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Investing.com - BofA Securities upgraded Rocket Pharmaceuticals (NASDAQ:RCKT) from Neutral to Buy and raised its price target to $10.00 from $4.00 on Wednesday. The stock, currently trading at $3.71, has seen analyst targets ranging from $2 to $16, according to InvestingPro data.
The upgrade follows the FDA’s decision to lift a clinical hold on the company’s A501 therapy for Danon disease, which BofA described as a "positive surprise" for the gene therapy developer. The company maintains a strong liquidity position, with a current ratio of 6.39 and more cash than debt on its balance sheet.
BofA noted that while many believed the hold would eventually be lifted, Rocket’s earlier restructuring had suggested the process might be lengthy. The clinical hold was reportedly related to safety protocols rather than the gene therapy itself.
The investment bank indicated that Rocket shares had been trading with limited value assigned to the rest of its pipeline due to negative readthroughs to other assets and broader concerns about the gene therapy class following various setbacks.
Despite acknowledging that sentiment typically changes slowly and that challenges remain for A501, BofA cited three factors supporting its upgrade: the trial restart, A501’s strong data thus far, and what appears to be an open FDA stance toward the therapy.
In other recent news, Rocket Pharmaceuticals announced that the U.S. Food and Drug Administration (FDA) has lifted a clinical hold on its pivotal Phase 2 trial of RP-A501 for Danon disease. This decision came after the company addressed the FDA’s concerns, allowing the study to resume with an adjusted dosage. In another development, Jefferies has raised its price target for Rocket Pharmaceuticals from $2.50 to $3.00, maintaining a Hold rating and highlighting potential future opportunities. Additionally, Rocket Pharmaceuticals has undertaken a strategic reorganization, reducing its workforce by approximately 30% to focus on its cardiovascular gene therapy programs. The company aims to prioritize its adeno-associated virus cardiovascular platform, which includes treatments for various heart conditions. Furthermore, the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to Rocket’s RP-A601 for PKP2-arrhythmogenic cardiomyopathy, a serious heart condition. This designation is significant as it marks the fifth RMAT designation for Rocket Pharmaceuticals. These developments reflect the company’s focus on advancing its gene therapy initiatives.
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