Rocket Pharmaceuticals Announces Major Restructuring and Pipeline Prioritization

Rocket Pharmaceuticals, a gene therapy-focused biotech company, has unveiled a significant restructuring plan that includes substantial layoffs and a strategic refocusing of its drug development pipeline. The move comes in response to recent setbacks and aims to extend the company's cash runway.

Workforce Reduction and Financial Impact

Rocket has announced plans to reduce its workforce by 30%, affecting approximately 80 employees. The layoffs, which began on Wednesday, are expected to be completed by August 8. The company anticipates incurring costs of $3.5 million, primarily from severance payments.

This restructuring is part of a broader strategy to extend Rocket's cash runway. The company now projects its financial resources to last into the second quarter of 2027, a significant improvement from the previous estimate of late 2026.

Pipeline Prioritization and Program Delays

In conjunction with the workforce reduction, Rocket is narrowing its focus to prioritize its cardiovascular disease programs. The company's pipeline, previously split between cardiovascular and hematology assets, will now concentrate primarily on the cardiovascular side.

Key programs receiving continued focus include:

1. The Danon disease gene therapy program, which recently faced a setback due to a patient death and subsequent FDA clinical hold.
2. Treatments for two forms of cardiomyopathy.
3. Kresladi, a leukocyte adhesion deficiency-I gene therapy, which remains a priority despite a recent FDA rejection.

As a result of this prioritization, Rocket has announced delays to several hematology programs:

• RP-L102 for Fanconi anemia: The company has abandoned its goal of obtaining FDA approval in 2026.
• RP-L301 for pyruvate kinase deficiency: This program is also expected to face delays.

Regulatory Challenges and Potential Opportunities

Rocket's restructuring comes in the wake of several regulatory challenges. In May, the company suffered a setback when a participant in its pivotal Danon disease gene therapy trial died, leading to an FDA clinical hold on the study.

Additionally, the FDA rejected Rocket's request for approval of Kresladi last year, citing the need for additional manufacturing information. The company is allocating resources to address the complete response letter from the FDA.

Despite these challenges, Rocket sees potential opportunities on the horizon. If Kresladi wins approval, the company could receive a priority review voucher (PRV). While not factored into current financial projections, PRVs have historically sold for $150 million or more, potentially providing a significant financial boost to the company.