This blog is the first installment in a series, Innovations Advanced by M&A, that underscores the importance of mergers and acquisitions in ensuring a competitive and vibrant biopharmaceutical landscape for patients.
Across the United States’ world-class life sciences ecosystem, mergers and acquisitions (M&A) have become a vital bridge for companies to secure the resources, investment and expertise necessary to bring new treatments and cures to patients. Case in point: the 2019 merger between Roche and Spark Therapeutics that was instrumental in helping to expand the global reach of Luxturna, a first-in-class gene therapy approved as a one-time treatment for biallelic RPE65 mutation-associated retinal dystrophy – a rare, inherited form of vision loss.
Spark, a Philadelphia-based biotech, was founded in 2013 by highly-specialized researchers and funded via seed investment from the Children’s Hospital of Pennsylvania (CHOP). Starting with just a few dozen employees, the company quickly emerged as a pioneer in the discovery and development of gene therapies – medicines that target or replace damaged genes to address the root cause of a disease. In December 2017, Spark obtained FDA approval for Luxturna, making it the first gene therapy ever approved to treat an inherited genetic disease and a potentially transformative breakthrough that could restore patients’ vision.
Shortly after, Spark sought to partner with a company that could help it expand its gene therapy science. In 2019, Roche acquired Spark, allowing the start-up access to the sophisticated global manufacturing and distribution infrastructure necessary to bring Luxturna – and other promising gene therapies in their pipeline – to a greater number of patients across the world.
“As the only biotechnology company that has successfully commercialized a gene therapy for a genetic disease in the U.S., we have built unmatched competencies in the discovery, development and delivery of genetic medicines. But the needs of patients and families living with genetic diseases are immediate and vast. With its worldwide reach and extensive resources, Roche will help us accelerate the development of more gene therapies for more patients for more diseases and further expedite our vision of a world where no life is limited by genetic disease.”
– Jeff Marrazzo, former CEO, Spark Therapeutics
Today, Spark continues to operate as an independent, Philadelphia-based company within the Roche group. The two companies’ collaborative relationship has allowed them to leverage their own unique, and highly sophisticated resources and expertise and ultimately innovate more effectively.
“With its extensive experience running global clinical trials, navigating FDA approvals, and deploying international commercial and marketing teams for new products, Roche has been able to let Spark focus on what it does best—develop innovative gene therapies. As Spark’s experience shows, mergers often give new products the best chance of surviving the long and perilous road to market.”
– Spark Therapeutics (Comments to Multilateral Pharmaceutical Merger Taskforce)
In addition, Spark’s acquisition by Roche helped propel rapid growth in Philadelphia’s blossoming biopharmaceutical ecosystem. Today, Spark employs more than 800 people and – in partnership with Roche – has made significant investment in local infrastructure through the creation of a Roche global center of excellence for gene therapy manufacturing, supporting its gene therapy pipeline for conditions such as Hemophilia A and Pompe disease.
The Spark-Roche merger also ensured that CHOP received a return on its initial investment, setting a precedent for other research hospitals to be able to continually invest and support promising gene therapy research that translates into new discoveries. As a result, a cascade of investment followed from Philadelphia-area research hospitals, and the region is now home to a highly-competitive ecosystem of more than 45 companies working to develop and deliver the next generation of gene therapies.
“As one of the U.S.’s leading biotech hubs, there is no doubt that Philadelphia will play a crucial role in the advancement of cell and gene therapies. Spark’s gene therapy innovation center creates endless opportunities for collaboration, talent development and research investment, and we’re proud to make a long-term commitment to the city and add Philadelphia to the Roche map.”
– Severin Schwan, former chief executive officer, Roche
Spark’s merger with Roche exemplifies the unique role of M&A in helping to advance new innovations and promote competition in the life sciences ecosystem, and the importance of balanced competition policies that recognize this reality.