NovartisConsiders Offer for Takeda Eye-Disease Assets

(Bloomberg) -- Novartis AG is considering a bid for eye-disease assets that Takeda Pharmaceutical Co. gained through its $62 billion acquisition of Shire Plc, according to people familiar with the situation.

The Swiss drugmaker is among companies looking at the business, which includes Xiidra prescription drops for adults with dry-eye disease, said the people. No final decision has been made and Novartis could opt to pursue other targets or Takeda could choose a different buyer for the assets, said the people, asking not to be identified because the deliberations are private.

The possible sale would be the first major deal for Takeda since Chief Executive Officer Christophe Weber said in January that the Japanese company plans to move quickly on disposals to reduce debt after its takeover of Shire. Bloomberg News reported in September that Xiidra was among the potential divestments being considered.

The eye-disease assets could be worth $3.5 billion to $4 billion, according to Elizabeth Krutoholow, a Bloomberg Intelligence analyst. Xiidra, the main driver in the business, could generate peak sales of as much as $1.4 billion, she said.

Representatives for Novartis and Takeda declined to comment.

Novartis has just spun off its Alcon contact-lens and surgical-products unit but previously transferred eye drugs from the unit to the main pharma business in 2016. Xiidra competes with Allergan Plc’s blockbuster Restasis. Dry-eye disease is a common condition that can hinder daily activities ranging from reading to driving.

Under CEO Vas Narasimhan, Novartis is narrowing its focus on cutting-edge drugs for cancer and rare diseases and betting on treatments such as gene therapies to potentially cure severe illnesses. In his first year at the helm, the new chief split with Alcon, ditched a stake in a consumer-health venture and carried out three crucial acquisitions to revamp the Basel, Switzerland-based company.

Takeda has laid out a scenario of a potential $10 billion in divestments in an effort to deleverage as net borrowings more than doubled with the takeover of Shire. The company is looking to divest overseas businesses where it isn’t an industry leader and doesn’t have critical mass.

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