Dive Brief:
- Novartis is selling off more eye care assets, announcing Friday it’s divesting the dry eye disease drug Xiidra along with some drug delivery technology and other experimental medicines to ophthalmology specialist Bausch + Lomb.
- Per deal terms, Bausch + Lomb is paying $1.75 billion upfront, and could add another $750 million if sales of Xiidra and the two pipeline projects, libvatrep and OJL332, hit certain targets. In 2019, Novartis paid $3.4 billion to acquire Xiidra from Takeda, which had gained rights to the medicine a year earlier when it bought Shire.
- The deal is part of Novartis’ yearslong push to focus on developing and selling innovative medicines. Four years ago, the Swiss company spun off its eye care division Alcon, which sells contact lenses, diagnostics and ophthalmic drugs. More recently, it announced plans to spin off its Sandoz generics division.
Dive Insight:
Novartis generated $487 million from sales of Xiidra in 2022, a 4% uptick from a year earlier but dwarfed by the totals of top-selling medicines like the heart drug Entresto and autoimmune disease treatment Cosentyx. The drug is one of several eye disease medicines Novartis sells, but for a “front of the eye disease,” rather than the retinal conditions it aims to focus on.
Moreover, Novartis never got Xiidra approved in Europe because regulators doubted its effectiveness. Some of its key patents are due to expire in 2024, while others are being challenged by generic drugmakers.
Selling Xiidra and other assets like it, then, allows Novartis to focus on the eye-related projects that align with its future strategy. The company owns partial rights to the gene therapy Luxturna, for instance, and is developing other genetic medicines for other retinal conditions. In recent years, the company has acquired biotechnology startups Gyroscope Therapeutics, Arctos Medical and Vedere Bio, in each case getting ahold of eye-related gene therapies.
“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,” said Ronny Gal, Novartis’ chief strategy and growth officer, who joined the drugmaker last year from advisory firm Bernstein.
Novartis expects to finalize the deal in the second half of 2023. It will continue to supply Xiidra to patients for a limited time after the deal closes to ensure consistent supply.