Roche and Spark Move Closer to Merger Following Endorsement from FTC Staff

It appears the long-awaited merger of Spark Therapeutics and Roche is moving closer to completion following the Federal Trade Commission staff’s endorsement of the deal. The announcement Thursday afternoon caused shares of Spark to rocket more than eight points to close at $108.64 per share.

On Thursday, FTC staff reviewing Roche’s $4.8 billion bid for Spark gave the deal a thumbs up after reviewing the potential merger. The FTC staff, Reuters reported, specifically honed in on hemophilia treatments in the armory of both companies. Spark’s gene therapy treatment has been seen as a complement to Roche’s line of drugs for the bleeding-disorder. However, there had been concern that Spark could have been forced to sell that asset prior to a merger due to concerns regarding a potential monopoly of the market. Similar concerns prompted Bristol-Myers Squibb and Celgene to offload psoriasis and psoriatic arthritis treatment Otezla for $13.4 billion ahead of the merger of those companies.

Last year, Spark released mid-stage data that showed a one-time treatment yielded a 97% response rate in reduced bleeding events in patients. That therapy, a one-and-done type treatment if approved, would complement Roche’s Hemlibra. In 2018, Roche’s hemophilia treatment won regulatory approval from the U.S. Food and Drug Administration and became the only prophylactic treatment for people with hemophilia A with and without factor VIII inhibitors that can be administered subcutaneously and also includes a dosing regimen up to once every four weeks.

Since Roche made its bid for Spark, the Swiss pharma giant has run into some antitrust concerns but has remained committed to the deal. Over the summer, Roche Chief Executive Officer Severin Schwan said the deal was taking longer than he hoped but that has not diminished his excitement over the partnership between the two companies.  

While the FTC staff has approved the idea of a merger, there are still a few obstacles in the way. Citing Capitol Forum, the first outlet to report about the FTC staff recommendation, Reuters said there are still a few approvals required before the merger can be completed. According to the report, officials at the FRC’s Bureau of Competition must give their approval, as must the FTC chairman and four commissioners.

Additionally, the deal must be approved by the UK's Competition and Markets Authority, Reuters said. That agency has planned a preliminary decision for the middle of December and a more in-depth probe to be completed later.

The deadline for the agreed merger between the two companies is April 30, 2020. The deadline had been extended due to the ongoing delays from the reviewing bodies.