Roche’s Spark Buyout Delayed … Again

Roche logo on side of building

On February 25, Roche announced plans to acquire Spark Therapeutics for $114.50 per share, a value of about $4.3 billion. Today, Roche announced it had withdrawn its Premerger Notification and Report Form under the Hart-Scott-Rodino Act over the deal. They intend to refile their respective forms on or about May 9.

This is the second extension that has been filed, this time delaying it until June 3. The companies indicate it is because U.S. authorities are taking longer than expected to review the deal. All the terms and conditions of the deal will stay the same during the extended period. Earlier this month Roche extended the offer until May 2, but the Federal Trade Commission (FTC) required more time to review it.

“The review of the transaction is ongoing, and the parties are actively working with the government to facilitate that process,” Roche stated. “In order to provide the government with additional time to complete its current review, Roche has elected to withdraw and refile the premerger notification and report form.”

Roche indicates it still expects the deal to go through by mid-year.

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Spark Therapeutics is headquartered in Philadelphia, Pa. It focuses on developing and commercializing gene therapies for genetic diseases, including blindness, hemophilia, lysosomal storage diseases and neurodegenerative diseases.

Spark was the first company to receive U.S. Food and Drug Administration (FDA) approval for a gene therapy. Luxturna (varotigene neparvovec-rzyl) was approved in 2017 by the FDA for patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy. It was granted marketing authorization by the European Commission in 2018.

In addition to Luxturna, Spark’s lead clinical asset is SPK-8011, a gene therapy for hemophilia A, which is planned to begin Phase III trials this year. It also has SPK-8016 in Phase I/II for hemophilia A. Other assets include SPK-9001, a possible gene therapy for hemophilia B, which is in Phase III, and SPK-7001, a therapy for choroideremia in Phase I/II. It is also developing SPK-3006 for Pompe disease and SPK-1001 for ZCLN2 disease, a form of Batten disease. There are also preclinical programs for Huntington’s disease and Stargardt disease.

According to Reuters, “Spark faces several lawsuits in the United States brought by shareholders challenging the sale to Roche, on grounds that it undervalues Spark’s stock and is unfair to shareholders. Roche has declined to comment on the lawsuits.”

Before Roche made the announcement, it counted 26.1% of Spark’s outstanding shares had been tendered, which is slightly lower than the 29.4% announced on the earlier April 2 deadline. Fifty percent is required to complete the deal.

That is not necessarily meaningful, because many shareholders wait until the last minute to tender their shares. However, given the lawsuits, it might suggest the deal is facing some headwinds from shareholders.

Similar concerns were voiced by activist shareholders for the recent Takeda takeover of Shire for $74 billion, but that deal was eventually closed. Spark shareholders have already approved this deal, which is nowhere near as large as the Takeda-Shire deal.

When the deal was originally announced, Jeffrey D. Marrazzo, chief executive officer of Spark, stated, “With its worldwide reach and extensive resources, Roche will help us accelerate the development of more gene therapies for more patients for more diseases and further expedite our vision of a world where no life is limited by genetic disease.”

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