Shares of Spark Therapeutics (NASDAQ:ONCE), a clinical-stage gene therapy company, plunged as much as 25% during Thursday afternoon's trading session, after Spark and its development partner Pfizer (NYSE:PFE) released an abstract of updated data concerning their phase 1/2 trial of SPK-9001 for the treatment of hemophilia B. The abstract was released ahead of the American Society of Hematology's (ASH) annual meeting in December.
According to the abstract, of the first seven participants who received a single administration dose of SPK-9001, four achieved "consistent and sustained factor IX activity levels, with a mean greater than 30% of normal, with no sustained elevation in liver enzyme levels" 12 weeks post-administration. Factor IX is a protein naturally produced by the body (but lacking in hemophilia B patients) that helps the blood form clots and stop bleeding.
However, the abstract also notes that one participant, who didn't reach 12 weeks post-administration, "manifested an immune response to the adeno-associated virus capsid, accompanied by a drop in factor IX activity level, and was put on a tapering course of corticosteroids." Both Spark Therapeutics and Pfizer note that the patient didn't have any bleeding events or require replacement factor, but it's nonetheless worrisome that one of seven patients had what can be described as a notable hiccup.
Additionally, the abstract states that one patient had a precautionary infusion two days after administration due to a suspected ankle bleed.
While the initial efficacy in four of the first seven patients is encouraging, and I'm sure Spark and Pfizer will have more to say a month from now at ASH, the safety of SPK-9001 is going to shuffle to the forefront in these early-stage trials. It's really difficult to make an assessment on efficacy and safety from just seven patients, but clearly there are concerns based on today's move lower.
Just to pile things on, Spark Therapeutics also reported its third-quarter results before the opening bell this morning. The company wound up recognizing $1.3 million in revenue from its collaboration with Pfizer, but its research and development expenses nearly doubled to $22.4 million from $11.8 million in the year-ago quarter. Its loss for Q3 worked out to $1.07 per share, or $32.6 million, which was $0.07 worse than Wall Street had expected. Understandably, though, it's very difficult for Wall Street to predict how large a loss a clinical-stage biotech will report, and thus today's earnings miss is probably having little effect on its share price.
With only three clinical-stage compounds in the works, Spark Therapeutics looks to be lugging around a hefty valuation at $1.25 billion, even including today's drop. My suggestion, based on the expectation of continued near-term losses and the relative "youngness" of its pipeline, would be to monitor its progress from a safe distance.