Bausch + Lomb Corp. (NYSE:BLCO) shares are on the rise today after it agreed to acquire Novartis’ (NYSE:NVS) dry eye disease (DED) non-steroid eye drop, Xiidra. The former is a subsidiary of Bausch Health Companies (NYSE:BHC).
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The strategic move could make BLCO a leading name in ocular surface diseases while also helping it expand its margins.
Under the deal, BLCO is snapping up Xiidra along with investigational candidates libvatrep and AcuStream for nearly $2.5 billion. This includes $1.75 billion in an upfront cash payment and $750 million in the form of milestone payments.
Further, BLCO has received a financing commitment from JP Morgan and plans to finance the upfront cash payment via new debt. The deal is anticipated to close by the end of this year and importantly, is expected to be immediately accretive to the company.
The move remains subject to regulatory approvals and closing conditions and has already received the approval of the Boards of both companies.
Overall, the Street has a $20.50 consensus price target on BLCO alongside a Moderate Buy consensus rating. Shares of the company have now gained nearly 36.2% over the past year.
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