By Josh Nathan-Kazis

The death of a patient in a trial of an experimental gene therapy casts new shadows over a technology once seen as the future of the drug industry.

Rocket Pharmaceuticals, a New Jersey-based biotech, said early Tuesday that a patient participating in a small trial of a gene therapy died over the weekend. The therapy is meant to treat a rare genetic condition called Danon Disease, which weakens the heart muscle and generally kills male patients in early adulthood. Rocket shares fell 58.6% on Tuesday.

The gene therapy, called RP-A501, was being tested in a Phase 2 trial -- the last step before Rocket planned to submit the treatment for Food and Drug Administration approval. Analysts had been reasonably confident that the trial would be successful: In February, Jefferies analysts Andrew Tsai wrote that he put 65% to 75% odds on a positive readout.

On an investor call early Tuesday, Rocket executives said the company had decided to add a new drug to the cocktail of medicines used to tamp down the immune system in patients who receive RP-A1501, intended as a safety measure. Both of the patients who received the new drug had developed a condition called capillary leak syndrome, which causes low blood pressure and other serious complications.

Rocket said one of the patients with capillary leak syndrome developed other medical and procedural complications, and that, in response, the FDA had suspended the trial on Friday. That patient developed an infection over the weekend and died. Rocket executives said on the call that the second patient had received less of the new drug, and suggested that his condition was less serious.

"This is a deeply tragic loss," Rocket CEO Gaurav Shah said on the Tuesday morning call.

The company said it still believes there is a "path forward" for RP-A501. But it also announced plans to conserve its cash balance, which stood at $318.2 million as of its last quarterly report. With new prioritization of its pipeline under way, its cash can last into 2027, it added.

The death poses yet another challenge for the field. Once an area of enormous optimism for biotech investors and pharma companies, gene therapies have had little commercial success thus far.

The treatments are meant to be one-and-done cures. But their effectiveness doesn't always match those of cutting-edge drugs. The fate of Bluebird Bio is indicative of the disappointments in the industry. The company had a market value of more than $10 billion in 2018, when the excitement over gene therapy treatments was at its peak. It has launched gene therapies to treat sickle cell disease and beta thalassemia, among other conditions. In February, though, bluebird agreed to sell itself for around $29 million up front to two private-equity firms.

Or take Pfizer, which in 2019 unveiled plans to invest hundreds of millions of dollars in a "state-of-the-art gene therapy manufacturing facility" in North Carolina. This February, the company pulled its $3.5 million gene therapy for hemophilia from the market due to lack of interest from patients, according to Reuters, and now appears to have no involvement in gene therapy in its portfolio.

The problems have to do with the price, complexity, and risk of the treatments. The FDA has approved gene therapies to treat hemophilia, spinal muscular atrophy, and sickle cell disease, among other conditions. But the treatments are expensive, often costing millions of dollars, and companies have had a hard time finding patients. One exception is Zolgensma, the Novartis gene therapy for spinal muscular atrophy patients under the age of 2, which had $1.2 billion of sales in 2024.

There are also the safety risks. Safety concerns have dogged the field since its inception. Genetic information encoded in a gene therapy needs a way to enter a cell, and drugmakers often package the genes they want to deliver in viral shells. Those viral shells are dosed in large volumes, raising the risk of dangerous immune responses.

The most recent death was in March, when a patient on Sarepta Therapeutics' Elevidys, an approved gene therapy for Duchenne muscular dystrophy, died of liver failure.

As a result, gene therapies have become largely unattractive to investors, who are worried about unexpected safety risks and commercialization challenges. Rocket's latest update won't make the space any more appealing.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 27, 2025 12:11 ET (16:11 GMT)

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