(Reuters) - Bausch + Lomb said on Friday it would acquire several Novartis eye-care products for $1.75 billion as their market grows, sending the company's shares up over 8% in early trading.
The deal includes acquisition of Novartis' anti-inflammation eye drop Xiidra, experimental drug libvatrep for chronic ocular surface pain, and rights to use the Swiss pharma company's AcuStream dry-eye drug delivery device.
The first big deal by CEO Brent Saunders since his return to the company in March also includes potential milestone payments of up to $750 million to Novartis.
It is expected to close by the end of this year and will boost the company's earnings, the company said.
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.
Novartis said it would continue to supply Xiidra on behalf of Bausch + Lomb for a "limited period" after the deal closes to ensure consistent supply to patients.
The company 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.
It 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, stood at $487 million in 2022, up 4% from a year earlier. The treatment faces competition from AbbVie (NYSE:ABBV)'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.