On February 25, Roche Holdings (RHHBY) issued a press release announcing that it has entered a definitive agreement to acquire Spark Therapeutics (ONCE) for a total consideration of around $4.3 billion. This acquisition follows closely on the heels of the announcement of Bristol-Myers Squibb’s (BMY) acquisition of Celgene (CELG) and Eli Lilly’s (LLY) acquisition of Loxo Oncology.
According to Roche Holdings’ press release, the company is paying cash of $114.50 per Spark Therapeutics share, which represents a premium of 122% to Spark Therapeutics’ closing price on February 22. This deal has been approved by the boards of both Roche Holdings and Spark Therapeutics and is expected to close in the second quarter of 2019. According to Roche Holdings’ press release, Spark Therapeutics will be adding the only successfully commercialized gene therapy in the US, Luxturna, as well as four investigational gene therapy assets to Roche Holdings’ portfolio.
On February 25, Spark Therapeutics (ONCE) closed at $113.48, 120.09% higher than its previous closing price, 228.64% higher than its 52-week low of $34.53, and 17.49% higher than its 52-week high of $96.59. Its market capitalization was $4.20 billion.
Based on its closing price on February 25, Spark Therapeutics reported returns of 115.05% in the last week, 168.53% in the last month, and 192.63% in the last quarter. The company also reported returns of 86.61% in the last half year, 109.41% in the last year, and 189.93% YTD.
The dramatic rise in the stock price highlights the favorable sentiment of Spark Therapeutics shareholders in regards to this transaction. On February 22, Roche Holdings (RHHBY) closed at $34.60, 0.36% below its previous closing price, 31.56% higher than its 52-week low of $26.30, and 0.72% below its 52-week high of $34.85. Its market capitalization was $192.94 billion, and its trailing-12-month PE ratio is are 22.54x.
Next, we’ll discuss analysts’ recommendations for Roche Holdings and Spark Therapeutics.