Roche and Spark Therapeutics’ road to a $4.3 billion merger has been a rocky one, with various delays pushing the long-gestating agreement back four times. Now, in order to get all its regulatory ducks in a row, Roche is moving its own deal-close deadline back as well.
Roche moved its Spark closing deadline from Jan. 31, 2020 to April 30, 2020, according to a Monday regulatory filing. The move is a precautionary one, meant to give the deal partners time to clear any hurdles that may come up as U.S. and U.K. antitrust regulators review the companies’ marriage.
In a note to Spark investors, Roche CEO Severin Schwan said the plan was still to close the merger in 2019 despite the new deadline.
“While we still expect this transaction to close in 2019, we want to ensure that we proactively identify and remove any potential future obstacles to achieving this outcome,” he said. “Good things almost always take time, so as we work to bring this agreement to a close, I ask for your continued patience.”
The new deadline is just the latest delay in the two companies’ star-crossed affair after U.S. regulators asked for a “second review” of the agreement on anti-competition grounds. In early June, Roche pushed back its June 14 tender offer date to July 31 after the Federal Trade Commission filed for an extended investigation.
The repeated pushback from U.S. regulators has been a confusing sticking point for analysts, who don’t see any clear competition concerns in the proposed agreement. Roche intends to acquire Spark in order to boost its play in a hot gene therapy market and gird its hemophilia portfolio—both competitive fields without a clear path to a monopoly, according to Jefferies analyst Michael Yee.
Although previous delays allowed U.S. regulators more time to review the deal, the June filing added a new wrinkle into the process, with the FTC investigating whether the U.K. Competition and Markets Authority (CMA) has jurisdiction over the proposed acquisition.
If so, the CMA has filed an interim order that would require Roche to hold Philadelphia-based Spark as a separate entity rather than merging into a single company. Roche said that outcome wouldn’t be a major hindrance to the deal, as it plans to maintain Spark’s presence in Pennsylvania as an "independent company" after the merger.