May 31, 2019 | Health Care | North America | Ended

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

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 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 (36 pages)

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