ROCKET PHARMACEUTICALS INC

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our results of operations, in thousands, for each of the periods presented:

Research and Development Expenses

R&D expenses decreased $9.3 million to $35.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease in R&D expenses was primarily driven by decreases in manufacturing and development and direct costs of $2.5 million, lab supplies and office expense of $2.3 million, compensation and benefits expense of $1.4 million due to decreased R&D headcount, and professional fees of $1.6 million. Reflected in the decrease in R&D expenses was the receipt of $2.7 million of CIRM grant recorded as a reduction of R&D expenses.

General and Administrative Expenses

G&A expenses increased $6.3 million to $28.4 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase in G&A expenses was primarily driven by increases in commercial preparation related expenses of $1.5 million, legal expenses of $4.0 million, and non-cash stock compensation expense of $0.7 million.

Other Income, Net

Other income decreased $2.3 million to $3.1 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease in other income was primarily driven by a decrease in accretion of discount on investments, net, of $0.6 million and a decrease in interest and other income, net, of $1.7 million due to a decrease in interest earned on investments due to lower interest rates year over year and a decrease in fair value of warrant liabilities in 2024.

Liquidity and Capital Resources

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.

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.

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 $61.3 million for the three months ended March 31, 2025, and $258.7 million for the year ended December 31, 2024. We have experienced negative cash flows from operations and as of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $1.28 billion and $1.22 billion, respectively. As of March 31, 2025, we had $318.2 million of cash, cash equivalents and investments. We believe that our existing cash, cash equivalents, and available-for-sale investments will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2026. We have financed our operations primarily through proceeds from the sale of equity securities and continue to manage our capital resources with discipline and a focus on long-term sustainability.

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.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities, in thousands, for each of the periods presented: