Roche sees glimmer of hope for $4.3B Spark deal as FTC staff gives thumbs-up: report

The Federal Trade Commission staff has reported recommended approval of Roche's $4.3 billion buyout of Spark Therapeutics. (Roche)

After an agonizing wait, Roche might finally be looking at an antitrust clearance from U.S. authorities for its proposed $4.3 billion takeover of Spark Therapeutics.

The Federal Trade Commission staff on the Roche-Spark case has recommended approval of the deal without any product divestiture requests, according to a report by the Capitol Forum cited by Reuters.

Roche had its eye on Spark’s gene therapy platform, especially its hemophilia franchise, when making the acquisition offer, officially unveiled in late February—and that’s exactly what the FTC staff had been focused on, the report said.

The Swiss drugmaker already markets Hemlibra to help prevent bleeding episodes in hemophilia A patients with or without factor VIII inhibitors. Approved in the U.S. late 2017, the drug has quickly become a new cash cow for Roche, rapidly chipping away market share with sales of CHF 921 million ($927 million) in the first nine months of 2019.

Since Roche and Spark said they had received a “second request” from the FTC for more information in June, industry watchers have suspected that hemophilia might be the FTC’s concern, as gene therapy is considered the "next big thing" in the disease area.

However, Spark’s hem A candidate, SPK-8011, is still in clinical development, with no guarantee of success, analysts have argued. And it also has clear competition in BioMarin’s valoctocogene roxaparvovec, which is ahead in the clinical race.

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Since that rare second request, the two companies have postponed their tender offer several times, citing additional time needed for antitrust authorities to complete their review. The current deadline is Oct. 30.

Before the FTC gives its official stamp of approval, top officials at the agency's Bureau of Competition will weigh in as well. And finally, the five commissioners, including chairman Joseph Simons, will vote on it.

Still, the FTC is just one hurdle. The U.K.’s Competition and Markets Authority has an open investigation into the deal, too. According to an update from the agency on Tuesday, it has launched a merger inquiry and set the deadline for a phase 1 decision on Dec. 16. The process could take even longer if a phase 2 probe is opened.

In the company's Q3 earnings announcement, Roche reiterated that it expects the transaction to close by year-end.