Stealthy NY Startup Rocket Pharma Merges With Inotek, Heads to Nasdaq
Rocket Pharmaceuticals, a stealthy gene therapy startup in New York City, has made its first splash.
Through a merger with struggling Inotek Pharmaceuticals (NASDAQ: ITEK), Rocket, a company developing treatments for a variety of rare blood diseases, has taken itself public. Rocket shareholders are expected to own 81 percent of the combined company, with Inotek stockholders getting the remaining 19 percent. The actual amount each group gets depends on the amount of cash Inotek has on hand at when the deal closes, which is expected in early 2018.
Rocket declined to comment Tuesday afternoon. A conference call to discuss the merger is scheduled for Wednesday morning.
An SEC filing shows that the company raised about $25 million in May from 15 investors, among them RTW Investments, whose managing partner Roderick Wong chairs its board of directors. Rocket CEO Guarav Shah once worked in the cell and gene therapy unit of Novartis. The firm based at the Alexandria Center for Life Science on the East Side of Manhattan.
There are two main types of gene therapy, a method of shuttling genetic instructions into the body for a one-time, long-lasting disease treatment, and unlike a variety of other gene therapy companies, Rocket aims to use both of them.
One method is an in vivo process, in which a therapeutic gene is introduced into the patient’s body. The other is the ex vivo variety, in which patients’ stem cells are harvested, equipped with a healthy version of a gene, and then infused back into the body. Everything remains experimental, but in vivo therapy is currently the more common approach, pursued by companies such as Spark Therapeutics (NASDAQ: ONCE), BioMarin Pharmaceutical (NASDAQ: BMRN), and UniQure (NASDAQ: QURE).
Less common is the ex vivo procedure used by companies such as Bluebird Bio (NASDAQ: BLUE), U.K.-based startup Orchard Therapeutics, and Boston-area startup Avrobio. Through this process, a virus from the lentivirus family that has been genetically modified to be harmless carries healthy genes into stem cells harvested from the patient. The stem cells are then grown in a culture and infused back into the patient, where they are supposed to give rise to more cells with the correct gene.
Rocket says it aims to use ex vivo gene therapy to go after rare bone marrow disorders like Fanconi anemia, Leukocyte adhesion deficiency-1, pyruvate kinase deficiency, and the inherited bone disease infantile malignant osteopetrosis. Rocket is targeting an unspecified rare pediatric disease with its in vivo approach.
The company has yet to begin clinical testing, however. Its first trials are set for 2018. Proof-of-concept data in one or more of the ex vivo programs should come next year as well, Shah said in a statement.
For Inotek, meanwhile, the move comes as a result of a failed quest to develop a drug called trabodenoson for glaucoma. After trabodenoson flunked a Phase 3 trial, Inotek announced plans to explore strategic alternatives, including a sale, this summer. President and CEO David Southwell, who will remain on the combined company’s board, said in the statement that the deal is the “best scenario for value creation” for its stockholders. Inotek shares, which closed at just $1.05 apiece, slipped about 5.7 percent late Tuesday.