Street Calls of the Week
Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), a biotechnology company currently valued at $328 million, disclosed Wednesday that it has entered into a Separation and Release Agreement as well as a Consulting Agreement with Dr. Kinnari Patel, following her departure to join RTW Investments LP as a venture partner. According to InvestingPro data, while the company maintains a strong liquidity position with more cash than debt, it has been rapidly depleting its cash reserves. The agreements were executed on September 11, according to a statement released via a Securities and Exchange Commission filing.
Under the terms of the Separation Agreement, Dr. Patel will receive her current salary and medical, dental, and vision benefits through December 31, 2025. She will also be compensated for accrued and unused paid time off as of that date. The agreement provides for a lump sum payment of $482,040, contingent upon Dr. Patel delivering an executed release of claims within seven days of her separation date. In addition, Dr. Patel will receive a lump sum healthcare allowance of $30,045, which is equal to the cost of ten months of COBRA premiums. This executive transition comes as the company’s stock has experienced significant volatility, with shares down over 85% in the past year, though InvestingPro analysis suggests the stock may be undervalued at current levels.
Rocket Pharmaceuticals will offer Dr. Patel a Consulting Agreement, which becomes effective after the expiration of the revocation period associated with her release of claims. The consulting arrangement is set to begin after this period and will continue through December 31, 2026, unless terminated earlier by either party under the terms of the agreement. For her services, Dr. Patel will receive an aggregate retainer fee of $582,156. She will also retain her restricted stock units and options granted under the company’s equity plans for the duration of the consulting period.
The company stated that Dr. Patel has agreed to a general release of claims and certain restrictive covenants as part of the separation process.
This information is based on a press release statement included in Rocket Pharmaceuticals’ SEC filing.
In other recent news, Rocket Pharmaceuticals announced that the U.S. Food and Drug Administration (FDA) has lifted the clinical hold on its pivotal Phase 2 trial of RP-A501 for Danon disease. The hold, which had been in place for nearly three months, was removed after Rocket Pharmaceuticals addressed the FDA’s concerns. The trial will now proceed with a reduced dose of 3.8 x 10¹³ GC/kg, down from the previously used 6.7 x 10¹³ GC/kg, and will include adjustments to the immunomodulatory regimen. This development has led BofA Securities to upgrade Rocket Pharmaceuticals from Neutral to Buy, raising its price target from $4.00 to $10.00. In contrast, Goldman Sachs has maintained its Sell rating with a $2.00 price target, despite the FDA’s decision. The trial will involve treating three patients sequentially, with a minimum four-week interval between each treatment. This sequence aims to carefully monitor the effects of the recalibrated dose. The FDA’s decision to lift the hold is seen as a significant step forward for Rocket Pharmaceuticals in its efforts to advance treatment options for Danon disease.
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