In one of the largest ophthalmic drug deals to date, Novartis has agreed to acquire dry eye drug Xiidra (lifitegrast ophthalmic solution) 5% from Takeda Pharmaceutical in a deal worth up to $5.3 billion.
Under terms of the deal, Novartis will pay $3.4 billion upfront, plus potential milestone payments of up to $1.9 billion. Novartis will be taking on approximately 400 employees associated with the product.
The deal is expected to close in the second half of 2019.
Xiidra is the first and only prescription treatment approved to treat both signs and symptoms of dry eye by inhibiting inflammation caused by the disease. The FDA approved Xiidra in 2016, becoming just the second drug approved in the United States for dry eye disease, joining Allergan’s Restasis (cyclosporine ophthalmic emulsion) 0.05%, which was approved in 2003.
Takeda acquired the rights to Xiidra following its $62 billion acquisition of Shire in January 2019. Last year, adjusted net sales reported for Xiidra were $388 million.
Novartis said the acquisition of the dry eye drug would bolster its front-of-the-eye portfolio and ophthalmic leadership.
“For us it was an asset that we have long since been interested in frankly,” Patrick Mooney, vice president and head of Novartis’ US ophthalmology franchise, said in an interview with Eyewire.News. “Xiidra is the only prescription treatment approved for both treatment of signs and symptoms of dry eye disease. That says something. It’s a really high bar to achieve with the FDA. … From our standpoint, it starts with the product efficacy and the profile, and can it obviously help patients? We believe this can and it already is on its way. So to take a great product with an excellent label and to bring it to millions more Americans that suffer, I think this is what we do best at Novartis.”
Mr. Mooney also discussed Novartis’s ophthalmic pharmaceuticals’ portfolio and the focus of the company following its spinoff from Alcon.
“I think it’s a really important position to understand that there’s two professions here, both optometry and ophthalmology. So we’re going to be ultra-focused in on that and making sure that we are serving both customers well, and having what they need to obviously treat their patients,” Mr. Mooney said. “A mission for Novartis is to really focus in on transformative medicines that’ll obviously bring real change and real improvement for patients. I think the acquisition of Alcon back in 2011 for Novartis allowed both companies to think carefully about how to build both pipelines and focus. Obviously now that we’ve spun out Alcon as a fully standalone company, the mission is clear. I think our job is to be bringing transformative medicines to market. Alcon is going to continue to focus in on being a med-tech medical device company.”
“It really gives two great companies an opportunity to focus in what they do best. I’m excited for Alcon and the team to take it from here, as well as Novartis to continue to innovate and bring first-in-class therapies to millions more patients and new therapies to market,” he said.
In a separate news release, Takeda stated that its decision to sell Xiidra was part of its strategy to focus on business areas core to its long-term growth and facilitate rapid deleveraging following its acquisition of Shire.
Christophe Weber, President and Chief Executive Officer of Takeda, said the company will focus on its key business areas—Gastroenterology (GI), Rare Diseases, Plasma-Derived Therapies, Oncology, and Neuroscience.
Xiidra is approved for sale in the United States, Canada, and Australia and under regulatory review in additional markets.