Bausch + Lomb Corp has announced plans to buy dry eye disease treatment Xiidra from Swiss pharma giant Novartis AG (ADR) (NYSE:NVS) in a deal that could be valued as high as $2.5 billion.
The two companies reached an agreement Friday for a portion of Novartis’ eye medicine portfolio, as Novartis shifts its focus towards the development of new and more profitable drugs.
The deal involves $1.75 billion in upfront cash and additional milestone payments, according to a statement.
Xiidra, a prescription drug for dry eye disease, generated $487 million in sales last year.
The potential milestone payments of $750 million are contingent on future sales of Xiidra, as well as two pipeline assets: libvatrep, an experimental drug currently in mid-stage trials for chronic ocular surface pain, and a second-generation experimental compound with similar mechanisms. Novartis will supply Xiidra on behalf of Bausch + Lomb.
Shares of Bausch + Lomb were up 8.3% in New York at US$20.80, while US-listed Novartis shares gained 1% in early trading to reach US$100.35.
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