Roche is buying U.S.-based gene therapy specialist Spark Therapeutics for $4.3 billion after developments in this area convinced the Swiss drugmaker to "step up", Chief Executive Severin Schwan said on Monday. Roche will pay $114.50 per share for Spark, more than twice the U.S. company's closing price on Feb. 22, for a portfolio that includes a blindness treatment that has U.S. and European approval and other projects for haemophilia and neurodegenerative disorders like Huntington's disease. Basel-based Roche is buying Spark as rivals, including Novartis, also move aggressively into gene therapy, where treatments for rare, inherited diseases command some of the highest prices in medicine. Spark's blindness therapy Luxturna is priced at $850,000 per patient. "We've been watching this space for quite some time. We just feel it's now the right time to step up," Schwan told Reuters in an interview. "The fit of Spark and Roche is really excellent. It provides us with a broad portfolio, it provides us with expertise across the value chain."

A logo of the Swiss pharmaceuticals giant Roche. Fabrice Coffrini | AFP | Getty Images

Schwan is counting on new medicines, including gene therapies, to help compensate for patent losses on his $21-billion-per-year trio of cancer medicines Rituxan, Herceptin and Avastin, that are facing competition from cheaper copies. Roche, the biggest cancer drugs maker, was late to the game in immuno-oncology where Merck's Keytruda is becoming the dominant player and has eclipsed Roche's own product, Tecentriq, that seeks to harness the body's immune system to fight cancer. Bank Vontobel analysts said the Spark deal gives Roche a proven platform for commercialising gene therapies, but did not come without risks -- including getting beaten to market by rivals with similar treatments in the works. Roche shares were 0.4 percent lower by 1140 GMT. Gene therapies use specially engineered viruses, or viral vectors, to deliver genetic material into defective cells, in hopes of improving or potentially even curing an inherited condition. Luxturna, sold in the United States by Spark and elsewhere by Novartis after its approval in 2017, targets a rare genetic disease, Leber's congenital amaurosis, that causes blindness in about 1 in 200,000 people. Loss-making Spark had $51.6 million in revenue in the first nine months of 2018 from Luxturna and also had income from a deal with Pfizer, which it is partnering on another gene therapy for haemophilia B. Philadelphia-based Spark's shares are up about 30 percent this year. The U.S.-company's stock tumbled last year after two of 12 patients showed an unfavourable immune response when treated with a higher dose of Spark's haemophilia therapy SPK-8011. Schwan said Roche was satisfied that the issues that emerged could be addressed with steroid treatment.

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