The Children’s Hospital of Philadelphia Foundation is about to see its investment in a drug company launched by its researchers pay off in a big way—the organization stands to receive more than $450 million for its ownership stake in the company.
The company, Philadelphia-based Spark Therapeutics, announced Monday it is being purchased by Roche in a deal worth $4.8 billion. Roche will buy the company for $114.50 per share in cash, a premium of 122% to Spark’s closing price on Feb. 22. The companies expect the deal to close in the second quarter, subject to regulatory approvals and closing conditions.
Spark is a fully integrated commercial company that specializes in developing gene therapies for genetic diseases like blindness, hemophilia, lysosomal storage disorders and neurodegenerative diseases. The company was founded in March 2013 based on more than two decades’ worth of technology development and research at CHOP, according to its website.
As of April 9, 2018, the CHOP Foundation owned 10.7% of Spark’s outstanding shares, or about 4 million shares, according to Spark’s 2018 proxy filing. At $114.50 per share, the Foundation stands to receive more than $450 million for its investment. The hospital foundation’s assets totaled $6.7 billion at the end of 2018, according to its year-end financial filing. CHOP representatives did not immediately provide comment on the deal.
With its launch of the drug Luxturna, a gene therapy for patients with an inherited retinal disease, Spark became the first biotechnology company to have successfully commercialized a gene therapy for a genetic disease in both the U.S. and the E.U.
Spark CEO Jeffrey Marrazzo said in a statement his company has built unmatched competencies in the discovery.
“But the needs of patients and families living with genetic diseases are immediate and vast,” he said. “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.”
Sparks’ Chief Scientific Officer, Federico Mingozzi, studied liver gene transfer with adeno-associated virus vectors and immunology at CHOP, and was involved in several first-in-human clinical studies of gene therapy based on the adeno-associated virus vector platform there.
Dr. Katherine High, the company’s head of research and development, formerly served as director of CHOP’s Center for Cellular and Molecular Therapeutics, where she worked on the clinical transaction of potential gene therapies for multiple inherited disorders.
In an email, Roche spokeswoman Simone Oeschger said Roche was interested in Spark because gene therapy has transformational potential for patients, both in monogenic rare diseases and beyond.
“Our long-lasting commitment to making a difference for patients through innovative approaches has allowed us to build strong franchises and expertise in areas such as rare diseases, ophthalmology and neuroscience,” she said. “Spark Therapeutics represents an attractive opportunity for Roche to broaden and supplement our portfolio globally.”
Oeschger said Roche has been active in the gene therapy space since its straregic collaboration with 4D Molecular Therapeutics.
According to Spark’s 2018 proxy filing, the company paid CHOP $6.1 million in 2017 pursuant to a number of ongoing agreements. Spark entered a licensing agreement with CHOP in October 2013 that was amended several times. In November 2015, Spark entered an additional licensing agreement with CHOP that granted it a worldwide exclusive license, with the right to sublicense, and to use and practice a provisional patent application related to the production of gene therapies.
Spark’s Board Chairman, Dr. Steven Altschuler, is the former CEO of CHOP and the CHOP Foundation. He made $285,000 in cash and stock awards for his role in 2017.
Spark’s share price was up 120% on Monday to $113.49 per share as of noon Central time, compared with $51.56 at market close on Friday, Feb. 22.
Source: ModernHealthCare.com
