Analyst: Weakness In Spark Therapeutics Is Overdone

Spark Therapeutics Inc (NASDAQ:ONCE) reported during the ASH conference an update concerning its SPK-8011 therapy, which has many investors concerned.

The Analyst

Cantor Fitzgerald's Elemer Piros maintains an Overweight rating on Spark Therapeutics's stock with an unchanged $105 price target.

The Thesis

Spark presented additional Hemophilia A data during the ASH event, which "raises new questions on variability of factor VIII expression levels associated" with the therapy, Piros said in a note. While the questions may be valid, the stock's 40-percent plunge Monday could be considered an "overreaction" as it's "not entirely dissimilar from when eventually well managed immune responses were observed in Hemophilia B."

"Although initial results demonstrated signs of a dose response (particularly patient 3), a sudden decrease in factor VIII expression was observed - mediated by the precautionary treatment with corticosteroids - in the two patients treated at the higher dose," the analyst said. "Additionally, a plateau effect was not yet observed in three of the four more recently treated patients, with the second patient demonstrating an increase in expression at approximately six months of follow-up and expression level of 37% normal at last follow-up."

Bottom line, Spark's program should still considered to be "early and promising" and while future data releases will "further characterize these challenges" the company's management team does have a positive track record of "successfully addressing them."

Price Action

Shares of Spark hit a new 52-week low of $41.06 before slightly rebounding to $44.47, still a decline of 35 percent for the day.

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