In a $4.8 billion deal, Swiss life sciences giant Roche has agreed to acquire Spark Therapeutics, a University City-based developer of gene therapy treatment for genetic ailments.
Initially reported by the Wall Street Journal on Saturday, Roche officially announced Monday it will fully acquire Spark — a publicly traded spinout of Children’s Hospital of Philadelphia (CHOP) founded in 2013 — at a price of $114.50 per share, which represents a premium of approximately 122 percent to Spark’s last closing stock price. Including $500 million of “projected net cash” expected at the close of the acquisition, the total size of the deal is $4.8 billion, making it an easy contender for the largest exit for a tech company within city limits.
As part of the deal, the company will retain its 3711 Market St. headquarters, where it employs in Philadelphia and operate as a standalone Roche company.
“The needs of patients and families living with genetic diseases are immediate and vast,” said Spark CEO Jeffrey Marrazzo. “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.”
Spark — with the Nasdaq ticker “ONCE,” a reference to its treatments’ one-time dose administration — committed $50 million from CHOP upon spinning out. The following year, it had raised a $72.8 million Series B round led by Silicon Valley investors Sofinnova Ventures, and by 2015 it went public, hitting a $1 billion valuation on opening day.
The lineup of therapies in development by Spark, which looks to eradicate genetic diseases like hemophilia A and certain types of blindness, is the product of decades of research from the University of Pennsylvania Perelman School of Medicine’s Dr. Jean Bennett and Dr. Albert Maguire.
“Spark Therapeutics’ haemophilia A programme could become a new therapeutic option for people living with this disease,” said Roche CEO Severin Schwan in a press release. “We are also excited to continue the investments in Spark Therapeutics’ broad product portfolio and commitment to Philadelphia as a center of excellence.”
Spark’s exit to a top-tier name like Roche pairs well with the narrative of Philly as a regional hub for life sciences. For Nick Frontino, managing director of the Economy League of Greater Philadelphia, a deal with a sticker price like this one is likely to pay local dividends both in jobs and economic growth.
“An exit of this scale for a company so directly associated with Philadelphia institutions will sends a global signal about the strength of our region’s life sciences innovation ecosystem,” Frontino said in an email Monday. “This approach to economic development — nurturing and supporting homegrown firms that emerge from local centers of expertise and draw upon our region’s competitive advantages — is a model we should be working to replicate as often as we can.”