Harrow Enters Into Agreement to Acquire Exclusive US Rights to Five Ophthalmic Products from Novartis

Harrow announced it has entered into a agreement for the acquisition of the exclusive US commercial rights to five FDA‑approved ophthalmic products from Novartis in a deal worth up to $175 million. 

This transaction, which is the second acquisition transaction between Harrow and Novartis, transfers exclusive US rights to the following ophthalmic products:

• Ilevro (nepafenac ophthalmic suspension) 0.3%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated with cataract surgery
• Nevanec (nepafenac ophthalmic suspension) 0.1%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated with cataract surgery
• Vigamox (moxifloxacin hydrochloride ophthalmic solution) 0.5%, a fluoroquinolone antibiotic eye drop for the treatment of bacterial conjunctivitis caused by susceptible strains of organisms
• Maxidex (dexamethasone ophthalmic suspension) 0.1%, a steroid eye drop for steroid-responsive inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior segment of the globe
• Triesence (triamcinolone acetonide injectable suspension) 40 mg/ml, a steroid injection for the treatment of certain ophthalmic diseases and for visualization during vitrectomy

“This is a landmark transaction for Harrow, catapulting Harrow into a leadership position in the U.S. ophthalmic pharmaceuticals market," Mark L. Baum, Chairman and CEO of Harrow, said in a company news release. "Following the satisfaction of the relevant closing conditions, these products will be immediately accretive to our revenues and excellently complement our current portfolio of ophthalmic prescription products.

Subject to customary closing conditions, the acquisition is expected to close in early 2023.

Under the terms of the agreement:

• Harrow will make a one-time payment of $130 million at closing, with up to an additional $45 million payable in a milestone payment upon the commercial availability of Triesence, which is expected in the second half of 2023
• During an estimated 6-month NDA transfer period, Novartis will continue to sell the products in the US market and will transfer all net profits to Harrow
• Following the NDA transfer period, Harrow will assume control over all US market activities and will begin a process to have the products manufactured by third parties
• Novartis will retain all rights to the products outside of the US

“Our market research indicates an increasing demand for the indications these products treat. Based on U.S. demographic growth, favorable competitive trends, and broad public and private payor reimbursement, revenue contribution from these products is expected to grow for many years," Mr. Baum 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.”