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What changed in ROCKET PHARMACEUTICALS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ROCKET PHARMACEUTICALS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+549 added−634 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-28)

Top changes in ROCKET PHARMACEUTICALS, INC.'s 2023 10-K

549 paragraphs added · 634 removed · 429 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

151 edited+43 added−79 removed310 unchanged
Biggest changeThe gene therapies can be delivered either (1) ex vivo (outside the body), in which case the patient’s cells are extracted and the vector is delivered to these cells in a controlled, safe laboratory setting, with the modified cells then being reinserted into the patient, or (2) in vivo (inside the body), in which case the vector is injected directly into the patient, either intravenously (“IV”) or directly into a specific tissue at a targeted site, with the aim of the vector delivering the transgene to the targeted cells. 5 Table of Contents We believe that scientific advances, clinical progress, and the greater regulatory acceptance of gene therapy have created a promising environment to advance gene therapy products as these products are being designed to restore cell function and improve clinical outcomes, which in many cases include prevention of death at an early age.
Biggest changeWe believe that our LV and AAV-based programs have the potential to offer a significant and long-lasting therapeutic benefit to patients. 7 The gene therapies can be delivered either (1) ex vivo (outside the body), in which case the patient’s cells are extracted and the vector is delivered to these cells in a controlled, safe laboratory setting, with the modified cells then being reinserted into the patient, or (2) in vivo (inside the body), in which case the vector is injected directly into the patient, either intravenously (“IV”) or directly into a specific tissue at a targeted site, with the aim of the vector delivering the transgene to the targeted cells.
Of note, ICDs are not curative, and breakthrough life-threatening arrythmias may persist with ongoing risk of death; ICDs furthermore do not prevent the progression to end-stage heart failure. ICD firings, although lifesaving, are physically and emotionally traumatic events.
Of note, ICDs are not curative, and breakthrough life-threatening arrythmias may persist with ongoing risk of death. Furthermore, ICDs do not prevent the progression to end-stage heart failure. ICD firings, although lifesaving, are physically and emotionally traumatic events.
Leukocyte Adhesion Deficiency (LAD-I) Our patent portfolio includes pending patent applications in the U.S., EU, Japan, China and other countries with claims directed to transduction of allogeneic HSCT, which may be relevant to our LAD-I program.
Leukocyte Adhesion Deficiency Our patent portfolio includes pending patent applications in the U.S., EU, Japan, China and other countries with claims directed to transduction of allogeneic HSCT, which may be relevant to our LAD-I program.
Under the terms of the agreement, we are obligated to use commercially reasonable efforts to (a) develop and obtain regulatory approval for one or more products or processes covered by the licensed intellectual property, introduce such products or processes into the commercial market and then make them reasonably available to the public (b) develop or commercialize at least one product or process covered by the licensed intellectual property in at least one country for at least two uninterrupted years following regulatory approval, and (c) use the licensed intellectual property in an adequate, ethical and legitimate manner.
Under the terms of the agreement, we are obligated to use commercially reasonable efforts to (a) develop and obtain regulatory approval for one or more products or processes covered by the licensed intellectual property, introduce such products or processes into the commercial market and then make them reasonably available to the public (b) develop or commercialize at least one product or process covered by the licensed intellectual property in at least one country for at least two uninterrupted years following regulatory approval, and (c) use the licensed intellectual property in an adequate, ethical and legitimate manner.
We are obligated to license (without charge) to CIEMAT for non-commercial use any improvements to the licensed intellectual property that we create. As consideration for the licensed rights, we paid CIEMAT an initial upfront license fee of €0.1 million (approximately $0.1 million), which was expensed as R&D costs.
We are obligated to license (without charge) any improvements to the licensed intellectual property that we create to CIEMAT for non-commercial use. As consideration for the licensed rights, we paid CIEMAT an initial upfront license fee of €0.1 million (approximately $0.1 million), which was expensed as R&D costs.
The license is in effect for a duration for each of the countries defined in this agreement for as long as a license right exists that covers the licensed product or process in such country, or until the end of any additional legal protection that should be obtained for the license rights in each country.
The license is in effect for a duration for each of the countries defined in this agreement for as long as a license right exists that covers the licensed product or process in such country, or until the end of any additional legal protection that should be obtained for the license rights in each country.
Under the terms of the agreement, we are obligated to use commercially reasonable efforts to (a) develop and obtain regulatory approval for one or more products or processes covered by the licensed intellectual property, introduce such products or processes into the commercial market and then make them reasonably available to the public, (b) develop or commercialize at least one product or process covered by the licensed intellectual property in at least one country for at least two uninterrupted years following regulatory approval, and (c) use the licensed intellectual property in an adequate, ethical and legitimate manner.
Under the terms of the agreement, we are obligated to use commercially reasonable efforts to (a) develop and obtain regulatory approval for one or more products or processes covered by the licensed intellectual property, introduce such products or processes into the commercial market and then make them reasonably available to the public, (b) develop or commercialize at least one product or process covered by the licensed intellectual property in at least one country for at least two uninterrupted years following regulatory approval, and (c) use the licensed intellectual property in an adequate, ethical and legitimate manner.
In the event that we enter into a sublicense agreement with a sublicensee, we will be obligated to pay a portion of any consideration received from such sublicensees in specified circumstances. We may terminate this agreement at any time by providing the Licensors with 90 days advance notice.
In the event that we enter into a sublicense agreement with a sublicensee, we will be obligated to pay a portion of any consideration received from such sublicensees in specified circumstances. We may terminate this agreement at any time by providing Licensors with 90 days advance notice.
Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the implementation of other risk management measures.
Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications, and may also require the implementation of other risk management measures.
The term “remuneration” has been broadly interpreted to include anything of value. The Federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other.
The term “remuneration” has been broadly interpreted to include anything of value. The Federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other.
Changes in KCCQ score of +/- 5 points are considered meaningful and have been shown to correlate with outcomes. • Histologic examination of endomyocardial biopsies via hematoxylin and eosin (“H&E”) histology and electron microscopy is used to detect evidence of DD-associated tissue derangements, including the presence of autophagic vacuoles and disruption of myofibrillar architecture, each of which are characteristic of DD-related myocardial damage. • LAMP2B gene expression in endomyocardial biopsy samples is measured via both immunohistochemistry and Western blot and confirms the presence of LAMP2B protein in DD cardiac tissue following RP-A501 treatment.
Changes in KCCQ score of +/- 5 points are considered meaningful and have been shown to correlate with outcomes. 9 • Histologic examination of endomyocardial biopsies via hematoxylin and eosin (“H&E”) histology and electron microscopy is used to detect evidence of DD-associated tissue derangements, including the presence of autophagic vacuoles and disruption of myofibrillar architecture, each of which are characteristic of DD-related myocardial damage. • LAMP2B gene expression in endomyocardial biopsy samples is measured via both immunohistochemistry and Western blot and confirms the presence of LAMP2B protein in DD cardiac tissue following RP-A501 treatment.
This study has received a $6.6 million CLIN2 grant award from the California Institute for Regenerative Medicine (“CIRM”) to support the clinical development of gene therapy for LAD-I. The open-label, single-arm, Phase 1/2 registration-enabling clinical trial of RP-L201 has treated nine severe LAD-I patients to assess the safety and tolerability of RP-L201 to date.
This study has received a $6.6 million CLIN2 grant award from the California Institute for Regenerative Medicine (“CIRM”) to support the clinical development of gene therapy for LAD-I. The open-label, single-arm, Phase 1/2 registration-enabling clinical trial of RP-L201 has treated nine severe LAD-I patients to assess the safety and tolerability of RP-L201.
Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payors to reimburse all of part of the costs associated with their prescription drugs. Patients are unlikely to use our products unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost of our products.
Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Patients are unlikely to use our products unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost of our products.
Effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners. In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.
Effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners. 29 In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.
Our potential competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our products. Manufacturing Our gene therapy platform has two main components: the production of LV vectors and AAV vectors and the target cell transduction process, which results in drug product.
Our potential competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our products. 20 Manufacturing Our gene therapy platform has two main components: the production of LV and AAV vectors and the target cell transduction process, which results in drug product.
Although we would not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label.
Although we would not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, knowingly providing inaccurate billing or coding information to customers or promoting a product off-label.
Elevations in BNP are strongly associated with worsening heart failure and poor outcomes in cardiovascular disease. • High sensitivity troponin I (“hsTnI”) is a blood-based evaluation and a key marker of cardiac injury, one that is (like BNP) frequently elevated in DD patients and has been shown to be markedly elevated in patients with advanced stage disease. • Echocardiographic measurements of heart thickness, most notably, left ventricular mass (“LVM”) and maximal left ventricular wall thickness (“MLVWT”), indicate the degree of hypertrophy present in the heart. • Kansas City Cardiovascular Questionnaire (“KCCQ”) is a validated, patient-reported outcomes assessment that measures a patients perception of their heart failure symptoms, impact of disease on physical and social function, and the impact of their heart failure on overall health status and quality of life.
Elevations in BNP are strongly associated with worsening heart failure and poor outcomes in cardiovascular disease. • High sensitivity troponin I (“hsTnI”) is a blood-based evaluation and a key marker of cardiac injury, one that is (like BNP) frequently elevated in DD patients and has been shown to be markedly elevated in patients with advanced stage disease. • Echocardiographic measurements of heart thickness, most notably, left ventricular mass and maximal left ventricular wall thickness, indicate the degree of hypertrophy present in the heart. • Kansas City Cardiovascular Questionnaire (“KCCQ”) is a validated, patient-reported outcomes assessment that measures a patients perception of their heart failure symptoms, impact of disease on physical and social function, and the impact of their heart failure on overall health status and quality of life.
The length of the patent term extension is related to the length of time the drug is under regulatory review. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended.
The length of the patent term extension is related to the length of time the drug was under regulatory review. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended.
In particular, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars; addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of January 1, 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and provided incentives to programs that increase the federal government’s comparative effectiveness research.
In particular, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars; addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of January 1, 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D (which has been repealed effective 2025); and provided incentives to programs that increase the federal government’s comparative effectiveness research.
While we believe that our experience and scientific knowledge provides it with competitive advantages, we face potential competition from many different sources, including larger and better-funded pharmaceutical and biotechnology companies, new market entrants and new technologies, as well as from academic institutions, government agencies and private and public research institutions, which may in the future develop products to treat the indications targeted by our pipeline that have not yet been conceived.
While we believe that our experience and scientific knowledge provides us with competitive advantages, we face potential competition from many different sources, including larger and better-funded pharmaceutical and biotechnology companies, new market entrants and new technologies, as well as from academic institutions, government agencies and private and public research institutions, which may in the future develop products to treat the indications targeted by our pipeline that have not yet been conceived.
FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product, and FDA will not approve an application for a biosimilar or interchangeable product based on the reference biological product until twelve (12) years after the date of first licensure of the reference product.
FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four (4) years after the date of first licensure of the reference product, and FDA will not approve an application for a biosimilar or interchangeable product based on the reference biological product until twelve (12) years after the date of first licensure of the reference product.
This patient had more advanced disease than the four other adult/older adolescent patients who received treatment in the low and high dose cohorts, as evidenced by diminished baseline left ventricle (“LV”) ejection fraction (35%) on echocardiogram and markedly elevated LV filling pressure prior to treatment. The patient’s clinical course was characteristic of DD progression. The patient is doing well post-transplant.
This patient had more advanced disease than the four other adult/older adolescent patients who received treatment in the low and high dose cohorts, as evidenced by diminished baseline left ventricle ejection fraction (35%) on echocardiogram and markedly elevated left ventricle filling pressure prior to treatment. The patient’s clinical course was characteristic of DD progression. The patient is doing well post-transplant.
Also, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.
New government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development.
The process required by the FDA before a biologic may be marketed in the United States generally involves the following: • completion of non-clinical laboratory tests, animal studies and formulation studies conducted according to Good Laboratory Practice (“GLP”), or other applicable regulations; • submission of an IND, which allows clinical trials to begin unless FDA objects within 30 days; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug or biologic for its intended use or uses conducted in accordance with FDA regulations and Good Clinical Practices (“GCP”), which are international ethical and scientific quality standards meant to ensure that the rights, safety and well-being of trial participants are protected, and that the integrity of the data is maintained; • preparation and submission to the FDA of a BLA; • submission of a user fee for FDA review of the BLA; • review of the product by an FDA advisory committee, where appropriate or if applicable; • satisfactory completion of pre-approval inspection of manufacturing facilities and clinical trial sites at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements, and if applicable, the FDA’s current Good Tissue Practice (“cGTP”) requirements, and of selected clinical trial sites to assess compliance with GCP requirements; and • FDA approval of a BLA which must occur before a biologic can be marketed or sold.
The process required by the FDA before a biologic may be marketed in the U.S. generally involves the following: • completion of non-clinical laboratory tests, animal studies and formulation studies conducted according to Good Laboratory Practice (“GLP”), or other applicable regulations; • submission of an IND, which allows clinical trials to begin unless FDA objects within 30 days; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug or biologic for its intended use or uses conducted in accordance with FDA regulations and Good Clinical Practices (“GCP”), which are international ethical and scientific quality standards meant to ensure that the rights, safety and well-being of trial participants are protected, and that the integrity of the data is maintained; • preparation and submission to the FDA of a BLA; • submission of a user fee for FDA review of the BLA; • review of the product by an FDA advisory committee, where appropriate or if applicable; • satisfactory completion of pre-approval inspection of manufacturing facilities and clinical trial sites at which the product, 21 or components thereof, are produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements, and if applicable, the FDA’s current Good Tissue Practice (“cGTP”) requirements, and of selected clinical trial sites to assess compliance with GCP requirements; and • FDA approval of a BLA which must occur before a biologic can be marketed or sold.
Fanconi Anemia Our Fanconi Anemia patent portfolio includes granted patents in Australia and Japan and pending applications in the U.S., Europe, Japan, China and other countries with claims directed to polynucleotide cassettes and expression vector compositions containing Fanconi Anemia complementation group genes and methods for using such vectors to provide gene therapy in mammalian cells for treating Fanconi Anemia.
Fanconi Anemia Our FA patent portfolio includes granted patents in Australia, Japan, and Russia and pending applications in the U.S., Europe, Japan, China and other countries with claims directed to polynucleotide cassettes and expression vector compositions containing FA complementation group genes and methods for using such vectors to provide gene therapy in mammalian cells for treating FA.
Furthermore, RP-A501 continued to be well tolerated at 2-3 years post treatment in both adult /older adolescent high and low-dose cohorts and at 8 to 13 months in the pediatric cohort. In the pediatric cohort, no significant immediate or delayed toxicities, significant skeletal myopathy, or late transaminase elevations have been observed.
Furthermore, RP-A501 continued to be well tolerated at 2-3 years post treatment in both adult/older adolescent high and low-dose cohorts and at 8 to 13 months in the pediatric cohort. In the pediatric cohort, no significant immediate or delayed toxicities, significant skeletal myopathy, or late transaminase elevation have been observed.
The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage, and security requirements intended to prevent the unauthorized sale of pharmaceutical products. 26 Table of Contents The Federal Anti-Kickback Statute makes it illegal for any person or entity, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully, directly or indirectly, in cash or in kind, solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of, any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare or Medicaid.
The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage, and security requirements intended to prevent the unauthorized sale of pharmaceutical products. 28 The Federal Anti-Kickback Statute makes it illegal for any person or entity, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully, directly or indirectly, in cash or in kind, solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of, any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare or Medicaid.
Although improvements in allogeneic (donor-mediated) hematopoietic stem cell transplant (“HSCT”), currently the most frequently utilized therapy for FA, have resulted in more frequent hematologic correction of the disorder, HSCT is associated with both acute and long-term risks, including transplant-related mortality, graft versus host disease (“GVHD”), a sometimes fatal side effect of allogeneic transplant characterized by painful ulcers in the GI tract, liver toxicity and skin rashes, as well as increased risk of subsequent cancers.
Although improvements in allogeneic (donor-mediated) hematopoietic stem cell transplant (“HSCT”), currently the most frequently utilized therapy for FA, have resulted in frequent hematologic correction of the disorder, HSCT is associated with both acute and long-term risks, including transplant-related mortality, graft failure, and graft versus host disease, a sometimes fatal side effect of allogeneic transplant characterized by painful ulcers in the GI tract, liver toxicity and skin rashes, as well as increased risk of subsequent cancers.
Patent and Trademark Office in granting a patent or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
Patent and Trademark Office (“USPTO”) in granting a patent or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
Vector copy number (VCN) [product] The average number of gene copies per infused stem cell (as determined by DNA analysis; this is an average ratio, not a precise value) 0.5 to 2 has been target in some LV clinical studies (5.0 generally considered maximum) Vector copy number (VCN) [ in vivo , post-treatment] The average number of gene copies per peripheral blood or bone marrow cell (as determined by DNA analysis; this is an average ratio, not a precise value) Will depend on underlying disorder, but many disorders may be correctable with in vivo VCNs AAV Therapy Vector copy number (VCN) [ in vivo , post-treatment] The average number of gene copies per cell in the organ of interest (as determined by DNA analysis; this is an average ratio, not a precise value) Will depend on underlying disorder, but vivo VCNs Pipeline Overview The chart below shows the current phases of development of Rocket’s programs and product candidates: Cardiovascular Programs Danon Disease Danon disease (“DD”) is a multi-organ lysosomal-associated disorder leading to early death due to heart failure.
Vector copy number (VCN) [product] The average number of gene copies per infused stem cell (as determined by DNA analysis; this is an average ratio, not a precise value) 0.5 to 2 has been target in some LV clinical studies (5.0 generally considered maximum) Vector copy number (VCN) [ in vivo , post-treatment] The average number of gene copies per peripheral blood or bone marrow cell (as determined by DNA analysis; this is an average ratio, not a precise value) Will depend on underlying disorder, but many disorders may be correctable with in vivo VCNs AAV Therapy Vector copy number (VCN) [ in vivo , post-treatment] The average number of gene copies per cell in the organ of interest (as determined by DNA analysis; this is an average ratio, not a precise value) Will depend on underlying disorder, but vivo VCNs Pipeline Overview The chart below shows the current phases of development of our programs and product candidates: 8 Cardiovascular Programs Danon Disease DD is a multi-organ lysosomal-associated disorder leading to early death due to heart failure.
Patent term restorations, however, cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended and the extension must be applied for prior to expiration of the patent. The U.S.
Patent term restorations, however, cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended and the extension must be applied for prior to expiration of the patent.
On January 9, 2023, we presented additional positive efficacy updates from our Phase I study of RP-A501 during the 41 st Annual J.P. Morgan Healthcare Conference. The data presented included several additional months of follow-up, which showed further improvements in key biomarkers, echocardiographic and functional measures. A summary of these updates is provided in the table below.
On January 9, 2023, we presented positive efficacy updates from our Phase I study of RP-A501 during the 41st Annual J.P. Morgan Healthcare Conference. The data presented included several additional months of follow-up, which showed further improvements in key biomarkers, echocardiographic and functional measures. A summary of these updates is provided in the table below.
RP-A501 is in clinical trials as an in vivo therapy for DD, which is estimated to have a prevalence of 15,000 to 30,000 patients in the U.S. and the EU. 6 Table of Contents DD is an X-linked dominant, monogenic rare inherited disorder characterized by progressive cardiomyopathy which is almost universally fatal in males even in settings where cardiac transplantation is available.
RP-A501 is in clinical trials as an in vivo therapy for DD, which is estimated to have a prevalence of 15,000 to 30,000 patients in the U.S. and the EU. DD is an X-linked dominant, monogenic rare inherited disorder characterized by progressive cardiomyopathy which is almost universally fatal in males even in settings where cardiac transplantation is available.
Rare Pediatric Disease Designation and Priority Review Vouchers Under the FDCA, the FDA incentivizes the development of drugs and biological products that meet the definition of a “rare pediatric disease,” defined to mean a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making in the United States a drug or biological product for such disease or condition will be received from sales in the United States of such drug or biological product.
Rare Pediatric Disease Designation and Priority Review Vouchers Under the FDCA, the FDA incentivizes the development of drugs and biological products that meet the definition of a “rare pediatric disease,” defined to mean a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the U.S. or affects more than 200,000 in the U.S. and for which there is no reasonable expectation that the cost of developing and making in the U.S. a drug or biological product for such disease or condition will be received from sales in the U.S. of such drug or biological product.
Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators that meet GCP requirements. 21 Table of Contents During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points.
Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators that meet GCP requirements. During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points.
In addition, certain state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other and from HIPAA in significant ways and may not have the same effect, thus complicating compliance efforts. 27 Table of Contents The failure to comply with regulatory requirements subjects us to possible legal or regulatory action.
In addition, certain state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other and from HIPAA in significant ways and may not have the same effect, thus complicating compliance efforts. The failure to comply with regulatory requirements subjects us to possible legal or regulatory action.
License Agreement for Danon Disease with UCSD In February 2017, we entered into a license agreement with The Regents of the University of California, represented by its San Diego campus (“UCSD”), under which UCSD granted us an exclusive, sublicensable, worldwide license to certain intellectual property rights for the treatment of lysosomal storage diseases, including Danon disease.
License Agreement for DD with UCSD In February 2017, we entered into a license agreement with The Regents of the University of California, represented by its San Diego campus (“UCSD”), under which UCSD granted us an exclusive, sublicensable, worldwide license to certain intellectual property rights for the treatment of lysosomal storage diseases, including DD.
Our common stock is listed on the NASDAQ Global Market under the symbol “RCKT.”
Our common stock is listed on the NASDAQ Global Market under the symbol “RCKT.” 35
For instance, the new Clinical Trials Regulation provides for a streamlined application procedure via a single-entry point (instead of submitting applications separately to each national competent authority and ethics committee in the Member States in which the trial will be conducted) and strictly defined deadlines for the assessment of clinical trial applications.
For instance, the new Clinical Trials Regulation provides for a streamlined application procedure through the EU CTIS via a single-entry point (instead of submitting applications separately to each national competent authority and ethics committee in the Member States in which the trial will be conducted) and strictly defined deadlines for the assessment of clinical trial applications.
The facility also houses lab space for research & development and quality. We reached an understanding with the FDA on chemistry, manufacturing, and controls requirements to start AAV cGMP manufacturing at our in-house facility as well as potency assay plans for a Phase 2 pivotal trial in Danon disease.
The facility also houses lab space for research & development and quality. We reached an understanding with the FDA on chemistry, manufacturing, and controls requirements to start AAV cGMP manufacturing at our in-house facility as well as potency assay plans for a Phase 2 pivotal trial in DD.
Any patents, if issued, arising from these patent applications, are expected to expire in 2039, absent any patent term adjustments or extensions, if the appropriate maintenance, renewal, annuity, or other governmental fees are paid. We have also filed additional patent applications directed to methods for treatment of Danon disease.
Any patents, if issued, arising from these patent applications, are expected to expire in 2039, absent any patent term adjustments or extensions, if the appropriate maintenance, renewal, annuity, or other governmental fees are paid. We have also filed additional patent applications directed to methods for treatment of DD.
In light of the efficacy seen in non-conditioned patients, the addressable annual market opportunity is now believed to be 400 to 500 patients collectively in the U.S. and EU. 11 Table of Contents We currently have one ex-vivo LV-based program targeting FA, RP-L102.
In light of the efficacy seen in non-conditioned patients, the addressable annual market opportunity is now believed to be 400 to 500 patients collectively in the U.S. and EU. We currently have one ex vivo LV-based program targeting FA, RP-L102.
There was a transition period during which EU pharmaceutical laws continued to apply to the UK, which expired on December 31, 2020. However, the EU and the UK have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021.
There was a transition period during which EU pharmaceutical laws continued to apply to the UK, which expired on December 31, 2020. Initially, the EU and the UK concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021.
In addition, FDA currently requires, unless otherwise informed by the agency, pre-approval of promotional materials intended for dissemination or publication within 120 days of marketing approval . 24 Table of Contents Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time period for FDA review or approval may not be shortened.
In addition, FDA currently requires, unless otherwise informed by the agency, pre-approval of promotional materials intended for dissemination or publication within 120 days of marketing approval. 26 Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time period for FDA review or approval may not be shortened.
As of February 22, 2023, our patent portfolio includes both owned and in-licensed patent families relating to our product candidates and related technologies, discussed more fully below.
As of February 22, 2024, our patent portfolio includes both owned and in-licensed patent families relating to our product candidates and related technologies, discussed more fully below.
We make available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”).
We make available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
In July 2016, we entered into a license agreement with CIEMAT granting us worldwide, exclusive rights to certain patents, know-how, data and other intellectual property relating to lentiviral vectors containing the FA-A gene solely within the field of human therapeutic uses of VSV-G packaged integration component lentiviral vectors for FA type-A gene therapy.
In July 2016, we entered into a license agreement with CIEMAT granting us worldwide, exclusive rights to certain patents, know-how, data and other intellectual property relating to LVs containing the FANCA gene solely within the field of human therapeutic uses of VSV-G packaged integration component LVs for FA type-A gene therapy.
Therefore, our products, once approved, may not obtain market acceptance unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost of our products. 25 Table of Contents The process for determining whether a third-party payor will provide coverage for a drug product typically is separate from the process for setting the price of a drug product or for establishing the reimbursement rate that the payor will pay for the drug product once coverage is approved.
Therefore, our products, once approved, may not obtain market acceptance unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost of our products. 27 The process for determining whether a third-party payor will provide coverage for a drug product typically is separate from the process for setting the price of a drug product or for establishing the reimbursement rate that the payor will pay for the drug product once coverage is approved.
For example, federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs.
For example, there are federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs.
The first patient was treated at UCLA with RP-L201 in the third quarter of 2019. Enrollment is now complete in both the Phase 1 and 2 portions of the study; nine patients have received RP-L201 at 3 investigative centers in the U.S. and Europe. In December 2021, we presented positive clinical data at the 63rd Annual Meeting of ASH.
The first patient was treated at UCLA with RP-L201 in the third quarter of 2019. Enrollment is now complete in both the Phase 1 and 2 portions of the study; nine patients have received RP-L201 at 3 investigative centers in the U.S. and Europe. In December 2022, we presented positive clinical data at the 64th Annual Meeting of ASH.
We filed a prospectus supplement with the SEC on February 28, 2022, in connection with the offer and sale of the shares and have agreed to pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares, pursuant to the Sales Agreement.
We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares pursuant to the Sales Agreement. We will pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement.
Bio similarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical trial or trials.
Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical trial or trials.
Each of our hematology programs utilize third-generation, self-inactivating lentiviral vectors to correct defects in patients’ HSCs, which are the cells found in bone marrow that are capable of generating blood cells over a patient’s lifetime.
Each of our hematology programs utilize third-generation, self-inactivating LV to correct defects in patients’ HSCs, which are the cells found in bone marrow that are capable of generating blood cells over a patient’s lifetime.
Orphan medicinal product status in the EU has similar, but not identical, benefits. 23 Table of Contents Pediatric exclusivity is another type of non-patent marketing exclusivity in the U.S. and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent exclusivity.
Orphan medicinal product status in the EU has similar, but not identical, benefits. 25 Pediatric exclusivity is another type of non-patent marketing exclusivity in the U.S. and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent exclusivity.
If any such changes were to be imposed, they could adversely affect the operation of our business. Healthcare Legislative Reform In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably.
If any such changes were to be imposed, they could adversely affect the operation of our business. Healthcare Legislative Reform In both the U.S. and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably.
The Clinical Trials Regulation also makes it more efficient for EU Member States to evaluate and authorize applications together, via the Clinical Trials Information System.
The Clinical Trials Regulation also makes it more efficient for EU Member States to evaluate and authorize applications together, via the Clinical Trials.
DD predominantly affects males early in life and is characterized by absence of LAMP2B expression in the heart and other tissues. Preclinical models of DD have demonstrated that AAV-mediated transduction of the heart results in reconstitution of LAMP2B expression and improvement in cardiac function. We currently have one adeno-associated viral vector program targeting DD, RP-A501.
DD predominantly affects males early in life and is characterized by absence of LAMP2B expression in the heart and other tissues. Preclinical models of DD have demonstrated that AAV-mediated transduction of the heart results in reconstitution of LAMP2B expression and improvement in cardiac function. We currently have one AAV program targeting DD, RP-A501.
RP-L102 is our lead lentiviral vector-based program that we in-licensed from Centro de Investigaciones Energéticas, Medioambientales y Tecnológicas (“CIEMAT”), which is a leading research institute in Madrid, Spain.
RP-L102 is our lead LV-based program that we in-licensed from Centro de Investigaciones Energéticas, Medioambientales y Tecnológicas (“CIEMAT”), which is a leading research institute in Madrid, Spain.
In nonclinical studies conducted by the Sponsor, RP-A601 has demonstrated efficacy in altering the natural history of PKP2-driven ACM. PKP2 cKO animals treated with the study drug have exhibited extended survival to the longest timepoint measured (5 months), reduced cardiac dilation and fibrofatty replacement / fibrosis of the myocardium, preserved LV function, and mitigation of the arrhythmic phenotype.
Nonclinical studies conducted by the Sponsor, RP-A601 have demonstrated efficacy in altering the natural history of PKP2-driven ACM. 100% of PKP2 cKO animals treated with the study drug exhibited extended survival to the longest timepoint measured (5 months), reduced cardiac dilation and fibrofatty replacement/fibrosis of the myocardium, preserved left ventricular function, and mitigation of the arrhythmic phenotype.
To the extent that our consultants or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. 16 Table of Contents Material Contracts License Agreements with CIEMAT In March 2016, we entered into a license agreement with CIEMAT, CIBER, and FIISFJD, (collectively, “CIEMAT”), granting us worldwide, exclusive rights to certain patents, know-how and other intellectual property relating to lentiviral vectors containing the human PKLR gene solely within the field of treating PKD.
To the extent that our consultants or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. 17 Material Contracts License Agreements with CIEMAT In March 2016, we entered into a license agreement with CIEMAT, CIBER, and FIISFJD, (collectively, “CIEMAT”), granting us worldwide, exclusive rights to certain patents, know-how and other intellectual property relating to LVs containing the human PKLR gene solely within the field of treating PKD.
Additionally, manufacturers and other parties involved in the supply chain for prescription drug products must also comply with product tracking and racing requirements and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the U.S.
Additionally, manufacturers and other parties involved in the supply chain for prescription drug products must also comply with product tracking and tracing requirements and notify the FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the U.S.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. Our human capital resources objectives include, as applicable, identifying, attracting, recruiting, retaining, incentivizing, developing, and integrating our existing and new employees, advisors, and consultants.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. 34 Compensation and Benefits Programs Our human capital resources objectives include, as applicable, identifying, attracting, recruiting, retaining, incentivizing, developing, and integrating our existing and new employees, advisors, and consultants.
We currently have one adeno-associated viral vector program targeting PKP2-ACM, RP-A601, which is a recombinant AAVrh.74 vector expressing PKP2a. PKP2-ACM is typically caused by heterozygous pathogenic mutations in the PKP2 gene resulting in reduced PKP2 expression in the myocardium.
We currently have one AAV program targeting PKP2-ACM, RP-A601, which is a recombinant AAVrh.74 vector expressing PKP2a. PKP2-ACM is typically caused by heterozygous pathogenic mutations in the PKP2 gene resulting in reduced PKP2 expression in the myocardium.
Anticipated Milestones We are in the process of evaluating the optimal development pathway for this program and plan to submit an IND for BAG3-DCM in the first half of 2024. Hematology Programs Fanconi Anemia Complementation Group A (FANCA) FA, a rare and life-threatening DNA-repair disorder, generally arises from a mutation in a single FA gene.
Recently Achieved Milestones We are in the process of evaluating the optimal development pathway for this program and plan to submit an IND for BAG3-DCM in 2024. 12 Hematology Programs Fanconi Anemia Complementation Group A (FANCA) FA, a rare and life-threatening DNA-repair disorder, generally arises from a mutation in a single FA gene.
Our objective is to continue to expand its portfolio of patents and patent applications in order to protect our gene therapy product candidates and manufacturing processes.
Future Objectives Our objective is to continue to expand our portfolio of patents and patent applications in order to protect our gene therapy product candidates and manufacturing processes.
We expect any patents in this family, if issued, and if the appropriate maintenance, renewal, annuity, or other governmental fees are paid, to expire in 2037, absent any patent term adjustments or extensions. 15 Table of Contents Pyruvate Kinase Deficiency (PKD) Our PKD patent portfolio includes granted patents in Europe, China, Hong Kong, Japan, Mexico, South Korea, and the United States and a pending patent application in the U.S., EU, Japan, China and other countries with claims directed to polynucleotide cassettes and expression vector compositions containing pyruvate kinase genes and methods for using such vectors to provide gene therapy in mammalian cells for treating pyruvate kinase deficiency.
We expect any patents in this family, if issued, and if the appropriate maintenance, renewal, annuity, or other governmental fees are paid, to expire in 2037, absent any patent term adjustments or extensions. 16 Pyruvate Kinase Deficiency Our PKD patent portfolio includes granted patents in Europe, China, Hong Kong, Japan, Mexico, South Korea, Australia, India, Russia, Singapore, and the U.S. and a pending patent application in the U.S., EU, Japan, China and other countries with claims directed to polynucleotide cassettes and expression vector compositions containing pyruvate kinase genes and methods for using such vectors to provide gene therapy in mammalian cells for treating pyruvate kinase deficiency.
We are conducting a variety of efficacy assessments in the Phase I clinical study to measure the prospect of benefit for patients. These assessments include the following: • New York Heart Association (“NYHA”) Functional Classification is the most commonly used heart failure classification system.
We conducted a variety of efficacy assessments in the Phase I clinical study to measure the prospect of benefit for patients. These assessments included the following: • New York Heart Association (“NYHA”) Functional Classification is the most commonly used heart failure classification system.
Rocket’s drugs must be approved by the FDA as biologics through the BLA approval process applicable to gene therapy product candidates, before they may be legally marketed in the U.S.
Our drug candidates must be approved by the FDA as biologics through the BLA approval process applicable to gene therapy product candidates, before they may be legally marketed in the U.S.
Changes in law or the interpretation of existing law could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements.
Changes in law or the interpretation of existing law could impact our business in the future by requiring, for example: (i) changes to our manufacturing or sales arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; (iv) increases in our governmental rebate liability; or (v) additional record-keeping requirements.
The safety profile appears highly favorable, with no RP-L301-related serious adverse events through 24 months post-infusion in both adult patients. Insertion site analyses in peripheral blood and bone marrow in both adult patients up to 12 months post-RP-L301 demonstrated highly polyclonal patterns and there has been no evidence of insertional mutagenesis.
The safety profile continues to appear highly favorable, with no RP-L301-related serious adverse events in either of the adult patients. Insertion site analyses in peripheral blood and bone marrow in both adult patients through 24 months post-RP-L301 demonstrated highly polyclonal patterns and there has been no evidence of insertional mutagenesis.
ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. These elements are negotiated as part of the BLA approval, and in some cases the approval date may be delayed.
ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. These elements are negotiated as part of the BLA approval, and in some cases the approval date may be delayed. Once adopted, REMS are subject to periodic assessment and modification.
In exchange for the license, we became obligated to make an up-front payment, certain clinical and commercial milestone payments, royalty payments (on net sales of products covered by a valid claim within the licensed intellectual property), maintenance fees and sublicense revenue payments. Rocket paid an upfront license fee of $0.05 million.
In exchange for the license, we became obligated to make an up-front payment, certain clinical and commercial milestone payments, royalty payments (on net sales of products covered by a valid claim within the licensed intellectual property), maintenance fees and sublicense revenue payments.
Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.
The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.
The variability in anemia severity is believed to arise in part from the large number of diverse mutations that may affect the PKLR gene. Estimates of disease incidence have ranged between 3.2 and 51 cases per million in the white U.S. and EU population.
The variability in anemia severity is believed to arise in part from the large number of diverse mutations that may affect the PKLR gene. Estimates of disease incidence have ranged between 3.2 and 51 cases per million in the white U.S. and EU population. Industry estimates suggest at least 2,500 cases in the U.S. and EU have already been diagnosed.
Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
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 registrational clinical trial for LAD-I, and HNJ and GOSH serving as the lead clinical sites in Spain and London, respectively.
University of California, Los Angeles (“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 registrational clinical trial for LAD-I, and HNJ and GOSH are serving as the lead clinical sites in Spain and London, respectively.
Importantly, the patient tolerated induction chemotherapy for the lymphoma without significant complications and is currently in a complete response. The presence of gene-corrected hematopoietic cells may have contributed to this patient’s overall tolerance of chemotherapy. In December 2022, we presented positive clinical data for RP-L102 at the 64 th Annual Meeting of ASH.
Importantly, the patient tolerated induction chemotherapy for the lymphoma without significant complications and is currently in a complete response. The presence of gene-corrected hematopoietic cells may have contributed to this patient’s overall tolerance of chemotherapy. In May 2023, we presented updated clinical data for RP-L102 at the ASGCT 26th Annual Meeting.
Our gene therapy program in FA is designed to enable a minimally toxic hematologic correction using a patient’s own stem cells during the early years of life. We believe that the development of a broadly applicable autologous gene therapy can be transformative for these patients.
Our gene therapy program in FA is designed to enable a minimally toxic hematologic correction using a patient’s own stem cells early in the disease course and administered without conditioning. We believe that the development of a broadly applicable autologous gene therapy can be transformative for these patients.
Danon Disease Our Danon disease patent portfolio includes both proprietary intellectual property and a patent family in-licensed from the University of California, San Diego, which includes patent applications in the U.S., Europe, Japan, China and other countries with claims directed to the treatment of Danon disease.
Danon Disease Our DD patent portfolio includes both proprietary intellectual property and a patent family in-licensed from the University of California, San Diego, which includes granted patents in Europe, India, the U.S., and Hong Kong, allowed patent applications in Japan and Russia, and pending patent applications in the U.S., Europe, Japan, China and other countries with claims directed to the treatment of DD.
These include programs for Fanconi Anemia (“FA”), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells, Leukocyte Adhesion Deficiency-I (“LAD-I”), a genetic disorder that causes the immune system to malfunction and Pyruvate Kinase Deficiency (“PKD”), a rare red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia.
We have three clinical-stage ex vivo lentiviral vector (“LV”) programs, which include programs for: • Fanconi Anemia (“FA”), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells; • Leukocyte Adhesion Deficiency-I (“LAD-I”), a genetic disorder that causes the immune system to malfunction; and • Pyruvate Kinase Deficiency (“PKD”), a red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs part of our initial response to the spread of COVID-19 and its variants, most of our corporate employees converted to working remotely part-time, with a smaller number of employees whose roles require them to be on-site full-time working at our Cranbury, NJ facility. 32 Table of Contents As a result of the ongoing COVID-19 outbreak, or similar pandemics, we have and may in the future experience disruptions that could severely impact our business, preclinical studies, and clinical trials, including: • delays or difficulties in enrolling patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources from the conduct of clinical trials such as patient follow up visits, the diversion of hospitals ability to serve as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • interruption of clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (particularly any procedures that may be deemed non-essential), which may impact the integrity of subject data and clinical study endpoints; • delays or difficulties in the buildout of our in-house manufacturing; • delays or difficulties in securing manufacturing slots or materials; • delays or difficulties in advancing preclinical research requiring in-person laboratory work at our facility at academic partners or contract research facilities; and • interruption or delays in the operations of the FDA and/ comparable foreign regulatory agencies, which may impact approval timelines.
Biggest changeAs a result of the ongoing COVID-19 outbreak, or similar pandemics, we have and may in the future experience disruptions that could severely impact our business, preclinical studies, and clinical trials, including: • delays or difficulties in enrolling patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • diversion of healthcare resources from the conduct of clinical trials such as patient follow up visits, the diversion of hospitals ability to serve as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • delays or difficulties in securing manufacturing slots or materials; • delays or difficulties in advancing preclinical research requiring in-person laboratory work at our facility at academic partners or contract research facilities; and • interruption or delays in the operations of the FDA and/or comparable foreign regulatory agencies, which may impact approval timelines.
Additionally, the holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA. The holder of an approved BLA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process.
Additionally, the holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA and must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process.
We and our vendors are required to comply with current requirements of GMP, good clinical practice (“GCP”), and good laboratory practice (“GLP”), which are a collection of laws and regulations enforced by the FDA, the EMA or comparable foreign authorities for our drug candidates in clinical development.
We and our vendors are required to comply with the current requirements of GMP, good clinical practice (“GCP”), and good laboratory practice (“GLP”), which are a collection of laws and regulations enforced by the FDA, the EMA or comparable foreign authorities for our drug candidates in clinical development.
A clinical trial may be delayed or halted at any stage of testing for various reasons, including: • failure of patients to enroll in the studies at the rate we expect; • ineffectiveness of our product candidates; • patients experiencing unexpected side effects or other safety concerns being raised during treatment; • changes in governmental regulations or administrative actions; • failure to conduct studies in accordance with required clinical practices; • inspection of clinical study operations or study sites by the FDA, the EMA or other regulatory authorities, resulting in a clinical hold; • insufficient financial resources; • insufficient supplies of drug product to treat patients in our ongoing and planned clinical trials; • political unrest or natural disasters at domestic or foreign clinical sites; • a shutdown of the U.S. government, including the FDA; • public health crises such as pandemics and epidemics.
A clinical trial may be delayed or halted at any stage of testing for various reasons, including: • failure of patients to enroll in the studies at the rate we expect; • ineffectiveness of our product candidates; • patients experiencing unexpected side effects or other safety concerns being raised during treatment; 38 • changes in governmental regulations or administrative actions; • failure to conduct studies in accordance with required clinical practices; • inspection of clinical study operations or study sites by the FDA, the EMA or other regulatory authorities, resulting in a clinical hold; • insufficient financial resources; • insufficient supplies of drug product to treat patients in our ongoing and planned clinical trials; • political unrest or natural disasters at domestic or foreign clinical sites; • a shutdown of the U.S. government, including the FDA; • public health crises such as pandemics and epidemics.
Our ability to generate future revenues from product sales depends heavily on our success in: • completing research and preclinical and clinical development of our product candidates; • seeking and obtaining regulatory and marketing approvals for product candidates for which we successfully complete clinical studies; • developing a sustainable, commercial-scale, reproducible, and transferable manufacturing process for our vectors and product candidates; • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support preclinical and clinical development and the market demand for our product candidates, if approved; • launching and commercializing product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales force, marketing and distribution infrastructure; 35 Table of Contents • obtaining and maintaining a favorable market protection for our products, e.g., obtaining (and maintaining) orphan designation with market exclusivity in the EU, which in turn may depend on activities of third parties and other factors on which we have no influence; • obtaining sufficient pricing and reimbursement for our product candidates from private and governmental payors; • obtaining market acceptance of our product candidates and gene therapy as a viable treatment option; • addressing any competing technological and market developments; • identifying and validating new gene therapy product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; and • maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how.
Our ability to generate future revenues from product sales depends heavily on our success in: • completing research and preclinical and clinical development of our product candidates; • seeking and obtaining regulatory and marketing approvals for product candidates for which we successfully complete clinical studies; • developing a sustainable, commercial-scale, reproducible, and transferable manufacturing process for our vectors and product candidates; • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support preclinical and clinical development and the market demand for our product candidates, if approved; • launching and commercializing product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales force, marketing and distribution infrastructure; • obtaining and maintaining a favorable market protection for our products, e.g., obtaining (and maintaining) orphan designation with market exclusivity in the EU, which in turn may depend on activities of third parties and other factors on which we have no influence; • obtaining sufficient pricing and reimbursement for our product candidates from private and governmental payors; • obtaining market acceptance of our product candidates and gene therapy as a viable treatment option; • addressing any competing technological and market developments; • identifying and validating new gene therapy product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; and • maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how.
Any of these occurrences may harm our ability to develop other product candidates, and may harm our business, financial condition and prospects significantly. Risks Related to Government Regulation Our gene therapy product candidates are based on novel technology, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval.
Any of these occurrences may harm our ability to develop other product candidates, and may harm our business, financial condition and prospects significantly. 40 Risks Related to Government Regulation Our gene therapy product candidates are based on novel technology, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Intellectual property rights do not necessarily address all potential threats.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 58 Intellectual property rights do not necessarily address all potential threats.
The risks we face in connection with any strategic alliance or joint venture, include: • diversion of management time and focus from operating our business to addressing integration challenges; • coordination of R&D efforts; • changes in relationships with strategic partners as a result of any product acquisitions or strategic positioning; • cultural challenges associated with integrating employees; • the need to implement or improve controls, procedures, and policies at any joint venture; • liability for activities of any partnered company prior to any strategic alliance or joint venture, including intellectual property infringement claims, violation of laws, commercial disputes, tax liabilities, and other known liabilities; 58 Table of Contents • unanticipated write-offs or charges; and • litigation or other claims, including claims from employees, customers, former stockholders or other third parties Our failure to address these risks or other problems encountered in connection with our past or future strategic alliances could cause us to fail to realize the anticipated benefits of these transactions, cause us to incur unanticipated liabilities and harm the business generally.
The risks we face in connection with any strategic alliance or joint venture, include: • diversion of management time and focus from operating our business to addressing integration challenges; • coordination of R&D efforts; • changes in relationships with strategic partners as a result of any product acquisitions or strategic positioning; • cultural challenges associated with integrating employees; • the need to implement or improve controls, procedures, and policies at any joint venture; • liability for activities of any partnered company prior to any strategic alliance or joint venture, including intellectual property infringement claims, violation of laws, commercial disputes, tax liabilities, and other known liabilities; • unanticipated write-offs or charges; and • litigation or other claims, including claims from employees, customers, former stockholders or other third parties Our failure to address these risks or other problems encountered in connection with our past or future strategic alliances could cause us to fail to realize the anticipated benefits of these transactions, cause us to incur unanticipated liabilities and harm the business generally.
Any product that we commercialize may not gain acceptance by physicians, patients, health care payors and others in the medical community. If any products that we commercialize do not achieve an adequate level of acceptance by physicians, patients, health care payors and others in the medical community, we may not generate significant product revenue and may not become profitable.
If any products that we commercialize do not achieve an adequate level of acceptance by physicians, patients, health care payors and others in the medical community, we may not generate significant product revenue and may not become profitable.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own; • we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent applications that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or in-licensed intellectual property rights; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • we cannot ensure that any patents issued to us, or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; • we cannot ensure that our commercial activities or product candidates will not infringe upon the patents of others; • we cannot ensure that we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own, or license expire; • we may not develop additional proprietary technologies that are patentable; • the patents or intellectual property rights of others may harm our business; and • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own; • we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent applications that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or in-licensed intellectual property rights; • our competitors might conduct R&D activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • we cannot ensure that any patents issued to us, or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; • we cannot ensure that our commercial activities or product candidates will not infringe upon the patents of others; • we cannot ensure that we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own, or license expire; • we may not develop additional proprietary technologies that are patentable; • the patents or intellectual property rights of others may harm our business; and • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
In the European Union, the European Commission, based on the recommendation of the EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition and either (i) such condition affects not more than 5 in 10,000 persons in the European Union; or (ii) without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug or biologic product.
In the EU, the European Commission, based on the recommendation of the EMA’s Committee for Orphan Medicinal Products grants orphan drug designation to promote the development of products that are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition and either (i) such condition affects not more than 5 in 10,000 persons in the EU; or (ii) without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary investment in developing the drug or biologic product.
We and, to our knowledge, our licensors have systems in place to remind us and them to pay these fees, and we and, to our knowledge, our licensors employ outside firms and rely on our and their respective outside counsel to pay these fees due to non-U.S. patent agencies. The U.S.
We and, to our knowledge, our licensors have systems in place to remind us and them to pay these fees, and we and, to our knowledge, our licensors employ outside firms and rely on our and their respective outside counsel to pay these fees due to non-U.S. patent agencies.
We may be, and to the extent we commercialize our product candidates outside the United States, expect to be subject to various risks associated with operating internationally, including: • different regulatory requirements for approval of drugs and biologics in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in the United States; • shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; • business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires, public health crises such as pandemics and epidemics, or from economic or political instability; • compliance with foreign laws, regulations, standards, and regulatory guidance governing the collection, use, disclosure, retention, security and transfer of personal data, including the GDPR and UK GDPR; and • greater difficulty with enforcing our contracts in jurisdictions outside of the United States.
We may be, and to the extent we commercialize our product candidates outside the U.S., expect to be subject to various risks associated with operating internationally, including: • different regulatory requirements for approval of drugs and biologics in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; 61 • shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; • business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires, public health crises such as pandemics and epidemics, or from economic or political instability; • compliance with foreign laws, regulations, standards, and regulatory guidance governing the collection, use, disclosure, retention, security and transfer of personal data, including the GDPR and UK GDPR; and • greater difficulty with enforcing our contracts in jurisdictions outside of the U.S.
Finally, if new data obtained from fulfilment of the conditions of the conditional authorization or otherwise show that our product’s benefits no longer outweigh its risks, the EMA can take regulatory action, such as suspending or revoking the conditional marketing authorization. We have received rare pediatric disease designation for RP-A501 for Danon disease, RP-L102 for FA, and RP-L201 for LAD-I.
Finally, if new data obtained from fulfilment of the conditions of the conditional authorization or otherwise show that our product’s benefits no longer outweigh its risks, the EMA can take regulatory action, such as suspending or revoking the conditional marketing authorization. We have received rare pediatric disease designation for RP-A501 for DD, RP-L102 for FA, and RP-L201 for LAD-I.
However, the Coronavirus Aid, Relief and Economic Security Act repeals the 80% limitation on the utilization of such federal net operating losses for taxable years beginning after December 31, 2017 and beginning before January 1, 2021 and allows for federal net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021 to be carried back to each of the five taxable years preceding the taxable year in which the loss arises.
However, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) repeals the 80% limitation on the utilization of such federal net operating losses for taxable years beginning after December 31, 2017 and beginning before January 1, 2021 and allows for federal net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021 to be carried back to each of the five taxable years preceding the taxable year in which the loss arises.
Our primary focus is on our R&D activities and the clinical testing and commercialization of our product candidates, and we anticipate that we will remain principally engaged in these activities for an indeterminate, but substantial, period. R&D was our most significant operating expense for the year ended December 31, 2022.
Our primary focus is on our R&D activities and the clinical testing and commercialization of our product candidates, and we anticipate that we will remain principally engaged in these activities for an indeterminate, but substantial, period. R&D was our most significant operating expense for the year ended December 31, 2023.
R&D activities, including the conduct of clinical studies, by their nature, preclude definitive statements as to the time required and costs involved in reaching certain objectives. Actual R&D costs, therefore, could significantly exceed budgeted amounts and estimated time frames may require significant extension.
R&D activities, including the conduct of clinical studies, by their nature, preclude definitive statements as to the time required and costs involved in reaching certain objectives. Actual R&D costs, therefore, could significantly exceed budgeted amounts and estimated timeframes may require significant extension.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patent and other intellectual property rights to third parties under collaborative development relationships; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of is product candidates, and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • whether and the extent to which inventors are able to contest the assignment of their rights to our licensors.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patent and other intellectual property rights to third parties under collaborative development relationships; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of is product candidates; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • whether and the extent to which inventors are able to contest the assignment of their rights to our licensors.
Patents granted before the implementation of the UPC will have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
Patents granted before the implementation of the UPC have the option of opting out of the jurisdiction of the UPC and remaining as national patents in the UPC countries.
However, a marketing application for these product candidates, if approved, may not meet the eligibility criteria for a rare pediatric disease priority review voucher. We have received rare pediatric disease designation for RP-A501 for Danon disease, RP-L102 for FA, and RP-L201 for LAD-I.
However, a marketing application for these product candidates, if approved, may not meet the eligibility criteria for a rare pediatric disease priority review voucher. We have received rare pediatric disease designation for RP-A501 for DD, RP-L102 for FA, and RP-L201 for LAD-I.
The final guidance advises that patients treated with gene therapies that incorporate integrating vectors, such as lentiviral vectors, undergo long-term safety and efficacy follow up of fifteen years post therapy while patients treated with gene therapies that incorporate AAV vectors undergo long-term safety and efficacy follow-up as long as five years post therapy.
The final guidance advises that patients treated with gene therapies that incorporate integrating vectors, such as LVs, undergo long-term safety and efficacy follow up of fifteen years post therapy while patients treated with gene therapies that incorporate AAV vectors undergo long-term safety and efficacy follow-up as long as five years post therapy.
Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain drug access and marketing cost disclosure and transparency measures, and designed to encourage importation from other countries and bulk purchasing.
Individual states in the U.S. have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain drug access and marketing cost disclosure and transparency measures, and designed to encourage importation from other countries and bulk purchasing.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the European Union do not follow price structures of the U.S. and generally prices tend to be significantly lower.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not follow price structures of the U.S. and generally prices tend to be significantly lower.
We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. 57 Table of Contents We employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors.
We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. We employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors.
The degree of market acceptance of gene therapy products and our product candidates, if approved for commercial sale, will depend on several factors, including: • the efficacy and safety of such product candidates as demonstrated in preclinical studies and clinical trials; • the potential and perceived advantages of product candidates over alternative treatments; • the cost of our treatment relative to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA or the EMA; • patient awareness of, and willingness to seek, gene therapy; • the willingness of physicians to prescribe new therapies; • the willingness of physicians to undergo specialized training with respect to administration of our product candidates; • the willingness of the target patient population to try new therapies; • the prevalence and severity of any side effects; • product labeling or product insert requirements of the FDA, the EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • relative convenience and ease of administration; • the strength of marketing and distribution support; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; and • sufficient third-party payor coverage and reimbursement.
The degree of market acceptance of gene therapy products and our product candidates, if approved for commercial sale, will depend on several factors, including: • the efficacy and safety of such product candidates as demonstrated in preclinical studies and clinical trials; • the potential and perceived advantages of product candidates over alternative treatments, including the prevalence and severity of any side effects; • the cost of our treatment relative to alternative treatments; • the clinical indications for which the product candidate is approved by the FDA or the EMA; • patient and physician awareness of, and willingness to seek, gene therapy; • the willingness of physicians to undergo specialized training with respect to administration of our product candidates; • product labeling or product insert requirements of the FDA, the EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • relative convenience and ease of administration; • the strength of marketing and distribution support; • the timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; and • sufficient third-party payor coverage and reimbursement.
If we fail to obtain additional funding to conduct our planned research and development efforts, we could be forced to delay, reduce, or eliminate our product development programs or commercial development efforts. We are an early-stage gene therapy company with a limited operating history on which to base your investment decision.
If we fail to obtain additional funding to conduct our planned research and development efforts, we could be forced to delay, reduce, or eliminate our product development programs or commercial development efforts. We are a late-stage gene therapy company with a limited operating history on which to base your investment decision.
The cumulative effects of the disruption to the regulatory framework may add considerably to the development lead time to marketing authorization and commercialization of products in the European Union and/or the United Kingdom. It is possible that there will be increased regulatory complexities which can disrupt the timing of our clinical trials and regulatory approvals.
The cumulative effects of the disruption to the regulatory framework may add considerably to the development lead time to marketing authorization and commercialization of products in the EU and/or the United Kingdom. It is possible that there will be increased regulatory complexities which can disrupt the timing of our clinical trials and regulatory approvals.
Gene therapy is still a relatively new approach to disease treatment and adverse side effects could develop with our product candidates. 37 Table of Contents Possible adverse side effects that could occur with treatment with gene therapy products include an immunologic reaction soon after administration which could substantially limit the effectiveness and durability of the treatment.
Gene therapy is still a relatively new approach to disease treatment and adverse side effects could develop with our product candidates. Possible adverse side effects that could occur with treatment with gene therapy products include an immunologic reaction soon after administration which could substantially limit the effectiveness and durability of the treatment.
We have received fast track designation for RP-A501 for Danon disease, RP-L102 for FA, RP-L201 for LAD-I and RP-L301 for PKD. We may seek Fast Track designation for future product candidates, but there is no assurance that the FDA will grant this status to any of our proposed product candidates.
We have received Fast Track designation for RP-A501 for DD, RP-L102 for FA, RP-L201 for LAD-I and RP-L301 for PKD. We may seek Fast Track designation for future product candidates, but there is no assurance that the FDA will grant this status to any of our proposed product candidates.
The EMA may also decide not to renew the conditional marketing authorization, although such measure is rarely applied in practice. An analysis of reimbursement decisions for conditionally authorized medicines in the European Union has shown some delays in the timeline for reaching a positive health technology recommendation.
The EMA may also decide not to renew the conditional marketing authorization, although such measure is rarely applied in practice. An analysis of reimbursement decisions for conditionally authorized medicines in the EU has shown some delays in the timeline for reaching a positive health technology recommendation.
Item 1A. Risk Factors We operate in an industry that involves numerous risks and uncertainties. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Annual Report, including our financial statements and related notes hereto.
Item 1A. R isk Factors We operate in an industry that involves numerous risks and uncertainties. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Annual Report, including our financial statements and related notes hereto.
On the other hand, the exclusivity period in the European Union can be reduced to six years if a product no longer meets the criteria for orphan drug designation, such designation is revoked by the sponsor or expires, including if the product is sufficiently profitable so that market exclusivity is no longer justified.
On the other hand, the exclusivity period in the EU can be reduced to six years if a product no longer meets the criteria for orphan drug designation, such designation is revoked by the sponsor or expires, including if the product is sufficiently profitable so that market exclusivity is no longer justified.
PTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
In either case, the applicant for orphan designation must also demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been authorized in the European Union or, if such method exists, the product must be of significant benefit compared to products available for the condition.
In either case, the applicant for orphan designation must also demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been authorized in the EU or, if such method exists, the product must be of significant benefit compared to products available for the condition.
The FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
The FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the U.S., or a patient population greater than 200,000 in the U.S. where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the U.S.
If we are not successful with this process, the development or commercialization of our product candidates for which we seek accelerated approval or conditional approval could be delayed, abandoned or become significantly more costly . 40 Table of Contents We may seek approval of our product candidates using the FDA’s accelerated approval and the EMA’s conditional approval pathways.
If we are not successful with this process, the development or commercialization of our product candidates for which we seek accelerated approval or conditional approval could be delayed, abandoned or become significantly more costly. We may seek approval of our product candidates using the FDA’s accelerated approval and the EMA’s conditional approval pathways.
There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S.
There has been increasing legislative and enforcement interest in the U.S. with respect to specialty drug pricing practices. Specifically, there have been several recent U.S.
Patient enrollment and trial completion is affected by numerous factors including: • severity of the disease under investigation; • design of the study protocol; • size of the patient population; • eligibility criteria for the study in question; • perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; • proximity and availability of clinical study sites for prospective patients; • availability of competing therapies and clinical studies; • efforts to facilitate timely enrollment in clinical studies; • patient referral practices of physicians; and • ability to monitor patients adequately during and after treatment.
Patient enrollment and trial completion is affected by numerous factors including: • severity of the disease under investigation and size of the patient population; • eligibility criteria for the study in question; • perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; • proximity and availability of clinical study sites for prospective patients; • availability of competing therapies and clinical studies; • patient referral practices of physicians; and • ability to monitor patients adequately during and after treatment.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
Moreover, increasing efforts by governmental and third-party payors in the U.S. and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
Enforcing a claim that a third-party illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing or unwilling to protect trade secrets. Our trade secrets could otherwise become known or be independently discovered by our competitors.
Enforcing a claim that a third-party illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming and the outcome is unpredictable. In addition, courts outside the U.S. are sometimes less willing or unwilling to protect trade secrets. Our trade secrets could otherwise become known or be independently discovered by our competitors.
In addition, to the extent we seek to obtain regulatory approval for our product candidates in foreign countries, our ability to successfully initiate, enroll and complete a clinical study in any foreign country is subject to numerous risks unique to conducting business in foreign countries, including: • difficulty in establishing or managing relationships with CROs and physicians; • different standards for the conduct of clinical trials; • absence in some countries of established groups with sufficient regulatory expertise for review of LV and AAV gene therapy protocols; • our inability to locate qualified local partners or collaborators for such clinical trials; and • the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment.
In addition, to the extent we seek to obtain regulatory approval for our product candidates in foreign countries, our ability to successfully initiate, enroll and complete a clinical study in any foreign country is subject to numerous risks unique to conducting business in foreign countries, including: • difficulty in establishing or managing relationships with Contract Research Organizations (“CROs”) and physicians; • absence in some countries of established groups with sufficient regulatory expertise for review of LV and AAV gene therapy protocols; • our inability to locate qualified local partners or collaborators for such clinical trials; and • the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment.
For certain commercial prescription biological products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States.
For certain commercial prescription biological products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the U.S.
Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to it. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.
Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to the institution. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.
If our management is unable to effectively manage our growth, our expenses may increase more than expected our ability to generate and/or grow revenues could be reduced and we may not be able to implement our business strategy. We may fail to realize the anticipated benefits of potential acquisitions or business combinations, such as the acquisition of Renovacor.
If our management is unable to effectively manage our growth, our expenses may increase more than expected our ability to generate and/or grow revenues could be reduced and we may not be able to implement our business strategy. We may fail to realize the anticipated benefits of potential acquisitions or business combinations.
Department of Health and Human Services, or HHS, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow the CMS to a substantial degree.
Department of Health and Human Services (“HHS”), as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare. Private payors tend to follow the CMS to a substantial degree.
Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States.
Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the U.S.
In addition, certain of our employees, executive officers, directors, and affiliated stockholders have entered or may enter into Rule 10b5-1 plans providing for sales of shares of our common stock from time to time.
In addition, certain of our employees, executive officers, directors, and affiliated stockholders may enter into Rule 10b5-1 plans providing for sales of shares of our common stock from time to time.
Other Risks Related to Our Business If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors’ views of us and, as a result, the value of our common stock.
If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors’ views of us and, as a result, the value of our common stock.
We could become subject to stockholder or other third-party litigation, as well as investigations by the SEC, the New York Stock Exchange, NASDAQ or other regulatory authorities, which could require additional financial and management resources and could result in fines, trading suspensions, payment of damages or other remedies.
We could become subject to stockholder or other third-party litigation, as well as investigations by the SEC, NASDAQ or other regulatory authorities, which could require additional financial and management resources and could result in fines, trading suspensions, payment of damages or other remedies.
We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S.
RTW Investments, LP (“RTW”), in the aggregate, beneficially owns approximately 25.2% of our outstanding shares of common stock. This concentration of voting power gives RTW the power to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.
RTW Investments, LP (“RTW”), in the aggregate, beneficially owns approximately 20.21% of our outstanding shares of common stock. This concentration of voting power gives RTW the power to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.
We have not yet completed clinical trials of our product candidates, obtained marketing approvals, manufactured a commercial-scale product, or conducted sales and marketing activities necessary for successful commercialization. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history.
We have not yet obtained marketing approvals, manufactured a commercial-scale product, or conducted sales and marketing activities necessary for successful commercialization. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S.
In addition, in connection with any potential acquisition of businesses, technologies or products in the future, we could, among other things: • issue equity securities that would dilute our current stockholders’ percentage ownership; • incur substantial debt that may place strains on our operations; • assume substantial actual or contingent liabilities; • reprioritize our development programs and even cease development and commercialization of certain of our product candidates; or • merge with, or otherwise enter into a business combination with, another company in which our stockholders would receive cash or shares of the other company on terms that certain of our stockholders may not deem desirable.
In addition, any acquisition or business combination may impact the market price for shares of our common stock, which could result in substantial losses for our stockholders. 60 In addition, in connection with any potential acquisition of businesses, technologies or products in the future, we could, among other things: • issue equity securities that would dilute our current stockholders’ percentage ownership; • incur substantial debt that may place strains on our operations; • assume substantial actual or contingent liabilities; • reprioritize our development programs and even cease development and commercialization of certain of our product candidates; or • merge with, or otherwise enter into a business combination with, another company in which our stockholders would receive cash or shares of the other company on terms that certain of our stockholders may not deem desirable.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the U.S. PTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the U.S. in several stages over the lifetime of the patents and/or applications.
Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S. or other jurisdictions.
The success of acquisitions or business combinations, such as the acquisition of Renovacor will depend on, among other things, our ability to combine our businesses in a manner that allows us to achieve developmental and operational synergies.
The success of acquisitions or business combinations will depend on, among other things, our ability to combine our businesses in a manner that allows us to achieve developmental and operational synergies.
We have received RMAT designation for RP-A501 for Danon disease, RP-L102 for FA and RP-L201 for LAD-I. RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and potential eligibility for rolling review and priority review.
We have received RMAT designation for RP-A501 for DD, RP-L102 for FA, RP-L201 for LAD-I and RP-L301 for PKD. RMAT designation provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate, and potential eligibility for rolling review and priority review.
As described above, we have incurred net losses for the past three taxable years and anticipate that we will continue to incur losses for the foreseeable future; and therefore, we do not know whether or when we will generate the U.S. federal or state taxable income necessary to utilize our net operating loss or tax credit carryforwards.
As described above, we have incurred significant net losses since our inception and anticipate that we will continue to incur losses for the foreseeable future; and therefore, we do not know whether or when we will generate the U.S. federal or state taxable income necessary to utilize our net operating loss or tax credit carryforwards.
The market price for our common stock may be influenced by many factors, including: • results of clinical trials of our product candidates or those of our competitors; • the success of competitive products or technologies; • commencement or termination of collaborations; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional product candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • negative publicity around gene therapy in general, or our product candidates; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • macroeconomic conditions and the economic impact of the COVID 19 pandemic , inflation and rising interest rates and global conflicts, including the Russia-Ukraine war; • market conditions in the pharmaceutical and biotechnology sectors; and • general economic, industry and market conditions.
The market price for our common stock may be influenced by many factors, including: • results of clinical trials of our product candidates or those of our competitors; • the success of competitive products or technologies; • commencement or termination of collaborations; • regulatory or legal developments in the U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional product candidates; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • negative publicity around gene therapy in general, or our product candidates; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • macroeconomic conditions, including inflation and rising interest rates, capital market volatility and global conflicts, including the Russia-Ukraine war, the Israel-Hamas war and the conflict between China and Taiwan; • market conditions in the pharmaceutical and biotechnology sectors; and • general economic, industry and market conditions.
For example, FDA’s Center for Biologics Evaluation and Research (“CBER”) may require us to perform additional nonclinical studies or clinical trials that may increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our gene therapy product candidates or lead to significant post-approval limitations or restrictions.
For example, FDA’s CBER may require us to perform additional nonclinical studies or clinical trials that may increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our gene therapy product candidates or lead to significant post-approval limitations or restrictions.
Future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Sections 382 and 383 of the Internal Revenue Code and limit our ability to utilize our net operating losses and credits. Our net operating losses or credits may also be impaired under state law.
Future changes in our stock ownership, many of which are outside of our control, could result in one or more additional ownership changes under Sections 382 and 383 of the Internal Revenue Code and further limit our ability to utilize our net operating losses and credits. Our net operating losses or credits may also be impaired under state law.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may take a variety of actions, including: • issue a warning letter asserting that we are in violation of the law; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend any ongoing clinical studies; • refuse to approve a pending marketing application, such as a BLA or supplements to a BLA submitted by us; • seize products; or • refuse to allow us to enter into supply contracts, including government contracts.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may take a variety of actions, including: • issuing a warning letter asserting that we are in violation of the law; • seeking an injunction or impose civil or criminal penalties or monetary fines; • suspending any ongoing clinical studies; • refusing to approve a pending marketing application, such as a BLA or supplements to a BLA submitted by us; • seizing products; or • refusing to allow us to enter into supply contracts, including government contracts.
If we do not successfully identify, develop and commercialize product candidates, we will not be able to obtain product revenue in future periods, which would likely result in significant harm to our financial position and results of operations. 49 Table of Contents The success of our research and development activities, clinical testing and commercialization, upon which we primarily focus, is uncertain.
If we do not successfully identify, develop and commercialize product candidates, we will not be able to obtain product revenue in future periods, which would likely result in significant harm to our financial position and results of operations. The success of our R&D activities, clinical testing and commercialization, upon which we primarily focus, is uncertain.
A severe or prolonged economic downturn, political unrest or additional global financial crises, including those resulting from the COVID-19 pandemic and the current Russia-Ukraine war, could result in a variety of risks to our business, including weakened demand for our products, if approved, or our ability to raise additional capital when needed on acceptable terms, if at all.
A severe or prolonged economic downturn, political unrest or additional global financial crises, including those resulting from the COVID-19 pandemic and the ongoing Russia-Ukraine war, Israel-Hamas war and the conflict between China and Taiwan, could result in a variety of risks to our business, including weakened demand for our products, if approved, or our ability to raise additional capital when needed on acceptable terms, if at all.
The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. We believe that any of our product candidates approved as a biologic product under a BLA should qualify for the 12-year period of exclusivity.
The law is complex and, as a result, its ultimate impact, implementation, and meaning are subject to uncertainty. We believe that any of our product candidates approved as a biologic product under a BLA should qualify for the 12-year period of exclusivity.
Under the unitary patent system, European applications will soon have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court (UPC). As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.
Under the unitary patent system, European applications have the option, upon grant of a patent, of becoming a Unitary Patent subject to the jurisdiction of the Unitary Patent Court (“UPC”). As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.
Given our commercial relationships outside of the United States, in particular in the European Union, a variety of risks associated with international operations could harm our business. We engage in various commercial relationships outside the U.S., and we may commercialize our product candidates outside of the U.S.
Given our commercial relationships outside of the U.S., in particular in the EU, a variety of risks associated with international operations could harm our business. We engage in various commercial relationships outside the U.S., and we may commercialize our product candidates outside of the U.S.
Regulatory authorities in some jurisdictions, including the United States and other major markets, may designate drugs intended to treat conditions or diseases affecting relatively small patient populations as orphan drugs.
Regulatory authorities in some jurisdictions, including the U.S., EU and other major markets, may designate drugs intended to treat conditions or diseases affecting relatively small patient populations as orphan drugs.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S.
In addition, certain patents in the field of gene therapy that may have otherwise potentially provided patent protection for certain of our product candidates may expire prior to commercial launch of our products; this patent expiration risk could be partially addressed by pursuing and receiving 10 years Biologics regulatory exclusivity from the FDA, which would grant protection in later years where patent expiration may not exist.
Certain patents in the field of gene therapy that may have otherwise potentially provided patent protection for certain of our product candidates may expire prior to commercial launch of our products; though we can mitigate this risk by pursuing and receiving 10 years Biologics regulatory exclusivity from the FDA, which would grant protection in later years where patent expiration may not exist.
With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. Prior art we have disclosed to the United States Patent and Trademark Office (“USPTO”) could impact the scope or validity of certain of our patent claims.
With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. Such prior art and prior art we have disclosed to the USPTO could impact the scope or validity of certain of our patent claims.
In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP, and current good tissue practice, as well as adherence to commitments made in the BLA.
In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP and cGTP, as well as adherence to commitments made in the BLA.
The applicable period is seven years in the United States and 10 years in the European Union. The exclusivity period in the European Union may be extended by an additional two years if the applicant enjoys the incentives and rewards granted for including the results of additional pediatric studies in its product information.
The applicable period is seven years in the U.S. and 10 years in the EU. The exclusivity period in the EU may be extended by an additional two years if the applicant enjoys the incentives and rewards granted for including the results of additional pediatric studies in its product information.
Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. Internal control deficiencies could also result in a restatement of our financial results in the future.
Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.
In January 2020, FDA released a final guidance with recommendations for long-term follow-up studies of patients following human gene therapy administration due to the increased risk of undesirable and unpredictable outcomes with gene therapies that may present as delayed adverse events.
Additionally, the FDA continues to develop its approach to assessing gene and cell therapy products. In January 2020, FDA released its final guidance with recommendations for long-term follow-up studies of patients following human gene therapy administration due to the increased risk of undesirable and unpredictable outcomes with gene therapies that may present as delayed adverse events.
The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.
The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies with greater cash resources and clinical development and commercialization capabilities are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.
Currently, only a few gene and cell therapy products have received marketing authorization in the U.S. or the EU, including Novartis Pharmaceuticals’ Kymriah and Zolgensma (developed by AveXis), Kite Pharma’s Yescarta, GlaxoSmithKline’s Strimvelis and Spark Therapeutics’ Luxturna.
Currently, relatively few gene and cell therapy products have received marketing authorization in the U.S. or the EU, including Novartis Pharmaceuticals’ Kymriah and Zolgensma (developed by AveXis), Kite Pharma’s Yescarta, GlaxoSmithKline’s Strimvelis, Spark Therapeutics’ Luxturna, Vertex Pharmaceuticals’ Casgevy and Bluebird Bio’s Lyfgenia.
Additionally, recent volatility in capital markets, rising interest rates and lower market prices for securities generally may affect our ability to access new capital on terms favorable to us, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets.
Additionally, recent volatility in capital markets, rising interest rates and lower market prices for securities generally may affect our ability to access new capital on terms favorable to us, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets. 37 Our operations have consumed significant amounts of cash since inception.
If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection would have a material adverse impact on our business.
If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease space in New York, New York at the Empire State Building, which consists of approximately 6,600 square feet of office space under a lease that expires in July 2024. Rocket leases an additional 4,666 square feet storage facility in Dayton, New Jersey.
Biggest changeThe NJ Lease Agreement has an initial term ending in 2034, with an option to renew for an additional two consecutive five-year renewal terms. In addition, we lease space in New York, New York at the Empire State Building, which consists of approximately 6,600 square feet of office space under a lease that expires in July 2024.
Item 2. Properties Corporate Headquarters, R&D and GMP Manufacturing Facility, Storage Facility Rocket’s corporate headquarters is located in Cranbury, New Jersey, in a leased facility consisting of 103,720 square feet of space including areas for offices, process development, research and development laboratories and 50,000 square feet dedicated to AAV Current Good Manufacturing Practice (cGMP) manufacturing to support our pipeline.
Item 2. Prop erties Corporate Headquarters, R&D and GMP Manufacturing Facility, Storage Facility Rocket’s corporate headquarters is located in Cranbury, New Jersey, in a leased facility consisting of 103,720 square feet of space including areas for offices, process development, research and development laboratories and 50,000 square feet dedicated to AAV cGMP manufacturing to support our pipeline.
We will endeavor to sublease the entire premises through the remainder of the lease term. Facility in Cambridge, Massachusetts As part of the acquisition of Renovacor, we assumed a sublease agreement for approximately 5,945 square feet of office space in Cambridge, Massachusetts that expires in April 2024.
The Company intends to sublease these facilities and signed a sublease agreement for one of the Hopewell, NJ facilities in January 2024. 66 Facility in Cambridge, Massachusetts As part of the acquisition of Renovacor, we assumed a sublease agreement for approximately 5,945 square feet of office space in Cambridge, Massachusetts that expires in April 2024.
This space is the former headquarters of Inotek and is subleased through the remainder of the lease term. 62 Table of Contents Facility in Hopewell, New Jersey As part of the acquisition of Renovacor, we assumed a lease agreement for approximately 15,463 square feet of space in Hopewell, New Jersey that expires in March 2033.
Rocket leases an additional 4,666 square feet storage facility in Dayton, New Jersey. Facilities in Hopewell, New Jersey As part of the acquisition of Renovacor, we assumed lease agreements for approximately 15,463 square feet of space in Hopewell, New Jersey that expires in March 2033.
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A smaller area within this facility was originally leased in August 2018, and the lease was amended in June 2019 to include the full building (such lease, as amended, the “NJ Lease Agreement”). The NJ Lease Agreement has an initial term which ends in 2034, with an option to renew for an additional two consecutive five-year renewal terms.
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Facility in Lexington, Massachusetts We currently lease approximately 15,000 square feet of office space in Lexington, Massachusetts under a lease that expires on February 28, 2023, which is the end of the lease term.
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We will endeavor to sublease the premises through the remainder of the lease term.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not Applicable. PART II
Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine S afety Disclosures Not Applicable. 67 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future determination to pay cash dividends will be made at the discretion of our Board of Directors.. Investors should not purchase our common stock with the expectation of receiving cash dividends. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities There were no repurchases of our common stock during the year ended December 31, 2022. Item 6.
Biggest changeAny future determination to pay cash dividends will be made at the discretion of our Board of Directors. Investors should not purchase our common stock with the expectation of receiving cash dividends.
This graph assumes the investment of $100 on January 1, 2017 of our common stock, the NASDAQ Biotechnology Index and the NASDAQ Composite Index and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based upon historical data.
This graph assumes the investment of $100 on January 1, 2019 of our common stock, the NASDAQ Biotechnology Index and the NASDAQ Composite Index and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based upon historical data.
Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between January 1, 2017 and December 31, 2022 with the cumulative total return of (a) the NASDAQ Biotechnology Index and (b) the NASDAQ Composite Index, over the same period.
Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between January 1, 2019 and December 31, 2023 with the cumulative total return of (a) the NASDAQ Biotechnology Index and (b) the NASDAQ Composite Index, over the same period.
We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 63 Table of Contents Stockholders As of February 22, 2023, there were 45 stockholders of record, which excludes stockholders whose shares were held in nominee or street name by brokers.
We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. Stockholders As of February 22, 2024, there were 32 stockholders of record, which excludes stockholders whose shares were held in nominee or street name by brokers.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Market under the symbol “RCKT” and on the NASDAQ Biotechnology Index (NASDAQ: NBI).
Item 5. Market for Registrant’s Common Equity, Re lated Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Market under the symbol “RCKT”. On February 22, 2024, the last reported sale price for our common stock on the Nasdaq Global Market was $29.00 per share.
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On February 22, 2023, the last reported sale price for our common stock on the Nasdaq Global Market was $19.20 per share.
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Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K. 68 Recent Sales of Unregistered Securities None.
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We previously completed a reverse merger with Inotek Pharmaceuticals Corporation (“Inotek”) which closed on January 4, 2018. The stock performance information prior to January 4, 2018, represents the share price of our predecessor company Inotek prior to the reverse merger as adjusted for a 4 for 1 reverse split completed upon the reverse merger.
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Use of Proceeds from Public Offering of Common Stock On September 15, 2023, we completed a Public Offering of approximately 9.5 million shares of our common stock at a public offering price of $16.00 per share and pre-funded warrants to purchase 3.1 million shares of common stock at a price of $15.99 per warrant (“September 2023 Public Offering”).
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The gross proceeds from the September 2023 Public Offering were approximately $201.3 million, net of $12.4 million of offering costs, underwriting discounts and commissions, legal and other expenses for net proceeds from the offering of $188.9 million.
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The offer and sale of the shares and pre-funded warrants were registered under the Securities Act pursuant to a prospectus supplement, filed with the SEC on September 15, 2023, to the Company’s effective registration statement on Form S-3 (Registration No. 333-253756), which was previously filed with the SEC, and declared effective on September 10, 2021.
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There has been no material change in the planned use of proceeds from our September 2023 Public Offering as described in the prospectus supplement related to the offering. Issuer Purchases of Equity Securities There were no repurchases of our common stock during the year ended December 31, 2023. Item 6. Re served

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash Flows The following table summarizes our cash flows for each of the periods presented: For the Years Ended December 31, 2022 2021 2020 Net cash used in operating activities $ (178,142 ) $ (121,163 ) $ (74,640 ) Net cash (used in) provided by investing activities (69,326 ) 18,853 (96,591 ) Net cash provided by financing activities 155,288 37,681 282,989 Net (decrease) increase in cash, cash equivalents and restricted cash $ (92,180 ) $ (64,629 ) $ 111,758 Net Cash Used in Operating Activities During the year ended December 31, 2022, operating activities used $178.1 million of cash, primarily resulting from our net loss of $221.9 million and net changes in our operating assets and liabilities of $6.1 million, partially offset by net non-cash charges of $37.6 million, including stock-based compensation expense of $31.0 million and depreciation and amortization expense of $6.3 million.
Biggest changeFinancial Statements and Supplementary Data.” We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations. 75 Cash Flows The following table summarizes our cash flows from operating, investing and financing activities, in thousands, for each of the periods presented: For the Years Ended December 31, 2023 2022 2021 Net cash used in operating activities $ (194,916 ) $ (178,142 ) $ (121,163 ) Net cash (used in) provided by investing activities (98,066 ) (69,326 ) 18,853 Net cash provided by financing activities 208,401 155,288 37,681 Net decrease in cash, cash equivalents and restricted cash $ (84,581 ) $ (92,180 ) $ (64,629 ) Operating Activities During the year ended December 31, 2023, operating activities used $194.9 million of cash and cash equivalents, primarily resulting from our net loss of $245.6 million offset by net non-cash charges of $37.2 million, including non-cash stock-based compensation expense of $39.4 million, depreciation and amortization expense of $7.1 million, impairment of acquired intangible asset and write down of property and equipment of $0.9 million, partially offset by accretion of discount on investments of $10.2 million.
During the year ended December 31, 2021, operating activities used $121.2 million of cash, primarily resulting from our net loss of $169.1 million and net changes in our operating assets and liabilities of $3.4 million, partially offset by net non-cash charges of $51.3 million, including expenses in connection with the issuance of warrant of $12.8 million, stock-based compensation expense of $29.2 million, amortization of premium on investments of $2.9 million and depreciation and amortization expense of $5.4 million.
During the year ended December 31, 2021, operating activities used $121.2 million of cash and cash equivalents, primarily resulting from our net loss of $169.1 million and net changes in our operating assets and liabilities of $3.4 million, partially offset by net non-cash charges of $51.3 million, including expenses in connection with the issuance of warrant of $12.8 million, stock-based compensation expense of $29.2 million, amortization of premium on investments of $2.9 million and depreciation and amortization expense of $5.4 million.
Costs to close out the study were incurred in 2022. We cannot determine with certainty the duration and costs to complete current or future clinical studies of product candidates or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval.
Costs to close out the study were incurred in 2022. 71 We cannot determine with certainty the duration and costs to complete current or future clinical studies of product candidates or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval.
If our development efforts for product candidates are successful and result in regulatory approval or license agreements with third parties, we may generate revenue in the future from product sales. Research and Development Expenses Our R&D program expenses consist primarily of external costs incurred for the development of our product candidates.
If our development efforts for product candidates are successful and result in regulatory approval or license agreements with third parties, we may generate revenue in the future from product sales. 70 Research and Development Expenses Our R&D program expenses consist primarily of external costs incurred for the development of our product candidates.
Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with performing R&D services on our behalf; • investigative sites or other providers in connection with clinical trials; • vendors in connection with non-clinical development activities; and • vendors related to product manufacturing, development and distribution of clinical supplies.
Examples of estimated accrued R&D expenses include fees paid to: • CROs in connection with performing R&D services on our behalf; • investigative sites or other providers in connection with clinical trials; • vendors in connection with non-clinical development activities; and • vendors related to product manufacturing, development and distribution of clinical supplies.
Other Income (Expense), Net Other income, net increased by $4.3 million to $2.5 million for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Other Income, Net Other income, net increased by $4.3 million to $2.5 million for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. The Company has one segment and one reporting unit and as such review’s goodwill for impairment at the consolidated level.
Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. The Company has one segment and one reporting unit and as such reviews goodwill for impairment at the consolidated level.
The duration, costs, and timing of clinical studies and development of product candidates will depend on a variety of factors, including: • the scope, rate of progress, and expense of ongoing as well as any clinical studies and other R&D activities that we undertake; • future clinical study results; • uncertainties in clinical study enrollment rates; 66 Table of Contents • changing standards for regulatory approval; and • the timing and receipt of any regulatory approvals.
The duration, costs, and timing of clinical studies and development of product candidates will depend on a variety of factors, including: • the scope, rate of progress, and expense of ongoing clinical studies as well as any clinical studies and other R&D activities that we undertake in the future; • future clinical study results; • uncertainties in clinical study enrollment rates; • changing standards for regulatory approval; and • the timing and receipt of any regulatory approvals.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, related notes and other financial information included elsewhere in this Annual Report.
Item 7. Management’s Discussion and Analysis of Fin ancial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, related notes and other financial information included elsewhere in this Annual Report.
We have agreed to pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement and to provide Cowen with customary indemnification and contribution rights and also reimburse Cowen for certain expenses incurred in connection with the Sales Agreement.
We will pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement. We also agreed to provide Cowen with customary indemnification and contribution rights. We have reimbursed Cowen for certain expenses incurred in connection with the Sales Agreement.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”).
Recent Developments At-the-Market Offering Program On February 28, 2022, we entered into the Sales Agreement with Cowen and Company LLC (“Cowen”) with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time at our sole discretion, shares through Cowen as our sales agent.
Recent Developments At-the-Market Offering Program On February 28, 2022, we entered into a Sales Agreement with Cowen with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time at our sole discretion, shares through Cowen as our sales agent.
The increase in G&A expenses was primarily driven by increases in commercial preparation expenses w hich consists of commercial strategy, medical affairs, market development and pricing analysis of $4.9 million, compensation and benefits of $4.4 million due to increased G&A headcount and acquisition related expense of $3.2 million.
The increase in G&A expenses was primarily driven by increases in commercial preparation expenses which consists of commercial strategy, medical affairs, market development and pricing analysis of $4.9 million, compensation and benefits of $4.4 million due to increased G&A headcount and acquisition related expenses of $3.2 million.
At-the-Market Offering Program On February 28, 2022, we entered into the Sales Agreement with Cowen and Company LLC (“Cowen”) with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time at our sole discretion, shares through Cowen as our sales agent.
At-the-Market Offering Program On February 28, 2022, we entered into a Sales Agreement with Cowen with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time at our sole discretion, shares through Cowen as our sales agent.
We classify stock-based compensation expense in our statements of operations in the same manner in which the award recipient’s payroll costs and services are classified or in which the award recipient’s service payments are classified. The Company recognizes compensation expense for at least the portion of awards that are vested.
We classify stock-based compensation expense in our statements of operations in the same manner in which the award recipient’s payroll costs and services are classified or in which the award recipient’s service payments are classified. The Company recognizes compensation expense for at least the portion of awards that are vested. Forfeitures are accounted for as they occur.
We do not allocate personnel-related discretionary bonus or stock-based compensation costs, costs associated with our general discovery platform improvements, depreciation or other indirect costs that are deployed across multiple projects under development and, as such, the costs are separately classified as other R&D expenses.
We allocate salary and benefit costs directly related to specific programs. We do not allocate personnel-related discretionary bonus or stock-based compensation costs, costs associated with our general discovery platform improvements, depreciation or other indirect costs that are deployed across multiple projects under development and, as such, the costs are separately classified as other R&D expenses.
We expect our R&D expenses to increase in future periods for the foreseeable future as we seek to complete development of our product candidates. The successful development and commercialization of our product candidates is highly uncertain.
We expect our R&D expenses to increase for the foreseeable future as we seek further development of our product candidates. The successful development and commercialization of our product candidates is highly uncertain.
The following table of R&D expenses tracked on a program-by-program basis as well as by type and nature of our expense for our product candidates for the years ended December 31, 2022 and 2021, and 2020.
The following table presents R&D expenses, in thousands, tracked on a program-by-program basis as well as by type and nature of our expense for our product candidates for the years ended December 31, 2023 and 2022, and 2021.
Information regarding our obligations relating to income taxes and lease arrangements are provided in “Note 13. Income Taxes” and “Note 14. Commitments and Contingencies” to our consolidated financial statements contained in “Item 8.
Information regarding our obligations relating to income taxes and lease arrangements are provided in “Note 12. Income Taxes” and “Note 13. Leases” to our consolidated financial statements contained in “Item 8.
The change was primarily driven by decreased interest expense of $1.1 million associated with the 2022 Convertible Notes which were fully redeemed in April 2021 and the 2021 Convertible Notes which were converted in August 2021, an increase in interest and other income, net, of $0.8 million due to increased interest rates and an increase in investment amortization, net, of $2.9 million.
The change was primarily driven by decreased interest expense of $1.1 million associated with convertible notes due in 2022, which were converted into common stock in April 2021 and convertible notes due in 2021, which were converted into common stock in August 2021, an increase in interest and other income, net, of $0.8 million due to increased interest rates and a decrease in amortization of premium on investment, net, of $2.9 million.
We do not have any products approved for sale and have not generated any revenue from product sales. From inception through December 31, 2022, we raised net cash proceeds of approximately $835.6 million from investors through both equity and convertible debt financing to fund operating activities.
We do not have any products approved for sale and have not generated any revenue from product sales. From inception through December 31, 2023, we raised net cash proceeds of approximately $1.0 billion from investors through both equity and convertible debt financing to fund operating activities.
The shares to be offered and sold under the Sales Agreement are being offered and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-253756). We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares, pursuant to the Sales Agreement.
The shares to be offered and sold under the Sales Agreement, if any, will be offered and sold pursuant to our shelf registration statement on Form S-3. We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares pursuant to the Sales Agreement.
These include programs for Fanconi Anemia (“FA”), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells, Leukocyte Adhesion Deficiency-I (“LAD-I”), a genetic disorder that causes the immune system to malfunction and Pyruvate Kinase Deficiency (“PKD”), a rare red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia.
We have three clinical-stage ex vivo lentiviral vector (“LV”) programs, which include programs for: • Fanconi Anemia (“FA”), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells; • Leukocyte Adhesion Deficiency-I (“LAD-I”), a genetic disorder that causes the immune system to malfunction; and • Pyruvate Kinase Deficiency (“PKD”), a red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia.
If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit. 71 Table of Contents The Company performed the qualitative assessment of its goodwill and determined that it is more likely than not that the fair value of a reporting unit exceeds the carrying value of the reporting unit.
If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit.
Interest Income Interest income is related to interest earned from investments and cash equivalents. 67 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2022 and 2021: For the Years Ended December 31, 2022 2021 Change (in thousands) Operating expenses: Research and development $ 165,570 $ 125,476 $ 40,094 General and administrative 58,773 41,772 17,001 Total operating expenses 224,343 167,248 57,095 Loss from operations (224,343 ) (167,248 ) (57,095 ) Research and development incentives 500 1,000 (500 ) Interest expense (1,862 ) (2,977 ) 1,115 Interest and other income, net 3,889 3,068 821 Amortization of premium on investments, net (47 ) (2,912 ) 2,865 Total other income (expense), net 2,480 (1,821 ) 4,301 Net loss $ (221,863 ) $ (169,069 ) $ (52,794 ) Research and Development Expenses R&D expenses increased $40.1 million to $165.6 million for the year ended December 31, 2022, compared to the year ended December 31, 2021.
The increase in interest and other income, net, of $1.4 million was due to increased interest rates of $1.6 million and a liability extinguishment of $0.6 million, partially offset by increased fair value of warrant liability of $0.4 million. 73 Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations, in thousands, for each of the periods presented: For the Years Ended December 31, 2022 2021 Change Operating expenses: Research and development $ 165,570 $ 125,476 $ 40,094 General and administrative 58,773 41,772 17,001 Total operating expenses 224,343 167,248 57,095 Loss from operations (224,343 ) (167,248 ) (57,095 ) Research and development incentives 500 1,000 (500 ) Interest expense (1,862 ) (2,977 ) 1,115 Interest and other income, net 3,889 3,068 821 Accretion of discount and amortization of premium on investments, net (47 ) (2,912 ) 2,865 Total other income (expense), net 2,480 (1,821 ) 4,301 Net loss $ (221,863 ) $ (169,069 ) $ (52,794 ) Research and Development Expenses R&D expenses increased $40.1 million to $165.6 million for the year ended December 31, 2022, compared to the year ended December 31, 2021.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Risk Factors” included elsewhere in this Annual Report. Unless otherwise indicated, references to the terms the “combined company,” “Rocket,” the “Company,” “we,” “our” and “us” refer to Rocket Pharmaceuticals, Inc.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Risk Factors” included elsewhere in this Annual Report. Unless otherwise indicated, references to “ Rocket, ” the “ Company, ” “ we,” “ our ” and “ us ” refer to Rocket Pharmaceuticals, Inc. and its subsidiaries.
We periodically review our estimates as a result of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate.
We periodically review our estimates as a result of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. For a description of our significant accounting policies, refer to “Note 3.
Additionally, we have an AAV vector program targeting Plakophilin-2 Arrhythmogenic Cardiomyopathy (“PKP2-ACM”), an inheritable cardiac disorder that is characterized by a progressive loss of cardiac muscle mass, severe right ventricular dilation, dysplasia, fibrofatty replacement of the myocardium and a high propensity to arrhythmias and sudden death.
The DD program is currently in an ongoing Phase 2 trial. • Plakophilin-2 Arrhythmogenic Cardiomyopathy (“PKP2-ACM”), an inheritable cardiac disorder that is characterized by a progressive loss of cardiac muscle mass, severe right ventricular dilation, dysplasia, fibrofatty replacement of the myocardium and a high propensity to arrhythmias and sudden death.
Operations of the Company are subject to certain risks and uncertainties, including, among others, uncertainty of drug candidate development, technological uncertainty, uncertainty regarding patents and proprietary rights, having no commercial manufacturing experience, marketing or sales capability or experience, dependency on key personnel, compliance with government regulations and the need to obtain additional financing.
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.
No additional milestones were achieved as of December 31, 2022. 69 Table of Contents 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.
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.
For the Years Ended December 31, 2022 2021 2020 Direct Expenses: Danon Disease (AAV) RP-A501 $ 28,524 $ 15,804 $ 18,459 Plakophilin-2 Arrhythmogenic Cardiomyopathy (AAV) RP-A601 11,724 1,071 122 Leukocyte Adhesion Deficiency (LV) RP-L201 20,617 24,222 5,531 Fanconi Anemia (LV) RP-L102 23,917 15,453 15,015 Pyruvate Kinase Deficiency (LV) RP-L301 2,744 4,206 4,990 Infantile Malignant Osteopetrosis (LV) RP-L401 (1) 271 2,236 2,057 Other product candidates 3,580 3,504 1,199 Total direct expenses 91,377 66,496 47,373 Unallocated Expenses Employee compensation $ 32,274 $ 20,780 $ 14,137 Non-cash R&D expense related to the issuance of warrants - 12,781 26,562 Stock based compensation expense 12,465 11,954 7,121 Depreciation and amortization expense 4,037 5,130 2,770 Laboratory and related expenses 17,405 3,359 4,240 Professional Fees 3,601 1,797 1,443 Other expenses 4,411 3,179 1,792 Total other research and development expenses 74,193 58,980 58,065 Total research and development expense $ 165,570 $ 125,476 $ 105,438 (1) Effective December 2021, a decision was made to no longer pursue Rocket-sponsored clinical evaluation of RP-L401; this program was returned to academic innovators.
Years Ended December 31, 2023 2022 2021 Direct Expenses: Danon Disease (AAV) RP-A501 $ 28,992 $ 28,524 $ 15,804 Plakophilin-2 Arrhythmogenic Cardiomyopathy (AAV) RP-A601 7,171 11,724 1,071 Leukocyte Adhesion Deficiency (LVV) RP-L201 17,725 20,617 24,222 Fanconi Anemia (LVV) RP-L102 25,276 23,917 15,453 Pyruvate Kinase Deficiency (LVV) RP-L301 4,808 2,744 4,206 Infantile Malignant Osteopetrosis (LVV) RP-L401 (1) - 271 2,236 Other product candidates 5,501 3,580 3,504 Total direct expenses 89,473 91,377 66,496 Unallocated Expenses: Employee compensation $ 46,867 $ 32,274 $ 20,780 Non-cash R&D expense related to the issuance of warrants - - 12,781 Stock based compensation expense 17,509 12,465 11,954 Depreciation and amortization expense 5,375 4,037 5,130 Laboratory and related expenses 17,618 17,405 3,359 Professional fees 3,927 3,601 1,797 Other expenses 5,573 4,411 3,179 Total other research and development expenses 96,869 74,193 58,980 Total research and development expense $ 186,342 $ 165,570 $ 125,476 (1) Effective December 2021, a decision was made to no longer pursue Rocket-sponsored clinical evaluation of RP-L401; this program was returned to academic innovators.
Goodwill Business combinations are accounted for under the acquisition method. The total cost of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values as of the acquisition date.
The total cost of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values as of the acquisition date.
Introduction We are a clinical-stage, multi-platform biotechnology company focused on the development of first, only and best-in-class gene therapies, with direct on-target mechanism of action and clear clinical endpoints, for rare and devastating diseases. We have three clinical-stage ex vivo lentiviral vector (“LV”) programs.
Introduction We are a fully integrated, late-stage biotechnology company focused on the development of first, only and best in class gene therapies, with direct on-target mechanism of action and clear clinical endpoints, for rare and devastating diseases.
These expenses include: • expenses incurred under agreements with research institutions that conduct R&D activities including, process development, preclinical, and clinical activities on our behalf; • costs related to process development, production of preclinical and clinical materials, including fees paid to contract manufacturers and manufacturing input costs for use in internal manufacturing processes; • consultants supporting process development and regulatory activities; and • costs related to in-licensing of rights to develop and commercialize our product candidate portfolio. 65 Table of Contents We recognize external development costs based on contractual payment schedules aligned with program activities, invoices for work incurred, and milestones which correspond with costs incurred by the third parties.
These expenses include: • expenses incurred under agreements with research institutions and consultants that conduct R&D activities, including process development and preclinical and clinical activities on our behalf; • costs related to process development and production of preclinical and clinical materials, including fees paid to contract manufacturers and manufacturing input costs for use in internal manufacturing processes; • consultants supporting process development and regulatory activities; and • costs related to in-licensing of rights to develop and commercialize our product candidate portfolio.
For a description of our significant accounting policies, refer to “Note 3 – Summary of Significant Accounting Policies” included in the notes to our consolidated financial statements appearing elsewhere in this report. We consider the most critical accounting policies to be those related to our Accrued Research and Development Expenses, Stock-Based-Compensation, Goodwill and Intangible Assets.
Summary of Significant Accounting Policies” included in the notes to our consolidated financial statements appearing elsewhere in this report. We consider the most critical accounting policies to be those related to our Accrued R&D Expenses, Stock-Based-Compensation, Goodwill and Intangible Assets. Goodwill Business combinations are accounted for under the acquisition method.
We also anticipate that as we continue to operate as a public company with increasing complexity, we will continue to incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses. Interest Expense Interest expense in 2022 was related to our financing lease obligation for the Cranbury, NJ facility.
We also anticipate that as we continue to operate as a public company with increasing complexity, we will continue to incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses.
During the year ended December 31, 2021, net cash provided by financing activities was $37.7 million, consisting of proceeds from the issuance of common stock related to the August 2021 Private Placement of $11.3 million and issuance of common stock, pursuant to exercises of stock options, of $26.4 million.
During the year ended December 31, 2022, net cash provided by financing activities was $155.3 million, consisting primarily of proceeds related to the October 2022 Public Offering of $108.1 million and issuance of common stock through our at-the-market offering program of $46.6 million. 76 During the year ended December 31, 2021, net cash provided by financing activities was $37.7 million, consisting of proceeds from the issuance of common stock related to a private placement in August 2021 of $26.4 million and issuance of common stock, pursuant to exercises of stock options, of $11.3 million.
Changes in our operating assets and liabilities for the year ended December 31, 2020, consisted of an increase in finance lease liability of $0.5 million, an increase in accounts payable and accrued expenses of $11.0 million and an increase in prepaid expenses and other assets of $1.5 million. 70 Table of Contents Net Cash (Used in) Provided by Investing Activities During the year ended December 31, 2022, net cash used in investing activities was $69.3 million, consisting of proceeds of $272.9 million from the maturities of investments and proceeds of $42.7 million from the acquisition of Renovacor, offset by purchases of investments of $376.3 million, purchases of property and equipment of $8.4 million and purchases of right of use assets of $0.3 million.
During the year ended December 31, 2022, net cash used in investing activities was $69.3 million, consisting of proceeds of $272.9 million from the maturities of investments and proceeds of $42.7 million from the acquisition of Renovacor, offset by purchases of investments of $376.3 million, purchases of property and equipment of $8.4 million and purchases of right of use assets of $0.3 million.
Rocket incurred net losses of $221.9 million, $169.1 million, and $139.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. We have experienced negative cash flows from operations and have an accumulated deficit of $713.8 million as of December 31, 2022. As of December 31, 2022, we had $399.7 million of cash, cash equivalents and investments.
Rocket has incurred net losses and negative cash flows from its operations each year since inception. Rocket incurred net losses of $245.6 million, $221.9 million, and $169.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. We have experienced negative cash flows from operations and have an accumulated deficit of $959.4 million as of December 31, 2023.
During the year ended December 31, 2020, operating activities used $74.6 million of cash, primarily resulting from our net loss of $139.7 million and net changes in our operating assets and liabilities of $9.9 million, partially offset by net non-cash charges of $55.1 million, including expenses in connection with the issuance of warrants of $26.6 million, stock-based compensation expense of $18.6 million, accretion of discount on convertible notes of $2.8 million and depreciation and amortization expense of $1.1 million.
During the year ended December 31, 2022, operating activities used $178.1 million of cash and cash equivalents, primarily resulting from our net loss of $221.9 million and net changes in our operating assets and liabilities of $6.1 million, partially offset by net non-cash charges of $37.6 million, including stock-based compensation expense of $31.0 million and depreciation and amortization expense of $6.3 million.
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.
Even if our product development efforts are successful, it is uncertain when, if ever, we will generate significant revenue from product sales.
We also agreed to provide Cowen with customary indemnification and contribution rights and will also reimburse Cowen for certain expenses incurred in connection with the Sales Agreement.
We will pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement. We also agreed to provide Cowen with customary indemnification and contribution rights. We have reimbursed Cowen for certain expenses incurred in connection with the Sales Agreement.
In the U.S., we also have a clinical stage in vivo adeno-associated virus (“AAV”) program for Danon disease, a multi-organ lysosomal-associated disorder leading to early death due to heart failure. The Danon program is currently in an ongoing Phase 1 trial.
Additional work on a gene therapy program for the less common FA subtypes C and G is ongoing. 69 In the U.S., we also have two clinical stage and one pre-clinical stage in vivo adeno-associated virus (“AAV”) programs, which include programs for: • Danon disease (“DD”), a multi-organ lysosomal-associated disorder leading to early death due to heart failure.
Through December 31, 2022, we have sold 3.3 million shares of common stock pursuant to the at-the-market offering program for gross proceeds of $48.0 million, less commissions of $1.4 million for net proceeds of $46.6 million.
Through December 31, 2023, we sold 4.2 million shares under the at-the-market offering program for gross proceeds of $65.8 million, less commissions of $2.0 million for net proceeds of $63.8 million.
As a result, the Company has determined there was no goodwill impairment as of and for the years ended December 31, 2022, 2021 and 2020. Intangible Assets Intangible assets related to in process research and development (“IPR&D”) projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts.
Intangible Assets Intangible assets consisted of indefinite lived intangible in process research and development (“IPR&D”) assets and a mice colony model. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts.
Net Cash Provided by Financing Activities During the year ended December 31, 2022, net cash provided by financing activities was $155.3 million, consisting primarily of proceeds related to the October 2022 Public Offering of $108.1 million and issuance of common stock in connection with the at-the-market offering program of $46.6 million.
Financing Activities During year ended December 31, 2023, net cash provided by financing activities was $208.4 million, consisting primarily of proceeds related to the September 2023 Public Offering of $188.9 million, $17.2 million from issuance of common stock through our at-the-market offering program and $2.2 million from the exercise of stock options.
The gross proceeds to Rocket from the public offering were approximately $115.3 million, net of $7.2 million of offering costs, commissions, legal and other expenses for net proceeds from the offering of $108.1 million.
The gross proceeds from the September 2023 Public Offering were approximately $201.3 million, net of $12.4 million of offering costs, underwriting discounts and commissions, legal and other expenses for net proceeds from the offering of $188.9 million.
Interest expense in 2021 and 2020 related to the 2021 Convertible Notes (as defined below), which were converted into common stock on August 2, 2021, the 2022 Convertible Notes (as defined below), which were redeemed and converted into common stock in April 2021, and our financing lease obligation for the Cranbury, NJ facility.
Interest expense in 2021 was related to convertible notes due in 2021, which were converted into common stock in August 2021 and convertible notes due in 2022, which were converted into common stock in April 2021, and our financing lease obligation for the Cranbury, NJ facility. 72 Interest and Other Income Interest and other income related to interest earned from investments and cash equivalents, liability extinguishment and reduced fair value of warrant liability.
During the year ended December 31, 2020, net cash used in investing activities was $96.6 million, consisting of proceeds of $141.8 million from the maturities of investments, offset by purchases of investments of $209.3 million, purchases of property and equipment of $20.6 million, and payments made to acquire right of use asset of $8.5 million.
Investing Activities During the year ended December 31, 2023, net cash used in investing activities was $98.1 million, primarily resulting from proceeds of $309.3 million from the maturities of investments, offset by purchases of investments of $390.9 million, and purchases of property and equipment of $16.5 million.
Forfeitures are accounted for as they occur. 72 Table of Contents Recent Accounting Pronouncements There were no recent accounting pronouncements that impacted the Company or are expected to have a significant effect on the consolidated financial statements.
Recent Accounting Pronouncements There were no recent accounting pronouncements that impacted the Company or are expected to have a significant effect on the consolidated financial statements. Not Adopted as of December 31, 2023 ASU 2023-09: Income Taxes Topic 740 - Improvements to Income Tax Disclosures.
We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares and have agreed to pay Cowen a cash commission of 3.0% of gross proceeds from the sale of the shares pursuant to the Sales Agreement.
The shares to be offered and sold under the Sales Agreement, if any, will be offered and sold pursuant to our shelf registration statement on Form S-3. We filed a prospectus supplement with the SEC on February 28, 2022 in connection with the offer and sale of the shares pursuant to the Sales Agreement.
Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses.
We recognize external development costs based on contractual payment schedules aligned with program activities, invoices for work incurred, and milestones that correspond with costs incurred by the third parties. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses.
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 operate in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. 74 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.
As a result of our acquisition of Renovacor, we are now able to utilize recombinant AAV9-based gene therapy designed to slow or halt progression of BAG3 Dilated Cardiomyopathy (“DCM”), which is the most common form of cardiomyopathy and is characterized by progressive thinning of the walls of the heart resulting in enlarged heart chambers that are unable to pump blood.
This program received FDA clearance of an Investigational New Drug (“IND”) application and we have initiated a Phase 1 study. • BAG3 Dilated Cardiomyopathy (“DCM”), which is the most common form of cardiomyopathy and is characterized by progressive thinning of the walls of the heart resulting in enlarged heart chambers that are unable to pump blood.
We expect such resources would be sufficient to fund our operating expenses and capital expenditure requirements through 2024. We have funded our operations primarily through the sale of equity. On April 30, 2019, CIRM awarded the Company up to $6.6 million under a CLIN2 grant award to support the clinical development of its LV-based gene therapy for RP-L201.
We expect such resources would be sufficient to fund our operating expenses and capital expenditure requirements into 2026. We have funded our operations primarily through the sale of equity.
Through December 31, 2022, we have sold 3.3 million shares of common stock pursuant to the at-the-market offering program for gross proceeds of $48.0 million, less commissions of $1.4 million for net proceeds of $46.6 million. Contractual Obligations In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future.
The gross proceeds from the September 2023 Public Offering were approximately $201.3 million, net of $12.4 million of offering costs, underwriting discounts and commissions, legal and other expenses for net proceeds from the offering of $188.9 million. Contractual Obligations In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future.
Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
No impairment of the IPR&D asset was recognized and the mice colony model was impaired and written off during the year ended December 31, 2023. 77 Accrued R&D Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued R&D expenses.
The increase was primarily due to an increase in manufacturing and development costs of $14.8 million, an increase in compensation and benefits of $6.6 million due to increased R&D headcount, an increase in non-cash stock compensation expense of $4.8 million, an increase in lab supplies and office expense of $2.9 million, an increase in depreciation and amortization of $1.9 million, offset by a decrease in new research agreements of $13.8 million in non-cash expenses due to the issuance of warrants in December 2020 and August and December 2021.
The increase in R&D expenses was primarily driven by increases in costs for compensation and benefits of $16.9 million due to increased R&D headcount, clinical trial costs of $14.5 million, non-cash stock compensation expense of $5.0 million, and license expenses of $2.2 million.
The increases in G&A expenses were primarily driven by an increase in non-cash stock compensation expense of $5.8 million, an increase in compensation and benefits of $1.8 million due to increased G&A headcount, an increase in office and administrative costs of $2.5 million due to increased insurance costs, an increase in commercial preparation expenses of $2.2 million, offset by a decrease in debt conversion expense recorded for the year ended December 31, 2020 of $2.0 million due to the refinancing of the 2021 Convertible Notes in February 2020.
The increase in G&A expenses was primarily driven by increases in commercial preparation related expenses of $8.4 million, non-cash stock compensation expense of $3.4 million, and legal expenses of $3.0 million, which were partially offset by a reduction in acquisition related expenses of $3.0 million due to the closing of the Renovacor acquisition in 2022.
Comparison of the Years Ended December 31, 2021 and 2020 The following table summarizes our results of operations for the years ended December 31, 2021 and 2020: For the Years Ended December 31, 2021 2020 Change (in thousands) Operating expenses: Research and development $ 125,476 $ 105,438 $ 20,038 General and administrative 41,772 28,865 12,907 Total operating expenses 167,248 134,303 32,945 Loss from operations (167,248 ) (134,303 ) (32,945 ) Research and development incentives 1,000 - 1,000 Interest expense (2,977 ) (6,967 ) 3,990 Interest and other income, net 3,068 2,150 918 Amortization of premium on investments, net (2,912 ) (580 ) (2,332 ) Total other expense, net (1,821 ) (5,397 ) 3,576 Net loss $ (169,069 ) $ (139,700 ) $ (29,369 ) 68 Table of Contents Research and Development Expenses R&D expenses increased $20.0 million to $125.5 million for the year ended December 31, 2021 compared to the year ended December 31, 2020.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations, in thousands, for each of the periods presented: For the Years Ended December 31, 2023 2022 Change Operating expenses: Research and development $ 186,342 $ 165,570 $ 20,772 General and administrative 73,317 58,773 14,544 Total operating expenses 259,659 224,343 35,316 Loss from operations (259,659 ) (224,343 ) (35,316 ) Research and development incentives - 500 (500 ) Interest expense (1,875 ) (1,862 ) (13 ) Interest and other income, net 5,288 3,889 1,399 Accretion of discount and amortization of premium on investments, net 10,651 (47 ) 10,698 Total other income, net 14,064 2,480 11,584 Net loss $ (245,595 ) $ (221,863 ) $ (23,732 ) Research and Development Expenses R&D expenses increased $20.8 million to $186.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
On December 14, 2020, we completed a public offering of 5,339,286 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 696,428 shares of our common stock, at a public offering price of $56.00 per share. The net proceeds to Rocket from the December 2020 public offering were approximately $280.8 million.
Public Offering On September 15, 2023, we completed a public offering of approximately 9.5 million shares of our common stock at a public offering price of $16.00 per share and pre-funded warrants to purchase 3.1 million shares of common stock at a price of $15.99 per warrant (the “September 2023 Public Offering”).
General and Administrative Expenses G&A expenses increased $12.9 million to $41.8 million for the year ended December 31, 2021 compared to the year ended December 31, 2020.
Increases noted were partially offset by decreases in manufacturing and development costs of $17.0 million and direct materials of $3.5 million. General and Administrative Expenses G&A expenses increased $14.5 million to $73.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
The Company received the additional milestone payments of $1.1 million and $1.0 million in January and April of 2021, respectively. In March 2022, the Company met the next CIRM milestone and received the $0.9 million milestone payment on April 5, 2022.
The Company achieved an additional milestone in 2021 and received $1.0 million. In 2022, the Company achieved one more milestone and received $0.9 million. In 2023, the Company achieved a final milestone resulting in a payment of $0.05 million. No additional payments are available under the grant award program as of December 31, 2023.
There were no debt conversion expenses recorded for the year ended December 31, 2021. Other Expense, Net Other expense, net was $1.8 million for the year ended December 31, 2021 compared to $5.4 million for the year ended December 31, 2020.
Other Income, Net Other income, net increased by $11.6 million to $14.1 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Removed
(formerly known as Inotek Pharmaceuticals Corporation) and its subsidiaries. The term “Rocket Ltd” refers to privately-held Rocket Pharmaceuticals, Ltd. prior to its merger with Rome Merger Sub, a wholly owned subsidiary of Rocket Pharmaceuticals, Inc. The term “Inotek” refers to Inotek Pharmaceuticals Corporation and its subsidiaries prior to the reverse merger.
Added
In September 2023, the FDA accepted the Biologics License Application (“BLA”) and granted priority review for RP-L201 for the treatment of severe LAD-I. Treatments in the FA Phase 2 studies were completed in 2023 with regulatory filings in the United States (“U.S.”) and Europe (“EU”) for FA anticipated in 2024.
Removed
For accounting purposes, the reverse merger is treated as a “reverse acquisition” under U.S. GAAP and Rocket Ltd is considered the accounting acquirer. Accordingly, the historical financial information included in this Annual Report, unless otherwise indicated or as the context otherwise requires, is that of Rocket Ltd prior to the reverse merger.
Added
Our program utilizes recombinant AAV9-based gene therapy designed to slow or halt progression of BAG3-DCM. We have global commercialization and development rights to all of these product candidates under royalty-bearing license agreements.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Rocket’s financial statements with a narrative from the perspective of management.
Added
During the year ended December 31, 2023, we sold 0.9 million shares under the at-the-market offering program for gross proceeds of $17.8 million, less commissions of approximately $0.6 million for net proceeds of $17.2 million.
Removed
Our management’s discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.
Added
On September 12, 2023, the Company and Cowen entered into an amendment pursuant to which the aggregate offering amount available under the at-the-market offering program was reduced to $180.0 million.
Removed
Of these, both the Phase 2 FA program and the Phase 1/2 LAD-I program are in potentially registration-enabling studies in the United States (“U.S.”) and Europe (“EU”). Additional work on a gene therapy program for the less common FA subtypes C and G is ongoing.
Added
Interest Expense Interest expense in 2023 and 2022 was related to our financing lease obligation for our Cranbury, NJ facility.
Removed
We have global commercialization and development rights to all of these product candidates under royalty-bearing license agreements. 64 Table of Contents Effective December 2021, a decision was made to no longer pursue Rocket-sponsored clinical evaluation of RP-L401; this program was returned to academic innovators.
Added
The increase in other income was primarily driven by an increase in accretion of discount and amortization of premium on investments, net, of $10.7 million and interest and other income, net, of $1.4 million.
Removed
Although we believe that gene therapy may be beneficial to patients afflicted with this disorder, we have opted to focus available resources towards advancement of RP-A601, RP-A501, RP-L102, RP-L201 and RP-L301, based on the compelling clinical data to date and potential for therapeutic advancement in these severe disorders of childhood and young adulthood.
Added
As of December 31, 2023, we had $407.5 million of cash, cash equivalents and investments. Included in the $407.5 million cash balance are securities that have yet to be paid of $13.1 million related to investments in securities that settled in 2024. The net cash balance, when adjusting for this payable would have been $394.4 million.
Removed
Renovacor Acquisition On September 19, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Renovacor, a Delaware corporation pursuant to which the Company acquired Renovacor (the “Renovacor Acquisition”). The Renovacor Acquisition closed on December 1 , 2022.
Added
On April 30, 2019, CIRM awarded the Company up to $7.5 million under a CLIN2 grant award program to support the clinical development of our LV-based gene therapy for RP-L201 based on achievements of specific development milestones. The Company achieved two milestones in 2019 and received $1.1 million. In 2020, the Company achieved two more milestones and received $2.8 million.

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