(Reuters) - Roche Holding AG made its second major gene therapy deal in a year on Monday, spending $1.15 billion to obtain the rights to Sarepta Therapeutics Inc’s investigational drug to treat duchenne muscular dystrophy (DMD) outside the United States.

FILE PHOTO: The logo of Swiss drugmaker Roche is seen at its headquarters in Basel, Switzerland February 1, 2018. REUTERS/Arnd Wiegmann/File Photo

The Swiss drugmaker closed a $4.3 billion deal to acquire Sparks Therapeutics this month, underscoring the growing appetite among large drugmakers for gene therapies.

Roche will make an upfront payment of $750 million in cash and take a $400 million stake in Sarepta, priced at $158.59 per share, a premium of about 26% to the U.S. drugmaker’s closing price on Friday.

Shares of Sarepta, which already has non-gene therapies for DMD in the market, were up 9% at $138 before the bell.

“This deal should increase confidence in Sarepta’s entire DMD gene therapy program, remove any financing overhang, and allow Sarepta to retain control and flexibility,” Cantor Fitzgerald analyst Alethia Young said in a note.

Gene therapies, one of the hottest areas of drug research, aim to correct certain diseases by replacing the missing or mutated version of a gene found in a patient’s cells with healthy copies.

Earlier this month, Japan’s Astellas Pharma Inc said it was buying gene therapy developer Audentes Therapeutics Inc for about $3 billion - more than double the U.S. company’s market value at the time.

DMD is a rare degenerative neuromuscular disorder, which affects about one in 3,500-5,000 male births worldwide, causes severe progressive muscle loss and premature death.

Sarepta already has a large presence in the DMD market. Its Exondys 51, a non-gene therapy that was approved in 2016, brought in sales of $99 million in the latest quarter. Earlier this month, the company gained a surprise U.S. approval for another DMD drug Vyondys 53.

The drugmaker is eligible to receive up to $1.7 billion in regulatory and sales milestones, plus royalties on net sales, Roche said, adding the agreement was expected to close in the first quarter of 2020.

Sarepta will continue to be responsible for the clinical development and manufacturing of the gene therapy, SRP-9001, while sharing global clinical development costs equally with Roche.

“This deal is as big as it gets for four patients worth of data and only ex-U.S. rights,” Baird analyst Brian Skorney said in a note.