Pharma giant Roche just bought biotech firm Spark, the maker of an $850,000 eye drug

Thomson Reuters

• Swiss pharmaceutical company Roche is set to purchase US gene therapy company Spark Therapeutics for approximately $4.8 billion.
• Spark Therapeutic's stock is soaring on news of the deal and is up 121% in premarket trading as of 11.45 a.m in London (6.45 a.m ET).
• The company has pioneered treatments for hemophilia A and plans to charge $425,000 per eye in a treatment approved by the FDA in 2017.

Spark Therapeutics' stock is surging in premarket trading on Monday after Roche agreed to buy the Philadelphia-based gene therapy company.

The $4.8 billion deal comes at a premium for the Swiss drugmaker as the race to get into the gene therapy market hots up. Spark Therapeutics' stock was trading up 121% in premarket trading as of 11.45 a.m in London (6.45 a.m ET).

Spark works to create gene therapies for genetic diseases, including blindness, haemophilia, lysosomal storage disorders and neurodegenerative diseases. Spark's gene therapy is for a rare form of blindness and is the first of such treatments, called Luxturna, to be approved by US regulators and is one of the priciest surgeries on the market at $425,000 per eye.

"Spark Therapeutics' proven expertise in the entire gene therapy value chain may offer important new opportunities for the treatment of serious diseases," Roche CEO Severin Schwan said in a release on Monday. "Spark Therapeutics' haemophilia A programme could become a new therapeutic option for people living with this disease."

The Wall Street Journal first reported the deal on Saturday.

Read More: Swiss drug giant Roche reportedly readies to buy the biotech behind the first FDA-approved gene therapy and the priciest medicine in the US

It's the second major deal in this space in the past 12 months after fellow Swiss pharma giant Novartis agreed to pay $8.7 billion for AveXis and the Zolgensma DNA therapy that treats spinal muscular atrophy, a rare muscle disease.

Founded in 2013, Spark pioneered research on a new class of treatments for a rare, genetic form of blindness called Leber congenital amaurosis at Children's Hospital of Pennsylvania.

Spark announced earlier this month that although it had shipped 75 vials of its new drug and generated $27 million in sales, the company generated less than $65 million in revenue last year, the WSJ reported, and posted a net loss of close to $79 million. Roche will pay $114.50 a share for the biotechnology company, a 122% premium to the biotechnology company's Friday close.

Emma Court contributed to this report.