FTC to Roche: OK, go ahead and complete your $4.3B Spark buyout — we're convinced now this isn't anticompetitive
After putting Roche through multiple delays during a 10-month review, the FTC has determined that Roche isn’t spending $4.3 billion to buy Spark so it can destroy a potential competitor, or use it to replace one of their new blockbusters. And the pharma giant followed up soon after to say that it had 60.4% of Spark’s stock and will formally wrap the buyout today.
The FTC announced Monday evening that the commissioners voted 5 to 0 to close the investigation after determining the evidence “did not indicate that Roche would have the incentive to delay or terminate Spark’s developmental effort for its hemophilia A gene therapy, or that the acquisition would affect Roche’s incentives regarding [its hemophilia treatment drug] Hemlibra.”
In a statement, the FTC explained that they needed to assure themselves that Roche was actually sincere. Their rivals in hemophilia A helped convince them that competition would only drive Roche faster — something that might seem obvious to anyone even casually acquainted with biopharma.
Among other things, Spark is only one of several companies currently developing a gene therapy treatment for hemophilia A. As the other companies endeavor to bring their gene therapies to market, Roche would have the incentive to accelerate, rather than decelerate the development of Spark’s gene therapy in order to compete for gene therapy patients.
For much of the year the FTC kept the biopharma industry guessing on what its concerns were, amping up concerns after the two Democratic appointees indicated a basic problem with all kinds of M&A deals in the drug industry.
Spark CEO Jeff Marrazzo told Endpoints News they hadn’t expected the protracted delay, and it setback some of their work.
“It was obviously a process that we thought would conclude earlier,” he said. “We’re disappointed we weren’t able to go about investing in research and development.”
The move comes just hours after the UK’s chief regulatory group for M&A offered its own green light, leaving the pharma giant free to complete what they always insisted was a simple buyout aimed at creating a new center for gene therapy R&D. And Spark’s hemophilia program is going up against rivals at BioMarin and Sangamo/Pfizer.