The term moonshot is reserved for ventures with long-shot goals. Yet it could also describe Rocket Pharmaceuticals, a gene therapy developer with an uncommon strategy and sky-high ambitions.
Since its founding in late 2015 by former Novartis and Eli Lilly veterans, Rocket has followed a less traditional path. The company started in New York, rather than the life sciences hubs of Boston and San Francisco, and went public in an unconventional way. It's also simultaneously developing gene therapies using two different deliver technologies, a more unusual approach.
"Our ambition is to become the Genentech of gene therapy," said President and Chief Operating Officer Kinnari Patel, a reference to the prolific cancer drug developer that is one of the biotech industry's pioneering companies.
Such a bold statement is likely to raise eyebrows and invite doubt. Rocket's lead programs, each for rare disorders, are unproven. A series of recent setbacks have also shaken confidence in gene therapy's recent progress, potentially making investors in the field more skeptical early promise will pan out as planned.
Even so, Rocket has quietly become one of the most valuable gene therapy developers that are still independent, worth more than well-established companies like Bluebird bio, Sangamo Therapeutics and UniQure. While the diseases Rocket's targeting affect very small groups of patients, Mani Foroohar, an analyst at SVB Leerink, noted its pipeline is relatively broad.
Clinical data expected over the course of this year, though, will determine whether Rocket's ascent will continue.
A fresh start
Six years ago, Gaurav Shah was working in the cell and gene therapy division of Novartis when an investor meeting changed his life.
At Novartis, Shah was shepherding along Kymriah, a blood cancer treatment that would later become the first CAR-T cell therapy approved in the U.S. But Shah's career took a turn after chatting with Roderick Wong, a managing partner at RTW Investments, a New York-based life sciences investment firm.
RTW had identified an experimental gene therapy at a research center in Spain designed to address a rare form of anemia known as pyruvate kinase deficiency, or PKD.
The two had become encouraged by the recent progress of Bluebird, whose gene therapy for the rare blood disease beta thalassemia had just begun showing promise in humans. The discussion quickly turned into a two-hour conversation not only about PKD and the program in Spain, but ultimately, starting a company to move that gene therapy — and others for uncommon inherited diseases without effective treatments — forward.
"I was personally compelled by not only the unmet need in rare disease, but also by the elegance of the science as laid out to me," Shah said.
Drawn by the possibilities, and convinced that RTW had correctly identified an opening in the market, Shah took a big risk and left Novartis to start a new company.
He recruited two compatriots: Patel, a former colleague at the Swiss pharma, and Jonathan Schwartz, with whom he had overlapped at Eli Lilly's ImClone division.
The call was serendipitous for Patel, who had just been rebuffed in an effort to start a rare disease unit within Bristol Myers Squibb. The proposal earned her a company-sponsored spot in NYU's executive MBA program, where she met Wong in his role as an adjunct associate professor.
Joining up with the company they were forming gave Patel another crack at the rare disease work she aimed to pursue. And the opportunity intrigued her, so long as the plan was to build a company for the long term.
"The only question I had for them in the interview," she recalled, was "can you allow me and the team to take it all the way?"
Like many gene therapy developers, Rocket began building its pipeline by licensing programs in development at research institutions, first with PKD and then another rare blood disorder, Fanconi anemia. But the company stands out for what it did next.
Both the PKD and Fanconi programs use lentiviruses to shuttle genetic instructions into the body's cells. Commonly used as a gene therapy delivery tool, lentiviruses are favored by companies like Bluebird, Avrobio and Orchard Therapeutics. They're a key part of a complex process in which cells are extracted from a patient, precisely modified with a functional gene and re-infused. Each of those companies have several lentiviral gene therapies in different stages of human testing, and Bluebird has one, Zynteglo, on the market in Europe for beta thalassemia. (Sales are currently suspended while Bluebird investigates two cancer cases reported in trials of a similar gene therapy.)
Rocket could have continued down a similar path and become a lentiviral gene therapy developer in the mold of Bluebird and others. But in February 2017, it acquired a program for a rare and deadly heart condition known as Danon disease. Rather than a lentivirus, the program used an adeno-associated virus, or AAV, for delivery.
AAVs are the backbone of a wide range of gene therapies, among them the inherited blindness treatment Luxturna and the spinal muscular atrophy medicine Zolgensma. They're easily administered via infusion and have proven safe in clinical testing.
AAVs and lentiviruses have different strengths and weaknesses as well as varying product profiles, which make them better or worse fits for use treating certain genetic diseases. Typically, developers choose one technology or the other to work with. Both Spark Therapeutics and AveXis, which respectively developed Luxturna and Zolgensma, were each exclusively AAV gene therapy companies, for example.
"The big question that we had was, do we stay as an ex-vivo, lenti [company], or are we focused on disease?" Patel said.
There was substantial internal debate about the pros and cons of becoming a multi-platform company, Patel said. But in the end, Rocket felt the potential rewards outweighed the risks and challenges ahead. "We're drug developers," and not gene therapists beholden to a specific technology, she added.
The usual next step for a developing biotech is to go public, typically through an initial stock offering. Rocket, however, executed a reverse merger in 2018 with a struggling eye drug developer, Inotek Pharmaceuticals.
Reverse mergers aren't uncommon in biotech. An alternative to IPOs, they involve one company taking over the shell of a publicly traded company to quickly access capital markets. But reverse mergers aren't as well perceived as IPOs and often leave the newly public company with a lower valuation than it may have secured through a traditional IPO process.
For their part, Rocket executives said they decided to trade a more modest valuation for a quicker infusion of cash, avoiding the typically monthslong process of meeting would-be investors ahead of an IPO.
By the end of 2018, the company was listed on the Nasdaq stock exchange; had announced its first clinical data, from the Fanconi anemia program; and added assets for two more rare genetic diseases known as leukocyte adhesion deficiency type 1 and infantile malignant osteopetrosis.
Rocket's early decisions have begun to pay dividends. The company has shown "proof of concept" across both lentiviral and AAV approaches, Stifel analyst Dae Gon Ha recently wrote, and "the ability to leverage both adds flexibility" as the company grows.
This past December, initial data from the Danon disease program sent Rocket stock soaring to nearly $60 apiece, or more than five times their price when the company went public. Executives used that stock bump to quickly raise $300 million and build out a manufacturing facility and new headquarters in New Jersey.
Rocket's biggest challenges lie ahead, though. Multiple data updates are expected this year, headlined by anticipated results from the Danon program, which has emerged as the company's largest opportunity.
Rocket's gene therapy pipeline
|Disease||Gene therapy platform||Stage of development||Next data|
|Fanconi anemia||Lentivirus||Phase 2||Second quarter, 2021|
|Leukocyte adhesion deficiency||Lentivirus||Phase 2||Second quarter, 2021|
|Danon disease||Adeno-associated virus||Phase 1||Second half, 2021|
|Pyruvate kinase deficiency||Lentivirus||Phase 1||Second half, 2021|
|Infantile malignant osteopetrosis||Lentivirus||Phase 1||Second half, 2021|
Danon is characterized by weakness of the heart and other muscles, forcing many patients to undergo heart transplants. There are no treatments for the disease's underlying cause, believed to be a mutation in a gene known as LAMP2.
Rocket estimates Danon impacts 15,000 to 30,000 people across the US and the European Union, though its exact prevalence is unclear. SVB's Foroohar questioned, for instance, how many pediatric heart failure patients "actually have Danon disease" as opposed to some other potentially deadly heart condition “without a good genetic cause to point to?"
Treatment with Rocket's gene therapy led to declines in markers of heart failure in all of the subjects treated in its early trial. The update coming later this year will be more telling, showing whether the changes have held up and if the treatment has improved function in the skeletal and liver muscles. No gene therapy has so far been successful in treating a cardiovascular condition.
"It's one thing to say it gets into the heart; we've got a pretty decent number of cells that look like they have protein," Foroohar said. "It's entirely another to say that leads to this clinical benefit in five years."
Rocket's study will be closely watched by more than analysts and investors. Eric Adler, who runs the cardiac transplant program at UC San Diego Health, is one of the few physicians studying Danon. A Rocket shareholder and scientific advisor, Adler believes the trial's results will advance understanding of the disease even if the treatment fails.
"Danon is emblematic of other rare diseases where they're very morbid and, and because they're so rare, no one has ownership — pharma doesn't have ownership, doctors don't have ownership," he said.
But that's changing because of companies like Rocket, which are pouring money into genetic medicines for little-known conditions.
"There are going to be really great opportunities to treat these diseases that we never had before with precision therapeutics," he said. "We're going to learn about treating Danon, but we're also going to learn about the effects of transducing [a functional gene] into the heart. It could be a paradigm for how we approach a lot of rare cardiovascular diseases."