Bausch + Lomb to buy ‘dry eye’ treatment from Novartis in a $2.5 billion deal

Bausch + Lomb Corp.
BLCO,
+2.50%
confirmed that it was buying the “dry eye” treatment Xiidra from Novartis AG
NVS,
+1.19%

NOVN,
+0.95%
in a deal valued at $2.5 billion. Under terms of the deal, Bausch + Lomb will make an upfront payment of $1.75 billion in cash, and could make milestone payments of up to $750 million based based on sales and commercialization thresholds. Bausch + Lomb’s stock jumped 5.2% toward a record high in premarket trading, while Novarits’ U.S.-listed shares were little changed. The deal is expected to close by the end of 2023. The Wall Street Journal had reported earlier that a deal would be announced. Bausch + Lomb said the acquisition of Xiidra (lifitegrast ophthalmic solution) 5%, and eye drop used to treat dry-eye disease, will complement its existing dry eye business, which includes eye and contact lens drops. “The deal is also expected to accelerate margin expansion through a larger mix of pharmaceutical products in our portfolio, provide strong and immediate earnings accretion and presents a clear path to deleverage, making it financially compelling,” said Chief Executive Brent Saunders. Bausch’s stock has run up 23.7% year to date through Thursday while the S&P 500
SPX,
+1.00%
has gained 14.5%.