Roche's $4.3B Spark deal wins U.K. antitrust clearance, foreshadowing a similar FTC move

Roche
U.K.'s Competition and Markets Authority has unconditionally cleared Roche's proposed $4.3 billion takeover of Spark Therapeutics. (Roche)

After months of delays, Roche has won the first major antitrust clearance for its proposed $4.3 billion buyout of Spark Therapeutics.

Monday, the U.K.’s Competition and Markets Authority (CMA) said it had sanctioned the deal—no strings attached—after a phase 1 investigation found no evidence of anticompetition effect.

Though the U.S. Federal Trade Commission (FTC) has yet to deliver its verdict, the CMA stated that the two authorities have “cooperated closely” in their separate reviews, suggesting a similar move might come from its U.S. counterpart.

As industry watchers have suspected, the U.K. antitrust watchdog was looking at whether adding Spark’s investigational gene therapy to Roche’s rising star performer Hemlibra would hurt competition in the hemophilia A market. In the U.K., Hemlibra is already covered by NHS England for both patients with or without factor VIII inhibitors.

“While gene therapy treatments are likely to compete with Roche’s Hemlibra in the 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 said in a statement.

Notably, BioMarin Pharmaceutical has already filed an EU application for valoctocogene roxaparvovec, a rival gene therapy that analysts suggested could be a better option than Spark’s SPK-8011 based on readouts from clinical studies. In fact, the Spark drug’s lackluster phase 1/2 data on boosting factor VIII levels helped Roche snatch up the biotech at a relatively cheaper price while the latter’s stock was suffering.

Other players developing gene therapies for hemophilia include uniQure and a partnership between Pfizer and Sangamo Therapeutics.

RELATED: Astellas inks $3B Audentes buyout to expand in gene therapy

What’s more, the CMA said it also found other non-gene therapies under development that are “likely to become viable alternatives to Roche and Spark’s treatments.”

The CMA first said it was looking more closely at the deal in June, just as the FTC sent the companies a “second request” for additional information—effectively dashing the Swiss drugmaker’s earlier hopes of wrapping up the deal in the third quarter. A recent report by The Capitol Forum stated that FTC staffers had also recommended approval of the deal unconditionally, teeing up a vote by the agency’s five commissioners.

Now, Roche is asking Spark investors to tender their shares by 5 p.m. U.S. ET Monday. However, that deadline—already delayed multiple times due to extensive antitrust reviews—might be pushed back further, given that the FTC has yet to announce its ruling and that Roche might not be able to collect the minimum 50% of Spark shares. As of Dec. 6, only 14.9% of Spark’s outstanding shares had been tendered, Roche previously said.

Despite the extra antitrust scrutiny, Roche has repeatedly said it expects to complete the deal by year-end.

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