Why Roche's Acquisition Of Spark May Be Complete By Year's End
Roche's (RHHBY) acquisition of Spark Therapeutics (ONCE) will likely close before the year ends, an analyst said after reports suggested U.S. regulators would bless the deal.
Late Thursday, news and analysis website Capitol Forum reported the U.S. Federal Trade Commission recommended clearing the Spark acquisition. The deal was first announced in February for an equity value of $4.8 billion. Since then, it's been mired in regulatory discussions.
Swiss pharma giant Roche is one of the biggest sellers of cancer treatments. Small biotech Spark is working on treatments for eye, liver and neurodegenerative diseases. The firm is also testing a gene therapy approach to hemophilia.
The hemophilia A gene therapy asset could have fueled competitive worries, RBC Capital Markets analyst Kennen MacKay said in a report to clients.
But "we see a high likelihood of the deal closure before year-end 2019 (in line with Roche's guidance) and narrowing the spread toward the $114.50 per share proposed acquisition price of Spark shares," he said.
Is The Spark Acquisition On Deck?
When it was first announced, Roche expected the Spark acquisition to close in the second quarter. In June, the companies each received additional requests for information from the FTC and CMA (EU's Competition and Markets Authority). Then, most believed the deal would wrap in July.
In October, Roche confirmed the Spark acquisition would close before 2019 ends.
Following the report late Thursday, Roche and Spark declined to comment in emails to Investor's Business Daily.
Another Gene Therapy Stock Rises
The next step would be a vote from the FTC chairman and four commissioners, MacKay said. He noted the U.K. regulatory body is still reviewing the proposed Spark acquisition. The CMA has set a Dec. 16 review date.
"However, we anticipate U.S. FTC clearance would be suggestive of a high likelihood of European Union CMA clearance," he said.
On the stock market today, Roche stock rose a fraction, to 37. Spark stock advanced 0.3%, to 109. Shares of Uniqure (QURE), another biotech working in gene therapy, popped 7.4%, to 49.43. Uniqure is often seen as a key takeover target.
Written by: ALLISON GATLIN
Published on: 10/25/2019