Bausch + Lomb to acquire Xiidra, libvatrep from Novartis for $1.75B upfront

Bausch + Lomb (BLCO) announced it has entered into a definitive agreement with Novartis (NVS) under which Bausch + Lomb will acquire Xiidra 5%, a non-steroid eye drop specifically approved to treat the signs and symptoms of dry eye disease, or DED, focusing on inflammation associated with dry eye. The strategic acquisition of Xiidra will complement Bausch + Lomb’s existing dry eye portfolio that includes eye and contact lens drops from the company’s consumer brand franchises and its pharmaceutical business that features Miebo, which was recently approved by the FDA as the first and only approved eye drop for DED that directly targets tear evaporation. Xiidra and Miebo work differently to target distinct elements of the DED cycle. As part of the transaction, Bausch + Lomb will also acquire libvatrep, an investigational compound being studied for the treatment of chronic ocular surface pain, and 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.5,6 Libvatrep is currently in Phase 2b development with study results expected in the third quarter of 2023. Under the terms of the agreement, Bausch + Lomb, through an affiliate, has agreed to acquire Xiidra, libvatrep and AcuStream from Novartis for up to $2.5B, including an upfront payment of $1.75B in cash with potential milestone obligations up to $750M based on sales thresholds and pipeline commercialization. Bausch + Lomb will also bring on the sales force supporting Xiidra. Bausch + Lomb has obtained fully committed financing from J.P. Morgan for the transaction and intends to finance the $1.75B upfront cash purchase price with new debt prior to closing. The transaction was approved by the board of directors at each of the respective companies and is subject to receipt of regulatory approval and other customary closing conditions. The transaction is expected to close by the end of 2023 and will be immediately accretive. Bausch + Lomb intends to maintain its strong balance sheet and expects to return to current leverage levels within approximately 24 months of closing.