Spark investors, unpersuaded by FTC signoff rumor, stay on the fence in Roche deal

Spark Therapeutics logo on labcoat
As Roche delayed its $4.3 billion buyout of Spark Therapeutics once again due to antitrust reviews, only 20.3% of Spark investors have tendered their shares. (Spark Therapeutics)

Unsurprisingly, Roche has delayed its $4.3 billion Spark Therapeutics buyout yet again, as Spark investors held onto their shares despite reports that the deal had won preliminary U.S. antitrust clearance.

Roche extended the tender offer for Spark’s shares to Monday, Nov. 25, citing once again the need to give the U.S. Federal Trade Commission and the U.K. Competition and Markets Authority more time to complete their reviews.

As of Monday—the previously set deadline—investors had only offered up 20.3% of Spark’s shares, Roche said. That number has remained largely unchanged over the past few months, even after a report last week that FTC reviewers had recommended the acquisition without any conditions.

According to an American Prospect repost of The Capitol Forum's report, FTC staff carried out an in-depth investigation before giving the deal the thumbs-up, and it was feedback from doctors that likely helped dispel regulators’ antitrust concerns.

FTC staff had worried that putting Roche’s successful Hemlibra and Spark’s gene therapy candidate SPK-8011 into the same company's portfolio might impede competition in hemophilia A, the report said, citing sources familiar with the matter.

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

Two physicians told The Capitol Forum that FTC staff had contacted them for comments on potential competition between the two drugs.

Guy Young, director of the hemostasis and thrombosis program at the Children’s Hospital of Los Angeles said the two would overlap somewhat only if SPK-8011 succeeds in a clinical trial. Robert Sidonio, a pediatric hematologist/oncologist at Children’s Healthcare of Atlanta, argued the Spark drug would only have a presence in the adult market.

And because SPK-8011 is trying to deliver a human factor VIII gene, it wouldn't be effective in patients with inhibitors to factor VIII, doctors argued. The inhibitor population only makes up about 5% of the total with hemophilia A. Spark is developing another candidate, SPK-8016, for that market.

The Roche-Spark case is up for review by the FTC’s Bureau of Competition—which almost always follows the agency staff’s recommendation—and the five commissioners will have the final vote on its U.S. fate.

RELATED: FTC throws up extra hurdle to AbbVie's Allergan buy as Roche, Spark dwell in limbo

Besides the FTC, the U.K. antitrust watchdog is also probing the deal in a phase 1 investigation, with a decision set for Dec. 16. The CMA is trying to determine whether the deal is a “killer acquisition,” in which a large corporation buys a small player and then stops developing the target’s rival drug, a source familiar with the matter told The Capitol Forum.

But doing so would arguably only hurt Roche, because gene therapy comes with the promise of a cure with just one injection—and indeed, Spark's gene therapies are the very reason Roche sought out to buy the company in the first place. Killing SPK-8011 would mean handing the next-generation hem A market to BioMarin. In July, that biotech said it plans regulatory filings in the U.S. and EU for its gene therapy valoctocogene roxaparvovec this year, based on positive, three-year phase 1/2 data and a phase 3 interim readout.

If the CMA and FTC deliver positive verdicts by mid-December, there’s still a chance Roche can close the deal by year's end, as the Swiss drugmaker has insisted it will. But investor reluctance might pose another problem.