Spark Therapeutics

Spark Therapeutics logo on labcoat
Although Roche's $4.8 billion acquisition of Spark is still in limbo, we're nudging the gene therapy player onto the "winning" side. (Spark Therapeutics)

IPO year: 2015
Raised: $161 million
Share price at IPO: $23
Valuation: $352 million
Close Aug. 30, 2019: $97.41
Change: Up 324%

After coming to life in late 2013 with $50 million and a clutch of gene therapy prospects out of Children’s Hospital of Philadelphia, Spark Therapeutics hit the gas.

Gene therapy R&D had been plagued by safety problems and deliverability issues, but Spark was part of a second wave of academics and biotechs that believed they had identified the right viral vectors to avoid those problems. And by May 2014, the company had picked up $73 million to build its team and push its lead program—a gene therapy for a rare, genetic eye disease—through the clinic. Now known as Luxturna, the treatment was then working through phase 3.

And some seven months later, in December, Spark teamed up with Pfizer on a gene therapy for patients with hemophilia B, who lack the blood clotting Factor IX. They're now treated with replacement infusions, but Spark’s treatment would deliver the Factor IX gene to jump-start its production, a fix designed to last for years. Though only $20 million changed hands at the time, Spark stood to reel in up to $280 million in milestones.

RELATED: Spark nails a $161M IPO to fund its 'breakthrough' gene therapy

But Spark had some cash-generating plans in mind. It filed the same month to raise up to $86 million in an IPO, targeting 5.5 million shares at a price of $15 to $17 each. Three weeks later, it upgraded its target to $108 million.

Spark would smash through both goals. It ended up raising $161 million in its public debut, selling 7 million shares at $23—about 35% above the high end of its initial target range.

That's far from the end of the story, though. Fast-forward two years, after phase 3 data showed Spark's lead therapy could improve vision in patients who had been going blind. It works by delivering the RPE65 gene into retinal cells, which then produce a protein to restore vision loss. Backed unanimously by a 16-member FDA advisory panel, the treatment won agency approval in December 2017 to treat biallelic RPE65-mediated inherited retinal dystrophy.

RELATED: Spark grabs FDA nod for Luxturna, a breakthrough gene therapy likely bearing a pioneering price

Dubbed Luxturna, the therapy launched at a price tag of $850,000, somewhat short of the $1 million analysts had mooted at the time, but still among the highest price tags in biopharma. Unlike its peers in rare disease treatment—such as BioMarin's Brineura, also approved in 2017 and priced at $702,000 a year before discounts—Luxturna is a one-shot treatment.

Novartis quickly snapped up the rights to develop and market Luxturna outside the U.S. in a deal worth up to $170 million. And with its first product out on the market, Spark could plow its cash flow into its pipeline of 11 programs, including its Pfizer-partnered hemophilia B treatment and therapies for Huntington disease and Pompe disease.

RELATED: Roche extends $4.3B Spark tender offer yet again. What are watchdogs so worried about?

But the big deal is yet to come: The gene therapy specialist took a $4.8 billion buyout offer from Roche in February. After a bidding war, the Swiss drugmaker snagged Spark for $114 per share—a 122% premium to its closing price the day the deal was announced. Thanks to antitrust scrutiny, the deal has been delayed five times, but Roche still says it's planning to close by year's end.

Although Spark and Roche’s union is still in limbo, we’re nudging this one over into the “winner” column.

Spark Therapeutics

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