On the 6th of October, SPRB received breakthrough designation for its TA-ERT therapy for MPS III Type B. The company was missed by the market, and was trading at a mere $8 million valuation just 1 day before the announcement, compared to today’s circa $300 mln fully diluted value, and is arguably still provides massive upside with a large margin of safety.
The FDA has started accepting CSF heparan sulfate as a reasonable surrogate endpoint, and it served as a basis in 2024 for Ultragenyx’s MPS III A gene therapy’s breakthrough designation. SPRB, after acquiring the TA-ERT program from the bankrupt Allievex (which acquired it from Biomarin), compiled an integrated long-term clinical dataset from the 3 studies Allievex conducted, which showed durable CSF heparan sulfate reduction alongside stabilized cortical grey matter volume.
What MPS III (Sanfilippo) is: a rare, inherited disease where the body can’t break down heparan-sulfate sugars. These build up—most harmfully in the brain—causing progressive intellectual disability (language loss, behavioral issues, then loss of daily function) and early death; median survival is typically late teens to early 20s (some subtypes a bit later). The B subtype has a 35% prevalence of all Sanfilippo cases, and is a bit milder (slower mental decline) compared to type A.
How big is the eligible pool? Incidence is roughly 1 in 60–100k births for type III, 35% is Type B in North America and the EU, with a mean survival of 18.91 years. Calculating with last years births, we have ~442–737 living MPS IIIB patients across the EU5, U.S., and Canada combined (EU5 ~178–297, U.S. ~240–400, Canada ~24–40), not counting Japan and the oil-rich Middle East countries. Note that births have also declined, so this is an underestimation.
Calculating with a weighted annual net price of $400k (company hinted at $1 mil gross price in the US, so this is conservative), we get peak sales of $221-368 mln, assuming full penetration. Real uptake will lie really close to that, given the continuously and irreversibly developing nature of the disease.
MPS IV A has roughly the same level of incidence, and patients had about 30% longer lifespans, hence 30% greater prevalence. Thanks to Vimizim, patients now live longer, increasing the prevalence, giving us a picture of how long-term TA-ERT sales might look like.
Given the serious unmet need, the uptake should be more dynamic than for the median drug (or than Vimizim, which has much milder symptoms compared to MPS III), which takes 6 years to achieve peak sales. As the drug gains adoption, the eligible pool of patients will also expand, thanks to their extended lifespan from 18 to potentially a completely normal one.
Fully diluted shares outstanding: 1,564,035 @$172 per share (at the time of writing). 270 million mcap with 63 mil net cash + shadow asset worth $160 million cash in the form of a Priority review voucher (Approval prior to 2026 September 30th is eligible, but Congress is working on extending it to 2029 in the “Give Kids a Chance Act”, which should qualify TA-ERT as well). The EV is merely 50 million, given the centimillion sales potential of SPRB’s therapy (not counting proceeds from warrant conversion of 169k warrants at strikes around $100, but strikes are not exactly disclosed).
Given the unmet need, FDA is extremely unlikely to reject the drug (even minimal signs of efficacy are good enough), and the agency signaled that it views the endpoint of the study as reasonable, and already approved a drug (CRL-d for CMC concerns, but no problem with endpoint) based on the same endpoint. The TA-ERT therapy also improved on other endpoints, proving its disease-modifying effects.
Why is it still trading here: Market takes time to digest information + asset is disposed from Biomarin (big pharma), and disposed assets often end up as clinical failures (hence the 8 mln market cap beforehand, even after good p2 data) + profit taking by early investors (some people just can’t sit on their hands)
PT: $500, aka around $750 million valuation from a conservative 3x peak sales figure of $250 mln. At current valuations, this story is a no-brainer.
Not investment advice ofc