Eye healthcare firm Bausch + Lomb Corp. (BLCO) Friday said it has entered into a definitive agreement to buy XIIDRA (lifitegrast ophthalmic solution) 5%, a non-steroid eye drop, from Swiss drug major Novartis AG (NVS) for up to $2.5 billion.
In pre-market activity on the NYSE, Bausch + Lomb shares were gaining around 3 percent to trade at $19.75.
Under the deal terms, Bausch + Lomb, through an affiliate, has agreed to acquire XIIDRA. The consideration includes an upfront payment of $1.75 billion in cash with potential milestone obligations up to $750 million based on sales thresholds and pipeline commercialization.
XIIDRA is specifically approved to treat the signs and symptoms of dry eye disease or DED focusing on inflammation associated with dry eye.
Bausch + Lomb will also bring on the sales force supporting XIIDRA. The company has obtained fully committed financing from J.P. Morgan for the transaction and intends to finance the $1.75 billion upfront cash purchase price with new debt prior to closing.
The deal was approved by the Board of Directors of both companies. It is subject to receipt of regulatory approval and other customary closing conditions.
The transaction would close by the end of 2023 and will be immediately accretive.
Bausch + Lomb expects the acquisition of XIIDRA will complement its existing dry eye portfolio that includes eye and contact lens drops from the company’s consumer brand franchises and its pharmaceutical business.
The prescription U.S. DED field is expected to grow at a double-digit compounded annual growth rate over the next five years. XIIDRA, which generated around $487 million in sales in 2022, is patented through 2033.
As part of the deal, Bausch + Lomb will also buy libvatrep, also known as SAF312, an investigational compound being studied for the treatment of chronic ocular surface pain. It will also acquire AcuStream technology, an investigational device that may have the potential to facilitate precise dosing and accurate delivery of certain topical ophthalmic medications to the eye.
Libvatrep is currently in Phase 2b development with study results expected in the third quarter of 2023.
In the deal, J.P. Morgan served as financial advisor to Bausch + Lomb.
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