Roche — surprise — delays $4.3B Spark buyout again as regulators hover
Roche has yet again delayed their Spark buyout.
The Swiss giant extended the window on the $4.3 billion gene therapy acquisition through November 25th. It is delay #8 for a deal first announced in February.
Roche said the delay was to give UK and US regulators more time to review the acquisition. The Federal Trade Commission staff reviewing the deal reportedly recommended approval last week, months after a rare second information request some analysts thought could augur a divestiture demand. But a recommendation is not an official approval, and across the Atlantic, UK Competition and Markets Authority is not due to announce its Phase I decision until December 16.
If the CMA decides the deal warrants a Phase II, it would initiate a more exhaustive probe.
Roche CEO Severin Schwan has insisted the Spark acquisition will likely be completed by the end of the year, even as the company has prepared for a more protracted process. Schwan told investors in his third-quarter call last week he was confident the deal would be done before 2020, but the company filed back in July to extend the buyout’s final deadline 3 months to April 30.
The regulatory process can be opaque and Roche has not commented on what lays behind the delays. Most of the speculation, though, has been that the holdup is over anticompetitive concerns around Roche’s hemophilia drug Hemlibra and a hemophilia gene therapy in development at Spark, SPK-8011.
Conversely, investors have argued that regulators have been overly scrutinizing for a deal of this size and that the persistent delays have had a chilling effect on a gene therapy space that has answered once-big questions about its clinical feasibility but still has large blanks on the business end.
It’s incrementally bad news for all of biotech that what used to be a routine deal as Roche / Spark has turned into such a complicated mess.
— Brad Loncar (@bradloncar) July 8, 2019