The strategic reprioritization comes after the company hit two major hurdles in the past year, including a clinical hold for an investigational gene therapy and an FDA rejection for its lead asset.
Rocket Pharmaceuticals is laying off 30% of its workforce in a strategic realignment initiative that also involves focusing its resources on its late-stage heart disease programs, the company announced on Thursday.
A total of 80 employees at Rocket’s Cranbury, New Jersey site will be affected, according to a Workers Adjustment and Retraining Notification (WARN) Act notice. The layoffs will start on Oct. 23 and continue through the end of the year, as per the WARN posting, and will allow Rocket to reduce its 12-month cash burn by almost 25%.
Alongside the layoffs, Rocket is also narrowing its pipeline priorities to focus its resources on its cardiovascular gene therapies, including its programs for Danon disease, PKP2-associated arrhythmogenic cardiomyopathy and BAG3-associated dilated cardiomyopathy. This shift, as per the biotech’s Thursday release, reflects its focus on its late-stage assets and will allow it to maximize near-term value for shareholders.
Rocket’s strategic push caps off what has been a turbulent year for the New Jersey–based company. In May, the FDA slapped a clinical hold on its pivotal Phase II study in Danon disease after a patient died following treatment with its investigational gene therapy, RP-A501. The patient developed complications associated with capillary leak syndrome, which prompted Rocket to voluntarily suspend dosing in the trial before the FDA’s regulatory freeze.
In a note to investors on Friday, analysts at Jefferies pointed out uncertainties surrounding RP-A501, particularly the timing of when the hold will be lifted. “We anticipate months,” the analysts said, adding that “we could see meaningful stock upside as we receive more visibility.”
“Ultimately, we think RP-A501 could be eventually approved in Danon, but we’d like to see more clarity on the path forward,” Jefferies said, noting that it would be important for Rocket to establish that the patient death “was an isolated event.”
In June last year, the FDA rejected Rocket’s Kresladi for the treatment of severe leukocyte adhesion deficiency-I, a rare pediatric disease that makes newborns susceptible to severe bacterial and fungal infections. The complete response letter (CRL) at the time flagged manufacturing issues with the gene therapy.
In its news release on Thursday, Rocket revealed that Kresladi remains a pipeline priority for the company and that it is currently working on submitting a response to the CRL.
As of March 31, Rocket had $318.2 million in cash, cash equivalents and investments, which as per its first-quarter earnings report would be enough to keep it afloat into the fourth quarter of 2026. But with Thursday’s strategic push, along with other potential proceeds coming in, the biotech now expects its cash runway to last into the second quarter of 2027, according to its Thursday announcement.
