OREANDA-NEWS. Spark Therapeutics (NASDAQ:ONCE) today announced financial results for the quarter ended June 30, 2016 and updated investors on its progress.

“During the last several months, we have made significant progress advancing our clinical portfolio of AAV gene therapy candidates and showcasing the strengths of our overall platform capabilities,” said Jeffrey D. Marrazzo, chief executive officer of Spark. “Notably, we released additional positive data from the continuation of the Phase 3 trial of voretigene neparvovec and remarkable, preliminary safety and efficacy data from the Phase 1/2 clinical trial of SPK-9001 in hemophilia B, which also was granted breakthrough therapy designation.”

“We also continued to make significant progress in preparing the potentially first-ever BLA submission of a gene therapy for a genetic disease, and we are on track to submit the clinical modules and finalize the vast majority of the chemistry, manufacturing and controls (CMC) components before the end of the year,” continued Mr. Marrazzo. “However, based on a recent reassessment of the timelines for completion of the CMC modules, we now expect the generation of certain data using validated quality control methods that are part of the CMC modules to occur in early 2017.”

“We closed the quarter with a healthy balance sheet and we remain focused on finalizing our regulatory submissions of voretigene neparvovec, initiating a clinical trial of SPK-8011 for hemophilia A and further scaling-up of our manufacturing process for future applications.”

Recent highlights

Voretigene neparvovec for RPE65-mediated inherited retinal disease:

  • Reported positive one-year safety and efficacy data for the nine subjects in the Phase 3 crossover group:
    • The eight responders demonstrated the maximum improvement measurable on the bilateral mobility test, the primary endpoint
    • The safety profile was largely consistent with prior studies and there were no product candidate-related serious adverse events, or SAEs, however, one procedure-related SAE was reported in one subject
  • Overall, 27 of 29, or 93%, of Phase 3 subjects responded, demonstrating a gain of functional vision as measured by the primary endpoint at one year
  • Reported positive follow-up two-year durability of benefit data for the 20 subjects in the Phase 3 intervention group, as measured by both bilateral mobility and full-field light sensitivity threshold testing
  • Positive follow-up data from a Phase 1 trial in 11 subjects were published in The Lancet, providing insight into the long-term safety and the durability of contralateral-eye administration for at least 3 years

SPK-9001 for hemophilia B:

  • Released initial Phase 1/2 safety and efficacy data, as of July 12, with a combined 76 weeks of observation across the first four subjects enrolled in the study:
    • Consistent and sustained average steady-state factor IX activity levels of 31.8% ±6.9% (range 20% to 44%) of normal determined by averaging levels beginning at 8 weeks post administration through follow up over 12 to 31 weeks following a single administration of SPK-9001 at the initial dose level of 5 x 1011 vg/kg
    • SPK-9001 has been well-tolerated, with no sustained elevation in liver enzyme levels above 1.5x the upper limit of normal
    • No subjects have needed, or received, immunosuppression
    • No subjects have received regular infusions of factor IX concentrates to prevent bleeding events
  • Expanded the Phase 1/2 trial, in collaboration with Pfizer, at the initial dose of 5 x 1011 vg/kg with a target of up to 10 subjects
  • Granted breakthrough therapy designation by FDA

SPK-8011 for hemophilia A:

  • Presented strong preclinical data showing factor VIII expression in the 15% to 35% range in preclinical models at clinically relevant doses of 2 x 1012 vg/kg
  • Presented additional preclinical data, utilizing an in vitro assay, of the Spark200 capsid, a novel bio-engineered adeno-associated virus (AAV) capsid optimized for more efficient transduction of human hepatocytes, demonstrating high efficiency in transducing human hepatocytes compared to Spark100, the capsid used in SPK-9001
  • On track to initiate a Phase 1/2 trial in the fourth quarter of 2016

Manufacturing scale-up:

  • Established proof-of-concept of a high-productivity and fully scalable, serum-free suspension cell culture system utilizing our current HEK293 mammalian cell line
  • Implemented a more scalable, all-column, downstream purification process

Expanded human capital and strengthened financial position:

  • Continued to grow our team across all disciplines, with now over 150 employees
  • Strong balance sheet with $379.1 million in cash, cash equivalents and marketable securities at June 30, 2016

Upcoming events

Dr. Stephen Russell, a clinical investigator at the University of Iowa and a principal investigator on the Phase 3 trial of voretigene neparvovec, will present “Visual Acuity Sensitivity/Subgroup Analyses from a Phase 3 Trial of AAV2-hRPE65v2 (voretigene neparvovec) in RPE65 Mutation-Associated Inherited Retinal Dystrophy” at the American Society of Retinal Specialists in San Francisco, CA on Sunday August 14, 2016 at 11:23 am (PT).

Financial results

Three Months Ended June 30, 2016 and 2015

In the three months ended June 30, 2016 and 2015, we recognized $1.3 million of revenue associated with our Pfizer collaboration.

Our research and development expenses for the three months ended June 30, 2016 were $19.6 million versus $9.3 million for the three months ended June 30, 2015. The $10.3 million increase was due to an $8.6 million increase in internal research and development expenses, primarily due to significantly increased headcount, and an increase of $1.7 million in external research and development, primarily from an increase of $2.0 million in expenses related to preclinical studies for other product candidates to support our advancing and expanding pipeline, offset by a decrease of $0.3 million related to clinical trials for SPK-CHM.

General and administrative expenses for the three months ended June 30, 2016 were $10.7 million versus $6.3 million for the three months ended June 30, 2015. General and administrative expenses consisted primarily of salaries and related costs, including stock-based compensation, legal and patent costs and other professional fees. The $4.4 million increase primarily was due to an increase in salaries and related cost, including stock-based compensation, as a result of increased headcount and increased legal and patent costs.

Our net loss applicable to common stockholders for the three months ended June 30, 2016 was $28.7 million, or ($1.04) basic and diluted net loss per common share, as compared with a net loss applicable to common stockholders of $14.3 million, or ($0.60) basic and diluted net loss per common share for the three months ended June 30, 2015.

Six Months Ended June 30, 2016 and 2015

In the six months ended June 30, 2016, we recognized $2.6 million of revenue associated with our Pfizer collaboration.  In the six months ended June 30, 2015 we recognized $2.6 million of revenue associated with our Pfizer collaboration and $1.0 million of a non-refundable payment after we concluded discussions on a potential agreement with a pharmaceutical company.

Our research and development expenses for the six months ended June 30, 2016 were $37.9 million versus $17.7 million for the six months ended June 30, 2015. The $20.2 million increase was due to a $15.4 million increase in internal research and development expenses, primarily due to significantly increased headcount, and an increase of $4.8 million in external research and development, primarily from an increase of $1.8 million in expenses related to clinical trials and pre-launch activities for voretigene neparvovec as well as an increase of $3.9 million related to preclinical testing of other product candidates, offset by a decrease of $0.9 million in external costs for clinical trials for SPK-CHM and SPK-9001.

General and administrative expenses for the six months ended June 30, 2016 were $19.6 million versus $10.0 million for the six months ended June 30, 2015. General and administrative expenses consisted primarily of salaries and related costs, including stock-based compensation, legal and patent costs and other professional fees. The $9.6 million increase primarily was due to increase in salaries and related cost, including stock-based compensation, as a result of increased headcount, and increased legal and patent costs.

Our net loss applicable to common stockholders for the six months ended June 30, 2016 was $54.3 million, or ($2.00) basic and diluted net loss per common share, as compared with a net loss applicable to common stockholders of $24.7 million, or ($1.17) basic and diluted net loss per common share for the six months ended June 30, 2015.

As of June 30, 2016, Spark had cash, cash equivalents and marketable securities of $379.1 million, with 30.6 million shares outstanding.

 

About Spark Therapeutics

Spark Therapeutics, a fully integrated gene therapy company, is seeking to transform the lives of patients with debilitating genetic diseases by developing one-time, life-altering treatments. Spark Therapeutics’ validated gene therapy platform is being applied to a range of clinical and preclinical programs addressing serious genetic diseases, including inherited retinal diseases, liver-associated diseases, such as hemophilia, and neurodegenerative diseases. Spark Therapeutics’ validated and proprietary technology platform for selecting, designing, manufacturing and formulating highly optimized gene therapies has successfully delivered gene therapies with proof-of-concept data in the eye and liver. Spark Therapeutics’ most advanced product candidate, voretigene neparvovec (formerly referred to as SPK-RPE65), which has received both breakthrough therapy and orphan product designations, reported positive top-line results from a pivotal Phase 3 clinical trial for the treatment of RPE65-mediated inherited disease, a rare blinding condition. Spark Therapeutics’ hemophilia programs have two lead assets: SPK-9001, being developed under a collaboration with Pfizer, in a Phase 1/2 trial for hemophilia B; and SPK-8011, a preclinical candidate for hemophilia A. SPK-9001 has received breakthrough therapy designation. 

Cautionary note on forward-looking statements

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's product candidates, including voretigene neparvovec,  SPK-9001 and SPK-8011. Any forward-looking statements are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in, or implied by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that: (i) the data from our Phase 3 clinical trial of voretigene neparvovec may not support a label for the treatment of RPE65-mediated IRDs other than Leber congenital amaurosis (LCA); (ii) the improvements in functional vision demonstrated by voretigene neparvovec in our clinical trials may not be sustained over extended periods of time; and (iii) we could experience delays in submitting our regulatory filings, including our Biologics Licensing Application with FDA and, once submitted, such regulatory filings may not be approved; (iv) preclinical results for our product candidate, SPK-8011, for hemophilia A may not translate to humans in clinical trials; (v) our lead SPK-FIX product candidate, SPK-9001, may not produce sufficient data in our Phase 1/2 clinical trial to warrant further development; (vi) our overall collaboration with Pfizer may not be successful; and (vii) any one or more of our product candidates in preclinical or clinical development will not successfully be developed and commercialized. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see the "Risk Factors" section, as well as discussions of potential risks, uncertainties and other important factors, in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other filings we make with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and Spark undertakes no duty to update this information unless required by law.

Spark Therapeutics, Inc.
Consolidated Balance Sheets
(Unaudited)
 
  December 31,
 2015		   June 30,
 2016
Assets      
Current assets:      
Cash and cash equivalents $ 293,530,590     $ 225,026,665  
Marketable securities —     107,185,716  
Other receivables 16,944,568     1,233,355  
Prepaid expenses and deferred financing costs 1,132,626     1,830,138  
Total current assets 311,607,784     335,275,874  
Marketable securities —     46,839,587  
Property and equipment, net 16,999,445     19,554,010  
Acquired-in-process research and development —     15,490,000  
Goodwill —     2,096,119  
Other assets 1,165,285     1,078,917  
Total assets $ 329,772,514     $ 420,334,507  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable $ 9,687,594     $ 6,764,933  
Accrued expenses and other 6,529,263     5,922,804  
Current portion of deferred rent 715,959     751,483  
Current portion of deferred revenue 5,182,835     5,168,674  
Total current liabilities 22,115,651     18,607,894  
Long-term deferred rent 8,084,509     7,687,001  
Long-term deferred revenue 9,034,559     6,471,463  
Deferred tax liability —     1,936,250  
Total liabilities 39,234,719     34,702,608  
Stockholders’ equity:      
Preferred stock, $0.001 par value. Authorized, 5,000,000 shares; no shares issued or outstanding —     —  
Common stock, $0.001 par value. Authorized, 150,000,000 shares; issued 27,082,493 and 30,579,756 shares at December 31, 2015 and June 30, 2016, respectively; 27,073,287 and 30,570,550 outstanding at December 31, 2015 and June 30, 2016, respectively 27,083     30,580  
Additional paid-in capital 419,791,732     569,061,035  
Accumulated other comprehensive income —     74,130  
Treasury stock, at cost 9,206 shares at December 31, 2015 and June 30, 2016 (552,636 )   (552,636 )
Accumulated deficit (128,728,384 )   (182,981,210 )
Total stockholders’ equity 290,537,795     385,631,899  
Total liabilities and stockholders’ equity $ 329,772,514     $ 420,334,507