Roche Buys Spark Therapeutics, Creators Of Most Expensive Medicine In US

Startup gene therapy firm Spark Therapeutics, maker of the most expensive single-dose medicine sold in the United States, will be acquired by Swiss multinational healthcare company F. Hoffmann-La Roche AG.

Roche Holding AG, the Roche division party in the deal, will pay upwards of $5 billion to acquire Philadelphia-based Spark Therapeutics. This American firm founded only in 2013 is the maker of “Luxturna” (Voretigene neparvovec), a gene for treating Leber's congenital amaurosis. This condition is a rare genetic eye disease that progressively leads to blindness.

Luxturna costs $850,000 for both eyes ($425,000 per eye), making it by far the most expensive medicine sold in the USA. A one-time treatment, Luxturna is applied as a subretinal injection.

Luxturna is the first treatment available for Leber's congenital amaurosis. This is a rare disorder in which a person’s blood doesn't clot as it should because it lacks blood-clotting proteins. Luxturna is not a cure for the condition, but it does significantly improve vision in those treated.

This novel gene therapy was developed by by Spark Therapeutics and the Children's Hospital of Philadelphia. It is the first in vivo gene therapy approved by the U.S. Food and Drug Administration (FDA).

Wall Street analysts, however, are rasing questions about Roche’s massive outlay for Spark Therapeutics, which had a market value of less than half that amount at $1.95 billion last Friday.

Spark Therapeutics generated less than $65 million in revenue in 2018, and posted a net loss of about $79 million. It announced it had shipped 75 vials of Luxturna and generated $27 million in sales.

Spark Therapeutics, however, is also working on gene therapies for hemophilia, which is a profitable market for Roche and one where it has plans for expansion.

Despite their promise, gene therapies remain tough to develop and expensive to finance. The few that have made it to market can cost some $1 million a dose, and are even more costly to develop. Gene therapies are so expensive they’re only offered at a small number of accredited facilities in the U.S. and worldwide.

The approach behind Luxturna, and all other gene therapies, involves modifying a person's DNA to address the underlying cause of an inherited disease. In gene therapies, doctors take a sample of a person’s diseased cells, correct the errors in the DNA code, and return the corrected cells to the person's body.

The healthy cells outnumber the diseased ones over time. The illness then disappears for good, as the current thinking goes.

Spark Therapeutics is a University City biotech company co-founded by researchers at the Children's Hospital of Philadelphia.

In January 2018, Novartis agreed to pay Spark Therapeutics $105 million (and $65 million more pending European regulatory approvals and early sales) to sell Luxturna outside the U.S.