Spark Therapeutics / Roche Holding

Spark Therapeutics / Roche Holding: Implications of Pull-and-Refiles and a Second Request



Publication Date: May 31, 2019


Research Report Overview

Roche’s pending $4.3bn acquisition of Spark has encountered difficulties with the FTC, which has subsequently led Roche to pull and refile its HSR application three times. Due to a specific carve-out in the merger agreement, Roche is not bound to completing the takeover if it is required to divest Spark’s haemophilia A pipeline drugs, or its own market-leading haemophilia A product, Hemlibra. Since the FTC’s concerns most likely surround Spark’s haemophilia A portfolio, a key driver of the acquisition, this has led to questions of Roche’s strategy for the pull and refiles and its overall commitment to pursue the takeover if a haemophilia A divestiture is required. Conversely, the FTC is weighing pursuing this deal further given recent high profile losses and questionable strengths in their arguments against market definitions and divesting pre-Phase III drugs. Our report balances FTC and Roche incentives, key debates and drugs, theories behind pull and refiles, and break prices, incorporating suitors and crowdedness.


Contents (36 Pages):

1. Situation Overview and Key Debates 2. Roche’s Hemlibra and Spark’s Haemophilia A Drugs 3. Inside Three Pull-and-Refiles: Positive and Negative Theories 4. Positive Arguments: Crystal Ball Gazing and Competitive Dynamics 5. Negative Arguments: Roche’s Divestiture Intentions and Gene Therapies 6. Break Price Analysis Incorporating Other Bidders and Crowdedness 7. Likely FTC Actions and Risk Arbitrage Trading Thoughts


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Deal Timeline

Spark Therapeutics / Roche Holding

November 2019

October 2019

September 2019

August 2019

July 2019

June 2019

May 2019

April 2019

March 2019

February 2019

Deal Announced: February 22, 2019
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