Chardan Sees ONCE PLA Amendments As Positive For Consolidating IP, Warns Of Risks Associated With Existing Issued Patent

Spark Therapeutics Inc

ONCE PLA amendments were viewed as "positive" for consolidating IP by analysts at Chardan Capital Markets but the firm also warned of risks associated with its existing issued patent. "The action is positive in terms of consolidating IP, but further emphasizes the risks we identified (in our 23 December 2015 initiation) associated with the weaknesses in the existing issued patent," Chardan commented in a research note on Friday. Chardan issued a Neutral rating on ONCE and a price target of $45.00 on Friday. "By converting Spark's previously non-exclusive license from Penn, Cornell, and Florida into an exclusive license, Spark is demonstrating a consolidation of their IP protection in line with their pending BLA submission for SPK-RPE65," the firm noted. The firm believes the exclusive IP license will create obstacles for competitor entry. "Such exclusive IP licensing should create barriers for entry for gene therapy competitors in RPE65-mediated LCA2. However, we believe this conversion of exclusivity emphasizes both the value and risks for Spark in achieving useful patent protection for SPK-RPE65," Chardan commented. On January 6, Spark Therapeutics filed with the SEC a Form 8-K. The form declared entry into a Material Definitive Agreement which amends its Patent License Agreement with the University of Pennsylvania ("Penn"). The company also filed another Form 8-K with the SEC on January 7, amending its License Agreement with the University of Iowa Research Foundation ("Iowa"). "We continue to model $342 million of risk-adjusted SPK-RPE65 sales in 2019 E." Chardan commented.