Source – Novartis
In a strategic move to concentrate on its core areas, Novartis has decided to transfer the dry eye disease drug, Xiidra, to eye health specialist Bausch + Lomb in a deal worth $2.5 billion. Bausch + Lomb will provide an upfront payment of $1.75 billion, with the possibility of additional milestone payments up to $750 million. Along with Xiidra, Bausch + Lomb will also acquire Novartis’ libvatrep, currently under investigation for chronic ocular surface pain, and the rights to AceStream, a device being developed for precise dosing and delivery of topical eye medications. Additionally, Bausch + Lomb will gain ownership of the preclinical asset OJL332, a TRPV1 antagonist.
Novartis had previously signaled its intention to divest some of its ophthalmology assets, as it focuses on its five priority areas: cardiovascular diseases, immunology, neuroscience, solid tumors, and hematology. However, Novartis remains committed to addressing retinal diseases through gene therapy and optogenetics.
This deal marks the third ownership change for Xiidra, following its initial manufacturer, Shire, being acquired by Takeda for $62 billion. Novartis then acquired Xiidra from Takeda in 2019 for $3.4 billion, including the transfer of over 400 associated staff members. Bausch + Lomb will now take over the sales team responsible for Xiidra.
Although Novartis had initially anticipated Xiidra’s “blockbuster potential,” the drug faced challenges with limited growth and struggled in Europe due to concerns about its effectiveness raised by the European Medicines Agency. In 2022, Xiidra generated sales of $487 million, falling significantly short of Novartis’ substantial investment.
“The deal is also expected to accelerate margin expansion through a larger mix of pharmaceutical products in our portfolio, provide strong and immediate earnings accretion and presents a clear path to deleverage, making it financially compelling,” Saunders added. The company’s ophthalmic pharmaceuticals sector made $677 million in 2022, a 4% decrease from 2021.
“This transaction will enhance our focus on prioritized innovative medicines to alleviate society’s greatest disease burdens, achieve the greatest patient impact and drive our growth strategy. Our ongoing portfolio refinement enables us to best deploy our scientific expertise and resources towards priority programs and therapeutic areas, while remaining open to opportunistic development for additional high impact conditions leveraging our advanced technology platforms. We believe that Bausch + Lomb has the capabilities, scale and commitment to continue the work of Novartis in delivering and developing much needed therapies for patients suffering from dry eye and related conditions.”
– Ronny Gal, Chief Strategy & Growth Officer of Novartis
For Bausch + Lomb, the acquisition of Xiidra aligns with its FDA-approved Miebo drops, which target tear evaporation directly, while Xiidra focuses on alleviating dry eye inflammation. The two drugs address different aspects of the dry eye disease cycle, as highlighted by the company in its announcement.