UK antitrust watchdog clears Roche/Spark deal — but what is the FTC thinking?
Roche has gained the blessing from the UK antitrust watchdog to proceed with its $4.3 billion acquisition of Spark, just in time for the latest deadline the pharma giant has set for Spark’s investors to tender their shares following 10 delays.
The Competition and Markets Authority confirmed speculation and rumors — pretty much assumed true at this point — that they had been looking into the competitive landscape for hemophilia A treatments. After concluding that there will still be an adequate choice of alternatives even after the makers of Hemlibra and a potential gene therapy are blended into one, regulators gave the deal an unconditional clearance.
The CMA added that it’s cooperated closely with the US Federal Trade Commission, which is still investigating the buyout.
By wrapping their investigation at Phase I, the British authority saved Roche some uncertainty and lengthy delays that would have ensued if they had initiated a Phase II, an extended and scrutinizing review that can last up to 24 weeks.
From their release:
While gene therapy treatments are likely to compete with Roche’s Hemlibra in future, the CMA found that Spark is not the only supplier developing a gene therapy treatment and that its products are not currently considered to hold any particular clinical or commercial advantages over those being developed by other suppliers.
The CMA’s investigation also found that there are several innovative non-gene therapy products under development that are likely to become viable alternatives to Roche and Spark’s treatments.
With the offering period set to expire by the end of the day, Roche has yet to announce either another delay or how it plans to close the deal in such a short time frame. In fact, the Swiss drugmaker raised some eyebrows last Monday when it extended the deadline by a mere six days, compared to the usual one month.
It appears that the FTC review remains the final hurdle ahead of a close. In October the Capitol Forum reported that the agency’s staff had recommended the deal from approval, but a spokesperson later followed up to Endpoints News with a clarification: “The FTC has not filed a complaint in this matter, and the agency doesn’t sign off on deals. It either files a complaint or it doesn’t.”
Earlier this year, the FTC requested a rare “second request” — something slapped on only 5% of acquisitions. A vote from the chairman and four commissioners on its Bureau of Competition would mark the final step for approval.
As the saga unfolded, observers have voiced concerns that the holdup would have a chilling effect on gene therapy M&A and scare would-be acquirers away. But Chardan analyst Gbola Amusa, who covers other gene therapy players such as BioMarin and uniQure, wonders if it has more to do with buyer’s remorse on Roche’s end.
“It was one that never made sense to us at that valuation given our view, and I don’t know why it hasn’t gone through,” he said, “but I don’t think there’s any read-across for the rest of the space.”