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Spark Therapeutics: Earnings Update For This Core Biotech Holding


  • My last "buy the dip" piece was followed by an all-out implosion (great example of the risks involved in the biotech sector).
  • The stock has rebounded nicely since late February and been a solid performer for the Core Biotech model portfolio.
  • An ex-US partnership inked with Novartis strengthened the bullish thesis and the firm appears increasingly prepared for its US launch.
  • A few catalysts are coming for the pipeline that readers should be aware of.
  • Readers who have done their due diligence should purchase a pilot position. Dips or weakness in the initial stage of the LUXTURNA launch would be a welcome buying opportunity for readers with multi-year time frames.

Shares of Spark Therapeutics (ONCE) have seen a nice bounce recently, having risen by 30% since late February. It looks like my "buy the dip" piece in late November was followed by a much larger "dip" than I was expecting (Note: This was an unexpected event and great example of how biotech is a minefield).

Figure 1: ONCE daily advanced chart (Source: Finviz Elite) (Disclosure: Contains affiliate link)

The stock plummeted as low as the $40 level after data for hemophilia A candidate SPK-8011 fell short of competitor BioMarin Pharmaceutical's (BMRN) valoctocogene roxaparvovec. While initial data was "positive," and in a small number of patients, mean factor VIII activity level after week 12 varied widely and a dose-response was not clearly observed, I'd say this program is far from dead, and there is a hope that clarity will be forthcoming with higher number of patients. Data could potentially improve with higher dosing considering the safety profile was solid (no serious adverse events observed).

Another event that significantly strengthened the bullish thesis was the ex-US collaboration inked with Novartis (NVS), whereby the larger firm forked over $105 million in upfront cash, could pay up to $65 million in potential near-term milestone payments, and will be on the hook for royalty payments (static mid-20s percent) on net sales. In addition to a nice cash infusion, this esteemed partner adds much credibility to the story and allows Spark to focus on maximizing its U.S. opportunity.

The stock has made an outsized move upward since fourth-quarter and full-year results were reported on February 20th and is currently the best performer in our Core Biotech model account. The company reported a cash position of $540 million (about 20% of the current market cap), while net loss for the full year came in at $253.5 million. General and administrative expenses more than

This article was written by

Jonathan Faison profile picture
Community of Biotech Investors Focused on Value & Clinical Momentum

Founder of 500+ member ROTY Biotech Community (try the 2-week free trial to see if it adds value for you). Quality over quantity- enjoy connecting with readers.

Analyst’s Disclosure: I am/we are long ONCE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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