Spark Therapeutics Lacks Catalysts, Says Goldman Sachs

Goldman Sachs is downgrading Spark Therapeutics Inc ONCE after the pharma startup presented disappointing data on its hemophilia A gene therapy at the annual meeting of the American Society of Hematology on Monday.

The Analyst

Goldman Sachs' Salveen Richter downgraded Spark Therapeutics from Buy to Neutral and lowered the price target to $58 from $106.

The Thesis

Sparks remains a leading gene therapy company, but it has limited value-driving catalysts in 2018, Richter said. (See Richter's track record here.) 

Goldman is projecting U.S. approval for Luxturna approval by Jan. 12, with a decent likelihood of a successful launch. There are also some preclinical assets that could enter clinic, like a liver disease-focused asset in-licensed from Genethon and drugs for Batten disease, Huntington's disease and the opthalmological disease Leber hereditary optic neuropathy, Richter said. 

The price target of Spark Therapeutics was calculated by averaging the sum-of-parts valuation of $70 and the discounted cash flow valuation of $45, Richter said. Goldman projects the takeover probability for Spark at zero to 15 percent. 

The Price Action

Spark's stock dropped around 35 percent Monday after the company presented weak hemophilia A gene therapy data. The stock was trading 1.68 percent lower at $45.14 at the time of publication. 

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