Novartis AG agreed to sell part of its portfolio of eye medicines to Bausch + Lomb Corp. in a deal worth as much as $2.5 billion as the Swiss pharma company focuses on developing new and more lucrative drugs.
The transaction consists of $1.75 billion in upfront cash and additional milestone payments, according to a statement Friday. It includes Xiidra, a prescription medicine for dry eye disease, that generated $487 million in sales last year.
Under Chief Executive Officer Vas Narasimhan, Novartis has helped lead an industry-wide push to hive off low-growth businesses. It spun off its eye-care unit Alcon in 2019 and is in the process of doing the same with Sandoz, its generic-drugs business.
The $750 million in potential milestone payments is linked to future sales for Xiidra as well as two pipeline assets: libvatrep, an experimental drug being tested in mid-stage trials for chronic ocular surface pain, and a second-generation experimental compound that works in a similar way. Novartis will supply Xiidra on behalf of Bausch + Lomb.
Novartis shares rose 1% in Zurich.
Xiidra was at the heart of a multibillion-dollar deal for Narasimhan in 2019, when Novartis agreed to buy the drug and other assets from Japan’s Takeda Pharmaceutical Co. But Novartis has struggled to boost sales much beyond the $400 million Xiidra was generating at the time of that acquisition. In 2020, the company gave up efforts to get Xiidra approved in Europe.
Bloomberg News first revealed last year that Basel-based Novartis was considering options for all or parts of its ophthalmology and respiratory units. The Wall Street Journal reported Bausch + Lomb’s interest earlier on Friday.
The deal is expected to close in the second half of the year, Novartis said. The Swiss drugmaker will continue to develop new medicines for other eye diseases.
(Updates with Xiidra sales in the second paragraph)
