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Roche to close $4.3bn Spark deal after FTC clearance

Comes on the heels of CMA green light

Roche

After ten long months of waiting, Roche can finally go-ahead with its $4.3bn takeover of gene therapy specialist Spark Therapeutics, following clearance from the Federal Trade Commission in the US. 

The US antitrust approval swiftly follows the clearance from the UK’s Competition and Markets Authority (CMA), which announced early yesterday that its investigation into the merger was complete.

Now that Roche has no barriers in the way of completing its the long-awaited deal, the merger is anticipated to close today.

In a statement released today, Roche said that it “intends to complete the acquisition of Spark today through a merger of 022019 Merger Subsidiary, Inc. with and into Spark without a vote or meeting of Spark’s shareholders”.

Investors will be happy that Roche has not been required to sell any assets to appease the financial regulators. The main concern posed by the CMA and the FTC is that the newly merged company could have an overly dominant position in the haemophilia A market.

Roche’s monoclonal antibody Hemlibra is a blockbuster treatment in the market, but Spark has a number of potentially transformative gene therapies for haemophilia A in the pipeline that, if approved, could give the company a monopoly when the merger goes through.

The FTC had also raised concerns in its investigation about whether Roche would delay or discontinue Spark’s development of its gene therapy to protect sales of Hemlibra.

However, the antitrust authority finally concluded that Roche did not have the incentive to delay or terminate Spark’s haemophilia A gene therapy development, “or that the acquisition would affect Roche’s incentives regarding Hemlibra”.

A common thread across both the CMA and FTC investigations’ findings was that Spark is only one of a number of companies trying to bring a gene therapy for haemophilia A to market, meaning that Roche would have to “acclerate, rather than decelerate the development of Spark’s gene therapy in order to compete for gene therapy patients”.

The FTC and CMA investigation into the merger was a surprise for not only Spark, but the entire pharma industry. The regulators secondary request for information on the takeover was rare and unusual, especially as Spark’s gene therapy is not anticipated to enter the market for some time still.

Roche is not the only big pharma who has faced pushback on a planned merger from the FTC – Bristol-Myers Squibb’s takeover of Celgene was delayed by an investigation and AbbVie said that there are “a few small product overlaps that we've agreed to divest promptly” ahead of its acqusition of Allergan to gain the FTC all-clear.

Article by
Lucy Parsons

17th December 2019

From: Regulatory

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