Novartis is in the process of divesting its eye disease unit, a move that includes discontinuing a geographic atrophy (GA) program due to disappointing data. This decision puts a halt to a series of milestone payments related to Novartis’ 2021 acquisition of Gyroscope Therapeutics. Specifically, the development of GT005, a potential treatment for GA secondary to dry age-related macular degeneration, has been terminated following an assessment by an independent data monitoring committee as part of the phase 2 HORIZON program. The committee concluded that the overall data did not justify continuing the program.
This development has significant financial implications, particularly for Syncona, an investment firm that previously owned Gyroscope Holdings before Novartis’ acquisition. Novartis had acquired Gyroscope Therapeutics for up to $1.5 billion, which included an $800 million upfront payment and $700 million in milestone payments. With the discontinuation of GT005, Syncona confirms that the milestone payments have ceased. As of June 30, Syncona still had outstanding milestone payments valued at £54.5 million ($68.2 million), which will now be written off. While this decision is disappointing, Syncona’s CEO, Chris Hollowood, expressed respect for Novartis’ choice.
Although data played a pivotal role in this decision, it is part of a broader strategic shift by Novartis, which is undergoing significant restructuring, including the planned reduction of 8,000 employees. The Swiss pharmaceutical company is also considering the sale of its ophthalmology and respiratory disease businesses, along with its generics unit, Sandoz.
Beyond GT005, Novartis continues its work on medications for glaucoma and ocular surface disease. In June, the company divested its “front of eye” ophthalmology assets to Bausch + Lomb for $2.5 billion, a transaction that included the approved dry eye disease therapy Xiidra. This move highlights Novartis’ commitment to reshaping its portfolio and strategic focus in the pharmaceutical industry.
