ROCKET PHARMACEUTICALS INC
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
RCKT$2.39-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091838
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-123459
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 141 previous paragraphs and 174 current paragraphs.
123 unchanged; 15 reworded; 36 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Item 2. Management’s Discussionand Analysis of Financial Condition and Results of Operations
Current report
In September 2023, we announced our alignment with the FDA on our pivotal study design for RP-A501 in DD and completion of enrollment in this study was announced in September 2024, dosing and follow-up is ongoing. We have received FDA clearance of an IND for RP-A601, and we have initiated a Phase 1 study for this program. For the BAG3 program, nonclinical and IND enabling studies are ongoing. Submission of the IND is anticipated in the first half of 2025.
Current report
In January 2024, we received CTIS approval to include clinical trial sites in certain EU Member States. The global Phase 2 study is ongoing in the U.S. and EU.
Current report
Nonclinical, IND-enabling studies are ongoing. Submission of the IND is anticipated in the first half of 2025.
Current report
On April 2, 2024, we announced that the EMA accepted our MAA for RP-L102. Submission of a BLA on a rolling review basis was initiated on September 26, 2024.
Current report
Results of Operations
Current report
Comparison of the Three Months Ended September 30, 2024 and 2023
Current report
R&D expenses decreased $4.5 million to $42.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease in R&D expenses was primarily driven by decreases in manufacturing development costs of $3.8 million, clinical trial costs of $1.6 million, and license expenses of $1.1 million. Decreases were partially offset by increases in direct material costs of $1.3 million and costs for professional fees and consultants of $0.7 million.
Current report
G&A expenses increased $8.5 million to $27.1 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase in G&A expenses was primarily driven by increases in commercial preparation related expenses of $6.2 million, compensation and benefit expenses of $0.9 million, non-cash stock compensation expense of $0.8 million, and legal expenses of $0.7 million.
Current report
Other Income, Net
Current report
Other income decreased $0.8 million to $2.7 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 primarily due to a decrease in interest and other income, net, of $0.3 million, decrease in liability extinguishments of net $0.6 million, partially offset by less reduction in fair value of warrant liability of $0.1 million.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
R&D expenses decreased $10.7 million to $133.9 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The decrease in R&D expenses was primarily driven by decreases in manufacturing development and direct material costs of $17.4 million and costs for research agreements of $1.2 million. Decreases were partially offset by increases in the costs for professional fees and consultants of $4.9 million, non-cash stock compensation expense of $1.2 million, and compensation and benefit expenses of $1.0 million.
Current report
G&A expenses increased $24.8 million to $76.6 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in G&A expenses was primarily driven by increases in commercial preparation related expenses of $15.7 million, legal expenses of $4.0 million, non-cash stock compensation expense of $2.2 million, and compensation and benefit expenses of $1.9 million.
Current report
Other Income, Net
Current report
Other income increased $1.6 million to $12.1 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in other income was primarily driven by an increase in interest income of $0.6 million and more reduction in fair value of warrant liability of $1.2 million.
Current report
Liquidity and Capital Resources
Current report
We have not generated any revenue and have incurred losses since inception. Operations of the Company are subject to certain risks and uncertainties, including, among others, those related to drug candidate development, technology and data security, patents and proprietary rights, our lack of commercial manufacturing marketing or sales experience, dependency on key personnel, compliance with government regulations and the need to obtain additional financing. Drug candidates currently under development will require significant additional R&D efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities.
Current report
Our drug candidates are in the development and clinical stage. There can be no assurance that our R&D will be successfully completed, that adequate protection for our intellectual property will be obtained, that any products developed will obtain necessary government approval or that any approved products will be commercially viable. Even if our product development efforts are successful, it is uncertain when, if ever, we will generate significant revenue from product sales. We operate in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies.
Current report
Our consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. Rocket has incurred net losses and negative cash flows from its operations each year since inception. We incurred net losses of $198.4 million for the nine months ended September 30, 2024, and $245.6 million for the year ended December 31, 2023. We have experienced negative cash flows from operations and as of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $1.16 billion and $959.4 million, respectively. As of September 30, 2024, we had $235.7 million of cash, cash equivalents and investments. We expect that in accordance with the current operating plan, which includes cost optimization and savings, such resources will be sufficient to fund our operating expenses and capital expenditure requirements into 2026. We have funded our operations primarily through the sale of equity.
Current report
In the longer term, our future viability is dependent on our ability to generate cash from operating activities or to raise additional capital to finance our operations. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation, or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. Our failure to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies.
Current report
Cash Flows
Current report
The following table summarizes our cash flows from operating, investing and financing activities, in thousands, for each of the periods presented:
Current report
Operating Activities
Current report
During the nine months ended September 30, 2024, operating activities used $162.8 million of cash and cash equivalents, primarily resulting from our net loss of $198.4 million offset by net non-cash charges of $33.0 million, including non-cash stock-based compensation expense of $32.8 million, depreciation and amortization expense of $7.0 million, partially offset by accretion of discount on investments of $6.8 million. Changes in our operating assets and liabilities for the nine months ended September 30, 2024 included an increase in accounts payable and accrued expenses of $5.3 million, an increase in our prepaid expenses of $1.0 million, and a decrease in other liabilities of $1.8 million.
Current report
During the nine months ended September 30, 2023, operating activities used $165.6 million of cash and cash equivalents, primarily resulting from our net loss of $185.9 million offset by net non-cash charges of $28.4 million, including non-cash stock-based compensation expense of $29.5 million, depreciation and amortization expense of $5.2 million, partially offset by accretion of discount on investments of $7.1 million. Changes in our operating assets and liabilities for the nine months ended September 30, 2023 included a decrease in accounts payable and accrued expenses of $5.6 million, an increase in our prepaid expenses of $2.0 million, and a decrease in other liabilities of $0.7 million.
Current report
Investing Activities
Current report
During the nine months ended ended September 30, 2024, net cash provided by investing activities was $169.6 million, primarily resulting from proceeds of $297.0 million from the maturities of investments, offset by purchases of investments of $121.8 million, and purchases of property and equipment of $5.6 million.
Current report
During the nine months ended ended September 30, 2023, net cash used in investing activities was $42.7 million, primarily resulting from proceeds of $237.0 million from the maturities of investments, offset by purchases of investments of $182.4 million, and purchases of property and equipment of $11.8 million.
Current report
Financing Activities
Current report
During the nine months ended September 30, 2024, net cash provided by financing activities was $2.9 million, consisting of proceeds from the exercise of stock options.
Current report
During the nine months ended September 30, 2023, net cash provided by financing activities was $208.0 million, consisting primarily of proceeds related to the September 2023 Public Offering of $188.9 million, $17.2 million from the sale of shares through our at-the-market facility and $1.8 million from the exercise of stock options.
Current report
Contractual Obligations and Commitments
Current report
Information regarding contractual obligations and commitments may be found in Note 13 of our unaudited interim consolidated financial statements in this Quarterly Report on Form 10-Q. We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations.
Current report
Recently Issued Accounting Pronouncements
Current report
There were no recent accounting pronouncements that impacted the Company, or which had a significant effect on the consolidated financial statements.
Removed paragraphs (3)
Previous report
Phase 2 enrollment and treatment in the U.S. is ongoing. We have filed the Clinical Trial Application and Investigational Medicinal Product Dossier for RP-A501 with the relevant Member States through the EU Clinical Trial Information System and the Medical and Healthcare Products Regulatory Agency. In January 2024, we received CTIS approval and MHRA approval for these clinical trial applications. We are initiating Phase 2 pivotal trial activities in Europe and the UK.
Previous report
We are in the process of evaluating the optimal development pathway for this program and plan to submit an IND for BAG3-DCM in 2024.
Previous report
On April 2, 2024 we announced that the European Medicines Agency accepted our Marketing Authorization Application for RP-L102. Regulatory filings and review for RP-L102 for the treatment of FA are on track with health authorities in the U.S. and Europe.
Reworded paragraphs (15)
Previous wording
In September 2023, the FDA accepted the BLA and granted priority review for RP-L201 for the treatment of severe LAD-I. On June 28, 2024 we announced that the FDA had issued a CRL in response to the BLA wherein the FDA requested limited additional CMC information to complete its review. We are in the process of submitting the additional requested information. Treatments in the FA Phase 2 studies were completed in 2023 with regulatory filing in the U.S. anticipated in 2024. In April 2024, the EMA accepted our MAA for RP-L102. Additional work on a gene therapy program for the less common FA subtypes C and G is ongoing.
Current wording
In September 2023, the FDA accepted the BLA and granted priority review for RP-L201 for the treatment of severe LAD-I. On June 28, 2024, we announced that the FDA had issued a CRL in response to the BLA wherein the FDA requested limited additional CMC information to complete its review. We are in the process of providing the additional requested information and approval is expected in 2025. Treatments in the FA Phase 2 studies were completed in 2023 and submission of a BLA on a rolling review basis was initiated on September 26, 2024. In April 2024, the EMA accepted our MAA for RP-L102. Additional work on a gene therapy program for the less common FA subtypes C and G is ongoing.
Previous wording
Danon Disease, a multi-organ lysosomal-associated disorder leading to early death due to heart failure. The DD program is currently in an ongoing Phase 2 trial.
Current wording
Danon Disease, a multi-organ lysosomal-associated disorder leading to early death due to heart failure. The DD program is currently in an ongoing Phase 2 trial (RP-A501);.
Previous wording
Plakophilin-2 Arrhythmogenic Cardiomyopathy, an inheritable cardiac disorder that is characterized by a progressive loss of cardiac muscle mass, severe right ventricular dilation, dysplasia, fibrofatty replacement of the myocardium and a high propensity to arrhythmias and sudden death. This program received FDA clearance of an Investigational New Drug application and we have initiated a Phase 1 study.
Current wording
Plakophilin-2 Arrhythmogenic Cardiomyopathy, an inheritable cardiac disorder that is characterized by a progressive loss of cardiac muscle mass, severe right ventricular dilation, dysplasia, fibrofatty replacement of the myocardium and a high propensity to arrhythmias and sudden death (RP-A601); and.
Previous wording
On February 28, 2022, we entered into the Sales Agreement with Cowen with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time at our sole discretion, shares through Cowen as our sales agent. The shares to be offered and sold under the Sales Agreement, if any, will be offered and sold pursuant to our shelf registration statement on Form S-3. We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares pursuant to the Sales Agreement. We will pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement. We also agreed to provide Cowen with customary indemnification and contribution rights. We have reimbursed Cowen for certain expenses incurred in connection with the Sales Agreement. On September 12, 2023, the Company and Cowen entered into an amendment pursuant to which the aggregate offering amount available under the at-the-market offering program was reduced to $180.0 million. Through June 30, 2024, we sold 4.2 million shares under the at-the-market offering program for gross proceeds of $65.8 million, less commissions of $2.0 million for net proceeds of $63.8 million. We did not sell any shares under the at-the-market offering program during the six months ended June 30, 2024.
Current wording
On February 28, 2022, we entered into the Sales Agreement with Cowen with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time at our sole discretion, shares through Cowen as our sales agent. The shares to be offered and sold under the Sales Agreement, if any, will be offered and sold pursuant to our shelf registration statement on Form S-3. We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares pursuant to the Sales Agreement. We will pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement. We also agreed to provide Cowen with customary indemnification and contribution rights. We have reimbursed Cowen for certain expenses incurred in connection with the Sales Agreement. On September 12, 2023, the Company and Cowen entered into an amendment pursuant to which the aggregate offering amount available under the at-the-market offering program was reduced to $180.0 million. Through September 30, 2024, we sold 4.2 million shares under the at-the-market offering program for gross proceeds of $65.8 million, less commissions of $2.0 million for net proceeds of $63.8 million. We did not sell any shares under the at-the-market offering program during the nine months ended September 30, 2024.
Previous wording
We believe that scientific advances, clinical progress, and the greater regulatory acceptance of gene therapy hZave created a promising environment to advance gene therapy products as these products are being designed to restore cell function and improve clinical outcomes, which in many cases include prevention of death at an early age. The FDA approval of several gene therapies in recent years indicates that there is a regulatory pathway forward for gene therapy products.
Current wording
We believe that scientific advances, clinical progress, and the greater regulatory acceptance of gene therapy have created a promising environment to advance gene therapy products as these products are being designed to restore cell function and improve clinical outcomes, which in many cases include prevention of death at an early age. The FDA approval of several gene therapies in recent years indicates that there is a regulatory pathway forward for gene therapy products.
Previous wording
Based on the initial efficacy observed in the low dose cohort and to mitigate complement-mediated safety concerns observed in the high dose cohort (thrombotic microangiopathy) and in agreement with the FDA, we are focusing on the low dose (6.7e13 gc/kg) and we will no longer administer doses of 1.1e14 gc/kg or higher in this trial. Additional safety measures have been implemented and are reflected in the updated trial protocol. These measures include exclusion of patients with end-stage heart failure, and a refined immunomodulatory regimen involving transient B- and T-cell mediated inhibition, with emphasis on preventing complement activation, while also enabling lower steroid doses and earlier steroid taper, with all immunosuppressive therapy discontinued 2-3 months following administration of RP-A501.
Current wording
Based on the initial efficacy observed in the low dose cohort and to mitigate complement-mediated safety concerns observed in the high dose cohort (thrombotic microangiopathy) and in agreement with the FDA, we have moved forward with the low dose (6.7e13 gc/kg). Additional safety measures were implemented and are reflected in the updated trial protocol for Phase I and the protocol for our ongoing pivotal Phase II study. These measures include exclusion of patients with end-stage heart failure, and a refined immunomodulatory regimen involving transient B- and T-cell mediated inhibition, with emphasis on preventing complement activation, while also enabling lower steroid doses and earlier steroid taper, with all immunosuppressive therapy discontinued 2-3 months following administration of RP-A501.
Previous wording
On February 7, 2023, we announced that RP-A501 received regenerative medicine advanced therapy designation from the FDA, and on May 31, 2023, we received priority medicines designation from the EMA. On September 12, 2023, we announced our alignment with the FDA on our pivotal study design for RP-A501 in DD and enrollment in the global study is ongoing.
Current wording
On February 7, 2023, we announced that RP-A501 received RMAT designation from the FDA, and on May 31, 2023, we received PRIME designation from the EMA. On September 17, 2024, we announced completion of enrollment of N=12 patients in the Phase 2 study across sites in the US and EU. Dosing and follow-up is ongoing.
Previous wording
We have achieved pre-clinical proof-of-concept for RP-A601 in an animal model representative of PKP2-ACM, completed pharmacology and GLP toxicology studies, produced GMP drug product, and developed an appropriate potency assay to support a Phase I study. On May 9, 2023, we announced FDA clearance of the IND, and on June 8, 2023, we announced receipt of FDA Fast Track and Orphan Drug Designations. On May 29, 2024, we announced receipt of Orphan Medicinal Product Designation from the European Commission. Enrollment in the U.S. Phase 1 study is ongoing.
Current wording
On June 8, 2023, we announced receipt of FDA Fast Track and Orphan Drug Designations. On May 29, 2024, we announced receipt of Orphan Medicinal Product Designation from the European Commission. Enrollment in the U.S. Phase 1 study is completed.
Previous wording
A BLA filing for RP-L201 was accepted by the FDA with priority review in October of 2023 with an initial Prescription Drug User Fee Act date of March 31, 2024. On February 13, 2024, the review time was extended by three months, to June 30, 2024, to allow additional time to review clarifying Chemistry, Manufacturing, and Controls information submitted by Rocket in response to FDA information requests. On June 28, 2024 we announced that the FDA issued a CRL in response to the BLA wherein the FDA requested limited additional CMC information to complete its review. We are in the process of submitting the additional requested information for review.
Current wording
A BLA filing for RP-L201 was accepted by the FDA with priority review in September 2023 with an initial Prescription Drug User Fee Act date of March 31, 2024. On February 13, 2024, the review time was extended by three months, to June 30, 2024, to allow additional time to review clarifying Chemistry, Manufacturing, and Controls information submitted by Rocket in response to FDA information requests. On June 28, 2024, we announced that the FDA issued a CRL in response to the BLA wherein the FDA requested limited additional CMC information to complete its review. We are in the process of providing the additional requested information for review and approval is expected in 2025.
Previous wording
In February 2024, we presented further clinical updates at the ASGCT 27 th Annual Meeting (data cut-off February 5, 2024), which included 36 months of follow-up on the two adult patients and 12 months of follow-up on the two pediatric patients. Sustained and clinically meaningful hemoglobin improvement observed in all patients including hemoglobin normalization in three of four patients. No patients have required red blood cell transfusion following neutrophil engraftment. Improvements in hemoglobin supported by improved markers of hemolysis and quality of life have been observed. RP-L301 remains well-tolerated, with no drug-related serious adverse events. Insertion site analyses in the peripheral blood and bone marrow for both adult patients through 36 months post-RP-L301 continued to demonstrate highly polyclonal patterns with no clonal dominance or insertional mutagenesis.
Current wording
In February 2024, we presented further clinical updates at the ASGCT 27 th Annual Meeting (data cut-off February 5, 2024), which included 36 months of follow-up on the two adult patients and 12 months of follow-up on the two pediatric patients. Sustained and clinically meaningful hemoglobin improvement was observed in all patients including hemoglobin normalization in three of four patients. No patients have required red blood cell transfusion following neutrophil engraftment. Improvements in hemoglobin supported by improved markers of hemolysis and quality of life have been observed. RP-L301 remains well-tolerated, with no drug-related serious adverse events. Insertion site analyses in the peripheral blood and bone marrow for both adult patients through 36 months post-RP-L301 continued to demonstrate highly polyclonal patterns with no clonal dominance or insertional mutagenesis.
Previous wording
We have reached agreement with FDA on study design of Phase 2 pivotal trial of RP-L301. Based on positive safety and efficacy data from the Phase 1 study, we have aligned with the FDA on the pivotal study design to support accelerated approval and are initiating a 10-patient, single-arm Phase 2 pivotal trial with a primary endpoint of ≥1.5 point Hgb improvement at 12 months.
Current wording
We have reached agreement with FDA on study design of Phase 2 pivotal trial of RP-L301. Based on positive safety and efficacy data from the Phase 1 study, we have aligned with the FDA on the pivotal study design to support accelerated approval with a 10-patient, single-arm Phase 2 pivotal trial with a primary endpoint of ≥1.5 point Hgb improvement at 12 months.
Previous wording
Our 103,720 square foot manufacturing facility in Cranbury, New Jersey has been scaled up to manufacture AAV drug product for our Phase 2 pivotal study in DD. The facility also houses lab space for research & development and quality. We reached an understanding with the FDA on chemistry, manufacturing, and controls requirements to start AAV cGMP manufacturing at our in-house facility as well as potency assay plans for a Phase 2 pivotal trial in DD.
Current wording
Our 103,720 square foot manufacturing facility in Cranbury, New Jersey has been scaled up to manufacture AAV drug product for our Phase 2 pivotal study in DD. The facility also houses lab space for research & development and quality. We reached an understanding with the FDA on chemistry, manufacturing, and controls requirements to conduct AAV cGMP manufacturing at our in-house facility as well as potency assay plans for a Phase 2 pivotal trial in DD.
Previous wording
The following table presents R&D expenses tracked on a program-by-program basis as well as by type and nature of expense for the three and six months ended June 30, 2024 and 2023:
Current wording
The following table presents R&D expenses tracked on a program-by-program basis as well as by type and nature of expense for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Interest expense for the three and six months ended June 30, 2024 and 2023 was related to our financing lease obligation for our Cranbury, NJ facility.
Current wording
Interest expense for the three and nine months ended September 30, 2024 and 2023 was related to our financing lease obligation for our Cranbury, NJ facility.
Previous wording
There have been no material changes in our critical accounting policies and estimates in the preparation of our consolidated financial statements during the three months ended June 30, 2024 compared to those disclosed in our 2023 Form 10-K.
Current wording
There have been no material changes in our critical accounting policies and estimates in the preparation of our consolidated financial statements during the nine months ended September 30, 2024 compared to those disclosed in our 2023 Form 10-K.