ROCKET PHARMACEUTICALS, INC. - Annual Report: 2022 (Form 10-K)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM 10-K

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(Mark One)

For the fiscal year ended December 31, 2022

OR

For the transition period from                  to

Commission File Number: 001-36829

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Rocket Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in Its Charter)

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(609) 659-8001

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ☐   No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.   Yes ☐   No   ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐    No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2022 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $644.3 million, based upon the closing price on the NASDAQ Global Market reported for such date.

As of February 22, 2023, there were 79,347,760 shares of common stock, $0.01 par value per share, outstanding.

Documents Incorporated by Reference

Part III of this annual report on Form 10-K incorporates by reference information (to the extent specific sections are referred to herein) from the registrant’s definitive proxy statement for its 2023 Annual Meeting of Stockholders (the “Proxy Statement”). The Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days of the end of the period covered by this Annual Report on Form 10-K.

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PART I.		Page
Item 1.	Business	5
Item 1A.	Risk Factors	32
Item 1B.	Unresolved SEC Comments	62
Item 2.	Properties	62
Item 3.	Legal Proceedings	63
Item 4.	Mine Safety Disclosures	63
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	63
Item 6.	Reserved	64
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	64
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	73
Item 8.	Financial Statements and Supplementary Data	73
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	73
Item 9A.	Controls and Procedures	73
Item 9B.	Other Information	74
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	74
Item 11.	Executive Compensation	74
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	74
Item 13.	Certain Relationships and Related Transactions, and Director Independence	74
Item 14.	Principal Accountant Fees and Services	75
PART IV
Item 15.	Exhibits and Financial Statement Schedules	75
Item 16.	Form 10-K Summary	77
Signatures		79

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our ability to meet our anticipated milestones for our various drug candidates with respect to the initiation and timing of clinical studies;

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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”);

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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;

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our competitors’ activities, including decisions as to the timing of competing product launches, pricing and discounting;

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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;

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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;

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our ability to establish key collaborations and vendor relationships for our product candidates and any other future product candidates;

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our ability to develop our sales and marketing capabilities or enter into agreements with third parties to sell and market any of our product candidates;

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our ability to obtain additional funding to conduct our planned research and development efforts;

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Our integration of an acquired business involves a number of risks, including the possibility that the integration process could result in the loss of key employees; the disruption of our ongoing business; or inconsistencies in standards, controls, procedures, or policies, in each case, that could adversely affect our ability to achieve the anticipated benefits of the acquisition.

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our ability to successfully develop and commercialize any technology that we may in-license or products we may acquire;

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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;

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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;

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anticipated trends and challenges in our business and the markets in which we operate;

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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;

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the impact of global economic and political developments on our business, including rising inflation and capital market disruptions, the current conflict in Ukraine, economic sanctions and economic slowdowns or recessions that may result from such developments which could harm our research and development efforts as well as the value of our common stock and our ability to access capital markets;

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our estimates regarding our capital requirements; and

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our ability to obtain additional financing and raise capital as necessary to fund operations or pursue business opportunities.

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The outbreak of SARS-CoV-2, which causes COVID-19, has and may continue to adversely impact our business, including our preclinical and clinical studies.

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If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any of our product candidates, we may not be successful in commercializing those product candidates if and when they are approved.

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If we fail to obtain additional funding to conduct our planned research and development efforts, we could be forced to delay, reduce, or eliminate our product development programs or commercial development efforts.

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We have never generated any revenue from product sales and may never be profitable.

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We may encounter substantial delays in commencement, enrollment or completion of our clinical trials or may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities, which could prevent us from commercializing our current and future product candidates on a timely basis, if at all.

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If we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit, or terminate planned clinical trials, the occurrence of any of which would harm our business, financial condition, results of operations and prospects.

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Initial or interim results in our ongoing clinical studies may not be indicative of results obtained when these studies are completed. Furthermore, success in early clinical studies may not be indicative of results obtained in later studies.

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Even if we successfully complete the necessary preclinical studies and clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize a product candidate and the approval may be for a narrower indication than we seek.

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We may never obtain approval for any of our product candidates in the United States or the European Union, or other jurisdictions, which would limit our ability to realize our full market potential.

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Even if we obtain regulatory approval for a product candidate, we will remain subject to ongoing regulatory obligations and continued regulatory scrutiny.

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Our product candidates may cause undesirable and unforeseen side effects or be perceived by the public as unsafe, which could delay or prevent their advancement into clinical trials or regulatory approval, limit the commercial potential or result in significant negative consequences.

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We could experience production problems that result in delays in our development or commercialization programs, limit the supply of our products or otherwise harm our business.

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We have limited experience in manufacturing, and there can be no assurance that we will be able to successfully manufacture products.

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Our manufacturing facilities are subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply with the regulations or maintain the approvals.

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Our ability to successfully develop and commercialize our product candidates will substantially depend upon the availability of reimbursement funds for the costs of the resulting drugs and related treatments.

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Even if approved, we may not successfully commercialize our product candidates.

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We may not be successful in our efforts to expand our pipeline of additional product candidates.

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The success of our research and development activities, clinical testing, and commercialization, upon which we primarily focus, is uncertain.

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We expect to rely on third parties to conduct some or all aspects of our drug product manufacturing, research, and preclinical and clinical testing, and these third parties may not perform satisfactorily.

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Our business could suffer if it loses the services of, or fails to attract, key personnel.

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We may need to expand our organization and may experience difficulties in managing this growth, which could disrupt our operations.

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Our employees, principal investigators, consultants, and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading which could harm our business.

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Given our commercial relationships outside of the United States, in particular the European Union, a variety of risks associated with international operations could harm our business.

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If we are unable to obtain and maintain adequate patent protection for products and related technology, our ability to successfully commercialize our products may be harmed.

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If we breach our license agreements, it could have a material adverse effect on our commercialization efforts for our product candidates.

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We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.

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If we are unable to obtain or protect intellectual property rights related to our product candidates, we may not be able to compete effectively in our markets.

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We may fail to realize the anticipated benefits of potential acquisitions or business combinations, such as the acquisition of Renovacor.

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RTW Investments, LP, our largest stockholder, may have the ability to significantly influence matters submitted to stockholders for approval.

Item 1.

Business

Term	Definition	Optimal Ranges
	LV Therapy (hematopoietic disorders)
CD34+ cell(s)	Hematopoietic Stem Cell (most CD34+ cells are not true stem cells, but this continues to be the most clinically useful measure)	Will depend on underlying disorder, generally > 1 million CD34+ cells/kg.
Vector copy number (VCN) [product]	The average number of gene copies per infused stem cell (as determined by DNA analysis; this is an average ratio, not a precise value)	0.5 to 2 has been target in some LV clinical studies (5.0 generally considered maximum)
Vector copy number (VCN) [in vivo, post-treatment]	The average number of gene copies per peripheral blood or bone marrow cell (as determined by DNA analysis; this is an average ratio, not a precise value)	Will depend on underlying disorder, but many disorders may be correctable with in vivo VCNs << 1.0
	AAV Therapy
Vector copy number (VCN) [in vivo, post-treatment]	The average number of gene copies per cell in the organ of interest (as determined by DNA analysis; this is an average ratio, not a precise value)	Will depend on underlying disorder, but vivo VCNs << 1.0

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New York Heart Association (“NYHA”) Functional Classification 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. Class III and IV are considered more severe or advanced heart failure.

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Brain natriuretic peptide (“BNP”) is a blood-based evaluation and a key marker of heart failure with prognostic significance in CHF and cardiomyopathies. Elevations in BNP are strongly associated with worsening heart failure and poor outcomes in cardiovascular disease.

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High sensitivity troponin I (“hsTnI”) is a blood-based evaluation and a key marker of cardiac injury, one that is (like BNP) frequently elevated in DD patients and has been shown to be markedly elevated in patients with advanced stage disease.

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Echocardiographic measurements of heart thickness, most notably, left ventricular mass (“LVM”) and maximal left ventricular wall thickness (“MLVWT”), indicate the degree of hypertrophy present in the heart.

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Kansas City Cardiovascular Questionnaire (“KCCQ”) is a validated, patient-reported outcomes assessment that measures a patients perception of their heart failure symptoms, impact of disease on physical and social function, and the impact of their heart failure on overall health status and quality of life. Assessment scores range from 0 (very poor health status) to 100 (excellent health status). Changes in KCCQ score of +/- 5 points are considered meaningful and have been shown to correlate with outcomes.

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Histologic examination of endomyocardial biopsies via hematoxylin and eosin (“H&E”) histology and electron microscopy is used to detect evidence of DD-associated tissue derangements, including the presence of autophagic vacuoles and disruption of myofibrillar architecture, each of which are characteristic of DD-related myocardial damage.

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LAMP2B gene expression in endomyocardial biopsy samples is measured via both immunohistochemistry and Western blot and confirms the presence of LAMP2B protein in DD cardiac tissue following RP-A501 treatment.

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completion of non-clinical laboratory tests, animal studies and formulation studies conducted according to Good Laboratory Practice (“GLP”), or other applicable regulations;

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submission of an IND, which allows clinical trials to begin unless FDA objects within 30 days;

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performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug or biologic for its intended use or uses conducted in accordance with FDA regulations and Good Clinical Practices (“GCP”), which are international ethical and scientific quality standards meant to ensure that the rights, safety and well-being of trial participants are protected, and that the integrity of the data is maintained;

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preparation and submission to the FDA of a BLA;

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submission of a user fee for FDA review of the BLA;

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review of the product by an FDA advisory committee, where appropriate or if applicable;

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satisfactory completion of pre-approval inspection of manufacturing facilities and clinical trial sites at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements, and if applicable, the FDA’s current Good Tissue Practice (“cGTP”) requirements, and of selected clinical trial sites to assess compliance with GCP requirements; and

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FDA approval of a BLA which must occur before a biologic can be marketed or sold.

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In August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals for deficit reduction of at least $1.2 trillion for the years 2013 through 2021. The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction, which triggered the legislation’s automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of, up to 2% per fiscal year, and, due to subsequent legislative amendments, will remain in effect through 2030 unless Congress takes additional action. These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030 unless additional action is taken by Congress.

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On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.

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On May 30, 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

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On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.

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a second applicant can establish that its product, although similar to the authorized product, is safer, more effective, or otherwise clinically superior;

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the marketing authorization holder for the authorized product consents to a second orphan medicinal product application; or

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the marketing authorization holder for the authorized product cannot supply enough orphan medicinal product.

Item 1A.

Risk Factors

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delays or difficulties in enrolling patients in our clinical trials;

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delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

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diversion of healthcare resources from the conduct of clinical trials such as patient follow up visits, the diversion of hospitals ability to serve as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

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interruption of clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures (particularly any procedures that may be deemed non-essential), which may impact the integrity of subject data and clinical study endpoints;

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delays or difficulties in the buildout of our in-house manufacturing;

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delays or difficulties in securing manufacturing slots or materials;

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delays or difficulties in advancing preclinical research requiring in-person laboratory work at our facility at academic partners or contract research facilities; and

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interruption or delays in the operations of the FDA and/ comparable foreign regulatory agencies, which may impact approval timelines.

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the timing of enrollment, commencement, completion, and results of our preclinical studies and clinical trials;

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costs for seeking regulatory approval for our product candidates in the U.S., Europe and other jurisdictions;

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the production of LV and AAV gene therapy product candidates to support preclinical and clinical needs;

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the results of our preclinical studies for our current product candidates and any subsequent clinical trials;

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the scope, progress, results, and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;

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the costs, timing, and outcome of regulatory review of our product candidates;

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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;

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the costs of manufacturing clinical-grade and commercial-grade product to support our clinical trials and commercial launch, if approved;

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the ability to receive additional non-dilutive funding, including grants from organizations and foundations;

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the revenue, if any, received from commercial sale of its products, should any of its product candidates receive marketing approval;

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the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

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our ability to establish and maintain collaborations on favorable terms, if at all;

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our ability to successfully integrate any complementary business or technology we may acquire;

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the extent to which we acquire or in-license other product candidates and technologies; and

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the timing, receipt, and amount of sales of, or milestone payments related to our royalties on, current or future product candidates, if any.

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completing research and preclinical and clinical development of our product candidates;

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seeking and obtaining regulatory and marketing approvals for product candidates for which we successfully complete clinical studies;

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developing a sustainable, commercial-scale, reproducible, and transferable manufacturing process for our vectors and product candidates;

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establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support preclinical and clinical development and the market demand for our product candidates, if approved;

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launching and commercializing product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales force, marketing and distribution infrastructure;

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obtaining and maintaining a favorable market protection for our products, e.g., obtaining (and maintaining) orphan designation with market exclusivity in the EU, which in turn may depend on activities of third parties and other factors on which we have no influence;

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obtaining sufficient pricing and reimbursement for our product candidates from private and governmental payors;

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obtaining market acceptance of our product candidates and gene therapy as a viable treatment option;

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addressing any competing technological and market developments;

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identifying and validating new gene therapy product candidates;

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negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; and

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maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how.

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failure of patients to enroll in the studies at the rate we expect;

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ineffectiveness of our product candidates;

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patients experiencing unexpected side effects or other safety concerns being raised during treatment;

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changes in governmental regulations or administrative actions;

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failure to conduct studies in accordance with required clinical practices;

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inspection of clinical study operations or study sites by the FDA, the EMA or other regulatory authorities, resulting in a clinical hold;

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insufficient financial resources;

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insufficient supplies of drug product to treat patients in our ongoing and planned clinical trials;

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political unrest or natural disasters at domestic or foreign clinical sites;

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a shutdown of the U.S. government, including the FDA;

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public health crises such as pandemics and epidemics.

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difficulty in establishing or managing relationships with CROs and physicians;

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different standards for the conduct of clinical trials;

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absence in some countries of established groups with sufficient regulatory expertise for review of LV and AAV gene therapy protocols;

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our inability to locate qualified local partners or collaborators for such clinical trials; and

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the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment.

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severity of the disease under investigation;

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design of the study protocol;

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size of the patient population;

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eligibility criteria for the study in question;

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perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies;

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proximity and availability of clinical study sites for prospective patients;

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availability of competing therapies and clinical studies;

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efforts to facilitate timely enrollment in clinical studies;

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patient referral practices of physicians; and

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ability to monitor patients adequately during and after treatment.

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regulatory authorities may suspend or withdraw approvals of such product candidate;

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regulatory authorities may require additional warnings on the label;

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we may be required to change the way a product candidate is administered or conduct additional clinical trials; and

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our reputation may suffer.

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the second applicant can establish in its application that its medicinal product, although similar to the orphan medicinal product already authorized, is safer, more effective or otherwise clinically superior;

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the holder of the marketing authorization for the original orphan medicinal product consents to a second orphan medicinal product application; or

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the holder of the marketing authorization for the original orphan medicinal product cannot supply sufficient quantities of orphan medicinal product.

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issue a warning letter asserting that we are in violation of the law;

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seek an injunction or impose civil or criminal penalties or monetary fines;

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suspend any ongoing clinical studies;

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refuse to approve a pending marketing application, such as a BLA or supplements to a BLA submitted by us;

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seize products; or

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refuse to allow us to enter into supply contracts, including government contracts.

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a covered benefit under its health plan;

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safe, effective, and medically necessary;

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appropriate for the specific patient;

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cost-effective; and

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neither experimental nor investigational.

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the efficacy and safety of such product candidates as demonstrated in preclinical studies and clinical trials;

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the potential and perceived advantages of product candidates over alternative treatments;

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the cost of our treatment relative to alternative treatments;

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the clinical indications for which the product candidate is approved by the FDA or the EMA;

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patient awareness of, and willingness to seek, gene therapy;

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the willingness of physicians to prescribe new therapies;

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the willingness of physicians to undergo specialized training with respect to administration of our product candidates;

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the willingness of the target patient population to try new therapies;

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the prevalence and severity of any side effects;

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product labeling or product insert requirements of the FDA, the EMA or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling;

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relative convenience and ease of administration;

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the strength of marketing and distribution support;

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the timing of market introduction of competitive products;

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publicity concerning our products or competing products and treatments; and

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sufficient third-party payor coverage and reimbursement.

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the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;

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reduced control as a result of using third-party manufacturers for certain aspects of manufacturing activities;

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the risk that these activities are not conducted in accordance with our study plans and protocols;

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termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; and

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disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier.

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the scope of rights granted under the license agreement;

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whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

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our right to sublicense patent and other intellectual property rights to third parties under collaborative development relationships;

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our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of is product candidates, and what activities satisfy those diligence obligations;

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the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and

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whether and the extent to which inventors are able to contest the assignment of their rights to our licensors.

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others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own;

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we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent applications that we license or may own in the future;

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we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions;

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others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or in-licensed intellectual property rights;

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our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

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we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates;

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we cannot ensure that any patents issued to us, or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages;

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we cannot ensure that our commercial activities or product candidates will not infringe upon the patents of others;

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we cannot ensure that we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own, or license expire;

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we may not develop additional proprietary technologies that are patentable;

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the patents or intellectual property rights of others may harm our business; and

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we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.

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issue equity securities that would dilute our current stockholders’ percentage ownership;

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incur substantial debt that may place strains on our operations;

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assume substantial actual or contingent liabilities;

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reprioritize our development programs and even cease development and commercialization of certain of our product candidates; or

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merge with, or otherwise enter into a business combination with, another company in which our stockholders would receive cash or shares of the other company on terms that certain of our stockholders may not deem desirable.

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diversion of management time and focus from operating our business to addressing integration challenges;

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coordination of R&D efforts;

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changes in relationships with strategic partners as a result of any product acquisitions or strategic positioning;

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cultural challenges associated with integrating employees;

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the need to implement or improve controls, procedures, and policies at any joint venture;

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liability for activities of any partnered company prior to any strategic alliance or joint venture, including intellectual property infringement claims, violation of laws, commercial disputes, tax liabilities, and other known liabilities;

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unanticipated write-offs or charges; and

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litigation or other claims, including claims from employees, customers, former stockholders or other third parties

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different regulatory requirements for approval of drugs and biologics in foreign countries;

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reduced protection for intellectual property rights;

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unexpected changes in tariffs, trade barriers and regulatory requirements;

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economic weakness, including inflation, or political instability in particular foreign economies and markets;

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compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad;

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foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

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workforce uncertainty in countries where labor unrest is more common than in the United States;

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shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

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business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires, public health crises such as pandemics and epidemics, or from economic or political instability;

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compliance with foreign laws, regulations, standards, and regulatory guidance governing the collection, use, disclosure, retention, security and transfer of personal data, including the GDPR and UK GDPR; and

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greater difficulty with enforcing our contracts in jurisdictions outside of the United States.

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results of clinical trials of our product candidates or those of our competitors;

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the success of competitive products or technologies;

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commencement or termination of collaborations;

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regulatory or legal developments in the United States and other countries;

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developments or disputes concerning patent applications, issued patents or other proprietary rights;

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the recruitment or departure of key personnel;

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the level of expenses related to any of our product candidates or clinical development programs;

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the results of our efforts to discover, develop, acquire or in-license additional product candidates;

•

actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

•

negative publicity around gene therapy in general, or our product candidates;

•

variations in our financial results or those of companies that are perceived to be similar to us;

•

changes in the structure of healthcare payment systems;

•

macroeconomic conditions and the economic impact of the COVID 19 pandemic , inflation and rising interest rates and global conflicts, including the Russia-Ukraine war;

•

market conditions in the pharmaceutical and biotechnology sectors; and

•

general economic, industry and market conditions.

•

permit only the Board of Directors to establish the number of directors;

•

require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;

•

prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; and

•

establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Item 1B.

Unresolved SEC Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4.

Mine Safety Disclosures

Item 6.

Reserved

Item 7.

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; 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.

		For the Years Ended December 31,
		2022				2021				2020
Direct Expenses:
Danon Disease (AAV) RP-A501		$	28,524			$	15,804			$	18,459
Plakophilin-2 Arrhythmogenic Cardiomyopathy (AAV) RP-A601			11,724				1,071				122
Leukocyte Adhesion Deficiency (LV) RP-L201			20,617				24,222				5,531
Fanconi Anemia (LV) RP-L102			23,917				15,453				15,015
Pyruvate Kinase Deficiency (LV) RP-L301			2,744				4,206				4,990
Infantile Malignant Osteopetrosis (LV) RP-L401 (1)			271				2,236				2,057
Other product candidates			3,580				3,504				1,199
Total direct expenses			91,377				66,496				47,373
Unallocated Expenses
Employee compensation		$	32,274			$	20,780			$	14,137
Non-cash R&D expense related to the issuance of warrants			-				12,781				26,562
Stock based compensation expense			12,465				11,954				7,121
Depreciation and amortization expense			4,037				5,130				2,770
Laboratory and related expenses			17,405				3,359				4,240
Professional Fees			3,601				1,797				1,443
Other expenses			4,411				3,179				1,792
Total other research and development expenses			74,193				58,980				58,065
Total research and development expense		$	165,570			$	125,476			$	105,438

•

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.

		For the Years Ended December 31,
		2022				2021				Change
						(in thousands)
Operating expenses:
Research and development		$	165,570			$	125,476			$	40,094
General and administrative			58,773				41,772				17,001
Total operating expenses			224,343				167,248				57,095
Loss from operations			(224,343	)			(167,248	)			(57,095	)
Research and development incentives			500				1,000				(500	)
Interest expense			(1,862	)			(2,977	)			1,115
Interest and other income, net			3,889				3,068				821
Amortization of premium on investments, net			(47	)			(2,912	)			2,865
Total other income (expense), net			2,480				(1,821	)			4,301
Net loss		$	(221,863	)		$	(169,069	)		$	(52,794	)

		For the Years Ended December 31,
		2021				2020				Change
						(in thousands)
Operating expenses:
Research and development		$	125,476			$	105,438			$	20,038
General and administrative			41,772				28,865				12,907
Total operating expenses			167,248				134,303				32,945
Loss from operations			(167,248	)			(134,303	)			(32,945	)
Research and development incentives			1,000				-				1,000
Interest expense			(2,977	)			(6,967	)			3,990
Interest and other income, net			3,068				2,150				918
Amortization of premium on investments, net			(2,912	)			(580	)			(2,332	)
Total other expense, net			(1,821	)			(5,397	)			3,576
Net loss		$	(169,069	)		$	(139,700	)		$	(29,369	)

		For the Years Ended December 31,
		2022				2021				2020
Net cash used in operating activities		$	(178,142	)		$	(121,163	)		$	(74,640	)
Net cash (used in) provided by investing activities			(69,326	)			18,853				(96,591	)
Net cash provided by financing activities			155,288				37,681				282,989
Net (decrease) increase in cash, cash equivalents and restricted cash		$	(92,180	)		$	(64,629	)		$	111,758

•

CROs in connection with performing R&D services on our behalf;

•

investigative sites or other providers in connection with clinical trials;

•

vendors in connection with non-clinical development activities; and

•

vendors related to product manufacturing, development and distribution of clinical supplies.

Item 7A.

Quantitative and Qualitative Disclosures about Market Risks

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

•

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

•

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Item 9B.

Other Information

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10.

Directors, Executive Officers, and Corporate Governance

Item 11.

Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13.

Certain Relationships and Related Party Transactions, and Director Independence

Item 14.

Principal Accountant Fees and Services

Item 15.

Exhibits, Financial Statements and Schedules

Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2022 and 2021	F-5
Consolidated Statements of Operations for the Years Ended December 31, 2022, 2021 and 2020	F-6
Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2022, 2021 and 2020	F-7
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2022, 2021 and 2020	F-8
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020	F-9
Notes to Consolidated Financial Statements	F-10

Exhibit	Exhibit Index
Number	Description of Exhibit
2.1	Agreement and Plan of Merger and Reorganization, dated as of September 12, 2017, by and among Inotek Pharmaceuticals Corporation, Rocket Pharmaceuticals, Ltd. and Rome Merger Sub (Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 13, 2017, and incorporated herein by reference)
2.2	Agreement and Plan of Merger, dated September 19, 2022, by and among Rocket Pharmaceuticals, Renovacor, Inc., Zebrafish Merger Sub, Inc. and Zebrafish Merger Sub, LLC (Filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2022, and incorporated herein by reference)
3.1	Seventh Amended and Restated Certificate of Incorporation of Rocket Pharmaceuticals, Inc., effective as of February 23, 2015 (Filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2015, and incorporated herein by reference)
3.2	Certificate of Amendment (Reverse Stock Split) to the Seventh Amended and Restated Certificate of Incorporation of the Registrant, effective as of January 4, 2018 (Filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 5, 2018, and incorporated herein by reference)
3.3	Certificate of Amendment (Name Change) to the Seventh Amended and Restated Certificate of Incorporation of the Registrant, effective January 4, 2018 (Filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 5, 2018, and incorporated herein by reference)
3.4	Certificate of Amendment to the Seventh Amended and Restated Certificate of Incorporation of the Registrant, effective June 25, 2018 (Filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on June 25, 2019, and incorporated herein by reference)
3.5	Amended and Restated By-Laws of Rocket Pharmaceuticals, Inc., effective as of March 29, 2018 (Filed as Exhibit 3.4 to the Company's registration statement on Form 8-A/A, as amended, filed with the SEC on January 11, 2018, and incorporated herein by reference)
4.1	Form of Common Stock Certificate of Rocket Pharmaceuticals, Inc. (Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 5, 2018, and incorporated herein by reference)
4.2	Description of Securities (Filed as Exhibit 4.8 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
10.1#	2004 Stock Option and Incentive Plan (Filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (333-199859), filed with the SEC on November 5, 2014, as amended, and incorporated herein by reference)
10.2#	Rocket Pharmaceuticals, Inc. Second Amended and Restated 2014 Stock Option and Incentive Plan (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 25, 2018, and incorporated herein by reference)
10.3#	Form of Incentive Stock Option Agreement (Employees) (Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2018, and incorporated herein by reference)
10.4#	Form of Non-Qualified Stock Option Agreement (Employees) (Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2018, and incorporated herein by reference)
10.5#	Form of Non-Qualified Stock Option Agreement (Non-Employee Directors) (Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2018, and incorporated herein by reference)
10.6#	Form of Non-Qualified Stock Option Agreement (Consultants) (Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2018, and incorporated herein by reference)
10.6.1#	Form of Restricted Stock Unit Award Agreement (Filed as Exhibit 10.6.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
10.7#	Rocket Pharmaceuticals, Ltd. 2015 Share Option Plan (Filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 7, 2018, and incorporated herein by reference)
10.8#	Letter Agreement, dated as of July 28, 2014, by and between the Registrant and David P. Southwell (Filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (333-199859), filed with the SEC on November 5, 2014, as amended, and incorporated herein by reference)
10.9#	Amendment to Offer Letter, effective as of September 1, 2017, by and between Inotek and David Southwell (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on September 1, 2017, and incorporated herein by reference)
10.10#	Offer Letter, dated September 29, 2017, by and between the Registrant and Raj Prabhakar.
10.11#	Offer Letter, dated April 29, 2021, by and between the registrant and Isabel Carmona.
10.12**	Amended and Restated Lease Agreement, dated as of June 26, 2019, by and between Rocket Pharmaceuticals, Inc. and Cedar Brook 12 Corporate Center, L.P. (Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 8, 2018, and incorporated herein by reference)
10.13#	Rocket Pharmaceuticals, Inc. Amended and Restated 2014 Employee Stock Purchase Plan (Filed as Exhibit 10.10 to the Company’s Annual Report on Form 8-K, filed with the SEC on March 7, 2018, and incorporated herein by reference)
10.14#	Form of Indemnification Agreement, to be entered into between the Registrant and its directors (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 5, 2018, and incorporated herein by reference)
10.15#	Form of Indemnification Agreement, to be entered into between the Registrant and its officers (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 5, 2018, and incorporated herein by reference)
10.16#	Form of Severance and Change of Control Agreements, to be entered into between the Registrant and certain of its officers (Filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
10.17	Agreement of Lease, dated as of June 6, 2018, by and between Rocket Pharmaceuticals, Inc. and ESRT Empire State Building, L.L.C., (Filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2018, and incorporated herein by reference)

10.18†	License Agreement, dated as of November 19, 2018, by and between Rocket Pharmaceuticals, Ltd. and REGENXBIO Inc. (Filed as Exhibit 10.26 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 8, 2019, and incorporated herein by reference)
10.19	Warrant to Purchase Shares of Common Stock, dated as of December 21, 2020, by and between the Registrant and Neptune Consulting, LLC. (Filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
10.20	Warrant to Purchase Shares of Series Preferred Stock, dated as of June 28, 2013, by and between Inotek Pharmaceuticals Corporation and Horizon Technology Finance Corporation (Filed as Exhibit 10.24 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
10.21	Warrant to Purchase Shares of Series Preferred Stock dated as of June 28, 2013, by and between Inotek Pharmaceuticals Corporation and Fortress Credit Co LLC (Filed as Exhibit 10.25 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
10.22	Warrant to Purchase Shares of Common Stock, dated as of December 17, 2021, by and between the Registrant and Neptune Consulting, LLC. (First Indication)
10.23	Warrant to Purchase Shares of Common Stock, dated as of December 17, 2021, by and between the Registrant and Neptune Consulting, LLC. (Second Indication)
10.24	Securities Purchase Agreement, dated as of August 27, 2021, by and among Rocket Pharmaceuticals, Inc., and each of those persons listed as a Purchaser on the Schedule of Purchasers attached as Schedule I thereto (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 30, 2021, and incorporated herein by reference)
10.25	Registration Rights Agreement, dated as of August 27, 2021, by and among Rocket Pharmaceuticals, Inc., and each of those persons listed as an Investor on the Schedule of Inventors attached as Schedule A thereto (Filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on August 30, 2021, and incorporated herein by reference)
10.26	Sales Agreement, dated February 28, 2022, by and between the Company and Cowen and Company, LLC (Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 1, 2022, and incorporated herein by reference)
21.1	List of Subsidiaries (Filed as Exhibit 21.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 1, 2021, and incorporated herein by reference)
23.1*	Consent of EisnerAmper LLP
24.1*	Power of Attorney (included in the signature page)
31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Link Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in exhibit 101)

†

The certification attached as Exhibit 32.1 accompanying this Annual Report on Form 10- K is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Rocket Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.

Rocket Pharmaceuticals, Inc.

Index to Consolidated Financial Statements

Contents

Rocket Pharmaceuticals, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)