We recently compiled a list of the 10 Best Gene Therapy Stocks to Buy Right Now. In this article, we are going to take a look at where Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) stands against the other gene therapy stocks.
Gene therapy is referred to as a medical technique that involves modifying or manipulating genes to treat or prevent disease. The therapy focuses on addressing the underlying genetic cause of a condition by repairing, replacing, or altering genes within an individual’s cells. Industry experts opine that this innovative therapy has the potential to treat a variety of genetic disorders, cancers, and other diseases.
As per IMARC, healthcare infrastructure in the US adapted to accommodate gene therapies. As per IQVIA’s tally, 114 gene therapy trials were initiated in the year 2023. Out of this, a large majority (~77%) were sponsored by the healthcare industry. As per Kella Kapnisi, Head of Cell and Gene Therapy at Team Consulting (a medical technology design and development consultancy), as of now, there are 38 cell and gene therapies approved by the FDA. Notably, many of these have reached commercialization through mostly manual laboratory manufacturing processes.
Growth Drivers of The Gene Therapy Industry
As per IMARC, the US gene therapy market size has been pegged at US$1,312.2 million in 2024. The market should reach US$3,697.8 million by 2033. This phenomenal growth is expected to stem from the increasing prevalence of genetic disorders, genetic engineering advancements, a strong focus on strategic collaborations, supportive regulatory frameworks, and heightened investments in R&D.
Ever since the initiation of the Orphan Drug Designation program, the FDA designated over 1,000 medicines for uncommon diseases as orphan drugs, many of which are gene therapies. Furthermore, optimism around the gene therapy industry grew after the regulatory body showcased its dedication to promoting the development of these medicines in 2023. IMARC added that the FDA approved 3 novel gene therapies for conditions such as spinal muscular atrophy and hemophilia.
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Trends to Drive Growth in 2025
As per Kella Kapnisi, as the cell and gene therapy industry has been continuously evolving, the need and requirement for purpose-built technology is of utmost importance. Small batch manufacturing systems that are customized for personalized therapies and decentralized manufacturing, real-time process control with the help of advanced inline and online analytics, and sophisticated data analysis and management systems using ML technology remain important trends that might drive the growth of cell and gene therapy manufacturing.
As per IMARC, the collaborations between biotech companies, pharmaceutical firms, and university research institutes can pool the funds needed to address challenges related to creating and promoting gene treatments.
IMARC further added that the increased prevalence of genetic disorders and chronic diseases, together with increasing strategic collaborations and partnerships are important trends in the US gene therapy market. The growing cases of cancer and genetic disorders remain one of the key factors in the gene therapy market. Gene therapy is a key component of cancer treatment as it can precisely research and target malignant cells to prevent further damage.
Our Methodology
To list the 10 Best Gene Therapy Stocks to Buy Right Now, we conducted extensive research and scanned through several online rankings. After getting the initial list of 15-20 stocks, we shortlisted the ones having high hedge fund holdings. Finally, the stocks are arranged in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Scientific equipment in a lab setting, revealing the cutting edge of biotechnology research.
Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT)
Number of Hedge Fund Holders: 31
Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) operates as a late-stage biotechnology company that focuses on developing gene therapies for rare and devastating diseases.
Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT)’s lead program, RP-A501 for Danon disease, received significant attention from the medical community. Danon disease is a rare, X-linked cardiomyopathy caused by a deficiency of LAMP2 protein, that often leads to severe cardiac issues and early mortality. RP-A501 is being developed as a potential one-time gene therapy and the results of the long-term Phase 1 study demonstrate the promise of gene therapy across cardiac diseases, including PKP2-ACM, BAG3-DCM, and others.
Long-term follow-up data from the Phase 1 trial of RP-A501 demonstrated sustained improvement in LAMP2 expression and left ventricular mass index (LVMI), together with a favorable tolerability profile. The pivotal Phase 2 trial is fully enrolled and ongoing, with primary endpoints consisting of improved LAMP2B expression and reduced LVMI.
Wall Street analysts believe that medicine possesses a high 65-75% chance to succeed in a pivotal Phase II study next year and can be a $1 billion opportunity for Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT). Despite being a rare disease, the severity of Danon disease and the lack of effective treatments ensure strong demand.
Baron Funds, an investment management company, released its Q2 2024 investor letter. Here is what the fund said:
“Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) specializes in the development of gene therapies for rare genetic diseases outside of oncology. Currently these include Danon disease, Fanconi anemia, lysosomal acid lipase deficiency, and pyruvate kinase deficiency. The first three drug treatments are slated for commercial launch by 2025, which should generate substantial revenue. Shares detracted from performance after the FDA extended the priority review period by three months for the Kresladi gene therapy for leukocyte adhesion deficiency, potentially influenced by sluggish competitive gene therapy launches from bluebird bio in sickle cell disease and BioMarin in hemophilia B. Given the lifesaving nature of Rocket’s therapies and the high unmet need for each of these life ending diseases, we retain conviction in our investment.”
Overall RCKT ranks 2nd on our list of the best gene therapy stocks to buy right now. While we acknowledge the potential of RCKT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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 is originally published at Insider Monkey.