Takeda divests eye product to Novartis for $5.3bn

By Ben Hargreaves contact

- Last updated on GMT

(Image: Getty/Metamorworks)
(Image: Getty/Metamorworks)

Related tags: Takeda, Shire, Novartis, Johnson & johnson, Xiidra

Takeda begins the process of divesting products to make its purchase of Shire viable, with $5.7bn worth of assets heading out of the door.

The biggest chunk of Takeda’s divestment, announced yesterday​, is from the sale of Xiidra (lifitegrast ophthalmic solution), which Novartis will add to its portfolio for $3.4bn (€3bn) in upfront cash.

Xiidra is a treatment for the symptoms of dry eye syndrome, functioning by inhibiting inflammation caused by the disease, which, if left untreated, can cause permanent damage to the cornea and the patient’s vision.

According to full year 2018 results​, the treatment brought in sales of $387m, and GlobalData projects​ that by 2022 the product will hit blockbuster status on the way to annual sales of $1.2bn in 2025.

As a strategic fit, the deal would fit into Novartis existing ophthalmic portfolio, which includes blockbuster Lucentis (ranibizumab injection) and Luxturna (oretigene neparvovec).

Alongside the treatment, Novartis will also take on approximately 400 staff members associated with Takeda’s asset and will potentially pay a further $1.9bn should the treatment reach unspecific milestones.

“Xiidra, with its unique dual benefits, is an example of the type of innovative advances we invest in for the benefit of patients,”​ said Paul Hudson, CEO of Novartis Pharmaceuticals.

The dual benefit Hudson refers to is based upon clinical studies showing that Xiidra can treat the signs of damage to the eye, such as corneal staining, and the physical symptoms, such as dryness and pain.

Takeda looks to reduce debt burden

For Takeda’s part, the product was acquired through its buyout of Shire​, which involved taking on a large amount of debt to finance the $62bn deal.

This is the first step through which the company is looking to balance its books and, according to CEO of Takeda, Christophe Weber, will also ‘simplify’ and ‘optimise’ the newly-merged company’s portfolio.

Maura Musciacco, senior director of neurology and ophthalmology at GlobalData, explained the appeal of this deal: “Given that Takeda did not have a presence in ophthalmology prior to the Shire acquisition, Shire’s Xiidra would have represented a new market for Takeda, but also a market that does not fit with its current competencies or strategy.”

Two-in-one

Takeda also announced that it would be selling its TachoSil Fibrin Sealant Patch to Ethicon, a subsidiary of Johnson & Johnson, for $400m in upfront cash.

The product is a surgical patch for bleeding control, which brought in $155m in sales during full year 2017 results. Similar to the Novartis deal, a number of employees will also move to the acquiring company, with approximately 80 employees to be transitioned to Ethicon.

Both deals are expected to close in the second half of 2019.

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