Switzerland-based Novartis has agreed to acquire dry eye drug Xiidra (lifitegrast ophthalmic solution) 5% from Japan-based Takeda, it was reported yesterday.

The deal is valued at USD3.4bn. According to the terms of the contract, Takeda is also eligible to secure up to an additional USD1.9bn in potential milestone payments from Novartis along with USD3.4bn upfront payment in cash. The deal is likely to be completed in the second half of 2019, subject to customary closing conditions including regulatory approvals. Under the deal, round 400 employees associated with Xiidra product and based in the US and Canada will join Novartis.

The product is said to be the first and only prescription treatment secured approval for the treatment of both signs and symptoms of dry eye by inhibiting inflammation caused by the disease. It received approval to treat signs and symptoms of dry eye disease in various markets including the US, Canada and Australia, and is also under regulatory assessment in a number of additional markets.