☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
04-3475813
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer ☒
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
RCKT
|
Nasdaq Global Market
|
|
Page
|
|
PART I - FINANCIAL INFORMATION
|
||
Item 1.
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
Item 2.
|
18
|
|
Item 3.
|
28
|
|
Item 4.
|
28
|
|
PART II - OTHER INFORMATION
|
||
Item 1.
|
29
|
|
Item 1A.
|
29
|
|
Item 2.
|
29
|
|
Item 3.
|
29
|
|
Item 4.
|
29
|
|
Item 5.
|
29
|
|
Item 6.
|
30
|
|
31
|
•
|
federal, state, and non-U.S. regulatory requirements, including regulation of our current or any other future product candidates by the U.S. Food and Drug Administration (“FDA”);
|
•
|
the timing of and our ability to submit regulatory filings with the FDA and to obtain and maintain FDA or other regulatory authority approval of, or other action with respect to, our product candidates;
|
•
|
our competitors’ activities, including decisions as to the timing of competing product launches, pricing and discounting;
|
•
|
whether safety and efficacy results of our clinical trials and other required tests for approval of our product candidates provide data to warrant progression of clinical trials, potential regulatory approval or further development of any of our product candidates;
|
•
|
our ability to develop, acquire and advance product candidates into, enroll a sufficient number of patients into, and successfully complete, clinical studies, and our ability to apply for and obtain regulatory approval for such product candidates, within currently anticipated timeframes, or at all;
|
•
|
our ability to establish key collaborations and vendor relationships for our product candidates and any other future product candidates;
|
•
|
our ability to establish key collaborations and vendor relationships for our product candidates and any other future product candidates;
|
•
|
our ability to acquire additional businesses, form strategic alliances or create joint ventures and our ability to realize the benefit of such acquisitions, alliances, or joint ventures;
|
•
|
our ability to successfully develop and commercialize any technology that we may in-license or products we may acquire;
|
•
|
unanticipated delays due to manufacturing difficulties, including the development of our direct manufacturing capabilities for our AAV programs, and any supply constraints or changes in the regulatory environment; our ability to successfully operate in non-U.S. jurisdictions in which we currently or in the future do business, including compliance with applicable regulatory requirements and laws;
|
•
|
uncertainties associated with obtaining and enforcing patents to protect our product candidates, and our ability to successfully defend ourselves against unforeseen third-party infringement claims;
|
•
|
anticipated trends and challenges in our business and the markets in which we operate;
|
•
|
natural and manmade disasters, including pandemics such as COVID-19, and other force majeures, which could impact our operations, and those of our partners and other participants in the health care industry, and which could adversely impact our clinical studies, preclinical research activities, and drug supply;
|
•
|
our estimates regarding our capital requirements; and
|
•
|
our ability to obtain additional financing and raise capital as necessary to fund operations or pursue business opportunities.
|
Item 1. |
Financial Statements
|
June 30,
|
December 31,
|
|||||||
|
2021
|
2020
|
||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
264,608
|
$
|
297,098
|
||||
Investments
|
162,222
|
185,621
|
||||||
Prepaid expenses and other current assets
|
3,596
|
4,626
|
||||||
Total current assets
|
430,426
|
487,345
|
||||||
Property and equipment, net
|
20,989
|
19,206
|
||||||
Goodwill
|
30,815
|
30,815
|
||||||
Restricted cash
|
1,334
|
1,568
|
||||||
Deposits
|
455
|
455
|
||||||
Operating lease right-of-use assets
|
1,628
|
914
|
||||||
Finance lease right-of-use asset
|
49,507
|
50,521
|
||||||
Total assets
|
$
|
535,154
|
$
|
590,824
|
||||
Liabilities and stockholders' equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
17,884
|
$
|
25,472
|
||||
Convertible notes, net of unamortized discount, current
|
5,102
|
4,875
|
||||||
Operating lease liabilities, current
|
792
|
626
|
||||||
Finance lease liability, current
|
1,666
|
1,644
|
||||||
Total current liabilities
|
25,444
|
32,617
|
||||||
Convertible notes, net of unamortized discount, non-current
|
-
|
35,066
|
||||||
Operating lease liabilities, non-current
|
1,096
|
498
|
||||||
Finance lease liability, non-current
|
19,070
|
18,988
|
||||||
Other liabilities
|
107
|
136
|
||||||
Total liabilities
|
45,717
|
87,305
|
||||||
Commitments and contingencies (Note 11)
|
|
|
||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.01 par value, authorized 5,000,000 shares:
|
||||||||
Series A convertible preferred stock; 300,000 shares designated as Series A; 0 shares issued and outstanding
|
-
|
-
|
||||||
Series B convertible preferred stock; 300,000 shares designated as Series B; 0 shares issued and outstanding
|
-
|
-
|
||||||
Common stock, $0.01 par value, 120,000,000 shares authorized; 63,448,069 and 60,996,367 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
|
634
|
610
|
||||||
Additional paid-in capital
|
886,431
|
825,794
|
||||||
Accumulated other comprehensive loss
|
(81
|
)
|
(42
|
)
|
||||
Accumulated deficit
|
(397,547
|
)
|
(322,843
|
)
|
||||
Total stockholders' equity
|
489,437
|
503,519
|
||||||
Total liabilities and stockholders' equity
|
$
|
535,154
|
$
|
590,824
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
||||||||||||||||
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
24,798
|
16,731
|
53,340
|
33,687
|
||||||||||||
General and administrative
|
9,250
|
6,828
|
19,930
|
13,990
|
||||||||||||
Total operating expenses
|
34,048
|
23,559
|
73,270
|
47,677
|
||||||||||||
Loss from operations
|
(34,048
|
)
|
(23,559
|
)
|
(73,270
|
)
|
(47,677
|
)
|
||||||||
Research and development incentives
|
-
|
-
|
500
|
-
|
||||||||||||
Interest expense
|
(251
|
)
|
(1,786
|
)
|
(1,980
|
)
|
(3,360
|
)
|
||||||||
Interest and other income - net
|
501
|
429
|
1,412
|
1,395
|
||||||||||||
Amortization of premium on investments - net
|
(727
|
)
|
(124
|
)
|
(1,366
|
)
|
(62
|
)
|
||||||||
Net loss
|
$
|
(34,525
|
)
|
$
|
(25,040
|
)
|
$
|
(74,704
|
)
|
$
|
(49,704
|
)
|
||||
Net loss per share attributable to common stockholders - basic and diluted
|
$
|
(0.55
|
)
|
$
|
(0.45
|
)
|
$
|
(1.20
|
)
|
$
|
(0.90
|
)
|
||||
Weighted-average common shares outstanding - basic and diluted
|
63,061,232
|
55,158,459
|
62,321,926
|
55,020,789
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
||||||||||||||||
Net loss
|
$
|
(34,525
|
)
|
$
|
(25,040
|
)
|
$
|
(74,704
|
)
|
$
|
(49,704
|
)
|
||||
Other comprehensive loss
|
||||||||||||||||
Net unrealized gain (loss) on investments
|
(6
|
)
|
304
|
(39
|
)
|
209
|
||||||||||
Total comprehensive loss
|
$
|
(34,531
|
)
|
$
|
(24,736
|
)
|
$
|
(74,743
|
)
|
$
|
(49,495
|
)
|
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
Other
|
Total
|
||||||||||||||||||||||||||
|
Common Stock
|
Treasury
|
Paid-In
|
Comprehensive
|
Accumulated
|
Stockholders'
|
||||||||||||||||||||||
Shares
|
Amount
|
Stock
|
Capital
|
Income/(Loss)
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balance at December 31, 2020
|
60,996,367
|
$
|
610
|
$
|
-
|
$
|
825,794
|
$
|
(42
|
)
|
$
|
(322,843
|
)
|
$
|
503,519
|
|||||||||||||
Issuance of common stock pursuant to exercise of stock options
|
991,432
|
9
|
-
|
8,783
|
-
|
-
|
8,792
|
|||||||||||||||||||||
Unrealized comprehensive loss on investments
|
-
|
-
|
-
|
-
|
(33
|
)
|
-
|
(33
|
)
|
|||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
7,900
|
-
|
-
|
7,900
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(40,179
|
)
|
(40,179
|
)
|
|||||||||||||||||||
Balance at March 31, 2021
|
61,987,799
|
619
|
-
|
842,477
|
(75
|
)
|
(363,022
|
)
|
479,999
|
|||||||||||||||||||
Issuance of common stock pursuant to exercise of stock options
|
133,838
|
2
|
-
|
1,113
|
-
|
-
|
1,115
|
|||||||||||||||||||||
Issuance of common stock pursuant to conversion of notes
|
1,326,432
|
13
|
-
|
35,530
|
-
|
-
|
35,543
|
|||||||||||||||||||||
Unrealized comprehensive loss on investments
|
-
|
-
|
-
|
-
|
(6
|
)
|
-
|
(6
|
)
|
|||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
7,311
|
-
|
-
|
7,311
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(34,525
|
)
|
(34,525
|
)
|
|||||||||||||||||||
Balance at June 30, 2021
|
63,448,069
|
$
|
634
|
$
|
-
|
$
|
886,431
|
$
|
(81
|
)
|
$
|
(397,547
|
)
|
$
|
489,437
|
Balance at December 31, 2019
|
54,773,061
|
$
|
548
|
$
|
(53
|
)
|
$
|
489,925
|
$
|
20
|
$
|
(183,143
|
)
|
$
|
307,297
|
|||||||||||||
Issuance of common stock pursuant to exercise of stock options
|
386,974
|
3
|
-
|
(3
|
)
|
-
|
-
|
-
|
||||||||||||||||||||
Share repurchase
|
(3,000
|
)
|
-
|
-
|
(72
|
)
|
-
|
-
|
(72
|
)
|
||||||||||||||||||
Sale of treasury stock
|
-
|
-
|
53
|
-
|
-
|
-
|
53
|
|||||||||||||||||||||
Issuance of treasury stock pursuant to exercise of stock options
|
-
|
-
|
(429
|
)
|
-
|
-
|
-
|
(429
|
)
|
|||||||||||||||||||
Unrealized comprehensive loss on investments
|
-
|
-
|
-
|
-
|
(95
|
)
|
-
|
(95
|
)
|
|||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
3,961
|
-
|
-
|
3,961
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(24,664
|
)
|
(24,664
|
)
|
|||||||||||||||||||
Balance at March 31, 2020
|
55,157,035
|
551
|
(429
|
)
|
493,811
|
(75
|
)
|
(207,807
|
)
|
286,051
|
||||||||||||||||||
Issuance of common stock pursuant to exercise of stock options
|
12,968
|
-
|
-
|
290
|
-
|
-
|
290
|
|||||||||||||||||||||
Sale of treasury stock
|
-
|
-
|
538
|
-
|
-
|
-
|
538
|
|||||||||||||||||||||
Issuance of treasury stock pursuant to exercise of stock options
|
-
|
-
|
(109
|
)
|
-
|
-
|
-
|
(109
|
)
|
|||||||||||||||||||
Unrealized comprehensive gain on investments
|
-
|
-
|
-
|
-
|
304
|
-
|
304
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
4,489
|
-
|
-
|
4,489
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(25,040
|
)
|
(25,040
|
)
|
|||||||||||||||||||
Balance at June 30, 2020
|
55,170,003
|
$
|
551
|
$
|
-
|
$
|
498,590
|
$
|
229
|
$
|
(232,847
|
)
|
$
|
266,523
|
|
Six Months Ended June 30,
|
|||||||
2021
|
2020
|
|||||||
Operating Activities:
|
||||||||
Net loss
|
$
|
(74,704
|
)
|
$
|
(49,704
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Accretion of discount on convertible notes
|
705
|
1,416
|
||||||
Depreciation and amortization expense
|
1,380
|
242
|
||||||
Write down of property and equipment
|
-
|
62
|
||||||
Stock-based compensation
|
15,211
|
8,450
|
||||||
Accretion of discount on investments, net
|
1,345
|
63
|
||||||
Unrealized loss on marketable securities
|
1
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
1,030
|
(2,522
|
)
|
|||||
Accounts payable and accrued expenses
|
(8,982
|
)
|
(3,188
|
)
|
||||
Operating lease liabilities
|
50
|
(94
|
)
|
|||||
Finance lease liability
|
1,184
|
997
|
||||||
Other long term liabilities
|
(29
|
)
|
-
|
|||||
Net cash used in operating activities
|
(62,809
|
)
|
(44,278
|
)
|
||||
Investing activities:
|
||||||||
Purchases of investments
|
(158,571
|
)
|
(56,436
|
)
|
||||
Proceeds from maturities of investments
|
180,584
|
88,714
|
||||||
Payments made to acquire right of use asset
|
(61
|
)
|
(2,731
|
)
|
||||
Purchases of property and equipment
|
(1,449
|
)
|
(7,115
|
)
|
||||
Purchases of internal use software
|
(325
|
)
|
(368
|
)
|
||||
Net cash provided by investing activities
|
20,178
|
22,064
|
||||||
Financing activities:
|
||||||||
Issuance of common stock, pursuant to exercise of stock options
|
9,907
|
3
|
||||||
Issuance of common stock, net of issuance costs
|
-
|
287
|
||||||
Common stock repurchase
|
-
|
(72
|
)
|
|||||
Proceeds from sale of treasury stock
|
-
|
591
|
||||||
Payment of withholding tax on option exercise
|
-
|
(538
|
)
|
|||||
Convertible notes refinancing costs to the lender
|
-
|
(237
|
)
|
|||||
Net cash provided by financing activities
|
9,907
|
34
|
||||||
Net change in cash, cash equivalents and restricted cash
|
(32,724
|
)
|
(22,180
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
298,666
|
186,908
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
265,942
|
$
|
164,728
|
||||
Supplemental disclosure of non-cash financing and investing activities:
|
||||||||
Accrued purchases of property and equipment
|
$
|
1,272
|
$
|
3,958
|
||||
Accrued purchases of internal use software
|
$
|
122
|
$
|
122
|
||||
Unrealized (loss) gain on investments
|
$
|
(39
|
)
|
$
|
209
|
|||
Conversion of convertible notes into common stock
|
$
|
35,544
|
$
|
-
|
||||
Finance lease right of use asset and lease liability
|
$
|
-
|
$
|
20,179
|
||||
Reclassification of construction in process (from) to finance right of use asset
|
$
|
(5
|
)
|
$
|
26,465
|
|||
Supplemental cash flow information:
|
||||||||
Cash paid for interest
|
$
|
1,347
|
$
|
1,495
|
1. |
Nature of Business
|
2. |
Risks and Liquidity
|
3. |
Basis of Presentation, Principles of Consolidation and Summary of Significant Accounting Policies
|
|
June 30,
2021
|
December 31,
2020
|
||||||
|
||||||||
Cash and cash equivalents
|
$
|
264,608
|
$
|
297,098
|
||||
Restricted cash
|
1,334
|
1,568
|
||||||
|
$
|
265,942
|
$
|
298,666
|
4. |
Fair Value of Financial Instruments
|
|
Fair Value Measurements as of
June 30, 2021 Using:
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
Money market mutual funds
|
$
|
221,680
|
$
|
-
|
$
|
-
|
$
|
221,680
|
||||||||
221,680
|
-
|
-
|
221,680
|
|||||||||||||
|
||||||||||||||||
Investments:
|
||||||||||||||||
United States Treasury securities
|
74,468
|
-
|
-
|
74,468
|
||||||||||||
Corporate Bonds
|
-
|
72,435
|
-
|
72,435
|
||||||||||||
Municipal Bonds
|
-
|
6,000
|
-
|
6,000
|
||||||||||||
Agency Bonds
|
-
|
9,319
|
-
|
9,319
|
||||||||||||
74,468
|
87,754
|
-
|
162,222
|
|||||||||||||
|
||||||||||||||||
|
$
|
296,148
|
$
|
87,754
|
$
|
-
|
$
|
383,902
|
|
Fair Value Measurements as of
December 31, 2020 Using:
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
Money market mutual funds
|
$
|
193,312
|
$
|
-
|
$
|
-
|
$
|
193,312
|
||||||||
United States Treasury securities
|
62,497
|
-
|
-
|
62,497
|
||||||||||||
Corporate Bonds
|
-
|
501
|
-
|
501
|
||||||||||||
Agency Bonds
|
-
|
8,015
|
-
|
8,015
|
||||||||||||
|
255,809
|
8,516
|
-
|
264,325
|
||||||||||||
|
||||||||||||||||
Investments:
|
||||||||||||||||
United States Treasury securities
|
112,328
|
-
|
-
|
112,328
|
||||||||||||
Corporate Bonds
|
-
|
63,710
|
-
|
63,710
|
||||||||||||
Municipal Bonds
|
-
|
6,000
|
-
|
6,000
|
||||||||||||
Agency Bonds
|
-
|
3,583
|
-
|
3,583
|
||||||||||||
112,328
|
73,293
|
-
|
185,621
|
|||||||||||||
|
||||||||||||||||
|
$
|
368,137
|
$
|
81,809
|
$
|
-
|
$
|
449,946
|
5. |
Property and Equipment, Net
|
|
June 30,
2021
|
December 31,
2020
|
||||||
Laboratory equipment
|
$
|
10,401
|
$
|
7,807
|
||||
Machinery and equipment
|
10,012
|
9,933
|
||||||
Computer equipment
|
218
|
218
|
||||||
Furniture and fixtures
|
1,914
|
1,880
|
||||||
Leasehold improvements
|
39
|
29
|
||||||
Internal use software
|
1,832
|
1,385
|
||||||
|
24,416
|
21,252
|
||||||
Less: accumulated depreciation and amortization
|
(3,427
|
)
|
(2,046
|
)
|
||||
|
$
|
20,989
|
$
|
19,206
|
6. |
Accounts Payable and Accrued Expenses
|
|
June 30,
|
December 31,
|
||||||
2021
|
2020
|
|||||||
Research and development
|
$
|
11,251
|
$
|
14,962
|
||||
Property and equipment
|
1,272
|
1,456
|
||||||
Employee compensation
|
3,115
|
4,875
|
||||||
Accrued interest
|
123
|
1,122
|
||||||
Government grant payable
|
597
|
590
|
||||||
Professional fees
|
735
|
1,332
|
||||||
Internal use software
|
122
|
300
|
||||||
Other
|
669
|
835
|
||||||
|
$
|
17,884
|
$
|
25,472
|
7. |
Convertibles Notes
|
2021 Notes
|
||||||||
|
June 30,
2021
|
December 31,
2020
|
||||||
Principal amount
|
$
|
5,150
|
$
|
5,150
|
||||
Discount
|
(48
|
)
|
(275
|
)
|
||||
Carrying value
|
$
|
5,102
|
$
|
4,875
|
8. |
Stock Based Compensation
|
|
Six Months Ended June 30,
|
|||||||
|
2021
|
2020
|
||||||
|
||||||||
Risk-free interest rate
|
0.74
|
%
|
1.27
|
%
|
||||
Expected term (in years)
|
5.84
|
5.84
|
||||||
Expected volatility
|
69.19
|
%
|
77.39
|
%
|
||||
Expected dividend yield
|
0.00
|
%
|
0.00
|
%
|
||||
Exercise price
|
$
|
57.18
|
$
|
21.56
|
||||
Fair value of common stock
|
$
|
57.18
|
$
|
21.56
|
|
Number of
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Contractual
Term (Years)
|
Aggregate
Intrinsic
Value
|
||||||||||||
|
||||||||||||||||
Outstanding as of December 31, 2020
|
11,050,931
|
$
|
9.10
|
6.55
|
$
|
504,079
|
||||||||||
Granted
|
1,243,509
|
57.18
|
9.32
|
|||||||||||||
Exercised
|
(1,125,270
|
)
|
8.76
|
53,345
|
||||||||||||
Cancelled
|
(128,473
|
)
|
34.15
|
|||||||||||||
Outstanding as of June 30, 2021
|
11,040,697
|
$
|
14.27
|
6.40
|
$
|
346,476
|
||||||||||
|
||||||||||||||||
Options vested and exercisable as of June 30, 2021
|
8,127,520
|
$
|
6.27
|
5.43
|
$
|
308,590
|
||||||||||
Options unvested as of June 30, 2021
|
2,913,177
|
$
|
36.57
|
9.11
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Stock options
|
$
|
7,215
|
$
|
4,489
|
$
|
15,041
|
$
|
8,450
|
||||||||
Restricted stock units
|
96
|
-
|
170
|
-
|
||||||||||||
Total share based compensation expense
|
$
|
7,311
|
$
|
4,489
|
$
|
15,211
|
$
|
8,450
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
||||||||||||||||
Research and development
|
$
|
3,148
|
$
|
1,679
|
$
|
6,064
|
$
|
3,414
|
||||||||
General and administrative
|
4,163
|
2,810
|
9,147
|
5,036
|
||||||||||||
Total share based compensation expense
|
$
|
7,311
|
$
|
4,489
|
$
|
15,211
|
$
|
8,450
|
|
Number of
Shares
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Unvested as of December 31, 2020
|
20,000
|
$
|
25.06
|
|||||
Granted
|
3,500
|
62.32
|
||||||
Unvested as of June 30, 2021
|
23,500
|
30.61
|
9. |
Warrants
|
10. |
Net Loss Per Share
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Net loss attributable to common stockholders
|
$
|
(34,525
|
)
|
$
|
(25,040
|
)
|
$
|
(74,704
|
)
|
$
|
(49,704
|
)
|
||||
Denominator:
|
||||||||||||||||
Weighted-average common shares outstanding - basic and diluted
|
63,061,232
|
55,158,459
|
62,321,926
|
55,020,789
|
||||||||||||
Net loss per share attributable to common stockholders - basic and diluted
|
$
|
(0.55
|
)
|
$
|
(0.45
|
)
|
$
|
(1.20
|
)
|
$
|
(0.90
|
)
|
|
Three and Six Months Ended June 30,
|
|||||||
|
2021
|
2020
|
||||||
Shares issuable upon conversion of the 2021 Convertible Notes
|
160,536
|
160,536
|
||||||
Shares issuable upon conversion of the 2022 Convertible Notes
|
-
|
1,460,412
|
||||||
Warrants exercisable for common shares
|
610,437
|
14,102
|
||||||
Restricted stock units exercisable for common shares
|
23,500
|
-
|
||||||
Options to purchase common shares
|
11,040,697
|
10,776,813
|
||||||
|
11,835,170
|
12,411,863
|
11. |
Commitments and Contingencies
|
Lease cost
|
June 30, 2021
|
|||
Operating lease cost
|
$
|
275
|
||
Finance lease cost
|
||||
Amortization of right of use assets
|
1,071
|
|||
Interest on lease liablities
|
920
|
|||
Total lease cost
|
$
|
2,266
|
Maturity of operating lease liabilities
|
June 30, 2021
|
|||
2021
|
$
|
428
|
||
2022
|
860
|
|||
2023
|
488
|
|||
2024
|
207
|
|||
Total lease payments
|
$
|
1,983
|
||
Less: interest
|
(95
|
)
|
||
Total operating lease liabilities
|
$
|
1,888
|
Maturity of finance lease liability
|
June 30, 2021
|
|||
2021
|
$
|
827
|
||
2022
|
1,689
|
|||
2023
|
1,736
|
|||
2024
|
1,791
|
|||
2025
|
1,856
|
|||
Thereafter
|
46,913
|
|||
Total lease payments
|
$
|
54,812
|
||
Less: interest
|
(34,076
|
)
|
||
Total finance lease liability
|
$
|
20,736
|
Leases
|
June 30, 2021
|
|||
|
||||
Operating right-of-use assets
|
$
|
1,628
|
||
|
||||
Operating current lease liabilities
|
792
|
|||
Operating noncurrent lease liabilities
|
1,096
|
|||
Total operating lease liabilities
|
$
|
1,888
|
||
|
||||
Finance right-of-use assets
|
$
|
49,507
|
||
Finance current lease liability
|
1,666
|
|||
Finance noncurrent lease liability
|
19,070
|
|||
Total finance lease liability
|
$
|
20,736
|
12. |
Agreements Related to Intellectual Property
|
13. |
CIRM Grants
|
14. |
Related Party Transactions
|
15. |
401(k) Savings Plan
|
16. |
Subsequent Events
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
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;
|
• |
patent fees; and
|
• |
costs related to in-licensing of rights to develop and commercialize our product candidate portfolio.
|
• |
salaries and personnel-related costs, including benefits, travel and stock-based compensation, for our scientific personnel performing R&D activities;
|
• |
facilities and other expenses, which include expenses for rent and maintenance of facilities, and depreciation expense; and
|
• |
laboratory supplies and equipment used for internal R&D activities.
|
• |
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;
|
• |
changing standards for regulatory approval; and
|
• |
the timing and receipt of any regulatory approvals.
|
• |
the scope, progress, outcome and costs of our clinical trials and other R&D activities;
|
• |
the efficacy and potential advantages of our product candidates compared to alternative treatments, including any standard of care;
|
• |
the market acceptance of our product candidates;
|
• |
obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
|
• |
significant and changing government regulation; and
|
• |
the timing, receipt and terms of any marketing approvals.
|
Three Months Ended June 30,
|
||||||||||||
2021
|
2020
|
Change
|
||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
24,798
|
$
|
16,731
|
$
|
8,067
|
||||||
General and administrative
|
9,250
|
6,828
|
2,422
|
|||||||||
Total operating expenses
|
34,048
|
23,559
|
10,489
|
|||||||||
Loss from operations
|
(34,048
|
)
|
(23,559
|
)
|
(10,489
|
)
|
||||||
Interest expense
|
(251
|
)
|
(1,786
|
)
|
1,535
|
|||||||
Interest and other income net
|
501
|
429
|
72
|
|||||||||
Amortization of premium on investments - net
|
(727
|
)
|
(124
|
)
|
(603
|
)
|
||||||
Total other expense, net
|
(477
|
)
|
(1,481
|
)
|
1,004
|
|||||||
Net loss
|
$
|
(34,525
|
)
|
$
|
(25,040
|
)
|
$
|
(9,485
|
)
|
Six Months Ended June 30,
|
||||||||||||
2021
|
2020
|
Change
|
||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$
|
53,340
|
$
|
33,687
|
$
|
19,653
|
||||||
General and administrative
|
19,930
|
13,990
|
5,940
|
|||||||||
Total operating expenses
|
73,270
|
47,677
|
25,593
|
|||||||||
Loss from operations
|
(73,270
|
)
|
(47,677
|
)
|
(25,593
|
)
|
||||||
Research and development incentives
|
500
|
-
|
500
|
|||||||||
Interest expense
|
(1,980
|
)
|
(3,360
|
)
|
1,380
|
|||||||
Interest and other income net
|
1,412
|
1,395
|
17
|
|||||||||
Amortization of premium on investments - net
|
(1,366
|
)
|
(62
|
)
|
(1,304
|
)
|
||||||
Total other expense, net
|
(1,434
|
)
|
(2,027
|
)
|
593
|
|||||||
Net loss
|
$
|
(74,704
|
)
|
$
|
(49,704
|
)
|
$
|
(25,000
|
)
|
Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
Cash used in operating activities
|
$
|
(62,809
|
)
|
$
|
(44,278
|
)
|
||
Cash provided by investing activities
|
20,178
|
22,064
|
||||||
Cash provided provided by financing activities
|
9,907
|
34
|
||||||
Net change in cash, cash equivalents and restricted cash
|
$
|
(32,724
|
)
|
$
|
(22,180
|
)
|
• |
leverage our programs to advance other product candidates into preclinical and clinical development;
|
• |
seek regulatory agreements to initiate clinical trials in Europe, the U.S. and ROW;
|
• |
establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any product candidates for which Rocket may obtain marketing approval and intend to commercialize on its own or jointly;
|
• |
hire additional preclinical, clinical, regulatory, quality and scientific personnel;
|
• |
expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;
|
• |
maintain, expand and protect our intellectual property portfolio; and
|
• |
acquire or in-license other product candidates and technologies.
|
• |
the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;
|
• |
the costs, timing and outcome of regulatory review of our product candidates;
|
• |
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
|
• |
the costs of manufacturing commercial-grade product to support commercial launch;
|
• |
the ability to receive additional non-dilutive funding, including grants from organizations and foundations;
|
• |
the revenue, if any, received from commercial sale of its products, should any of its product candidates receive marketing approval;
|
• |
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
|
• |
our ability to establish and maintain collaborations on favorable terms, if at all;
|
• |
the extent to which we acquire or in-license other product candidates and technologies; and
|
• |
the timing, receipt and amount of sales of, or milestone payments related to our royalties on, current or future product candidates, if any.
|
Item 3 |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4 |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
* |
Filed herewith.
|
ROCKET PHARMACEUTICALS, INC.
|
||
August 9, 2021
|
By:
|
/s/ Gaurav Shah, MD
|
Gaurav Shah, MD
|
||
President, Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
||
August 9, 2021
|
By:
|
/s/ Carlos Garcia-Parada
|
Carlos Garcia-Parada
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
1. |
I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2021 of Rocket Pharmaceuticals, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the registrant’s ability to record, process, summarize and report financial information; and
|
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 9, 2021
|
/s/ Gaurav Shah, MD
|
|
Gaurav Shah, MD
|
President, Chief Executive Officer and Director
|
|
|
(Principal Executive Officer)
|
1. |
I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2021 of Rocket Pharmaceuticals, Inc.;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the registrant’s ability to record, process, summarize and report financial information; and
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 9, 2021
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/s/ Carlos Garcia-Parada
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Carlos Garcia-Parada
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Chief Financial Officer
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(Principal Financial Officer)
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1) |
the Report which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: August 9, 2021
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/s/ Gaurav Shah, MD
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Gaurav Shah, MD
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President, Chief Executive Officer and Director
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(Principal Executive Officer)
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Date: August 9, 2021
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/s/ Carlos Garcia-Parada
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Carlos Garcia-Parada
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Chief Financial Officer
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(Principal Financial Officer)
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