Spark Therapeutics (NASDAQ:ONCE) recently updated investors on the clinical-trial performance of its gene therapy for hemophilia A. Despite solid efficacy, safety concerns quelled investor optimism. Is Spark Therapeutics on the cusp of a major advance in hemophilia treatment or will competitors outmaneuver it?

In this clip from The Motley Fool's Industry Focus: Healthcare, host Kristine Harjes and Motley Fool contributor Todd Campbell update investors on how drugmakers' efforts to create a one-and-done hemophilia treatment are progressing.

A full transcript follows the video.

This video was recorded on Aug. 15, 2018.

Kristine Harjes: First, Spark Therapeutics, ticker ONCE, lost 28% of its market cap on Tuesday of last week. We weren't able to cover it on our last Healthcare show, so we're digging in today. Todd, what happened?

Todd Campbell: It's funny, I was looking at the three stocks we're following, and it's the three tough luck tumbles.

Harjes: Yeah, it's pretty much all bad news today. Buckle up.

Campbell: Investors, bear with us. We'll hold your hands and get you through this crazy time. History does rhyme. Spark Therapeutics reported data for its hemophilia A gene therapy. Like you said, it got whacked after the data got parsed by investors. That's very similar to what we saw happen back in December, when they reported interim data for the same exact gene therapy, and investors concluded after looking at that data that Spark Therapeutics' SPK-8011 may not be as robust of a treatment option as competitor BioMarin's (NASDAQ:BMRN). BioMarin is working on a similar gene therapy. I won't even try to pronounce the name of it, it's long, it's crazy, it has all sorts of letters in it. We'll call it by its own name, BMN 270.

Essentially, what both of these therapies are trying to do is significantly improve the quality of life for people with hemophilia A. Hemophilia A is a disease that's characterized by an inability to produce a blood clotting factor. As a result, these patients are at risk for serious bleeds, and they must have regular prophylactic infusions of their missing factor VIII coagulate.

Harjes: Efficacy for this Spark drug, SPK-8011, was pretty strong. But, there were some concerns about safety. Seven of the patients in the trial needed to take steroids to offset the immune response that they had to drug. Some patients also showed signs of liver damage. This clotting factor that the drug is designed to help with, levels of that declined enough that two of the patients in the study required infusions of the factor replacement therapy once again.

Campbell: Let's dive into that a little bit. Back in December, SPK-8011, the doses that Spark was investigating at that time, delivered factor VIII activity levels that ranged between 9-37%. For comparison, BioMarin's data showed activity levels of 49%. You ask, why is that important, that's a lot of numbers. If you look at what's normal, activity levels of 50% and up is normal. However, if you ask any clinician, they're going to tell you that as long as you have an activity level of greater than 12%, you're likely to avoid the serious bleeds.

I think investors might be looking at this data and saying BioMarin's is more robust, but missing the point that both of these gene therapies could significantly remove the need for prophylactic infusions. If you look specifically at the data that Spark just put out, you saw an increase in the activity levels on this higher dose cohort that are now added to their trial.

Like you mentioned, there were some immune responses that concerned investors, though. You had five patients who were given the higher dose. They saw in those five patients a 100% reduction in both bleeding events and need for prophylactic treatment. Pretty good, 100%. But, as you mentioned, there were two specific cases where an immune response caused a decrease in activity levels below 5%, and that caused these patients to have to get steroid treatments.

People are looking at it and saying, if seven of 12 total patients -- 12 total have been tested so far, across all cohorts -- needed to have steroids because of elevated alts that could signal some liver problems, and two needed special intervention to get themselves back on track, does that mean this is an unsafe drug?

Harjes: Right. We'll see, as we move forward. They are going to take the drug into a Phase III trial, so more data will come out then, and we can see exactly how serious these adverse events might be across a larger patient cohort. But there will be this impending competition from BioMarin.

Meanwhile, there are other things going on with Spark Therapeutics. The name might sound familiar because we've previously talked on the show about Luxturna, which was their first gene therapy to be approved as a one and done treatment for a rare type of blindness. They also have started a pivotal trial in hemophilia B, which is another drug with an insane name that we're not going to try to say on the show.

Ultimately, this is still a pretty early stage company. That's why you're seeing this volatility. The company had run up quite a bit based on the early data from SPK-8011. Also, they have a partnership with Pfizer that was very exciting to hear about. The Luxturna approval, of course, was good news. Now it's being walked back a little bit.

Campbell: I'm glad you mentioned that. If you look at December, they got hit 30% after the news broke and they compared the results to BioMarin's results. You would have doubled your money buying it at that time, when it fell. No one knows where the stock is going to go from here, but they do have a lot of interesting things going on.

The one other thing I would mention is, in addition to the competitive threat from BioMarin, Sangamo, which is another gene therapy company, is also working on a drug for hemophilia A. It could be, while this is over a billion-dollar market, and maybe it can support multiple players, it could be, in two to three years, when all these drugs are reading out their Phase III data and making their way to the FDA, they could have to cut that pie up in a few different places.

Kristine Harjes owns shares of Spark Therapeutics. Todd Campbell owns shares of BioMarin Pharmaceutical and Pfizer. The Motley Fool recommends BioMarin Pharmaceutical. The Motley Fool has a disclosure policy.