Today, Rocket Therapeutics announced a huge change as part of its pipeline going forward. It enacted a reprioritization of its pipeline to focus on the use of its adeno-associated virus (AAV) gene therapies targeting patients with rare cardiovascular disorders. The purpose of this was to focus on pipeline items that deliver value to shareholders so that it could extend its cash runway into Q2 of 2027. It was revealed that the company would put an emphasis on advancing RP-A601 for PKP2 arrhythmogenic cardiomyopathy (PKP2-ACM), RP-A701 to treat patients with BAG3-associated Dilated Cardiomyopathy (BAG3-DCM), and RP-A501 for Danon Disease.
In order to implement this massive pipeline adjustment, the management of this company had to make a few big decisions. The first item on the agenda was to reduce its workforce by as much as 30%. Considering that it put many other AAV gene therapy candidates on the back burner for now, the move to reduce its headcount makes a lot of sense so that it may focus specifically on advancing the cardiomyopathy indications. This specific move of reduction of its employees is expected to reduce its 12-month cash burn by as much as 25%. Plus, as I noted beforehand, it would allow the company to be able to fund itself into Q2 of 2027.
There are a few reasons why the company chose this measure and why it makes a lot of sense to do this. I believe the reason why it enacted these measures is because of several roadblocks it hit this past year. The first problem being that the company received an FDA clinical hold relating to the development of RP-A501 for the treatment of patients with Danon disease. A major reason for this program suffering a setback was because a patient who received this AAV gene therapy suffered from capillary leak syndrome and ultimately died from acute systemic infection. It is not entirely clear why this happened, but it is currently being investigated. With that being said, the main focus of the investigation is that it is quite possible that adding in an immunosuppression agent may have been the cause of this event happening.
Regardless of the reason, the FDA had placed the clinical hold on May 23, 2025, and it has since not been lifted for the time being. If that wasn’t bad enough as is, things got worse just a few short months later. This is when the FDA reviewed the Biologics License Application (BLA) of its gene therapy KRESLADI (RP-L201) for the treatment of patients with leukocyte adhesion deficiency I (LAD-I) and gave the company a complete response letter (CRL). While it is very disappointing that the company didn’t receive U.S. marketing approval immediately, I believe its problem has a good chance at being solved. The reason why is because the problem with the regulatory application occurred due to that of the Chemistry, Manufacturing, and Controls (CMC) portion of the application.
To correct the action of this portion of the application, Rocket is in the process of engaging with the FDA’s division of the Center for Biologics Evaluation and Research. If all goes well with these talks in the next several months, then it should be well off to submit its BLA yet again in 2025. If it receives U.S. marketing approval, this would not only resolve the company’s pipeline setback, but it could also allow it to obtain a Priority Review Voucher (PRV) from the FDA upon approval. This would either give it the option to keep the PRV for itself to speed up the review of another AAV gene therapy candidate in its pipeline or to sell it for $150 million or more. The reason why is because that is the near approximate going rate for the sale of such PRVs.
Of course, if it ends up receiving this PRV and selling it, then it would extend its cash runway beyond that of the projected Q2 of 2027 date to fund its operations. There is even another option being considered that was noted in the update to this pipeline reorganization, which is a strategic review that remains ongoing. What this means is that the company could be looking to either sell off assets from its pipeline, partner out some AAV gene therapy candidates, merge with another company, or outright sell itself to another pharmaceutical company. It stated that further updates relating to its pipeline would be revealed in the next earnings update from the company itself.