Roche extends Spark deal offer for shorter period. Are antitrust decisions finally near?

Roche
Roche has extended its tender offer for Spark Therapeutics shares to Dec. 16, the same day U.K. antitrust watchdogs are set to announce the status of their deal review. (Roche)

For the past half a year or so, Roche has repeatedly postponed its tender offer deadline for Spark Therapeutics, typically for a month each time.

This time around, the extension only lasts a week.

Instead of Tuesday, Dec. 10, Roche now hopes Spark investors can tender their shares by Dec. 16, the same day the U.K.’s antitrust watchdog is set to announce whether it will clear the $4.3 billion deal or launch a more in-depth phase 2 investigation.

Reviews by that country's Competition and Markets Authority (CMA) and the U.S. Federal Trade Commission (FTC) were cited by Roche as the reason for the latest delay—as were previous ones, including the most recent 15-day postponement.

The Swiss drugmaker seems confident it will receive positive reviews from both agencies on time, having repeatedly stressed that it expects to close the deal by year-end.

Currently, there’s no telling when the FTC will deliver a final ruling. A previous report by The Capitol Forum stated that FTC staffers have recommended approval of the deal unconditionally, a move that would clear it for review by the agency’s Bureau of Competition and then a vote by its five commissioners.

It’s likely the FTC and CMA are coordinating their Roche-Spark probes, as they’re doing with DNA sequencing giant Illumina’s proposed $1.2 billion acquisition of competitor Pacific Biosciences, sources familiar with the matter said, according to The Capitol Forum in October. The latter develops long-read sequencing technology that differs from Illumina’s own short-read platform.

As for the Roche-Spark deal, word has it that the two regulatory agencies are looking into whether the merger would hurt potential competition in hemophilia A. Roche, with its antibody drug Hemlibra, is quickly grabbing market share in the field, while Spark’s investigational gene therapy, SPK-8011, could threaten its future use.

However, as analysts have pointed out, the Spark drug is still in clinical development and could still fail to win approval. Plus, another hem A gene therapy from BioMarin, valoctocogene roxaparvovec, is further down the path toward a launch. BioMarin filed an application to the European Medicines Agency under its accelerated pathway Nov. 21.

RELATED: Bristol-Myers’ $74B Celgene buy wins antitrust nod in FTC party-line split vote

While antitrust scrutiny represents an unexpected hurdle that Roche looks to clear soon, reluctant Spark shareholders could pose another problem. As of Friday, Dec. 6, only 14.9% of Spark’s outstanding shares had been tendered, Roche said. That's only a tiny improvement over the 14.8% collected by Nov. 21. Per a revision of the contract, Roche and Spark have until Apr. 30, 2020, to wrap the deal.

Repeated delays to the Spark buyout come as the FTC drills down into other biopharma M&A deals, too. It only recently cleared Bristol-Myers Squibb’s $74 billion merger with Celgene after forcing a selloff of the latter’s psoriasis blockbuster Otezla for $13.4 billion.

Meanwhile, the FTC made a second request to AbbVie and Allergan for information related to their $63 billion merger. And more than a year after its announcement, Aurobindo Pharma’s $1 billion acquisition of some of Novartis’ Sandoz U.S. generic assets is also said to have drawn the FTC’s attention.

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