Rocket Pharmaceuticals faces mounting regulatory and legal challenges after the FDA placed a clinical hold on the company's Phase 2 pivotal trial for RP-A501, an experimental gene therapy for Danon disease, following a patient death. The announcement triggered a dramatic 62% stock price decline and prompted a securities class action lawsuit alleging inadequate disclosure of safety risks and protocol modifications.
FDA Clinical Hold Follows Patient Death
The FDA imposed the clinical hold on May 27, 2025, after a patient in the Phase 2 study suffered a serious adverse event (SAE) and subsequently died. During an investor update call that day, Rocket Pharmaceuticals management disclosed that the company had amended the trial protocol "several months ago" to introduce a novel immunomodulatory agent to the pretreatment regimen. Analysts appeared unaware of these protocol changes prior to the disclosure.
The clinical hold represents a significant setback for RP-A501, which is being developed to treat patients with Danon disease, a rare genetic disorder. The therapy had been progressing through its pivotal Phase 2 trial before the FDA's intervention.
Securities Litigation Emerges
A securities class action lawsuit, styled Ho v. Rocket Pharmaceuticals, Inc., et al., No. 3:25-cv-10049 (D. N.J.), has been filed seeking to represent investors who purchased Rocket Pharmaceuticals securities between February 27, 2025 and May 26, 2025. The lawsuit alleges the company made materially false and misleading statements while failing to disclose critical information about the trial.
According to the complaint, Rocket Pharmaceuticals failed to disclose: (1) the true state of RP-A501's safety and clinical trial protocol; (2) that the company knew serious adverse events, including patient deaths, were at risk; and (3) that the company amended the trial protocol to introduce the novel immunomodulatory agent to the pretreatment regimen.
Market Impact and Investigation
The disclosure of the FDA clinical hold and undisclosed protocol amendments caused Rocket Pharmaceuticals' share price to crash $3.94, representing a 62% decline on May 27, 2025. The dramatic market reaction reflects investor concerns about both the immediate impact of the clinical hold and the company's disclosure practices.
"We're investigating claims that Rocket Pharmaceuticals may have misled investors about its Phase 2 protocol and whether it secretly amended it without first notifying the FDA and investors," said Reed Kathrein, the Hagens Berman partner leading the investigation.
Regulatory and Legal Implications
The case highlights the critical importance of transparent communication regarding clinical trial protocols and safety events in gene therapy development. The allegation that protocol amendments were made without proper disclosure to investors raises questions about compliance with securities regulations and clinical trial transparency requirements.
The lead plaintiff deadline for the class action lawsuit has been set for August 11, 2025, with the class period covering February 27, 2025 through May 26, 2025. Hagens Berman is encouraging investors who suffered substantial losses to participate in the litigation and is also seeking information from potential whistleblowers who may have knowledge relevant to the investigation.
