Roche extends $4.3B Spark tender offer yet again. What are watchdogs so worried about?

You might have lost count of how many times Roche has extended the tender offer period for shares of Spark Therapeutics. As of Wednesday, it's five. And once again, regulatory delays are part of the problem.

The two companies said the takeover offer is now scheduled to expire Tuesday, Sept. 3, rather than July 31 as previously scheduled. The extension will allow antitrust regulators in the U.S. and the U.K. more time to finish reviewing the combo, Roche said.

Roche and Spark "remain committed to the transaction and are working cooperatively and expeditiously with" the U.S. Federal Trade Commission and the UK Competition and Markets Authority, Roche said.

The delay this time was somewhat expected. Earlier this month, Roche said the two parties had agreed to move the deal-closing deadline from Jan. 31, 2020 to April 30, 2020. At the time, Roche CEO Severin Schwan said the companies still expect to close the transaction this year, but "we want to ensure that we proactively identify and remove any potential future obstacles to achieving this outcome."

The companies originally planned to close the buyout by June 30 of this year.

Despite Schwan's reassurance, Roche investors have been scratching their heads trying to make sense of the delays: What, exactly, are the regulatory hurdles the deal has yet to clear? And why is management still confident their buy will go through?

They're not getting any answers directly from the company. During Roche’s second-quarter earnings call with investors last week, Schwan reiterated that "we are very confident to close the transaction by the end of this year," but he declined to offer any details as to what’s causing the repeated delays.

Several theories are spreading among investors. According to Jefferies analyst Michael Yee in a recent note to clients, the FTC might have two concerns.

Roche’s fast-growing Hemlibra has already captured a big share of hemophilia A patients with factor VIII inhibitors, and Spark’s gene therapy candidate, SPK-8016, might make it difficult for competitors aiming for the same group. But Yee noted that both Spark and rival BioMarin are still in the early stages with their products and have not even treated patients yet.

The second fear is that Roche could tie Hemlibra and Spark’s lead hemophilia A candidate SPK-8011 together in reimbursement talks to defeat competition from BioMarin’s valoctocogene roxaparvovec in the larger, inhibitor-free patient population.

Yee sided with Roche. "We think the hemophilia gene therapy market is probably the most competitive and 'crowded' field in gene therapy and don't see how this could be a concern," he wrote in the note.

There’s at least one bit of good news coming out of Wednesday’s announcement: The proportion of Spark shares Roche has collected seems to be growing—from 21.1% in June to about 25.2% as of Tuesday. However, the number was still lower than the 29.4% Roche had captured on April 2, the last business day before it first extended the deadline.