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Roche reveals yet another Spark takeover delay

Are concerns about haemophilia dominance the cause?


Roche has put back the expected completion date for its takeover of gene therapy company Spark Therapeutics for another three months, leaving investors asking why.

The fresh delay to the $4.3bn acquisition - number five - could push the completion date out to 30 April 2020, and is leading to speculation about the reasons for the Federal Trade Commission’s reluctance to rubber stamp the transaction.

The big concern being voiced among shareholders is that progress is being held up due to FTC deliberations about Roche/Spark’s potentially dominant position in haemophilia.

Roche’s antibody drug Hemlibra (emicizumab) has been growing at a phenomenal rate with sales rocketing to almost $540m in the first half of the year, could the FTC be concerned about anticompetitive issues that might result from Spark’s emerging position in gene therapy for the blood disease?

Analysts at Jefferies have suggested that is unlikely to be the case, given that a number of other companies are developing haemophilia gene therapies including BioMarin, Sangamo and UniQure which all have candidates in clinical trials. It may however reflect the possibility that Roche could tie its two assets together in reimbursement negotiations with payers, they said.

Roche isn’t giving much away at the moment, with chief executive Severin Schwann saying as recently as the company’s second quarter results call last week that he was “very confident” of closing the acquisition by the end of the year, having previously suggested it should complete in the first half.

It has set a new deadline for the offer of 3 September, rather than its previous date of 31 July, and said in a statement that the two companies “remain committed to the transaction and are working cooperatively and expeditiously” with the FTC as well as the UK Competition and Markets Authority, which has opened its own investigation into the deal.

Analyst Mani Foroohar of SVB Leerink told Bloomberg this week that there is concern that the issue may be related more generally to gene therapy M&A, particularly as companies operating in this area have been sought after by large pharma companies in the last couple of years.

“For anyone trying to make that deal there’s a paralyzing effect,” he told the newswire.

“What would’ve been seen as a low execution risk, low regulatory risk, straightforward deal is suddenly something caught up for a year and a half, and you have to look at divesting” the asset that was the driver for the deal in the first place, he added.

Article by
Phil Taylor

1st August 2019

From: Regulatory



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