Fortune Article

Happy Monday, readers! I hope you enjoyed your weekend.

Oh, what a difference a deal (or two) can make.

Biotech companies developing gene therapies and gene editing tech saw their shares rise sharply in Monday trading. The apparent catalyst? Swiss drug giant Roche’s decision to snap up gene therapy maker Spark Therapeutics for a cool $4.8 billion, a significant premium over the company’s closing price on Friday.

Spark won the first Food and Drug Administration (FDA) approval for a true gene therapy (i.e., one which inserts a fresh, healthy copy of a gene into cells) in late 2017. The treatment, Luxturna, is used to treat a rare form of inherited blindness.

That history was clearly on Roche’s mind as it announced its bid.

“As the only biotechnology company that has successfully commercialized a gene therapy for a genetic disease in the U.S., we have built unmatched competencies in the discovery, development and delivery of genetic medicines. But the needs of patients and families living with genetic diseases are immediate and vast,” Spark CEO Jeffrey D. Marrazzo in a statement.

As with most Roche acquisitions, Spark will remain an independent operation if and when the deal closes. CEO Severin Schwan mapped out his hopes for experimental therapies in the Spark pipeline.

“Spark Therapeutics’ proven expertise in the entire gene therapy value chain may offer important new opportunities for the treatment of serious diseases,” he said. “In particular, Spark’s hemophilia A program could become a new therapeutic option for people living with this disease.”

The deal appeared to, ahem, spark joy for gene therapy company stocks (you’re going to have to forgive me for that joke). Spark itself was up more than 120% on Monday; specialist uniQure was up more than 34% and Bluebird Bio spiked 14%, among several other firms to enjoy a market value bump. Companies like Novartis, Gilead, Celgene, and rare disease specialists have been moving into the experimental space, often ponying up major premiums for experimental stage companies.

But as exciting as this sort of biopharmaceutical innovation is, achieving sufficient sales may yet prove an uphill battle, especially given the exorbitant R&D and manufacturing costs for such personalized treatments. The industry is clearly betting that such investments will eventually pay out.

Read on for the day’s news.

Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

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