aibioRocket Pharmaceuticals launches $150,000,000 stock offering, prices at $12.50
Tickers RCKT
Rocket Pharmaceuticals priced 13,200,000 shares at $12.50 on December 10, 2024, below the $13.84 last sale price on December 9. Net proceeds are about $154.8 million before the underwriters' option, and the company's own prospectus says the money will last into the second quarter of 2026.
Key facts
- Company
- Rocket Pharmaceuticals, Inc. (NASDAQ: RCKT)
- News type
- Financings
- Primary source
- Rocket Pharmaceuticals, Inc. 424B5 (2024-12-10)
The pricing
Rocket Pharmaceuticals, Inc. priced an underwritten offering of 13,200,000 shares of common stock at $12.50 a share on December 10, 2024. The final prospectus supplement is dated the same day. The offering was launched as a $150,000,000 deal, and the price is below the $13.84 last sale price on Nasdaq on December 9, 2024. On December 10 the last reported sale price was $13.51.
The company agreed to sell the shares to Morgan Stanley & Co. LLC, Leerink Partners LLC and Cantor Fitzgerald & Co., which the agreement names as representatives of the underwriters. The prospectus lists Morgan Stanley, Leerink Partners and Cantor as joint book-running managers, with LifeSci Capital as lead manager. The underwriters also hold a 30-day option to buy up to 1,980,000 more shares.
The private placement
An affiliate of RTW Investments, LP agreed to buy pre-funded warrants for 400,000 shares in a concurrent private placement, at $12.49 per warrant, which is the public offering price less the $0.01 exercise price. The prospectus describes the purchase as $5,000,000 of common stock. The 8-K names the investor as RTW Innovation Master Fund, Ltd., under a subscription agreement dated December 9, 2024. The private placement closes with the offering, and its closing depends on the offering's closing.
The money and its timing
The prospectus says the company expects net proceeds of about $154.8 million from the 13,200,000 shares, before the underwriters' option. If the underwriters exercise the option in full, the company expects about $178.1 million after underwriting discounts, commissions and estimated expenses. The company intends to use the money primarily to fund pipeline development, for commercialization preparedness and execution, and for other general corporate purposes.
The prospectus says the company, with its existing cash, cash equivalents and investments and the proceeds of this offering and the private placement, expects to fund operating expenses and capital requirements into the second quarter of 2026. That estimate is subject to assumptions, including clinical development plans. The runway figure therefore depends on those plans, and the filing does not state the cash balance at the date of the offering.
The regulatory record
Rocket's main program in the filing is RP-L201, a gene therapy for severe leukocyte adhesion deficiency-I (LAD-I). The FDA accepted the Biologics License Application for RP-L201 in September 2023 and granted priority review. On June 28, 2024, the FDA issued a Complete Response Letter, requesting limited additional chemistry, manufacturing and controls information. The company says it is providing that information. The prospectus gives no new action date.
The company also says it submitted a rolling BLA for RP-L102 in the Fanconi anemia program, starting on September 26, 2024, and that the European Medicines Agency accepted a Marketing Authorization Application for RP-L102 in April 2024.
Rocket's Danon disease program, RP-A501, is in an ongoing Phase 2 trial. The company announced in September 2024 that enrollment in its pivotal study was complete, and dosing and follow-up continue.
Dilution
At September 30, 2024, historical net tangible book value was $290.6 million, or $3.19 per share, on 91,116,692 shares. After the offering and the private placement the as-adjusted figure is $450.1 million, or $4.31 per share, which the prospectus calls immediate dilution of $8.19 per share to purchasers in this offering. The company expects 104,316,692 shares outstanding after the offering, or 106,296,692 if the option is exercised in full.
The lock-up and advisers
Executive officers, directors and certain other shareholders agreed to a 45-day lock-up on sales of common stock, subject to exceptions. Morgan Stanley & Co. LLC may release the restrictions at its discretion, on behalf of the underwriters. Rocket's own counsel, K&L Gates LLP of New York, passes on the validity of the shares. Latham & Watkins LLP of New York passes on legal matters for the underwriters.
What comes next
The offering is priced, and the prospectus says delivery of the shares would occur on or about December 12, 2024. The option for the additional 1,980,000 shares remains open for 30 days. The stated runway reaches only the second quarter of 2026, a short horizon for a company with a pivotal study still dosing and a BLA that has not yet been approved.