In what experts think will become part of a trend in which big pharma increases it presence in the biotechnology field, Roche and Spark Therapeutics completed a deal over the weekend in which the former will buy the latter for $4.8 billion.
The deal also represents a possible development in which, as Stat reports this morning, academic hospitals will become venture capitalists. Spark was founded in 2013 as an outgrowth of the gene therapy research program at the Children’s Hospital of Philadelphia. That program was headed by Katherine A. High, MD. Spark will continue to operate as an independent company within Roche, with High still in charge.
Stat makes keeping High in charge of Spark one of five bullet points highlighting the importance of the Roche-Spark deal. Stat reports that High “was one of a small number of researchers who kept gene therapy, which uses viruses to insert new genes into patients’ cells, alive after a safety controversy two decades ago. High’s shares will be worth many millions of dollars after the deal closes.”
The Wall Street Journal, which broke the story over the weekend, notes that “Roche is among a number of big drug companies hungry for biotechs that can help restock their pipelines and portfolios. There have been a raft of such deals already this year, including Bristol-Myers Squibb Co.’s roughly $74 billion planned purchase of Celgene Corp. and Eli Lilly & Co.’s agreement to pay $8 billion for cancer specialist Loxo Oncology Inc.”
Just how determined is big pharma to acquire biotech companies? Spark had revenue of $64.7 million last year with a net loss of $78.8 million —and that’s a dramatic improvement over 2017, the WSJ reports.
Spark’s Luxturna treats a condition that can cause blindness and in 2017 was the first gene therapy to get FDA approval. Spark’s also busy developing therapies for hemophilia, which whetted Roche’s desire to buy the company. The WSJ reports that “hemophilia is a new and emerging category for Roche.” The FDA approved Roche’s Hemlibra, which treats hemophilia A, in 2017. Financial experts expect Hemlibra to make billions a year.