Cantor Fitzgerald Sees 81% Upside In Spark Therapeutics; Initiating with a Buy, $100 PT

Cantor Fitzgerald said Spark Therapeutics Inc ONCE could become the first company with an approved gene therapy product in the United States. The brokerage initiated the company with a Buy rating and $100 price target. Cantor Fitzgerald's target price implies a potential upside of 80.67 percent from Thursday close of $55.35. Philadelphia, Pennsylvania-based Spark develops gene therapy products for patients suffering from genetic diseases. The company develops SPK-RPE65, which has successfully completed a study for the treatment of genetic blinding conditions called inherited retinal diseases (IRD). It is also developing SPK-FIX program for hemophilia B by partnering with Pfizer Inc. PFE. The company, which was spun out from The Children's Hospital of Philadelphia (CHOP) in October 2013, is in the process of submitting a BLA for SPK-RPE65, with a potential approval in 2017. "The benefit appears to be durable (up to three years so far) and may prevent progression to blindness with a single administration of the drug," analyst Elemer Piros wrote in a note. Meanwhile, Spark has raised nearly $400 million, including $35 million from Pfizer, to develop its pipeline of five clinical candidates. It is working on choroideremia and announced programs in two neurodegenerative conditions: Batten and Huntington's disease. "The advancement of the pipeline could create significant inflection points in the next 15-18 months," Piros noted. Piros highlighted that the shares appear undervalued as he estimates hemophilia B and the currently identified IRDs have a combined market potential of $3.5 billion. The risk-adjusted NPV of the visible clinical programs and the estimated YE16 cash is over $2.7 billion. The analyst estimates a 2016 loss of $3.92 a share and revenue of $5.2 million. With a market cap of $1.52 billion, shares of Spark have traded between $21.20 and $75.30 during the past 52-weeks.