Roche Reportedly Near $5 Billion Takeover Of Gene Therapy Firm Spark

Roche (RHHBY) is reportedly nearing a deal to acquire gene therapy player Spark Therapeutics (ONCE) for $ 5 billion as the Swiss drugmaker looks to expand its hemophilia treatments.

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According to the Wall Street Journal, the deal could be announced Monday, or sooner, and value Spark at $ 5 billion. The Journal cited people familiar with the matter. That price tag would offer a major premium to Spark’s market cap, which was around $ 2 billion on Friday.

The deal would give Roche access to Spark’s pipeline of gene therapy products, including a Pfizer (PFE)-partnered treatment for hemophilia B and a wholly owned hemophilia A treatment. Both gene therapies are currently in Phase 3 testing.

Spark also has the first Food and Drug Administration-approved gene therapy, Luxturna. The gene therapy gained approval in 2017 to treat a rare inherited eye disorder that often leads to blindness.

Representatives of Spark and Roche declined comment Saturday in emails to Investor’s Business Daily.

Betting On Hemophilia Treatments

Roche is betting big on hemophilia treatments with its drug called Hemlibra. Hemlibra is a hemophilia A treatment. Last month, Roche said Hemlibra generated about $ 154 million in 2018 sales in the U.S. Global sales were about $ 224 million.

William Anderson, who heads up Roche’s pharmaceuticals division, noted Hemlibra’s strong uptake on the company’s quarterly conference call in January.

“You can see essentially, we’ve been virtually doubling sales every quarter,” he told analysts. “I’d say the early read is that there’s not one kind of patient that is getting Hemlibra.”

Gene therapy companies also aim for this space. BioMarin Pharmaceutical (BMRN) and Spark are working on hemophilia A treatments, while UniQure (QURE) is developing hemophilia B treatments. Pfizer also partners with Spark on a hemophilia B gene therapy.

Last year, an ARK Invest analyst told IBD she believed hemophilia treatments could be a $ 26 billion opportunity by 2025.

Biotech Takeovers In 2019

Takeovers in the biotech space have been rampant in 2019.

Bristol-Myers Squibb (BMY) is spending $ 74 billion to buy Celgene (CELG). Eli Lilly (LLY) plans to pay $ 8 billion for Loxo Oncology (LOXO). Late last year, GlaxoSmithKline (GSK) agreed to buy Tesaro for $ 5.1 billion.

Analysts say big biotech companies could look to small- and midsize biotechs to staunch slowing sales with an infusion of new products.

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