Novartis offloads five eye drugs in deal worth up to $175M
Eye care pharma company Harrow said this morning that it’s acquiring the US rights to five different drugs from the Swiss pharma Novartis for $130 million upfront, with $45 million more if one of the drugs lands on the market.
If the deal goes through, Harrow will hold exclusive use in the US for the four eye drop products and one injectable drug.
The additional $45 million will come if the steroid injection Triesence hits the market, which is expected in the second half of next year, Harrow said.
“Assuming this transaction closes during the first quarter of 2023, Harrow expects 2023 net revenues to be between $135 million and $143 million and adjusted EBITDA to be between $44 million and $50 million, with both net revenues and adjusted EBITDA ramping up during 2024 and beyond,” Mark Baum, chairman and CEO of Harrow, which also owns ImprimisRx, said in a statement.
But it won’t happen right away once the deal is done: Novartis can continue to sell the drugs in the US for six months and then transfer all net profits to Harrow. After the six months, Harrow will outsource the manufacturing of the drugs.
Outside of the US, Novartis will continue to sell the drugs exclusively.
The five FDA-approved ophthalmic products are Ilevro and Nevanac, which relieve inflammation in the eye after cataract surgery; Vigamox, which kills off bacterial conjunctivitis; Maxidex, a steroid eye drop for inflammation; and Triesence, which is an injection that treats certain ophthalmic diseases.
This isn’t the first time Harrow has snatched up US rights to Novartis drugs. In December 2021, Harrow acquired the rights to four FDA-approved eye drops for $14 million.
Harrow is an eye care pharmaceutical company exclusively focused on ophthalmic therapies. It came onto the scene in 2011 and listed on Nasdaq for the first time in 2013, according to the company website. Since its founding in 2011 with an $8 million investment, it entered into a $15 million loan agreement with Life Sciences Alternative Funding, completed a $12 million equity offering in 2016 and another $10 million one in 2017.
The sell-off could be part of pharma giant Novartis’ downsizing of its ophthalmology arm. According to a report from last month, Novartis said private equity firms could spend up to $5 billion on its ophthalmology unit alone. In August, CEO Vas Narasimhan announced the company would spin off generics unit Sandoz.
Harrow, which saw its stock price rise 17% today, made two other announcements too: it priced an underwritten registered offering of 2.3 million shares of its common stock at a price of $10.52 per share for gross proceeds of $25 million. And it began an underwritten registered public offering of $100 million in aggregate senior notes due in 2027.