CANADA — Bausch + Lomb, a renowned ophthalmology company, has announced its plans to enhance its portfolio and pipeline through the acquisition of Novartis’ eye products.
The deal, valued at US$1.75 billion, includes a commercialized drug for dry eye disease, Xiidra, as well as two experimental eye products.
This upfront payment will be followed by an additional US$750 million tied to the achievement of specified milestones.
As part of the agreement, Bausch + Lomb will also inherit the Novartis salesforce responsible for supporting Xiidra.
The focal point of the transaction is Xiidra, an eye drop specifically designed to alleviate inflammation associated with dry eye disease.
By binding to LFA-1, a protein found on the surface of immune cells called leukocytes, Xiidra prevents the interaction between LFA-1 and another protein that triggers an inflammatory response in the eye.
Originally developed by Shire, Xiidra received FDA approval in 2016. Takeda Pharmaceutical later acquired Shire in 2019 and subsequently sold Xiidra to Novartis for an upfront payment of US$3.4 billion. Now, Novartis has decided to divest the product.
Bausch + Lomb already has a presence in the dry eye disease market following the FDA approval of its drug, Meibo, in May.
Meibo contains a compound that forms a protective layer on the tear film, preventing evaporation and addressing one of the underlying causes of dry eye disease.
Bausch + Lomb believes that the addition of Xiidra to its portfolio will complement Meibo, as the two products target different aspects of the dry eye disease cycle.
Although Xiidra generated revenue of US$487 million in 2022, a 4% increase from the previous year, the sales figures fell short of the blockbuster potential that Novartis had anticipated upon acquiring the drug.
Moreover, the drug’s potential approval in Europe, which could have further bolstered sales, did not materialize due to regulatory concerns that led to the withdrawal of the application in 2020.
In addition to Xiidra, Bausch + Lomb’s agreement with Novartis includes libvatrep, an experimental treatment for chronic ocular surface pain.
This small molecule drug works by blocking TRPV1, a receptor associated with pain. Results from a Phase 2b clinical trial for libvatrep are expected to be released in the third quarter of this year.
Furthermore, Bausch + Lomb will also gain AcuStream, a medical device currently under development that aims to provide precise dosing and accurate delivery of topical eye medications.
Chairman and CEO of Bausch + Lomb, Brent Saunders, expressed enthusiasm about the acquisition, stating that it aligns with the company’s strategic objectives and will significantly strengthen its pharmaceutical business in the field of ocular surface diseases.
The financing for the acquisition will be obtained through debt financing from J.P. Morgan, and the deal is anticipated to be finalized by the end of this year, pending regulatory approvals and customary closing conditions.
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