Bausch + Lomb to buy Novartis dry-eye drug for $1.75 billion

(Reuters) -Bausch + Lomb Corp said on Friday it would buy Swiss pharma company Novartis' dry-eye drop for $1.75 billion, boosting its drug portfolio for the disease as the market for its treatment grows.

Acquisition of the anti-inflammation eye drop Xiidra will mark the first big deal by CEO Brent Saunders since he returned to the company in March. The agreement also includes potential milestone payments of up to $750 million to Novartis.

Bausch + Lomb's Miebo was approved last month for dry-eye condition, which affects about 739 million people worldwide, including around 38 million in the United States.

The deal is expected to close by the end of this year and will boost the company's earnings, Bausch + Lomb said.

Novartis said last year it would slash costs and take an "opportunistic" approach to eye care and respiratory diseases, while focusing more on cardio-renal care, immunology, neuroscience, oncology and hematology..

The Swiss firm had acquired Xiidra from Takeda Pharmaceutical in 2019 for an upfront payment of $3.4 billion.

Sales of Xiidra, mainly in the U.S. market, were $487 million in 2022, up 4% from a year earlier. It faces competition from AbbVie's Restasis and cheaper copycat versions.

Novartis's largest ophthalmology product, Lucentis, for treating macular degeneration, a common cause of blindness in the elderly, has seen sales decline because of cheaper alternatives.

Its next-generation macular degeneration drug, Beovu, has also not been a commercial success because of concerns over potential side effects.

(Reporting by Leroy Leo in Bengaluru and Ludwig Burger in Frankfurt; Editing by Anil D'Silva and Vinay Dwivedi)