Bausch + Lomb to acquire dry eye disease medication XIIDRA from Novartis

Bausch + Lomb has reached a definitive agreement with Novartis to acquire the non-steroid eye drop XIIDRA (lifitegrast ophthalmic solution) 5%, known for treating dry eye disease (DED) symptoms.

The transaction, which includes a $1.75 billion upfront cash payment, will see the global eye health giant adding the lucrative product, which had sales of approximately $487 million in 2022 and a patent valid through 2033, to its impressive dry eye portfolio.

Under the agreement, Bausch + Lomb, through an affiliate, will acquire XIIDRA, libvatrep, and AcuStream for up to $2.5 billion, factoring in potential milestone obligations of up to $750 million based on sales and pipeline commercialization. As part of the deal, the sales force supporting XIIDRA will also join Bausch + Lomb.

Alongside the XIIDRA acquisition, Bausch + Lomb will also secure rights to libvatrep, a Phase 2b investigational compound for chronic ocular surface pain, and AcuStream, an experimental device designed to enhance the delivery of topical ophthalmic medications.

Brent Saunders — Bausch + Lomb chairman and CEO said: “This acquisition is a prime example of our strategy in action, as it provides needed scale for the company and transforms our pharmaceuticals business by making us a leader in ocular surface diseases.

“The deal is also expected to accelerate margin expansion through a larger mix of pharmaceutical products in our portfolio, provide strong and immediate earnings accretion and presents a clear path to deleverage, making it financially compelling.”

Dry eye disease, one of the leading ocular surface disorders, currently afflicts around 38 million Americans and 739 million individuals globally, with an increasing prevalence due to extensive screen time.

The US prescription dry eye disease market is projected to experience double-digit annual growth over the next five years, a trend Bausch + Lomb intends to capitalize on with its recently FDA-approved MIEBO eye drop and the incoming XIIDRA.

With the necessary financing provided by J.P. Morgan, the eye health company plans to meet the initial cash purchase price with new debt prior to closing.

The deal, approved by the Board of Directors at both companies, is awaiting regulatory approval and should be finalized by 2023-end, promising immediate returns for Bausch + Lomb.