We came across a bullish thesis on Rocket Pharmaceuticals, Inc. (RCKT) on Twitter by sharkbiotech. In this article, we will summarize the bulls’ thesis on RCKT. Rocket Pharmaceuticals, Inc. (RCKT)’s share was trading at $8.66 as of March 4th.
A researcher studying a microscopic image of a gene therapy under a microscope.
Rocket Pharmaceuticals (RCKT) is developing gene therapy for rare cardiac diseases, with its lead drug targeting Danon disease, a fatal condition caused by a mutation in the LAMP2 gene that leads to vacuole buildup in the heart. The key factors in evaluating pre-commercial biotechs are efficacy, market size, and financial runway. Phase 1 data, published in the New England Journal of Medicine, showed promising results in six patients, all demonstrating significant LAMP2 gene expression increases, reduced heart size, improved troponin levels, and, most importantly, a shift to NYHA Class 1, meaning they exhibited no heart failure symptoms. This compelling data establishes that the drug works.
Danon disease has around 2,000 diagnosed cases globally, with an estimated 150 new cases annually. However, as a newly identified condition—only discovered in the 1980s, with the LAMP2 gene mutation identified just 20 years ago—there are likely many undiagnosed patients. Rocket estimates a potential patient pool of 15,000. Even a conservative assumption of 7,500 patients, with a 60% treatment rate at $2 million per patient, translates to a $9 billion market opportunity over a decade, excluding newly diagnosed cases each year. Some cardiologists even believe the addressable market could be larger than company estimates.
Financially, Rocket is well-capitalized, having recently completed a secondary offering at $12.50 per share, securing cash runway through 2027. With pivotal data expected in late 2025 or early 2026, financial constraints are not a concern. Given the transformative potential of its Danon disease therapy, the stock could triple within 12-15 months and deliver a tenfold return over five years. With strong clinical data, a significant market opportunity, and a solid balance sheet, RCKT presents an exceptional investment case in the gene therapy space.
Rocket Pharmaceuticals, Inc. (RCKT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held RCKT at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of RCKT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RCKT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.