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February 25, 2019
Spark Therapeutics Inc., founded by two researchers from Children’s Hospital of Philadelphia, has agreed to be sold to Switzerland-based Roche Holding AG in a deal valued at $4.8 billion, the University City-based gene-therapy developer announced Monday morning.
Spark said it will continue operating in Philadelphia as an independent company within Roche — something officials in the city’s biotech community had hoped when word broke over the weekend of a pending deal. It has about 370 employees, 80 percent of whom are based in Philadelphia, said spokeswoman Monique DaSilva.
“As the only biotechnology company that has successfully commercialized a gene therapy for a genetic disease in the U.S., we have built unmatched competencies in the discovery, development and delivery of genetic medicines. But the needs of patients and families living with genetic diseases are immediate and vast,” said Spark CEO Jeffrey D. Marrazzo in a joint statement issued with Roche. “With its worldwide reach and extensive resources, Roche will help us accelerate the development of more gene therapies for more patients for more diseases and further expedite our vision of a world where no life is limited by genetic disease.”
For Roche, the merger is especially attractive in terms of its work on treatment of hemophilia, a bleeding disorder, said its CEO, Severin Schwan.
“In particular, Spark’s hemophilia A program could become a new therapeutic option for people living with this disease,” Schwan said. “We are also excited to continue the investment in Spark’s broad product portfolio and commitment to Philadelphia as a center of excellence.”
Under the agreement, which the Wall Street Journal reported on Saturday was pending, Roche would purchase all of the outstanding shares of Spark common stock at $114.50 per share in cash. The deal is expected to close in the second quarter.
Spark stock closed up Friday at $51.56 a share, with a market capitalization of $1.95 billion. Roche’s market cap is $230 billion.
“This is a remarkable exit for this revolutionary company,” Stephen Tang, the former head of the University City Science Center, where Spark manufactures, said Saturday night, calling rumor of the nearly $5 billion valuation a “very strong vote of confidence by Roche in Spark’s product pipeline and expertise. Let’s hope that Roche retains the Spark team in Philadelphia to continue their success.”
Tang appears to have gotten his wish.
Spark’s sale to Roche marks the second major exit for a Philadelphia start-up in weeks, adding credibility to the city’s reputation as a supportive incubator for new companies. Invisible Sentinel, a specialist in food safety and another resident of the University City Science Center, announced its sale earlier this month for $75 million to France-based BioMérieux, a premiere player in diagnosing infectious diseases worldwide.
Spark, in which CHOP remains a minority stakeholder, reported nearly $65 million in total revenue for 2018, of which $27 million came from net sales of Luxturna. In December 2017, Luxturna became the first gene therapy approved for a genetic disease by the U.S. Food and Drug Administration. Luxturna is used to treat Leber’s congenital amaurosis, a rare inherited form of blindness that affects the retinas of about 1,000 children in the United States, and a single injection to the retina restores sight in infants.
In January 2018, the Swiss drugmaker Novartis agreed to pay Spark $105 million, and up to $65 million more pending European regulatory approvals and early sales, to sell Luxturna outside the U.S.
Besides experimental drugs to treat hemophilia, Spark is also working on therapies for Huntington’s disease, a fatal genetic brain disorder, and Batten’s disease, a fatal nervous-system condition — potentially multibillion-dollar opportunities in an emerging market.