Rocket Pharmaceuticals Inc (NASDAQ:RCKT) on Tuesday announced an update related to RP-A501, its investigational gene therapy for Danon disease, a rare X-linked dominant genetic disorder that manifests with the clinical triad of cardiomyopathy (stiff heart muscles), skeletal myopathy (weakness) and intellectual disability.

A patient participating in the Phase 2 pivotal trial of RP-A501 experienced an unexpected Serious Adverse Event (SAE). The patient passed away after an acute systemic infection.

Needham analyst Gil Blum downgraded Rocket Pharmaceuticals from Buy to Hold, with a Nil price forecast from $42 earlier. The analyst cited increased uncertainty around the company’s main value driver as the key reason for the downgrade.

Also Read: Bill Ackman Slams Subsidies For Contributing To $37 Trillion National Debt, Hails Trump’s Drug Price Order

“We continue to have a favorable view of RP-A501’s efficacy; however, we see increased uncertainty for the product given safety concerns,” Blum said in an analyst note.

Blum anticipates limited readthrough to Rocket’s other AAV programs, which utilize simpler immunosuppression regimens.

Chardan Research analyst Geulah Livshits also lowered its price target from $46 to $17 while maintaining the Buy rating.

While the disclosure does not negate the benefit reported for the program, the patient death and commentary regarding instances of TMA impact the benefit/risk profile of RP-A501, Livshits said in an analyst note.

Livshits reduced the probability of success from 70% to 40%, given CBER leadership’s focus on benefit/risk, pending more details regarding agency feedback and next steps.

The analyst projects a slower uptake among the Danon population (3.6% by 2030E), assuming greater caution among prescribers.

Chardan notes the company hasn’t revealed how many patients have been treated in the trial so far but said the study is currently over-enrolled, with more patients ready to begin treatment.

Management mentioned several possible next steps, such as switching to a simpler immunomodulatory treatment, using existing complement inhibitors known to be safe, and continuing to exclude patients who are genetically predisposed to complement activation.

Chardan highlights that it’s still unclear whether other immunomodulatory treatments could reduce the risk of TMA. There’s no timeline for when the company might align with the FDA and restart the trial. Additional changes like enrolling more patients may be required, which could cause further delays.

Given this uncertainty, the topline results are expected to come later than the previously guided mid-2026 timeframe.