Novartis will sell a portion of its range of vision medicines to Bausch + Lomb. The deal, worth a total of $2.5 billion, is part of the Swiss pharmaceutical company’s strategy to focus on the development of higher-value new drugs.
The transaction includes an initial payment of $1.75 billion in cash and additional payments tied to the achievement of certain objectives.
The transaction includes Xiidra, a prescription drug for dry eye syndrome, which generated sales of $487 million last year. Under the leadership of Chief Executive Officer Vas Narasimhan, Novartis spearheaded an industry-wide movement to shed low-growth businesses. It spun off its eye care unit, Alcon, in 2019 and is doing the same with Sandoz, its generics business.
The $750 million potential earn out is tied to future sales of Xiidra, as well as two assets in the pipeline: libvatrep, an investigational drug currently in testing for chronic ocular surface pain, and a second-generation investigational drug that works similarly. Novartis will supply Xiidra on behalf of Bausch + Lomb.
Finally, shares of Novartis rallied 0.85% in Zurich.