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Wall Street Reacts To Spark Therapeutics' $850K Genetic Blindness Treatment

January 3, 2018 11:59 am
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The first gene therapy treatment ever approved in the U.S. comes with a steep price tag. On Wednesday, Spark Therapeutics Inc (NASDAQ:ONCE) announced it will charge $425,000 per eye for one-time treatments of a rare genetic retinal disease that causes blindness. The new therapy could be a huge plus for Spark and its investors.

Cantor Fitgerald's Take

Cantor Fitzgerald analyst Elemer Piros reiterated an Overweight and $105 price target for Spark.

Spark is exploring payment structures that will help increase the availability of Luxturna, Piros said. (See the analyst's track record here.) 

“We anticipate greater details on finalized payment structures closer to commercial launch of the drug, which could occur as early as this quarter," he said. 

Spark has plenty of opportunities to expand its gene therapy treatments to other areas and has a major advantage by being the first to the market, the analyst said. 

Evercore Weighs In

Evercore ISI analyst Steven Breazzano said Wednesday that gene therapy is a massive opportunity for investors, but Spark may not necessarily be the best play.

"Overall, we continue to believe in the potential for gene therapy as a field given the number of exciting programs advancing in the clinic, but we remain disciplined in our investment philosophy as we seek to identify those companies with differentiated assets and platforms and reasonable valuations," he said. (See Breazzano's track record here.) 

Spark's share price is in-line with the risk-reward balance Evercore sees for the Luxturna launch. The firm maintained its In-Line rating on Spark with an $83 price target.

Pricing And Potential

Luxturna's price may seem extremely expensive at first glance, but pharmacy benefits manager partner Express Scripts Holding Company (NASDAQ:ESRX) said the therapy has been priced “responsibly.” Wall Street analysts had been expecting the therapy to cost in the neighborhood of $1 million.

Gene therapy is a brand new field of treatment that involves using a virus to deliver a healthy copy of a gene to replace the deficient copy that occurs naturally in the body. Spark estimates that up to 2,000 people suffer from genetic retinal dystrophy in the U.S. caused by a defect in the RPE65 gene.

Price Action

Spark stock was up 1.59 percent at $54.16 at the time of publication Wednesday, but is down 39.7 percent overall in the past three months in light of positive data from gene therapy competitor BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).

Related Links:

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