What Happened

After reporting second-quarter results that contained upbeat clinical news, Spark Therapeutics (NASDAQ:ONCE), a clinical-stage company focused on gene therapy, rose 18% as of 12:30 p.m. EDT on Wednesday.

So what

Here's a review of the key highlights from the quarter that have traders feeling giddy today:

  • The company released preliminary data from a phase 1/2 dose-escalation clinical trial studying SPK-8011 as a potential one-time therapy for hemophilia A. The company reported that no serious adverse events were observed among the three participants infused thus far. What's more, the first two participants in the study showed a steady and consistent rise in factor VIII activity levels that have since stabilized. This data gave the company confidence to double the dose on the first two participants and move forward with infusing the third participant. Early results show that the third patient's activity level is tracking higher, too. Thus far, there have been no reports of spontaneous bleeds.
  • The company's lead compound Luxturna (voretigene neparvovec) has been given a PDUFA date of January 12, 2018. The FDA also granted the drug rare pediatric-disease designation. That means that a green light would entitle the company to receive a Priority Review Voucher, which history shows could be worth nine figures if sold on the open market. The drug was also submitted to European regulators on July 29, 2017.
  • The company recognized $1.5 million in quarterly revenue related to its collaboration with Pfizer. This is higher than the $1 million in revenue that was expected.
  • Net loss was $74.4 million, or $2.40 per share. This figure far exceeded the $1.74 loss that Wall Street was looking for.
  • Cash balance at quarter-end was $238.6 million.

Katherine High, Spark's president and chief scientific officer, expressed her enthusiasm for the early clinical data related to SPK-8011: "The encouraging start of our SPK-8011 clinical trial reinforces the strength of our gene therapy platform, delivers human proof-of-concept in a second liver-mediated disease -- a significant achievement in the gene therapy field -- and positions us well to potentially transform the current treatment approach for this life-altering disease with a one-time intervention." 

Investors appear to share her enthusiasm for the compound's potential, which is why the company's stock is rallying today.

Scientists working in lab

Image source: Getty Images.

Now what

2017 is shaping up to be a breakout year for Spark Therapeutics. The company's early-stage hemophilia program is producing exciting results and Luxturna looks to have a better-than-average chance of winning approval given its success in late-stage clinical trials

The only knock against Spark is that a lot of enthusiasm has already been priced into its hefty $2.4 billion market valuation. That's quite high when considering that the company still hasn't crossed the finish line with its first product yet and is still burning through capital each quarter.

However, there's no doubt that the company's product-development platform is creating drugs that are performing well in the clinic. As long as that remains the case, there's an argument to be made that the sky-high valuation is warranted.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.