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Rocket Pharmaceuticals Reports First Quarter 2019 Financial Results and Operational Highlights

NEW YORK--(BUSINESS WIRE)--

– Initiated Phase 1 Trial for FA “Process B” Using a Modified Cell Enrichment Process, Transduction Enhancers, and Commercial-Grade Vector Manufacturing and Cell Processing –

– Successful Closing of $90.6 Million Equity Offering to Support Pipeline –

– On Track for Clinical Data on Two of Four Gene Therapy Programs by Year End –

Rocket Pharmaceuticals, Inc. (RCKT) (“Rocket”), a leading U.S.-based multi-platform clinical-stage gene therapy company, reports financial results for the quarter ended March 31, 2019, and provides an update on the Company's recent achievements, as well as upcoming milestones.

“Last quarter, we continued to lay the groundwork towards achieving our objective of having four programs in the clinic by year end,” said Gaurav Shah, M.D., Chief Executive Officer and President of Rocket. “We initiated our Phase 1 clinical trial for FA ‘Process B’ and are encouraged by the continued long-term clinical profile of patients receiving ‘Process A’ RP-L102. We are also encouraged by the strong preclinical data package of RP-A501 as it nears the clinic. In non-human primate studies, RP-A501 demonstrated robust transduction and LAMP2 protein expression in all four heart chambers, the key target organ for Danon disease.”

“We remain focused on our core strategic goal of bringing transformative gene therapies to patients with devastating rare diseases, as quickly as possible. With the closing of our most recent equity raise, we are well capitalized to advance our pipeline and look forward to providing updates on two clinical programs by year end,” Dr. Shah concluded.

Recent Pipeline and Corporate Updates

  • Presentation of preclinical and clinical updates at the American Society of Gene and Cell Therapy (ASGCT) 2019 Annual Meeting. At ASGCT, Rocket’s oral and poster presentations highlighted promising data on four gene therapy programs: Fanconi Anemia (FA), Danon disease, Leukocyte Adhesion Deficiency-I (LAD-I) and Pyruvate Kinase Deficiency (PKD). Oral and poster presentations are available online: https://www.rocketpharma.com/asgct-presentations/
  • Patient dosing commences in Phase 1 clinical study for FA with improved “Process B”. The Center for Definitive and Curative Medicine at Stanford is serving as the lead U.S. clinical site. “Process B” incorporates a modified cell enrichment process, transduction enhancers, and commercial-grade vector manufacturing and cell processing. Initial patients have received treatment under “Process B” at Stanford under a U.S.-focused Phase 1 study, with additional Phase 2 enrollment anticipated in the second half of 2019. Preliminary data from the Phase 1 “Process B” study are expected by the end of 2019.
  • Partnership with University of California, Los Angeles (UCLA) to lead U.S. clinical development efforts for LAD-I and Infantile Malignant Osteopetrosis (IMO) programs. UCLA and its Eli and Edythe Broad Center of Regenerative Medicine and Stem Cell Research is serving as the lead U.S. clinical research center for the planned registrational clinical trial for LAD-I and also a lead U.S. clinical site for IMO.
  • Grant awarded from California Institute for Regenerative Medicine (CIRM). CIRM awarded Rocket a $6.5 million grant to support the development of RP-L201 for LAD-I. The grant will help fund the U.S. Phase 1/2 LAD-I registration-enabling study. The trial will evaluate the safety and efficacy of the infusion of autologous hematopoietic stem cells transduced with a lentiviral vector encoding the ITGB2 gene.
  • Rare Pediatric Disease designation for IMO. Rocket received Rare Pediatric Disease designation from the Food and Drug Administration (FDA) for RP-L401 for the treatment of IMO. The FDA defines a "rare pediatric disease" as a serious and life-threatening disease that affects less than 200,000 people in the U.S. that are aged between birth to 18 years. The Rare Pediatric Disease designation program allows for a Sponsor who receives an approval for a product to potentially qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product.
  • Approximately $90.6 million secured in public equity offering. Rocket successfully closed an oversubscribed underwritten public offering of common stock for gross proceeds of approximately $90.6 million. Net of expenses, the Company received approximately $86.0 million in net proceeds.

Anticipated Milestones

  • FA (RP-L102)
    • Initial Phase 1 data under “Process B” (2H19)
    • Regulatory alignment on final endpoints for registration and Phase 2 study (2H19)
    • Additional data from RP-L102 (2020)
  • Danon Disease (RP-A501)
    • Initiation of Phase 1 study (2Q19)
    • Phase 1 data (2020)
    • Initiate Phase 2/registration-enabling study (2020)
  • LAD-I (RP-L201)
    • Initiation of registration-enabling Phase 1/2 study (2Q19)
    • Initial Phase 1 data (2H19)
    • Additional data from RP-L201 (2020)
  • PKD (RP-L301)
    • Initiation of Phase 1 study (2H19)
    • Data from Phase 1 (2020)
  • IMO (RP-L401)
    • Initiation of clinical study (1H20)

Upcoming Investor Conferences

  • Bank of America Merrill Lynch Global Healthcare Conference 2019. Rocket is scheduled to present on Wednesday, May 15, 2019, at 3:40 p.m. Pacific Time. Rocket will also participate in a Gene Therapy Panel on Wednesday, May 15, 2019, at 4:20 p.m. Pacific Time.

First Quarter 2019 Financial Results

  • Cash position. Cash, cash equivalents and investments as of March 31, 2019, were $196.6 million.
  • Debt. Our balance sheet includes a $52.0 million fully convertible debenture which matures in August of 2021.
  • R&D expenses. Research and development expenses were $15.1 million for the three months ended March 31, 2019, compared to $5.7 million for the three months ended March 31, 2018. The increase was primarily driven by increases in manufacturing and process development expenses of $5.5 million and research agreement expenses of $1.9 million.
  • G&A expenses. General and administrative expenses were $3.8 million for the three months ended March 31, 2019, compared to $8.7 million for the three months ended March 31, 2018. The decrease was primarily due to certain stock compensation and severance termination expenses in Q-1, 2018 related to the reverse merger with Inotek Pharmaceuticals Corporation.
  • Net loss. Net loss was $19.5 million or $0.43 per share (basic and diluted) for the three months ended March 31, 2019, compared to $15.3 million or $0.42 per share (basic and diluted) for the three months ended March 31, 2018.
  • Shares outstanding. 45,114,437 million shares of common stock were outstanding as of March 31, 2019.

Financial Guidance

  • Cash position. As of March 31, 2019, we had cash, cash equivalents and investments of $196.6 million. On April 18, 2019, Rocket closed a public offering of 5,175,000 shares of common stock and received net proceeds of approximately $86.0 million. Considering the net proceeds from the public offering, Rocket expects such resources will be sufficient to fund its operations into the first half of 2021. As of April 30, 2019, we had cash, cash equivalents and investments of $273.1 million.

About Rocket Pharmaceuticals, Inc.

Rocket Pharmaceuticals, Inc. (RCKT) (“Rocket”) is an emerging, clinical-stage biotechnology company focused on developing first-in-class gene therapy treatment options for rare, devastating diseases. Rocket’s multi-platform development approach applies the well-established lentiviral vector (LVV) and adeno-associated viral vector (AAV) gene therapy platforms. Rocket's lead clinical program is a LVV-based gene therapy for the treatment of Fanconi Anemia (FA), a difficult to treat genetic disease that leads to bone marrow failure and potentially cancer. Rocket’s additional pipeline programs for bone marrow-derived disorders are for Pyruvate Kinase Deficiency (PKD), Leukocyte Adhesion Deficiency-I (LAD-I) and Infantile Malignant Osteopetrosis (IMO). Rocket is also developing an AAV-based gene therapy program for a devastating, pediatric heart failure indication, Danon disease. For more information about Rocket, please visit www.rocketpharma.com.

Rocket Cautionary Statement Regarding Forward-Looking Statements

Various statements in this release concerning Rocket's future expectations, plans and prospects, including without limitation, Rocket's expectations regarding the safety, effectiveness and timing of product candidates that Rocket may develop, to treat Fanconi Anemia (FA), Leukocyte Adhesion Deficiency-I (LAD-I), Pyruvate Kinase Deficiency (PKD), Infantile Malignant Osteopetrosis (IMO) and Danon disease, and the safety, effectiveness and timing of related pre-clinical studies and clinical trials, may constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995 and other federal securities laws and are subject to substantial risks, uncertainties and assumptions. You should not place reliance on these forward-looking statements, which often include words such as "believe," "expect," "anticipate," "intend," "plan," "will give," "estimate," "seek," "will," "may," "suggest" or similar terms, variations of such terms or the negative of those terms. Although Rocket believes that the expectations reflected in the forward-looking statements are reasonable, Rocket cannot guarantee such outcomes. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including, without limitation, Rocket's ability to successfully demonstrate the efficacy and safety of such products and pre-clinical studies and clinical trials, its gene therapy programs, the preclinical and clinical results for its product candidates, which may not support further development and marketing approval, the potential advantages of Rocket's product candidates, actions of regulatory agencies, which may affect the initiation, timing and progress of pre-clinical studies and clinical trials of its product candidates, Rocket's and its licensors ability to obtain, maintain and protect its and their respective intellectual property, the timing, cost or other aspects of a potential commercial launch of Rocket's product candidates, Rocket's ability to manage operating expenses, Rocket's ability to obtain additional funding to support its business activities and establish and maintain strategic business alliances and new business initiatives, Rocket's dependence on third parties for development, manufacture, marketing, sales and distribution of product candidates, the outcome of litigation, and unexpected expenditures, as well as those risks more fully discussed in the section entitled "Risk Factors" in Rocket's Annual Report on Form 10-K for the year ended December 31, 2018. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and Rocket undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

           
Selected Financial Information
Operating Results:
(amounts in thousands, except share and per share data)
    Three Months Ended March 31,
  2019     2018  
Revenue $ - $ -
 
Operating expenses:
Research and development 15,137 5,743
General and administrative   3,808     8,662  
Total operating expenses   18,945     14,405  
Loss from operations (18,945 ) (14,405 )
Research and development incentives 250 186
Interest expense (1,604 ) (1,427 )
Interest and other income net 601 288
Accretion of discount on investments   247     15  
Net loss $ (19,451 ) $ (15,343 )
Net loss per share attributable to common shareholders - basic and diluted $ (0.43 ) $ (0.42 )
Weighted-average common shares outstanding - basic and diluted   45,122,815     36,137,120  
 
Selected Balance Sheet Information
(amounts in thousands)
March 31, December 31,
  2019     2018  
Cash, cash equivalents and investments 196,590 213,132
Total assets 242,138 251,313
Total liabilities 65,061 57,276
Total shareholders' equity 177,077 194,037
 

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