By Dana Cimilluca, Dana Mattioli and Jonathan D. Rockoff 

This article is being republished as part of our daily reproduction of articles that also appeared in the U.S. print edition of The Wall Street Journal (February 25, 2019).

Roche Holding AG has agreed to buy Philadelphia biotechnology company Spark Therapeutics Inc., as the Swiss drugmaker seeks to expand its presence treating hemophilia.

The companies said Monday that Roche would acquire Spark for $114.50 a share and that the deal is expected to close in the second quarter.

The deal corresponds to a total equity value of about $4.8 billion on a fully diluted basis, inclusive of approximately $500 million of projected net cash expected at the transaction's closing, Spark said.

The per-share price represents a premium of 122% to Spark's closing price Friday, Spark said. The company had a market value of just under $2 billion as of Friday's close.

The Wall Street Journal reported on the planned deal Saturday.

The companies said Spark would continue to operate as an independent company within the Roche group.

Under the terms of the deal, Roche will file a tender offer to acquire all outstanding shares of Spark common stock, and Spark will file a recommendation statement containing the unanimous recommendation of the Spark board that its shareholders tender their shares to Roche, the companies said.

Therapies that replace a defective gene with a healthy one are an emerging class of treatment pioneered by companies including Spark. It was founded in 2013 out of gene-therapy research at Children's Hospital of Philadelphia.

Doctors and patients have been looking forward for years to gene therapies treating intractable inherited diseases, but development of the therapies has proved more challenging than initially thought, including the death in 1999 of a young man who received an experimental gene therapy.

Yet development of the therapies appeared to turn a corner in recent years, and big companies like Pfizer Inc. and Novartis AG have been making moves to offer such treatments.

Pfizer has joined with Spark on development of a hemophilia B treatment. Last year, Novartis paid $8.7 billion for gene-therapy developer AveXis.

In 2017, Spark's Luxturna, which treats a condition that can cause blindness, was the first gene therapy for an inherited disease to receive Food and Drug Administration approval.

Spark also is developing gene therapies to treat the inherited blood disorder hemophilia.

The company generated just $64.7 million in revenue last year and a net loss of $78.8 million. Even though that represents dramatic improvement from the prior year on both counts, it underscores how much Roche is having to pay up to secure the acquisition.

Hemophilia is a new and emerging category for Roche. In 2017, the U.S. Food and Drug Administration approved the company's hemophilia A treatment, Hemlibra, which analysts expect will have billions of dollars in yearly sales.

In January, the company described Hemlibra as one of its biggest growth drivers, with sales surpassing 100 million Swiss francs ($100 million) in the fourth quarter alone.

If Spark's hemophilia gene therapies pan out, Roche would be able to expand its offerings in the area, helping it compete with market rivals like Takeda Pharmaceutical Co. Ltd. and Sanofi SA.

Among the challenges confronting companies like Roche seeking to sell the new gene therapies is gaining reimbursement. Spark has said it plans to sell Luxturna in the U.S. at a cost of $850,000 a patient, but it wants to offer partial refunds if patients don't meet recovery targets.

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.

--Anthony Shevlin contributed to this article.

Write to Dana Cimilluca at, Dana Mattioli at and Jonathan D. Rockoff at


(END) Dow Jones Newswires

February 25, 2019 02:47 ET (07:47 GMT)

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