BASEL, Switzerland—Roche and Spark Therapeutics Inc. announced Feb. 25 that they have entered into a definitive merger agreement for Roche to fully acquire Spark Therapeutics at a price of $114.50 per share in an all-cash transaction. This corresponds to a total transaction value of approximately $4.3 billion on a fully diluted basis and represents a premium of approximately 122 percent to Spark Therapeutics’ closing price on Feb. 22 and a premium of approximately 19 percent to Spark Therapeutics’ 52-week high share price on July 9, 2018. The merger agreement has been unanimously approved by the boards of Spark Therapeutics and Roche.
Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all outstanding shares of Spark Therapeutics common stock, and Spark Therapeutics will file a recommendation statement containing the unanimous recommendation of its board of directors that the company’s shareholders tender their shares to Roche.
Spark Therapeutics, based in Philadelphia, is a fully integrated, commercial company committed to discovering, developing and delivering gene therapies for genetic diseases, including blindness, hemophilia, lysosomal storage disorders and neurodegenerative diseases.
The company’s lead clinical asset is SPK-8011, a novel gene therapy for the treatment of hemophilia A, which is expected to start Phase 3 clinical trials in 2019. Spark Therapeutics also has SPK-8016 in a Phase 1/2 trial aimed at addressing the hemophilia A inhibitor population. Additionally, Spark Therapeutics was the first company to receive FDA approval for a gene therapy for a genetic disease in 2017. Luxturna (voretigene neparvovec-rzyl), a one-time gene therapy product indicated for the treatment of patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy, is currently marketed in the United States by Spark Therapeutics. The European Commission granted marketing authorization for Luxturna in 2018.
Spark Therapeutics’ additional clinical assets include SPK-9001, an investigational gene therapy for the potential treatment of hemophilia B in Phase 3, and SPK-7001 for choroideremia in Phase 1/2. The company is also developing SPK-3006 for Pompe disease and SPK-1001 for CLN2 disease (a form of Batten disease) which are expected to be ready for clinical development in 2019, as well as additional preclinical programs for Huntington's disease and Stargardt disease.
Commenting on the transaction, Severin Schwan, CEO of Roche, said, “Spark Therapeutics’ proven expertise in the entire gene therapy value chain may offer important new opportunities for the treatment of serious diseases. In particular, Spark Therapeutics’ hemophilia A program could become a new therapeutic option for people living with this disease. We are also excited to continue the investments in Spark Therapeutics’ broad product portfolio and commitment to Philadelphia as a center of excellence.” Spark Therapeutics’ will continue its operations in Philadelphia as an independent company within the Roche Group.
“As the only biotechnology company that has successfully commercialized a gene therapy for a genetic disease in the US, 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 their needs vast,” commented Jeffrey D. Marrazzo, CEO of Spark Therapeutics. “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.”
Analysts at Bank Vontobel note that the acquisition would give Roche a “proven platform” for developing and marketing gene therapies, but say that the deal is not a slam-dunk to put Roche at the top of the game. According to the analysts, BioMarin Pharmaceutical, uniQure and Sangamo Therapeutics are also developing gene therapies for treating hemophilia, and they added that: “We view BioMarin likely first to market.” Vontobel analyst Stefan Schneider further remarked that “[W]e view the market opportunity big enough to accommodate more than one gene therapy, but a favorable safety profile will likely win gold.”