Roche stays mum about FTC, CMA reviews as $4.3B Spark deal faces yet another delay. What's up?
Just what exactly is holding up Roche’s $4.3 billion acquisition of Spark Therapeutics?
That’s the question that Spark investors are pondering as the Swiss drugmaker announced extension #6 of their tender offer to let antitrust watchdogs from both sides of the Atlantic complete their reviews.
The new deadline for Spark shareholders is now October 1.
The US Federal Trade Commission began its assessment soon after the deal was announced in February — a standard practice — but alarmed investors by repeated requests for more information. And in June the UK Competition and Markets Authority launched their own probe, heightening anxiety about the fate of the deal and potential divestitures.
While Roche has repeatedly declined to comment on the nature of the reviews, a common assumption is that regulators are wary of putting Roche’s Hemlibra, a prophylactic treatment for hemophilia A, and Spark’s experimental gene therapy for the disease in the same hands.
In response to the last delay, Mani Foroohar of SVB Leerink told Bloomberg this dragged on episode has a “paralyzing effect” for any buyers interested in gene therapy M&A. “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.
Having confidently predicted that the buyout would close in the first half of 2019, Roche has since shifted the expected close date to the end of 2019. Internally, Roche CEO Severin Schwan has prepared for further delays by amending the agreement to allow for completion by April 30, 2020.
The percentage of shares already tendered and received, which has hovered between a fifth to a quarter of the total, stands at 24.1% today.