Disappointing Trial Results send Spark Therapeutics shares down 30%

Shares of Spark Therapeutics Inc. (NASDAQ: ONCE) plummeted nearly 30% on Tuesday after the Company reported the results of a small trial for an experimental gene therapy treatment for hemophilia that reduced bleeds in most patients but sent one to the hospital.

The Philadelphia-based Biotechnology Company said its treatment for hemophilia A reduced bleeds and the need for therapeutic infusions by 97% in a trial of 12 patients, and that it plans to start a late-stage clinical trial in the fourth quarter.

Two patients, though, had an immune response that caused the level of that protein to decline to less than 5%. One of the patients was admitted to the hospital in what Spark described as a serious adverse event.

“The immune response in the two participants is a significant concern,” SunTrust analyst Edward Nash wrote in a note to investors, saying it’s unlikely Spark will further increase the dose of the drug.

Wall Street was looking for a level of 30% expression of Factor VIII or more to consider the trial a success, Evercore ISI analyst, Steve Breazzano, wrote in a July 30th research note, “provided that the results are not highly variable.”

Spark also released its second-quarter results before the market opened Tuesday, reporting USD 25.2 Million in total revenue for the three months ended June 30th, compared with USD 1.5 Million during the same period last year. The Company also swung to an USD 80.2 Million profit during the second quarter, from a USD 74.4 Million loss in 2017. More than USD 20 Million of its revenue came from agreements it has with Pfizer, Spark said.

Prior to Tuesday, Spark’s stock had gained more than 50% this year, following a massive drop in December on an earlier look at four patients in this clinical trial. After a presentation at the American Society of Hematology Conference in Atlanta, Spark’s stock dropped 35% in a single day as investors were worried about a lack of uniformity in the results and were more encouraged by an update from rival BioMarin Pharmaceutical Inc. (NASDAQ: BMRN).

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