of TMA versus phase one. What we then did to mitigate the risk of TMA was to add a C3 inhibitor. The C3 inhibitor did address the TMA risk, but seems to have led to a paradoxical increase in capillary leak syndrome risk, which we saw in recent patients treated with Danon Disease in phase two.
One of those patients unfortunately passed away. The trial was put on clinical hold. We were in rapid discussions with FDA to try to find a path forward. We agreed to go back to something more similar to the phase one immunomodulatory regimen, first of all. We also decided to recalibrate the dose down by about 40%. I would not call it a new dose. I would call it an equivalent dose in phase two that mimics the phase one. With those two major changes and dropping the C3 inhibitor, we were able to get the clinical hold lifted in less than three months. We're now in the process of getting the trial started.
We don't anticipate treating patients until early 2026 because we still have a three-month troponin run-in, and we still have all the logistics of IDMC and IRB and other bodies to go through before we start the trial. We are looking forward and very excited that the trial is back on track and that the FDA has been collaborating with us so effectively in lifting the clinical hold rapidly.
Yeah. Maybe just you touched on this, but the recalibrated dose and just, you know, how to think about that. Is there any sort of risk that, you know, the data might be different with this different dose?
I'm glad you asked. The higher full empty, while historically and traditionally, higher full empty is a great thing. Lower cost of goods, less total capsid exposure is supposed to be a good thing. In Danon Disease, and there's good reason to believe that the higher full empty might actually portend an innate immune response because of Danon Disease itself. It's more sensitized. Once these complement factors build up in Danon cells, it's hard to exclude them because there's no autophagy. Danon Disease patients might actually be more sensitive to higher full empties than we see in other diseases. We calibrated the dose down by about as much as we improved the full empty from phase one to phase two.
The good news, and what was really reassuring to us, is that the new dose is at the dose that we had effectively treated two pediatric patients who had to be dose reduced because they reached the weight cap for their age. They were large boys. Because the nomogram had a certain weight cap, we had to push their effective dose down to around 413 mg. Those two pediatric patients, 108 and 109 in phase one, actually had the most profound and rapid response in LV mass index, even as early as three months. Even though it looks like a lower dose, we feel good that this is the right dose to move forward and not a dose exploration.
Got it. Makes sense. You'd mentioned you added the C3 inhibitor because of TMA events. Maybe just talk about what you were seeing there in terms of those events. Now that you don't have a C3 inhibitor, what's the risk there?
For the first five or six days, it was basically like the patient's got nothing, almost like water. There's no complement activation. The lab profile looked very promising. Around day six for both patients, we started seeing evidence of vascular leak that just worsened in the first patient, partly because the patient was ill and had some other infections, but partly there were likely iatrogenic issues there as well. That patient unfortunately moved forward into a full capillary leak syndrome and ultimately passed away of an infection. The second patient, who also had a capillary leak around day six or so, fared much better, did have ultimate endothelial damage and had to be hospitalized for some prolonged time, but is now out, doing well, and hopefully benefits from the cardiac gene therapy anyway long term. It was unfortunate what happened. We were devastated for the patient and the patient's family.
That being said, the patient community understands that in Danon Disease, these boys unfortunately will pass away anyway and without a transplant. They've showed generous support for the trial and the program moving forward and are waiting to place their boys back in the trial as soon as possible. That's what happened with the capillary leak. All the lab parameters that we saw around complement activation did suggest that the combination of AAV9, a torrential pour of AAV9 plus C3 inhibition, the combination was not great for these patients. C3 inhibition alone, by the way, in other settings, it's obviously very effective. In this particular setting in Danon, it was not the right path to go down. We pulled it out and we're modifying the strategy in, I think, what's going to be an effective way.
Maybe talk about, you know, once post those changes, what your immunomodulatory regimen is currently and maybe just how that compares to others, you know, developing gene therapies in the space.
Yeah, we're all doing a variation genetic theme. We have pre-treatment rituximab, which we've modified slightly to extend the time period within which we give rituximab in order to affect a more profound B cell depletion, which there's evidence to suggest that could even further mitigate TMA. Rituximab, sirolimus, which has both a T cell and a B cell component, the rituximab and sirolimus together have been really effective in mitigating complement activation risk at the right dose, as we saw in phase one. We have steroids, but we try to start tapering the steroids as early as 10 to 14 days in patients who are doing well. Everything we try to turn off by three months after therapy. We don't do prophylactic eculizumab. We have reason to believe that it either doesn't work, and we also don't want to risk another paradoxical leak for patients who don't need it.
We do have a lower threshold for instituting eculizumab if and when needed based on lab parameters that we've garnered through our experience and the experience of others as well. Those four immunomodulation plans we feel we did in phase one as well, and we saw a great outcome there.
Got it. You're able to remove the hold fairly quickly, but maybe just discuss some of your interactions with the FDA. Obviously, there's been some changes in leadership there, and just, you know, any issues? How's that going?
Yeah, we were nervous early on with all the changes and some degree of uncertainty. What we found, however, I would say, is, if anything, more streamlined responses, quicker responses. We had a clinical hold in the past that was also resolved in just over three months in 2021. This was a similar time frame, but the amount of back and forth was streamlined and more, I would say, even more thoughtful than it has been in the past. I'm happy with the interactions we're having these days. I don't know if that applies to all of the companies and all of our future interactions, but so far, not just for Danon, but for other programs, it's been pretty efficient.
Gotcha.
are also supportive of the interest in rare devastating diseases, especially in pediatrics. They are really leaning into these rare diseases. The RDEP program is an example of a proof of that.
Gotcha. You talked about this already, but next steps in terms of what's required now moving forward with the FDA and adding more patients, I think, early next year, you mentioned.
Yeah. So far, the pivotal trial is based on a 12-patient trial compared with their pre-treatment baselines. We're also fortifying with an external natural history, but that's more to solidify assumptions rather than direct one-to-one comparisons. A 12-patient trial with a composite endpoint or really a coprimary protein expression plus LV mass index reductions. Out of those 12, not all the patients have to respond. When we do a program update next year, we'll be able to talk more about how many patients have to be responders to be a positive trial. We'll come back to that in 2026. The 12 patients were agreed upon in writing with FDA. In our recent interactions, they have not indicated that we need to increase the size. There's been no indication of that.
However, I might expect that we at least have to replace the patients treated with C3 and potentially treat more patients at the low dose, at the 3.8, to bulk up the overall profile of efficacy and safety. I don't know the answer yet. When we go back after the three safety patients have been treated at this dose, we'll have more clarity in that.
Gotcha. Those three patients that you sort of have to treat, is there an interval between treating each one, and how fast can you enroll those, and when do you get sort of that data?
One month in between. Those patients, as well as the rest of the trial, it's already spoken for. Those patients have already enrolled. There have been no dropouts. If we have to enroll more, we also have a group of patients that are eager and ready to get on the trial. Once that's done, the patients will not be staggered. They'll be treated in parallel, and hopefully, we're able to do that efficiently. I can say that just to give some color in the past, not guidance in the future, but color in the past, we enrolled the whole trial within two months and four days last summer. We would have treated all the patients who were lined up for infusion within, you know, over the course of two or three months.
The only issue is that because of this TMA risk, we had to pause the trial, came up with the C3 inhibitor plan that took another six months to get the trial started. Then again, we had all the patients lined up to be infused in two months over the summer. Unfortunately, we had this patient death in the clinical hold, so things are unpossible. Once we have these patients identified, the parallel infusion can be done pretty efficiently.
Do you have 12 patients that were originally enrolled? You had how many treated?
Six.
Six. Okay, and then you have to treat three more, and then you have a discussion with the FDA?
Correct. To see if it's just another three or if it's another five or another five plus. I don't know.
Okay. Any other, it sounds like you're not expecting any other changes to the study at all other than maybe in terms of patient numbers?
There's no indication that there's any question of the trial design itself. The assumptions are robust, and all of that is in writing, so we feel good about it.
Okay, we'll probably get an update sometime mid-next year, maybe something like that, second half?
We do anticipate a top-down epidemiology update at a conference this year. I think next year, we'll get an update on, number one, the trial status, number two, the trial design, and number three, also, we plan to do a bottoms-up patient-reported epidemiology update.
Gotcha. Okay. Maybe you can talk a little bit about just the market opportunity, right? Maybe just patient numbers that you're thinking about now and how that kind of shakes out.
Yeah. We're at the exact same place we started, 15,000 to 30,000 patients prevalence in the U.S. plus Europe. We're going to fortify that with some additional supporting data shortly. On the bottoms up, we're also going out and finding patients for the sake of future commercialization. We haven't disclosed what those numbers look like, but I will say that there's a known and diagnosed number of Danon patients, which is X, and then there's a total true number, and those two are different numbers. There's a big gap that over time we plan to fill with focus toward genetic testing.
You could potentially be in a position to maybe file and launch, you know, not next year, but maybe the year after. Just maybe talk about your manufacturing right now. I know that's been an area of investment for you in the past.
Yeah. Early in the company's history, when the biotech dollar was more available, we did build out this plant. I think that was a great move because it not only gives us access to very low cost of goods, and I think ultimately very great margin for this product ultimately, but also control on timelines and the ability to pivot for process development and analytics in response to FDA requirements. That was a very good move. We are producing the Danon product in-house in Cranbury. We anticipate commercializing with it as well. In terms of timelines, we don't have exact guidance on when the launch can be anticipated, but you know, hopefully, the trial is up and running next year and enrolling rapidly, and then we can calculate the endpoints after that.
Yeah. Makes sense. Maybe we can shift gears to sort of your wave two products. You've called them for cardiac diseases. Maybe before we dig into each one of those, just talk about how your experience with Danon kind of gives you an advantage or thing you can leverage that you've learned through that experience.
I think it's just the regulatory as well as commercial back and forth that we've been able to have with our stakeholders on the other side, just understanding what the FDA and payers are thinking about, what they're looking for. That helps shape our trials right at the first step, both in terms of trial size, trial design, the right endpoints to choose for both regulatory and payers. I think the experience in Danon then can carry forward to other cardiac programs. The safety experience, however, is probably the most meaningful, just knowing what to look for. We have a clinical monitoring team of experts around the world that when patients are treated, we meet with once, sometimes twice a day to follow patients very, very, very closely. The memory and the instincts developed with that group are, I think, very specific to Rocket, and we're proud of that information.
It's not anything that's shareable. It's just wisdom that the team has garnered. That wisdom can apply from Danon to PKP2 to BAG3 and to future wave two assets as well.
Maybe we can shift to PKP2 now and maybe just give us a little bit of background on the disease, the unmet need, and why it's a good candidate for your gene therapy approach.
Yeah. PKP2-arrhythmogenic cardiomyopathy, used to be called ARVC, is one of the most prevalent causes of sudden cardiac death. It's starting to move into common consciousness, right? Not just a rare disease, but something that people have actually heard of. There's at least 50,000 patients in the U.S. and Europe with PKP2 or PKP2-arrhythmogenic cardiomyopathy. It's a missing protein in the desmosome, the junction between cardiomyocytes that leads to loss of tight cardiomyocyte junctions, but also other effects in the cell that ultimately lead to right ventricular dilation, maybe left ventricular dilation, but most saliently arrhythmias such as fatal V-tachs and others that are fatal for patients. In many cases, 80% of patients end up with ICDs.
The ICDs can be effective, but there are still breakthrough fatal arrhythmias, and the ICDs don't address the underlying root cause of disease, which is this right ventricular dilatation that keeps going over time and is ultimately fatal for patients even with ICDs. The focus of gene therapy is, number one, to reduce the risk of fatal arrhythmias so the ICDs don't go off as often. You can do that by reducing the risk of other predictive arrhythmias like PVCs, NSVTs, T-wave inversions that have been shown to correlate with risk of fatal arrhythmias. The real long-term hope for gene therapy in this disease is to arrest the progression of heart failure so you can actually prolong life. Finding endpoints in this disease is not as straightforward as it is in Danon. Danon is a disease of big hearts. You shrink the heart, you have an endpoint.
Here, the arrhythmias are complex. Some of them increase with exercise. Relying on PVCs alone is probably not the right way to do it because a patient can have an increase in PVCs but still be improving, and the gene therapy could still be working. Although we saw decreases in our program. NSVTs, T-wave inversions, a combination of those three factors might be an interesting endpoint to consider. RV function is also an interesting endpoint. Ultimately, how patients function and feel. A point I want to make about our program on PKP2 is that we only tested three patients at one dose because we started with the right dose. We already have efficacy at this dose. We have a good benefit-risk profile. Our next step and next news that we would announce is when we've reached agreement on a pivotal trial design.
Gotcha. Maybe talk a little bit more about the data you shared so far in those first three patients, in terms of what stood out or what leads you to believe that you're sort of on the right track here.
All three patients showed robust protein expression with vector copy numbers of between three and six. You don't really want to go higher. We also saw what seems to be a plateau in protein expression. Two of them had a major increase. One of them had only a modest increase but already started at a high point. For whatever reason, that patient might be making up for lost protein, but that protein was likely not in the right places. All three patients, we saw a saturation of protein expression called near 100% with vector copy numbers that supported it. We also saw increases in other desmosomal proteins like desmocolin and CADH2 alongside the PKP2. What that showed is that not only are we increasing PKP2 protein expression, but it's migrating to the right place. You don't want PKP2 inside around the nucleus. You want it in the intracardiac junction.
We demonstrated convincingly that that is what's happening in these patients. We saw increased protein expression. We saw a combination of improvements of PVCs, NSVTs in patients who had NSVTs, and improvements in T-wave inversions in patients who had T-wave inversions in all three patients. One of the patients had a mild to moderate impaired right ventricular function who normalized during the course of the trial. These patients were followed for between 6 to 12 months. They've now obviously been followed longer, and at some point, we'll have updates. To us, that was enough and of a robust efficacy signal to suggest that it's time to move toward a pivotal trial design.
You mentioned you started with one dose, and that's the right dose. Do you think the FDA might make you try a different dose in the future, or is that unlikely?
Unlikely.
There are several other companies, or I guess I should say two other companies besides you, kind of, you know, looking at PKP2 with a gene therapy. I know it's very early, but any like early signs of differentiation?
There are different capsids. First of all, different patients could respond differently to different capsids and have antibodies versus different capsids. There could be room for multiple therapies in this population. It is a large population. We say at least 50,000, but at least one other company has suggested that it's 140,000 patients. There is a vast number of patients here to treat. That being said, we do think that we're at the right dose. We do think that we're in the most advanced discussions. At the end of the day, it's not about getting the smallest trial that looks good. It's about getting the right trial that actually wins. That's what our focus is, and we want to take our time and do it the right way.
Yeah. Got it. Maybe we can move now to just BAG3 and maybe a similar line of questioning. Just maybe give us a little bit of background on that disease and unmet need there.
BAG3 is a protein that affects several aspects of cells, including cardiomyocytes. It's involved in channel function. It's involved in autophagy. Missing BAG3 in patients leads to a dilated cardiomyopathy, loss of ejection fraction, early mortality. It is manifest in slightly older patients. BAG3 is more similar to female Danon. It's still one of the most aggressive forms of cardiomyopathy out there. We're now looking at Danon female-like population and similar endpoints. Danon female patients have dilated cardiomyopathy often as well. That and BAG3 fit into a second aggressive cardiomyopathy in a dilated form that is ultimately fatal for patients. There's at least 30,000 patients in the U.S. who have BAG3, so the total number may actually be bigger than PKP2. We cleared our IND earlier this year. We're in site startup mode, and we anticipate starting a phase one in 2026.
As far as we know, we're the first in the field to do that, and we're very excited about that program.
Yeah. Can you maybe talk about some of the endpoints in that study and maybe the dosing, how you're thinking about dosing?
Ejection fraction could be the ultimate measure of benefit, but there are other ways to look at LV function such as LV strain and also patients' exercise and also, of course, how patients function and feel. A combination of protein and one of these variables probably focused on the left ventricle will be the most likely endpoints here, but obviously, what I'm saying here is speculative, way ahead of any regulatory discussions.
Can you maybe talk about your choice of the vector across all your three programs and sort of what drove that?
For Danon Disease, Danon Disease involves heart, muscle, and CNS. AAV9 is, like we've said in the past, the hand-to-glove or glove-to-hand fit, right, for Danon Disease. Whereas if we're focusing on only cardiac, we prefer RH74 because of the much grander experience regulatory-wise and in the patient community using RH74, but also using RH74 at doses that are lower than what Sarepta has used. The doses that we're working on here are mid to upper E13. With the improved full empties here, the total exposure is much, much less than other RH74 programs. We feel good that for cardiac, RH74 is the right capsid to move forward. We're using that both for PKP2 and BAG3, by the way.
You mentioned sort of the improvements in the full empty in your process. Is that kind of peak now, or is it possible in the future that that could continue to improve?
The traditional education here that I've learned, many of us have learned, is that you want to maximize it, but the Danon experience suggests that there's a Goldilocks zone of optimal full empty. I think where we are for these programs is exactly where we need to be.
Makes sense. We've been talking a lot about gene therapy at the start. You mentioned sort of lentiviral as well. Maybe just you gave us a brief overview, but maybe just talk a little bit about CRISLATI and kind of, you know, where that is and next steps for that one.
CRISLATI is in final stages of submitting the response to the CRL. We took our time to do it right. It took time because we don't, this is not in-house. Everything is outsourced. We had to redo some runs and validate those runs, focusing on stability and sterility. It is just a matter of taking time to get those slots and finish the work. We're almost there. Once we submit it, we hope to update the street on the PDUFA date as soon as possible.
Okay. Maybe just as a last question, we've talked about a lot of most of this, but maybe just from here moving forward, maybe just lay out sort of the catalysts that we should expect over the next year or two.
I would say the PDUFA date for CRISLATI, some clarity on PKP2 trial design. I'm not giving exact timing on any of these, just these are the things to look forward to in the next 12 to 18 months. Third, a Danon top-down epi update that could actually be this year, but more importantly, a full-sum Danon program update with trial design, both the trial update and also a bottoms-up epidemiology update. That would be a program update later in 2026. BAG3 phase one start and hopefully some data next year. Fanconi and PKD are paused, but we are looking at partnership opportunities there as well. Those are the major catalysts in the near term. Wave two will be another force that we move forward as each of these programs succeed.
We think that all of these programs are viable, but the way to get them all done is to do one at a time and go slow so that we can get them all done.
Okay. Great. A lot to look forward to. Why don't we end it there? Thanks so much, Gaurav. Appreciate your time today.
Thank you, Mike. Always.