Bausch + Lomb Corporation has entered into a definitive agreement with Novartis to purchase Xiidra (lifitegrast ophthalmic solution) 5%.
Refresh me on Xiidra.
As an FDA-approved (in 2016) non-steroid eye drop, Xiidra is specifically indicated to treat the signs and symptoms of dry eye disease (DED).
The recommended dosage is one drop twice daily in each eye, administered approximately 12 hours apart, according to the prescribing information.
What’s the background story?
The eye drop has gone through a few acquisitions … it was originally developed by SARcode Biosciences Inc. and then acquired by Shire plc who commercialized it before being sold to Takeda Pharmaceutical Company as part of the company’s $62 billion acquisition of Shire in January 2019..
Novartis then acquired Xiidra in July 2019 from Takeda in a deal clocking in at up to $5.3 billion.
Doesn’t B + L already have a DED eye drop?
Indeed it does. Xiidra will join the company’s dry eye portfolio, which includes various ophthalmic and contact lens topical formulations—including MIEBO (perfluorohexyloctane ophthalmic solution).
To note: MIEBO was just approved by the FDA in May 2023 as the first and only DED treatment directly targeting tear evaporation (compared to Xiidra’s focus of inflammation targeting).
Gotcha … so what else does this deal include?
Per the agreement, B + L will also purchase the following:
- Libvatrep (SAF312) → an investigational compound for the treatment of chronic ocular surface pain.
- Currently undergoing phase 2b clinical trial; results are expected in Q3 2023.
- OJL332 → a second generation TRPV antagonist
- Currently in the pre-clinical development stage
- AcuStream technology → a preservative-free, electromechanical topical ocular delivery device with the potential coordinate precise dosing and accurate delivery of specific topical ophthalmic medications to the eye.
- To note: Acustream was originally developed by Kedalion Therapeutics before being acquired by Novartis in June 2022.
What else?
Novartis will continue to supply Xiidra (on behalf of B+L) for a limited period following the deal’s closing in order to ensure consistent supply to patients.
Talk numbers.
Via an affiliate, B+L will purchase Xiidra, Libvatrep (SAF312), OJL332, and AcuStream for up to $2.5 billion, which includes an upfront payment of $1.75 billion in cash and potential milestone obligations up to $750 million that will depend on sales thresholds and pipeline commercialization.
Per B+L, the company plans to use its sales force to support Xiidra; the company has also funded the transaction through financing from J.P. Morgan and plans to finance the upfront cash purchase price with new debt prior to closing.
When is the deal expected to close?
According to B+L, likely by the end of 2023.
Significance?
With this deal—B+L looks to accelerate margin expansion with a larger pharmaceutical product portfolio inclusive of dry eye assets through consolidation which could provide a path towards immediate sales earnings growth, according to CEO and Chairman Brent Saunders, who returned to the company earlier this year.