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Rocket Pharmaceuticals Primed for Takeoff

How far gene therapy company will climb depends a great deal on success of heart disease treatment

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Barry Cohen
Mar 15, 2021
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With all due respect to Elton John, the real Rocket Man is in Cranbury, New Jersey.

That's where President and Chief Operating Officer Kinnari Patel is steering Rocket Pharmaceuticals Inc. (

RCKT, Financial) to what he and investors hope will be even greater heights. Patel has certainly earned his stripes over the past year, as shares of the gene therapy developer have more than tripled to $56.68. Of course, that's still about $6 lower than the company traded at six years ago.

Management has set lofty goals for the company that was founded in 2015.

"Our ambition is to become the Genentech of gene therapy," Patel said, according to Biopharma Dive. Patel, second in command to CEO Gaurav Shah, is shooting for the moon, but so far many of the company's programs are still earthbound.

Moreover, the company has been tainted by recent concerns about the viability of gene therapy. For instance, in January, Sarepta Therapeutics Inc.'s (

SRPT, Financial) stock plunged after the company's Duchenne muscular dystrophy gene therapy failed to do better than a placebo in phase 2 clinical trial. Last year, three children with a rare neuromuscular disease died after receiving a high dose of a gene therapy in a clinical trial run by Audentes Therapeutics (BOLD, Financial).

Despite these setbacks, the outlook for the technique remains bright. Data Bridge Market Research reports that the global gene therapy market is increasing gradually, with a compound annual growth rate of more than 36% in the forecasted period of 2019 to 2026. Powering the growth is the higher incidence of cancer and rare life-threatening diseases.

Rocket, with a market cap of $51 billion, is still one of the most valuable independent gene therapy companies, dwarfing some of the better-known companies in the industry like bluebird bio Inc. (

BLUE, Financial), Sangamo and UniQure N.V. (QURE, Financial). That Rocket is seeking treatments for diseases that affect only a small percentage of the population didn't seem to phase Mani Foroohar, an analyst at SVB Leerink. He pointed out that the company's pipeline is relatively wide-ranging.

Two types of delivery methods are used in gene therapy: lentiviruses, favored by bluebird, Avrobio Inc. (

AVRO, Financial) and Orchard Therapeutics (ORTX, Financial), and adeno-associated virus, the approach taken by Spark Therapeutics Inc. (ONCE, Financial) and AveXis Inc. (AVXS, Financial). Faced with choosing what flight path to take, Rocket selected both.

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That decision was made after long internal talks about the benefits and weaknesses of each approach. The Rocket team finally concluded that becoming a multiplatform company was the best choice as they are not gene therapists beholden to a specific technology. "We're drug developers," Patel said.

Stifel analyst Dae Gon Ha agreed, recently writing, "the ability to leverage both adds flexibility" as the company grows.

Rocket's biggest opportunity is its program to treat Danon disease, which 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 gene mutation. Rocket estimates Danon impacts 15,000 to 30,000 people across the U.S. and the European Union, though precise figures aren't available.

Rocket will know more about the effectiveness of its therapy when data from a phase 1 study will be revealed in the second half of the year. So far, no gene therapy has worked in cardiovascular disease.

Based on nine analysts offering 12-month price targets for Rocket in the past three months, the average is $64.13 with a high forecast of $80 and a low of $19. The shares are rated a buy.

Disclosure: The author has no position in any of the stocks mentioned in this article.

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