Shares of Rocket Pharmaceuticals (NASDAQ: RCKT) were up by more than 36% as of 11 a.m. on Wednesday after the clinical-stage biotech company said late Tuesday that the Food and Drug Administration (FDA) had signed off on its phase 2 pivotal trial for a treatment for Danon disease.
Rocket’s gene therapy, RP-1501, is designed to treat Danon disease, a fatal inherited disease that often leads to death in men by age 20 and in women by age 40. According to Rocket, Danon affects between 15,000 to 30,000 patients in the U.S. and Europe. Patients with the rare disease are missing the DNA instructions needed for the body to make the LAMP2 protein, which is crucial to lysosome function and cellular recycling. Danon can cause heart muscle disease, muscle weakness, intellectual disability, and eye disease, and can also affect the lungs and liver. There is no FDA-approved cure for the disease.
The small trial will look at the effectiveness and safety of RP-A501 in a dozen Danon disease patients.
The company also announced, on Wednesday morning, that it was pricing a public offering of 7.8 million shares of its stock at $16 per share, though some investors with pre-funded warrants can purchase as much as 3.12 million shares at a price of $15.99. Rocket said it expects to receive $175 million from the public offering. The money will help fund the company’s trial.
As of the second quarter, the company had $307 million in cash, no revenue, and a net loss of $65.7 million in the quarter.
Rocket has several other genetic therapies in its pipeline. RP-L102 is being developed to treat Fanconi anemia, a rare DNA repair disorder that can cause bone marrow failure, predisposition to cancer, and early death. RP-L201 is being tested to treat leukocyte adhesion deficiency, a rare genetic immune disorder that can lead to frequent infections. RP-L301 is designed to treat pyruvate kinase deficiency, which can lead to chronic anemia. RP-A601 is being developed for plakophilin-2 related arrhythmogenic cardiomyopathy, another rare genetic disorder.
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Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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