Rocket Stock Down More Than 30% in Past Six Months: Here's Why

Shares of Rocket Pharmaceuticals RCKT have plunged 32.9% in the past six months compared with the industry's decline of 3.4%.

The company is developing its gene therapy candidate, Kresladi (marnetegragene autotemcel) to treat patients with severe leukocyte adhesion deficiency-I (LAD-I), a rare genetic disorder.

In June 2024, the FDA issued a complete response letter to Rocket's biologics license application (BLA) seeking approval for Kresladi to treat LAD-I.

Per the CRL, the FDA sought "limited" additional information on the Chemistry Manufacturing and Controls, which is part of the BLA submission. The goal of CMC is to ensure that every batch of the final product is identical in terms of its safety, purity, potency and performance.

This was the primary reason for the stock's decline in the said time.

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Setbacks in Kresladi Development Plans & Other Pipeline Updates

The abovementioned CRL is the second time the FDA has requested additional information from the company on Kresladi's CMC. In February 2024, the FDA extended the review period of the Kresladi BLA by an additional three months to review the CMC information.

Apart from Kresladi, Rocket is also evaluating two other gene therapies, namely RP-L102 and RP-L301, for the treatment of fanconi anemia and pyruvate kinase deficiency, respectively. Both candidates are in mid-stage development.

RCKT is evaluating another candidate, RP-A501, in a phase II study for the treatment of Danon disease.

The successful development of Kresladi, along with other pipeline candidates. remains the key focus area for Rocket as the company currently has no approved products in its commercial portfolio. However, the recent CRL is likely to delay the approval timeline for Kresladi.

Any further developmental or regulatory setback related to the ongoing studies will hurt the stock significantly in the future.

Zacks Rank & Stocks to Consider

Rocket currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Illumina, Inc., Krystal Biotech, Inc. and Fulcrum Therapeutics, Inc., each sporting a Zacks Rank #1 (Strong Buy) at present.

In the past 60 days, estimates for Illumina's 2024 earnings per share have moved up from $1.18 to $3.62. Earnings per share estimates for 2025 have improved from $2.93 to $4.50. Year to date, shares of ILMN have lost 10.6%.

ILMN's earnings beat estimates in each of the trailing four quarters, the average surprise being 463.46%.

In the past 60 days, estimates for Krystal Biotech's 2024 earnings per share have increased from $1.98 to $2.38. Earnings per share estimates for 2025 have improved from $4.33 to $7.31. Year to date, shares of KRYS have risen 48.5%.

KRYS' earnings beat estimates in three of the trailing four quarters while missing on the remaining occasion, the average surprise being 45.95%.

In the past 60 days, estimates for Fulcrum Therapeutics' 2024 loss per share have narrowed from $1.24 to 48 cents. Loss per share estimates for 2025 have narrowed from $1.71 to $1.51. Year to date, shares of FULC have jumped 26.5%.

FULC's earnings beat estimates in each of the trailing four quarters, the average surprise being 393.18%.

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