Spark’s meteoric rise from hospital-funded spinout to $4.8 billion deal

Roche vows to retain gene therapy leader’s culture.
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Roche’s acquisition of gene therapy developer Spark Therapeutics, founded by researchers from Children’s Hospital of Philadelphia, will result in a huge return on the hospital’s initial investment. Credit: Spark Therapeutics.

A pediatric hospital spinout responsible for bringing to market in the United States the first gene therapy for treating an inherited disease has been acquired by Swiss pharmaceutical giant Roche. Spark Therapeutics, the Children’s Hospital of Philadelphia startup, in 2017 received US Food and Drug Administration approval for Luxturna (voretigene neparvovec-rzyl) to treat an inherited form of retinal dystrophy (Nat. Biotechnol. 36, 6, 2018). The February 25 deal values the five-and-a-half year-old Spark at $4.8 billion, more than twice the company’s market valuation before the announcement. Basel-based Roche will keep its target at arm’s length in an attempt to preserve what made it an attractive target in the first place, saying that Spark will continue to operate as an independent gene therapy specialist out of its Philadelphia headquarters.

Also on March 4, Biogen acquired Nightstar Therapeutics, a London-based biotech developing gene therapies for rare inherited retinal diseases, for $800 million. This and the Spark deal underscore large companies' growing appetite for gene therapies, as well as ophthalmic indications' prominence as an early proving ground for these technologies.

With the Spark buyout, Roche gains US rights to Luxturna. The therapy replaces the mutated RPE65, a gene encoding the enzyme retinoid isomerohydrolase in the retina, which transduces light into electrical signals. Luxturna recorded $27 million in revenue in its first year on the US market. But Roche’s real prize is Spark’s gene therapy pipeline—in particular, a pair of treatments for hemophilia A, the most advanced of which should enter phase 3 this year. (Novartis already holds non-US rights to Luxturna and Spark’s hemophilia B program is partnered, with Pfizer; Table 1.)

Table 1 | Spark’s advanced gene-therapy pipeline

Drug candidate

Clinical stage





Biallelic RPE65-mutation-associated retinal dystrophy


SPK-9001 (fidanacogene elaparvovec)

Phase 3

Hemophilia B



Phase 2

Hemophilia A



Phase 1/2

Hemophilia A with inhibitors



Phase 1/2





Pompe disease




Batten disease


This blood-disorders market is one where Roche has already carved out a lucrative niche: its Hemlibra (emicizumab-kxwh) humanized IgG4 monoclonal antibody for hemophilia A has been a key growth driver for the company since its approval in 2017. But until this acquisition Roche lacked a gene therapy in this indication and was potentially vulnerable to the pack of gene therapies gaining ground on the biologics that dominate that field (Nat. Biotechnol. 34, 999–1001, 2016).

Spark’s presence in both hemophilia and inherited blindness stems from the work of its scientific founders at the Children’s Hospital of Philadelphia (CHOP)’s Center for Cellular and Molecular Therapeutics, established in 2004. Funding for the program that would become Luxturna began at the center in 2005, and the hospital helped conduct its first clinical trial in 2007.

Katherine High, Spark president and head of R&D and founding director of the Center for Cellular and Molecular Therapeutics, has credited the hospital’s leadership for the “extraordinary decision” to fund those initial trials, at a time when the future for gene therapy appeared bleak because of safety concerns and a reluctance from the biopharma industry to back companies trying to solve the field’s fundamental scientific challenges Despite this, CHOP poured resources into clinical trials and the development of the adeno-associated viral vector to deliver its gene therapies. In October 2013, it staked Spark with $50 million to spin off the technology and gene therapy pipeline from the center, and in 2014 it invested in the company’s second venture capital round.

In time the hospital was handsomely rewarded for its investment. Not long after that initial financing burst, Spark went public, raising $185 million—after the offering, CHOP still owned more than a third of the company—and raised several hundred million dollars through follow-on public offerings in 2017. Its financial and scientific success with Spark gives the hospital a key revenue stream to complement its traditional philanthropic and government capital sources and may provide a model for future company formation. CHOP president and CEO Madeline Bell says that for now the hospital is reviewing the acquisition’s impact “and will be developing plans to build upon our mission.” Meanwhile it retains its focus on gene therapy and will continue to collaborate with Spark.

CHOP’s success may prove to be an inspiration. As gene therapy becomes more commonplace, rare disease foundations may take on more of the risk and responsibility of moving these drug candidates along toward FDA approval, says Andrew Lo, director of the Massachusetts Institute of Technology's Laboratory for Financial Engineering. "The complexity of producing these altered viruses and administering them to patients resides at least initially within academic medical centers and research departments," he says. What CHOP and then Spark have been able to do shows that foundations can apply their research dollars to the roots of these diseases, he says, and it wouldn't be shocking if the FDA were approving three to five gene therapies a year in the near future. Patient advocacy groups and philanthropic foundations are taking note, for good reason. “The phrase 'I was blind but now I see' used to be reserved for religious experiences," says Lo.

doi: 10.1038/d41587-019-00007-6
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