Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related
notes that are included elsewhere in this Quarterly Report on Form 10-Q and our 2021 Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those discussed in the section entitled “Risk Factors” and elsewhere in this Quarterly
Report on Form 10-Q. In preparing this MD&A, we presume that readers have access to and have read the MD&A in our 2021 Form 10-K, pursuant to Instruction 2 to paragraph of Item 303 of Regulation S-K. Unless stated otherwise, references in
this Quarterly Report on Form 10-Q to “us,” “we,” “our,” or our “Company” and similar terms refer to Rocket Pharmaceuticals, Inc.
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 (“LVV”) programs. 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. 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”). In addition, in the U.S., we 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. Additional work on a gene therapy program for the less common FA subtypes C and G is ongoing. We have global commercialization and development rights to all of these product candidates under
royalty-bearing license agreements.
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. 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-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.
Recent Developments
At-the-Market Offering Program
On February 28, 2022, we entered into the Sales Agreement with Cowen with respect to an at-the-market offering program pursuant to which the Company may offer and sell, from time to time at its sole
discretion, shares through Cowen as its sales agent. The shares to be offered and sold under the Sales Agreement, if any, will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-253756), which was
filed with the SEC on March 2, 2021 and which became effective on September 10, 2021. 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 up to 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 and will also reimburse Cowen for
certain expenses incurred in connection with the Sales Agreement. As of March 31, 2022, the Company did not sell any shares under the at-the-market offering program. In April 2022, we sold 1.3 million
shares of common stock pursuant to the at-the-market offering program for gross proceeds of $17.8 million, less commissions of $0.5 million for net proceeds of $17.3 million.
Gene Therapy Overview
Genes are composed of sequences of deoxyribonucleic acid (“DNA”), which code for proteins that perform a broad range of physiologic functions in all living organisms. Although genes are passed
on from generation to generation, genetic changes, also known as mutations, can occur in this process. These changes can result in the lack of production of proteins or the production of altered proteins with reduced or abnormal function, which
can in turn result in disease.
Gene therapy is a therapeutic approach in which an isolated gene sequence or segment of DNA is administered to a patient, most commonly for the purpose of treating a genetic disease that is
caused by genetic mutations. Currently available therapies for many genetic diseases focus on administration of large proteins or enzymes and typically address only the symptoms of the disease. Gene therapy aims to address the disease-causing
effects of absent or dysfunctional genes by delivering functional copies of the gene sequence directly into the patient’s cells, offering the potential for curing the genetic disease, rather than simply addressing symptoms.
We are using modified non-pathogenic viruses for the development of our gene therapy treatments. Viruses are particularly well suited as delivery vehicles because they are adept at penetrating
cells and delivering genetic material inside a cell. In creating our viral delivery vehicles, the viral (pathogenic) genes are removed and are replaced with a functional form of the missing or mutant gene that is the cause of the patient’s
genetic disease. The functional form of a missing or mutant gene is called a therapeutic gene, or the “transgene.” The process of inserting the transgene is called “transduction.” Once a virus is modified by replacement of the viral genes with a
transgene, the modified virus is called a “viral vector.” The viral vector delivers the transgene into the targeted tissue or organ (such as the cells inside a patient’s bone marrow). We have two types of viral vectors in development, LVV and
AAV. We believe that our LVV and AAV-based programs have the potential to offer a significant therapeutic benefit to patients that is durable (long-lasting).
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.
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. The FDA approval of several gene therapies in recent years indicates that there is a regulatory
pathway forward for gene therapy products.
Pipeline Overview
The chart below shows the current phases of development of Rocket’s programs and product candidates:
AAV Program:
Danon Disease:
Danon disease (“DD”) is a multi-organ lysosomal-associated disorder leading to early death due to heart failure. DD is caused by mutations in the gene encoding lysosome-associated membrane
protein 2 (“LAMP-2”), a mediator of autophagy. This mutation results in the accumulation of autophagic vacuoles, predominantly in cardiac and skeletal muscle. Male patients often require heart transplantation and typically die in their teens or
twenties from progressive heart failure. Along with severe cardiomyopathy, other DD-related manifestations can include skeletal muscle weakness, liver disease, and intellectual impairment. There are no specific therapies available for the
treatment of DD and medications typically utilized for the treatment of congestive heart failure (CHF) are not believed to modify progression to end-stage CHF. Patients with end-stage CHF may undergo heart transplant, which currently is available
to a minority of patients, is associated with short- and long-term complications and is not curative of the disorder in the long-term. RP-A501 is in clinical trials as an in vivo therapy for Danon
disease, which is estimated to have a prevalence of 15,000 to 30,000 patients in the U.S. and the EU.
Danon disease is an autosomal dominant, rare inherited disorder characterized by progressive cardiomyopathy which is almost universally fatal in males even in settings where cardiac
transplantation is available. Danon disease predominantly affects males early in life and is characterized by absence of LAMP2B expression in the heart and other tissues. Pre-clinical models of Danon
disease 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. We have treated six patients in the RP-A501 Phase 1 clinical trial, which enrolled for adult and pediatric
male DD patients. This includes a first cohort evaluating a low-dose (6.7e13 genome copies (vg)/kilogram (kg)) in adult/older adolescent patients aged 15 or greater (n=3), a second cohort evaluating a higher dose (1.1e14 vg/kg) in adult/older
adolescent patients aged 15 or greater (n=2), and we have initiated treatment in a pediatric cohort at a low dose level (6.7e13 vg/kg; n=1).
Data disclosed from our Phase 1 study of RP-A501 in November 2021 and January 2022 included safety and
clinical activity results from the three patients treated with the low dose of 6.7e13 vg/kg and from two patients treated with the higher dose of 1.1e14 vg/kg, and early safety information from the initial pediatric patient (pediatric cohort is
age 8-14 years) treated with the low dose of 6.7e13 vg/kg.
Efficacy assessments include evaluation of New York Heart Association (“NYHA”) Functional Classification, which is the most commonly used heart failure classification system. NYHA Class II is
where a patient exhibits a slight limitation of physical activity, is comfortable at rest, and ordinary physical activity results in fatigue, palpitation and/or dyspnea. Class I is where a patient exhibits no limitation of physical activity and
ordinary physical activity does not cause undue fatigue, palpitation and/or dyspnea. Brain natriuretic peptide (BNP) is a blood-based evaluation and a key marker of heart failure with prognostic significance in CHF and cardiomyopathies. Other
efficacy parameters include echocardiographic measurements of heart thickness, most notably the thickness of the left ventricular posterior wall (LVPW), and importantly, measurement of LAMP2B gene expression both via immunohistochemistry and
Western blot, as obtained via endomyocardial biopsy. Biopsied heart tissue is also evaluated on electron microscopy for 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.
In November 2021 and January 2022, data for the ongoing Phase 1 trial of RP-A501 was presented, including efficacy parameters for the low and high dose cohorts in patients aged 15 and older with
at least 12 months follow-up (n=5). An improvement in NYHA Class (from II to I) was observed in three patients (two low-dose and one high-dose) who had closely monitored immunosuppression with follow-up greater than one year and stabilization was
observed in one low-dose patient without a closely monitored immunosuppressive regimen. A substantial improvement in BNP, a key marker of heart failure, was observed in all three low-dose patients and one high-dose patient. Among the three
low-dose patients, BNP decreased from a pretreatment baseline by 57% at 24 months, 79% at 18 months, and 75% at 15 months, respectively. In one high-dose patient, BNP decreased from a pretreatment baseline by 67% at 12 months. In patients with
closely monitored immunosuppression (two low-dose and one high-dose) left ventricular (LV) posterior wall thickness improved (average 23% decrease compared to pretreatment baseline) and ejection fraction improved or stabilized (average 20%
increase compared to pretreatment baseline) at 12 to 18 months on echocardiography. Severe and progressive wall thickening is a hallmark of the hypertrophic cardiomyopathy of Danon Disease and is a major contributor to early mortality in male
patients. Cardiac output remained normal for all patients with improved or stable left heart filling pressures as measured by cardiac catheterization. Three low-dose patients and one high-dose patient demonstrated improvements in the 6-minute
walk test (6MWT). One low-dose patient improved from a pretreatment baseline of 443 meters (m) to 467 m at 24 months. The second low-dose patient improved from a pretreatment baseline of 405 m to 410 m at 18 months. The third low-dose patient
improved from a pretreatment baseline of 427 m to 435 m at 15 months. One high-dose patient improved from a pretreatment baseline of 436 m to 492 m at 12 months. Evidence of sustained cardiac LAMP2B gene expression by immunohistochemistry and
Western blot with qualitative improvement of vacuoles and cardiac tissue architecture on electron microscopy was observed at both dose levels. Sustained cardiac LAMP2B gene expression by immunohistochemistry was observed in all three patients
with a closely monitored immunosuppressive regimen. Specifically, LAMP2B gene expression by immunohistochemistry in the low-dose (6.7e13 vg/kg) was 68% in one patient at Month 12 and 92% in another patient at Month 9. In one patient who received
the high-dose (1.1e14 vg/kg), LAMP2B gene expression by immunohistochemistry was 100% at Month 12.
One of the patients receiving therapy on the high dose cohort had progressive heart failure and underwent a heart transplant at Month 5 following therapy. This patient had more advanced disease
than the 4 other adult/older adolescent patients who received treatment in the low and high dose cohorts, as evidenced by diminished LV ejection fraction (35%) on echocardiogram and markedly elevated LV filling pressure prior to treatment. His
clinical course was characteristic of DD progression. Assessments regarding gene transduction from the explanted heart are summarized below:
Explanted Heart
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Analysis of the explanted heart revealed significant fibrosis consistent with advanced DD.
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Myocardial tissue from the explanted heart at 5 months post-treatment displayed 100% LAMP2B protein expression by immunohistochemistry throughout non-fibrotic cardiac regions including the ventricles and other essential targeted
areas
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RP-A501 was generally well tolerated at the 6.7e13 vg/kg dose level, or lower dose. All observed adverse effects were reversible with no lasting sequelae. Early transaminase and creatinine kinase
elevations returned to baseline or decreased. No unexpected and serious drug product-related adverse events or severe adverse events were observed in this low dose cohort. The most common adverse events were predominantly mild, not associated
with clinical symptoms and were related to elevated transaminases post-treatment. Elevation in transaminases and creatinine kinases was observed in all three low-dose patients and returned to baseline levels within the first one to two months
post-treatment. There was also a transient and reversible decline in platelets observed in these three patients. These changes were largely responsive to corticosteroids and other immunosuppressive therapies. All patients were given oral steroids
to prevent or minimize potential immune-related events. Corticosteroids were associated with transient exacerbation of DD-associated skeletal myopathy, which resolved upon discontinuation of steroid therapy. At the higher dose administered
(1.1e14 vg/kg), additional immunosuppressive therapies were stipulated and administered to mitigate the immune response associated with RP-A501. As disclosed in December 2020, one of the two patients receiving the 1.1e14 vg/kg dose had more
advanced heart failure than the others, and was the heaviest patient treated to-date (receiving the highest absolute AAV9 dose). This patient experienced a non-persistent, immune-related event that was classified as a drug product-related serious
adverse event. This thrombotic microangiopathy (“TMA”) event (which was later reclassified as a Sudden Unexpected Serious Adverse Reaction (“SUSAR”) was believed to be likely due to immune-mediated complement activation, resulting in reversible
thrombocytopenia and acute kidney injury requiring eculizumab and transient hemodialysis. This patient regained normal kidney function within three weeks. (This event occurred in the same patient in whom RP-A501 was not associated with clinical
stabilization or improvement, and who required a heart transplant 5 months post-therapy).
Following transplant, this patient has been clinically stable and reports resolution of a baseline skeletal myopathy that was present prior to treatment. Analysis of the explanted heart is
described above. Of note, this patient had more advanced heart failure at time of treatment; the clinical protocol has been modified to exclude enrollment of DD with end-stage CHF/cardiomyopathy. In May 2021, 5 months after details of this event
were disclosed and after recognition of complement-mediated TMA in other systemic AAV programs, the FDA placed the study on clinical hold. In response to the FDA’s clinical hold, we amended the trial protocol in order to enable more defined
mechanisms for prevention, early recognition and management of complement-mediated adverse events. The FDA lifted the clinical hold on August 16, 2021 and dosing of the pediatric cohort was initiated in the fourth quarter of 2021.
Based on the activity observed in the low dose cohort and to mitigate complement-mediated TMA (safety concerns observed in the high dose cohort) and in agreement with the FDA, we are focusing on
the low dose (6.7e13 vg/kg) and we will no longer administer doses of 1.1e14 vg/kg or higher in this trial. Additional safety measures have been implemented and are reflected in the updated trial protocol. These measures include exclusion of
patients with end-stage heart failure, and a refined immunosuppressive regimen involving transient B- and T-cell mediated inhibition, with emphasis on preventing complement activation, while also enabling lower steroid doses and earlier steroid
taper, with all immunosuppressive therapy discontinued 2-3 months following therapy. As announced in January 2022, the initial pediatric patient received RP-A501 therapy (6.7e13 vg/kg dose level) without evidence of significant complement
activation and with stable platelet levels; there was no worsening of the patient’s baseline DD-related skeletal myopathy during the weeks following RP-A501.
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. An estimated 60 to 70% of cases arise from mutations in the Fanconi-A (“FANCA”) gene,
which is the focus of our program. FA results in bone marrow failure, developmental abnormalities, myeloid leukemia, and other malignancies, often during the early years and decades of life. Bone marrow aplasia, which is bone marrow that no
longer produces any or very few red and white blood cells and platelets leading to infections and bleeding, is the most frequent cause of early morbidity and mortality in FA, with a median onset before 10 years of age. Leukemia is the next most
common cause of mortality, ultimately occurring in about 20% of patients later in life. Solid organ malignancies, such as head and neck cancers, can also occur, although at lower rates during the first two to three decades of life.
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. 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.
Each of our LVV-based 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. Defects in the genetic coding of HSCs can result in severe, and potentially life-threatening anemia, which is when a patient’s blood lacks enough properly functioning red
blood cells to carry oxygen throughout the body. Stem cell defects can also result in severe and potentially life-threatening decreases in white blood cells resulting in susceptibility to infections, and in platelets responsible for blood
clotting, which may result in severe and potentially life-threatening bleeding episodes. Patients with FA have a genetic defect that prevents the normal repair of genes and chromosomes within blood cells in the bone marrow, which frequently
results in the development of acute myeloid leukemia (“AML”), a type of blood cancer, as well as bone marrow failure and congenital defects. The average lifespan of an FA patient is estimated to be 30 to 40 years. The prevalence of FA in the
U.S. and EU is estimated to be approximately 4,000 patients in total. 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 LVV-based program targeting FA, RP-L102. 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 currently being studied in our Phase 2 registrational enabling clinical trials treating FA patients at the Center for Definitive and
Curative Medicine at Stanford University School of Medicine (“Stanford”), the University of Minnesota, Great Ormond Street Hospital (“GOSH”) in London and Hospital Infantil de Nino Jesus (“HNJ”) in Spain. The trial is expected to enroll a total
of ten patients from the U.S. and EU with the first patient in this Phase 2 trial treated in December 2019. Patients will receive a single intravenous infusion of RP-L102 that utilizes fresh cells and “Process B” which incorporates a modified
stem cell enrichment process, transduction enhancers, as well as commercial-grade vector and final drug product.
Resistance to mitomycin-C, a DNA damaging agent, in bone marrow stem cells at a minimum time point of one year post treatment is the primary endpoint for our ongoing Phase 2 study. Per agreement
with the FDA and EMA, engraftment leading to bone marrow restoration exceeding a 10% mitomycin-C resistance threshold could support a marketing application for approval.
In December 2020, we presented updated interim data from our FA at the 62nd American Society of Hematology (“ASH”) Annual Meeting. The FA data presented at the ASH Annual Meeting were from seven
of the nine patients treated (out of twelve patients enrolled) as of October 2020 in both the U.S. Phase 1 and global Phase 2 studies of RP-L102 for FA. Patients in these studies received a single intravenous infusion of “Process B” RP-L102 which
incorporates a modified stem cell enrichment process, transduction enhancers, as well as commercial-grade vector. Preliminary data from these studies support “Process B” as a consistent and reproducible improvement over “Process A” which was used
in earlier academic FA studies.
Seven patients had follow-up data of at least two-months and three of the seven patients had been followed for twelve-months or longer. As patients are treated with gene therapy product without
the use of a conditioning regimen, the data indicated that RP-L102 was generally well-tolerated with no significant safety issues reported with infusion or post-treatment. One drug related serious adverse event of Grade 2 transient
infusion-related reaction was observed. In five out of the seven patients for whom there was follow-up data, evidence of preliminary engraftment was observed, with bone marrow (“BM”) vector copy numbers (“VCNs”) from 0.16 to 0.22 (long-term
follow-up only) and peripheral VCNs ranging from 0.01 (2-month follow-up) to 0.11 (long-term follow-up). Further, two of the three patients with greater than 12-months follow-up showed evidence of increasing engraftment, mitomycin-C (“MMC”)
resistance and stable blood counts, which suggests a halt in the progression of bone marrow failure. The third patient with greater than 12-month follow-up contracted Influenza B nine months
post-treatment resulting in progressive BM failure, for which, such patient received a successful bone marrow transplant at 18 months post-treatment.
In May 2021, we presented positive clinical data at the 24th Annual Meeting of the American Society of Gene and Cell Therapy (“ASGCT”). The preliminary data from the Phase 1/2 trials presented in
a poster at ASGCT were from nine pediatric patients and showed increasing evidence of engraftment in at least six of the nine patients, including two patients with at least 15-months of follow-up and four patients with at least 6-months of
follow-up. RP-L102 demonstrated a highly favorable tolerability profile with all subjects being treated without conditioning and with no sign of dysplasia. One patient experienced a Grade 2 transient infusion-related reaction.
In December 2021, we presented encouraging clinical data at the 63rd Annual Meeting of the American Society of Hematology (ASH). The preliminary results from the Phase 1/2 trials were presented
in a poster at ASH were from eleven pediatric patients and showed increasing evidence of engraftment in at least six of eight patients for whom there are at least 12 months of follow-up, including bone marrow progenitor cell resistance to
mitomycin-C (MMC) ranging from 16-63% in six patients (bone marrow cells in FA patients are highly sensitive to DNA-damaging agents including MMC; this susceptibility to DNA damage is believed to mediate the FA-associated bone marrow failure and
predisposition to malignancy. In addition to the development of MMC-resistance in BM hematopoietic cells, sustained peripheral VCN levels were seen in six of seven patients with at least 12-months of follow-up. One patient experienced an
Influenza B infection approximately 9 months following treatment with concomitant progressive hematologic failure requiring allogeneic hematopoietic stem cell transplant, which was administered successfully; the remaining patients have not
required transfusions. RP-L102 demonstrated a highly favorable tolerability profile with all subjects being treated without cytotoxic conditioning and no signs of dysplasia. The only RP-L102 related serious adverse event to-date has been a Grade
2 transient infusion-related reaction in one patient.
Leukocyte Adhesion Deficiency-I (LAD-I):
LAD-I is a rare autosomal recessive disorder of white blood cell adhesion and migration, resulting from mutations in the ITGB2 gene encoding for the Beta-2 Integrin
component, CD18. Deficiencies in CD18 result in an impaired ability for neutrophils (a subset of infection-fighting white blood cells) to leave blood vessels and enter tissues where these cells are needed to combat infections. As is the case with
many rare diseases, accurate estimates of incidence are difficult to confirm; however, several hundred cases have been reported to date. Most LAD-I patients are believed to have the severe form of the disease. Severe LAD-I is notable for
recurrent, life-threatening infections and substantial infant mortality in patients who do not receive an allogeneic HSCT. Mortality for severe LAD-I has been reported as 60 to 75% by age two in the absence of allogeneic HCST.
We currently have one ex-vivo program targeting LAD-I, RP-L201. RP-L201 is a clinical program that we in-licensed from CIEMAT. We have partnered with
UCLA to lead U.S. clinical development efforts for the LAD-I program. 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. This study has received a $6.5 million CLIN2 grant award from the California Institute for Regenerative Medicine (“CIRM”) to support the
clinical development of gene therapy for LAD-I.
The ongoing open-label, single-arm, Phase 1/2 registration-enabling clinical trial of RP-L201 has treated four severe LAD-I patients to assess the safety and tolerability of
RP-L201 to date. The first patient was treated at UCLA with RP-L201 in the third quarter 2019. Enrollment is now complete in both the Phase 1 and 2 portions of the study; 9 patients have received RP-L102 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 ASH oral presentation included preliminary data from eight of nine severe LAD-I patients, as defined
by CD18 expression of less than 2%, who received RP-L201 treatment as of the November 8, 2021, data cut-off date. Eight patients had follow-up data of at least three months, and four of the eight patients had been followed for 12 months or
longer. All infusions of RP-L201 were well tolerated and no drug product-related serious adverse events were reported. Evidence of preliminary efficacy was observed in all eight evaluable patients. All eight patients demonstrated neutrophil CD18
expression that exceeded the 4-10% threshold associated with survival into adulthood and consistent with reversal of the severe LAD-I phenotype including six patients with at least 6 months of follow-up. Peripheral blood VCN levels have been
stable and in the 0.54 – 2.94 copies per genome range. No patients had LAD-I related infections requiring hospitalization after hematopoietic reconstitution post-RP-L201. Additional updates presented in January 2022 included a ninth patient
achieving CD18 expression of 61% at 3 months, with the preliminary observation that all nine of nine patients have demonstrated 26% to 87% CD18 expression at timepoints ranging from 3 to 24 months following RP-L102, with stable CD18 expression
levels for each patient subsequent to month 3.
Pyruvate Kinase Deficiency (PKD):
Red blood cell PKD is a rare autosomal recessive disorder resulting from mutations in the pyruvate kinase L/R (“PKLR”) gene encoding for a component of the red blood cell (“RBC”) glycolytic
pathway. PKD is characterized by chronic non-spherocytic hemolytic anemia, a disorder in which RBCs do not assume a normal spherical shape and are broken down, leading to decreased ability to carry oxygen to cells, with anemia severity that can
range from mild (asymptomatic) to severe forms that may result in childhood mortality or a requirement for frequent, lifelong RBC transfusions. The pediatric population is the most commonly and severely affected subgroup of patients with PKD, and
PKD often results in splenomegaly (abnormal enlargement of the spleen), jaundice and chronic iron overload which is likely the result of both chronic hemolysis and the RBC transfusions used to treat the disease. 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 despite the lack of FDA-approved molecularly targeted therapies. Market research indicates the application of gene therapy to broader populations could increase the market
opportunity from approximately 250 to 500 patients per year.
We currently have one ex-vivo LVV-based program targeting PKD, RP-L301. RP-L301 is a clinical stage program that we in-licensed from
CIEMAT. The IND for RP-L301 to initiate the global Phase 1 study cleared in October 2019. This program has been granted US and EMA orphan drug disease designation.
This global Phase 1 open-label, single-arm, clinical trial is expected to enroll six adult and pediatric PKD patients in the U.S. and Europe. The trial will be comprised of three cohorts to
assess RP-L301 in young pediatric (age 8-11), older pediatric (age 12-17) and adult populations. The trial is designed to assess the safety, tolerability, and preliminary activity of RP-L301, and initial safety evaluation will occur in the adult
cohort before evaluation in pediatric patients. Stanford will serve as the lead site in the U.S. for adult and pediatric patients, HNJ will serve as the lead site in Europe for pediatrics, and Hospital Universitario Fundación Jiménez Díaz will
serve as the lead site in Europe for adult patients. In July 2020, we treated the first patient in our clinical trial of RP-L301.
In December 2021, we presented positive clinical data at the 63rd Annual Meeting of ASH. The ASH poster presentation included preliminary data from two adult patients with severe anemia and
substantial transfusion requirements who were treated as of the November 3, 2021 cut-off date. Each of these patients had experience extensive PKD-related disease complications including hepatic iron overload. Both patients have had marked
improvement in hemoglobin levels, from baselines of 7.4 and 7.0 g/dL to 12-month values of 13.3 and 14.8 g/dL respectively; this represents an improvement from severe (Hb <8g/dL) to normal levels. Both patients have been transfusion
independent subsequent to post-treatment hematopoietic reconstitution. Anemia resolution has been accompanied by marked improvement in additional markers of hemolysis, including bilirubin, erythropoietin, and reticulocyte counts. RP-L301 has been
well tolerated in these adult patients, with no drug product related serious adverse events or infusion-related complications observed through 12-months post-treatment. Both patients have reported improved quality of life (QOL) following
treatment with increases on FACT-An and additional designated QOL evaluations sustained through 12 months following therapy.
Infantile Malignant Osteopetrosis (IMO):
IMO is a genetic disorder characterized by increased bone density and bone mass secondary to impaired bone resorption. During normal growth and development small areas of bone are constantly
being broken down by special cells called osteoclasts, then made again by cells called osteoblasts. In IMO, the cells that break down bone (osteoclasts) do not work properly, which leads to the bones becoming thicker and not as healthy. Untreated
IMO patients may suffer from a compression of the bone-marrow space, which results in bone marrow failure, anemia, and increased infection risk due to the lack of production of white blood cells. Untreated IMO patients may also suffer from a
compression of cranial nerves, which transmit signals between vital organs and the brain, resulting in blindness, hearing loss and other neurologic deficits.
IMO represents the autosomal recessive, severe variants of a group of disorders characterized by increased bone density and bone mass secondary to impaired bone resorption. IMO typically presents
in the first year of life and is associated with severe manifestations leading to death within the first decade of life in the absence of allogeneic HSCT, although HSCT results have been limited to-date and notable for frequent graft failure,
GVHD and other severe complications.
Approximately 50% of IMO results from mutations in the TCIRG1 gene, resulting in cellular defects that prevent osteoclast bone resorption. As a result of this defect, bone growth is markedly
abnormal. It is estimated that IMO occurs in 1 out of 250,000-300,000 within the general global population, although incidence is higher in specific geographic regions including Costa Rica, parts of the Middle East, the Chuvash Republic of
Russia, and the Vasterbotten Province of Northern Sweden.
Effective December 2021, the Company made a decision to no longer pursue Rocket-sponsored clinical evaluation of RP-L401; this program was returned to academic innovators. The Company has opted
to focus available resources towards advancement of 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.
Strategy
We seek to bring hope and relief to patients with devastating, undertreated, rare pediatric diseases through the development and commercialization of potentially curative first-in-class gene
therapies. To achieve these objectives, we intend to develop into a fully-integrated biotechnology company. In the near- and medium-term, we intend to develop our first-in-class product candidates, which are targeting devastating diseases with
substantial unmet need, develop proprietary in-house analytics and manufacturing capabilities and continue to commence registration trials for our currently planned programs. In the medium and long-term, we expect to submit our first biologics
license applications (“BLAs”) and establish our gene therapy platform and expand our pipeline to target additional indications that we believe to be potentially compatible with our gene therapy technologies. In addition, during that time, we
believe that our currently planned programs will become eligible for priority review vouchers from the FDA that provide for expedited review. We have assembled a leadership and research team with expertise in cell and gene therapy, rare disease
drug development and product approval.
We believe that our competitive advantage lies in our disease-based selection approach, a rigorous process with defined criteria to identify target diseases. We believe that
this approach to asset development differentiates us as a gene therapy company and potentially provides us with a first-mover advantage.
Financial Overview
Since our inception, we have devoted substantially all of our resources to organizing and staffing the company, business planning, raising capital, acquiring or discovering product candidates and
securing related intellectual property rights, conducting discovery, R&D activities for our product candidates and planning for potential commercialization. We do not have any products approved for sale and have not generated any revenue from
product sales. From inception through March 31, 2022, we raised net cash proceeds of approximately $680.5 million from investors through both equity and convertible debt financing to fund operating activities.
Revenue
To date, we have not generated any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the near future. 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.
Operating Expenses
Research and Development Expenses
Our R&D program expenses consist primarily of external costs incurred for the development of our product candidates. These expenses include:
|
• |
expenses incurred under agreements with research institutions and consultants 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;
|
|
• |
costs related to in-licensing of rights to develop and commercialize our product candidate portfolio.
|
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. 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 direct R&D expenses are tracked on a program-by-program basis for product candidates and consist primarily of external costs, such as research collaborations and third-party manufacturing
agreements associated with our preclinical research, process development, manufacturing, and clinical development activities. Our direct R&D expenses by program also include fees incurred under license agreements. Our personnel, non-program
and unallocated program expenses include costs associated with activities performed by our internal R&D organization and generally benefit multiple programs. These costs are not separately allocated by product candidate and consist primarily
of:
|
• |
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.
|
Our direct R&D expenses consist principally of external costs, such as fees paid to investigators, consultants, laboratories and CROs in connection with our clinical studies, and costs
related to acquiring and manufacturing clinical study materials. 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.
The following table presents R&D expenses tracked on a program-by-program basis as well as by type and nature of expense for the three months ended March 31, 2022 and 2021.
|
|
Three Months Ended March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Direct Expenses:
|
|
|
|
|
|
|
Danon Disease (AAV) RP-A501
|
|
$
|
6,374
|
|
|
$
|
3,799
|
|
Leukocyte Adhesion Deficiency (LVV) RP-L201
|
|
|
3,051
|
|
|
|
6,406
|
|
Fanconi Anemia (LVV) RP-L102
|
|
|
4,530
|
|
|
|
3,595
|
|
Pyruvate Kinase Deficiency (LVV) RP-L301
|
|
|
854
|
|
|
|
1,859
|
|
Infantile Malignant Osteopetrosis (LVV) RP-L401 (1)
|
|
|
190
|
|
|
|
796
|
|
Other product candidates
|
|
|
3,254
|
|
|
|
692
|
|
Total direct expenses
|
|
|
18,253
|
|
|
|
17,147
|
|
Unallocated Expenses
|
|
|
|
|
|
|
|
|
Employee compensation
|
|
|
5,549
|
|
|
|
4,664
|
|
Stock based compensation expense
|
|
|
2,318
|
|
|
|
2,916
|
|
Depreciation and amortization expense
|
|
|
827
|
|
|
|
1,176
|
|
Laboratory and related expenses
|
|
|
1,226
|
|
|
|
647
|
|
Legal and patent fees
|
|
|
-
|
|
|
|
59
|
|
Professional Fees
|
|
|
561
|
|
|
|
466
|
|
Other expenses
|
|
|
2,060
|
|
|
|
1,234
|
|
Total other research and development expenses
|
|
|
12,540
|
|
|
|
11,162
|
|
Total research and development expense
|
|
$
|
30,794
|
|
|
$
|
28,309
|
|
(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.
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. We may never succeed in achieving regulatory approval for any of our product candidates. 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;
|
|
• |
changing standards for regulatory approval; and
|
|
• |
the timing and receipt of any regulatory approvals.
|
We expect R&D expenses to increase for the foreseeable future as we continue to invest in R&D activities related to developing product candidates, including investments in manufacturing,
as our programs advance into later stages of development and as we conduct additional clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful
development of product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of R&D projects or when and to what extent we will generate revenue from the commercialization and sale of any of
our product candidates.
Our future R&D expenses will depend on the clinical success of our product candidates, as well as ongoing assessments of the commercial potential of such product candidates. In addition, we
cannot forecast with any degree of certainty which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital
requirements. We expect our R&D expenses to increase in future periods for the foreseeable future as we seek to further development of our product candidates.
The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and
commercialization, including the uncertainty of:
|
• |
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.
|
A change in the outcome of any of these variables with respect to the development of our product candidates that we may develop could mean a significant change in the costs and timing associated
with the development of our product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials or other testing beyond those that we currently contemplate for the completion of clinical
development of any of our product candidates that we may develop or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the
completion of clinical development of that product candidate.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related benefit costs for personnel, including stock-based compensation and travel expenses for our employees in executive,
operational, finance, legal, business development, and human resource functions. In addition, other significant general and administrative expenses include professional fees for legal, consulting, investor and public relations, auditing, and tax
services as well as other expenses for rent and maintenance of facilities, insurance and other supplies used in general and administrative activities. We expect general and administrative expenses to increase for the foreseeable future due to
anticipated increases in headcount to support the continued advancement of our product candidates. 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 for the three months ended March 31, 2022, is related to our financing lease obligation for the Cranbury, NJ facility. Interest expense for the three months ended March 31,
2021, related to the Convertible Notes and our financing lease obligation for the Cranbury, NJ facility.
Interest Income
Interest income is related to interest earned from investments and cash equivalents.
Critical Accounting Policies and Significant Judgments 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 in conformity with
accounting principles generally accepted in the United States (“US GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors
that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions. 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.
Our significant accounting policies are described in more detail in our 2021 Form 10-K.
Results of Operations
Comparison of the Three Months Ended March 31, 2022 and 2021
|
|
Three Months Ended March 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
Change
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
30,794
|
|
|
$
|
28,309
|
|
|
$
|
2,485
|
|
General and administrative
|
|
|
11,770
|
|
|
|
10,913
|
|
|
|
857
|
|
Total operating expenses
|
|
|
42,564
|
|
|
|
39,222
|
|
|
|
3,342
|
|
Loss from operations
|
|
|
(42,564
|
)
|
|
|
(39,222
|
)
|
|
|
(3,342
|
)
|
Research and development incentives
|
|
|
-
|
|
|
|
500
|
|
|
|
(500
|
)
|
Interest expense
|
|
|
(464
|
)
|
|
|
(1,729
|
)
|
|
|
1,265
|
|
Interest and other income, net
|
|
|
623
|
|
|
|
911
|
|
|
|
(288
|
)
|
Amortization of premium on investments - net
|
|
|
(577
|
)
|
|
|
(639
|
)
|
|
|
62
|
|
Total other expense, net
|
|
|
(418
|
)
|
|
|
(957
|
)
|
|
|
539
|
|
Net loss
|
|
$
|
(42,982
|
)
|
|
$
|
(40,179
|
)
|
|
$
|
(2,803
|
)
|
Research and Development Expenses
R&D expenses increased $2.5 million to $30.8 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. The increase in R&D expenses was
primarily driven by an increase in laboratory supplies of $1.3 million, an increase in compensation and benefits of $0.8 million due to increased R&D headcount, an increase in manufacturing and development costs of $0.6 million, offset by a
decrease in R&D non-cash stock-based compensation expense of $0.6 million.
General and Administrative Expenses
G&A expenses increased $0.9 million to $11.8 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. The increase in G&A expenses was
primarily driven by an increase in commercial preparation expenses which consists of commercial strategy, medical affairs, market development and pricing analysis of $1.1 million, an increase in
compensation and benefits of $0.3 million due to increased G&A headcount, an increase in legal expense of $0.2 million, offset by a decrease of $1.0 million in G&A stock-based compensation expense.
Other Expense, Net
Other expense, net decreased by $0.5 million to $0.4 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. The decrease in other expense, net
was primarily driven by reduced interest expense of $1.3 million associated with the 2022 Convertible Notes that were redeemed in April 2021 and the 2021 Convertible Notes that were converted in August 2021, as well as a decrease of $0.5 million
in research and development incentives due to the receipt of the New York State R&D tax credit in 2021.
Liquidity, Capital Resources and Plan of Operations
We have not generated any revenue and have incurred losses since inception. 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. Drug candidates currently under development will require significant additional R&D efforts, including extensive preclinical and clinical testing and regulatory approval,
prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities.
Our drug candidates are in the development and clinical stage. There can be no assurance that our R&D will be successfully completed, that adequate protection for our intellectual property
will be obtained, that any products developed will obtain necessary government approval or that any approved products will be commercially viable. 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.
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 had net losses of $42.9 million for the three months ended March 31, 2022, and $169.1 million for the year ended December 31, 2021. As of March 31, 2022 and December 31, 2021, we had an accumulated deficit of $534.9 million and
$491.9 million, respectively. As of March 31, 2022, we had $346.6 million of cash, cash equivalents and investments. We expect such resources would be sufficient to fund our operating expenses and capital
expenditure requirements into the first half of 2024. We have funded our operations primarily through the sale of our equity and debt securities.
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. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens
or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation, or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not
favorable to us or our stockholders. Our failure to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies.
|
|
Three Months Ended March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Net cash used in operating activities
|
|
$
|
(39,223
|
)
|
|
$
|
(24,283
|
)
|
Net cash used in investing activities
|
|
|
(62,995
|
)
|
|
|
(29,174
|
)
|
Net cash provided by financing activities
|
|
|
76
|
|
|
|
8,792
|
|
Net decrease in cash, cash equivalents and restricted cash
|
|
$
|
(102,142
|
)
|
|
$
|
(44,665
|
)
|
Operating Activities
During the three months ended March 31, 2022, operating activities used $39.2 million of cash, primarily resulting from our net loss of $43.0 million offset by net non-cash charges of $8.2
million, including non-cash stock-based compensation expense of $6.3 million, accretion of discount on investments of $0.6 million, and depreciation and amortization expense of $1.3 million. Changes in our operating assets and liabilities for the
three months ended March 31, 2022, consisted of a decrease in accounts payable and accrued expenses of $0.5 million and a decrease in our prepaid expenses of $3.9 million.
During the three months ended March 31, 2021, operating activities used $24.3 million of cash, primarily resulting from our net loss of $40.2 million offset by net non-cash charges of $9.8
million, including non-cash stock-based compensation expense of $7.9 million and depreciation of $0.7 million. Changes in our operating assets and liabilities for the three months ended March 31, 2021 consisted of an increase in accounts payable
and accrued expenses for $7.0 million and a decrease in our prepaid expenses of $0.8 million.
Investing Activities
During the three months ended March 31, 2022, investing activities used $63.0 million of cash, primarily resulting from proceeds of $82.0 million from the maturities of investments, offset by
purchases of investments of $143.0 million, and purchases of property and equipment of $2.0 million.
During the three months ended March 31, 2021, investing activities used $29.2 million of cash, primarily resulting from proceeds of $75.0 million from the maturities of investments, offset by
purchases of investments of $103.8 million, and purchases of property and equipment of $0.3 million.
Financing Activities
During the three months ended March 31, 2022, financing activities provided $0.1 million of cash, consisting of issuance of common stock, pursuant to exercises of stock options and restricted
stock units.
During the three months ended March 31, 2021, financing activities provided $8.8 million of cash, consisting of issuance of common stock, pursuant to exercises of stock options.
Contractual Obligations and Commitments
There were no material changes outside the ordinary course of our business to the contractual obligations specified in the table of contractual obligations included in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Form 10-K. Information regarding contractual obligations and commitments may be found in Note 10 of our unaudited consolidated condensed financial statements
in this Quarterly Report on Form 10-Q. 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.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3 of our unaudited consolidated
condensed financial statements in this Quarterly Report on Form 10-Q.