Fresh delay for $4.3B Roche/Spark deal triggers analyst concerns about gene therapy M&A
Roche CEO Severin Schwan may have prepared the staff at Spark for the fifth delay of its $4.3 billion acquisition — adding a few months of cushion and pushing the deadline as far as April 30, 2020 — but that’s not stopping analysts from becoming seriously concerned.
Severin Schwan Roche The FTC’s dragged on investigation, which is holding up the deal, points to something bigger than Spark or Roche, Mani Foroohar of SVB Leerink told Bloomberg. It sends a worrying signal to any buyers looking to make a move in gene therapy M&A.
“For anyone trying to make that deal there’s a paralyzing effect,” Foroohar said in an interview with the news outlet. “What would’ve been seen as a low execution risk, low regulatory risk, straightforward deal is suddenly something caught up for a year and a half, and you have to look at divesting,” he said.
The group of potential takeover targets includes uniQure and BioMarin, both of which have late-stage gene therapy programs lined up.
Gene therapies for hemophilia, too. While execs and regulators have repeatedly declined to shed light on the roadblock, a common assumption is that the FTC is probing for potential overlaps between Spark’s experimental hemophilia treatments and Roche’s newly launched Hemlibra. More recently, the UK’s Competition and Markets Authority has also launched its own investigation.
Jefferies analysts contended that “there is unlikely any major issue” as the hemophilia market is crowded and gene therapies work quite differently than Hemlibra, an antibody that bridges two other blood clotting factors.
Having confidently predicted that the deal would close in the first half of this year, Roche is now looking to wrap it by year-end. Spark stockholders — which have collectively tendered 25.2% of their shares — now have until September 3 to ponder if there will be yet another extension.
