Children's Hospital of Phila. funds gene-therapy company

Children's Hospital of Philadelphia has invested $50 million in a new biotech start-up that seeks to be the nation's first commercial provider of gene therapy, company officials announced Tuesday.

Spark Therapeutics will assume control over two clinical trials that originated at the prominent teaching hospital - one in which patients with a rare form of blindness already have regained some vision, the other an early-stage effort to treat hemophilia B.

Jeffrey D. Marrazzo, Spark's CEO, said the goal was to tackle still more genetic diseases in the future, including other rare forms of blindness, blood disorders, and two neurodegenerative diseases that he declined to identify.

Children's Hospital has spun off companies before with the involvement of other investors, but this marks the hospital's first foray as a primary source of start-up funds, said hospital CEO Steven M. Altschuler.

The move marks a coming-of-age moment for gene therapy - the concept of treating disease by replacing or correcting faulty genes. Confined to the realm of research for decades, it now appears headed to the clinic on multiple fronts.

A gene-therapy treatment called Glybera has been approved in Europe for treatment of lipoprotein lipase deficiency, an affliction marked by increased levels of fat in the blood. And earlier this year, a Cambridge, Mass.-based gene-therapy company called bluebird bio Inc. raised more than $100 million in an initial public offering.

Gary J. Kurtzman, managing director for health care at Safeguard Scientifics, the Wayne-based technology and health-care investment company, said Spark's prospects looked promising. He cited the involvement of Children's Hospital researchers such as Katherine A. High, a primary force in the hemophilia and blindness trials and now one of Spark's scientific advisers.

"It's a bold move," Kurtzman said of the hospital's investment. "Based on the technology and the assets and the expertise that Dr. High and other people there have, I think it's a . . . very smart move."

Marrazzo said the hospital's investment was designed to support the company until it has the ability to generate revenue, a period he estimated would last "roughly a couple of years."

He said the hospital was a good partner because, unlike some private investors, its goal was not a short-term gain.

"We felt that a capital partner that had a long-term view . . . was appropriate," said Marrazzo, who has previously held top positions at biotech companies such as MolecularHealth Inc. and Tengion.

Still unclear is how much gene-therapy treatments would cost for patients or their insurers. Unlike most drug treatments, gene therapy typically consists of just one injection.

"What will be interesting here is this notion of one and done," Altschuler said. "That's not something that the insurance companies have generally had experience with."

Even if such an injection were priced at tens of thousands of dollars, that could be offset easily by the savings from avoiding traditional treatments for the diseases Spark has in its sights.

With improved vision, blind children would be less likely to need a classroom aide, for example. And patients with hemophilia B, if successfully treated, would no longer need to buy synthetic blood-clotting factor, because their bodies could make it themselves.

High said an adult male with hemophilia B commonly needs to treat himself two to three times a week, at a cost of up to $200,000 a year. She said 4,000 to 5,000 people have the disease in the United States.

Researchers have not yet disclosed final results for the handful of human patients who have received the hemophilia treatment, but High said dogs with hemophilia have been given such treatments that have lasted for up to 10 years.

Among others on Spark's scientific advisory team is Jean Bennett, a molecular geneticist at the University of Pennsylvania's Scheie Eye Institute, who was involved with the blindness trial at Children's Hospital.

Several dozen people with mutations in a gene called RPE65 have been enrolled in that trial, now in its final phase. High estimated that in all, 1,000 people in the United States have a form of blindness resulting from mutations in that gene.

She stressed that her estimate was an educated guess.

"What often happens with genetic disease is, it's underdiagnosed until there's a treatment," High said. "Because people don't ordinarily seek DNA diagnosis if there's no treatment."

Now, she and her associates at Spark are betting there will be.

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