Viatris Sees Vision Drugs as Key to Growth and Commits $750M to Two M&A Deals

08 Nov 2022
medcitynews.com
Generic DrugBiosimilarAcquisition
Viatris, which is in the midst of a strategy shift intended to return the company to revenue growth, is acquiring two companies that together bring one commercialized product and five programs ready for pivotal testing or already in Phase 3 development. The new assets coming to Viatris are in ophthalmology, one of the new areas of focus for the company. In total, Viatris said it expects to spend between $700 million and $750 million to acquire publicly traded Oyster Point Pharma and privately held Famy Life Sciences. The acquisitions announced Monday come less than two years after the close of the merger that formed Viatris, bringing together the generic drugs giant Mylan with Upjohn, the generic medications and off-patent drugs unit of Pfizer. In its new incarnation, Viatris aimed to offer a portfolio of drugs projected to top $3 billion in global revenue. The Canonsburg, Pennsylvania-based company would soon change course. In February, Viatris announced it had agreed to sell its biosimilars business to Biocon Biologics for $3.3 billion. That deal resulted from a strategic review conducted to streamline the business and better position it for growth. “Non-core” assets like biosimilars would be sold. The remaining Viatris business would focus on three therapeutic areas: ophthalmology, gastrointestinal, and dermatology. At the time that deal was announced, Viatris also disclosed it had acquired rights to Pimecrolimus, an eye ointment to treat blepharitis, a type of eye irritation. The company’s latest deals further expand its eye drug ambitions. Oyster Point’s main asset is Tyrvaya, a dry eye disease drug approved last year that the biotech company developed in a nasal spray formulation. The drug works by binding to certain receptors, activating them to stimulate cells and glands involved in producing the tear film covering the eye. For the first half of this year, the Princeton, New Jersey-based company reported the drug accounted for $7.3 million in revenue. Oyster Point’s pipeline includes two preclinical gene therapies in development for certain eye surface diseases. According to the financial terms of deal, Viatris will pay $11 cash for each share of Oyster Point. That price is a 31.7% premium to the stock’s closing price last Friday. The agreement also includes a contingent value right, an additional $2 per share payment that’s tied to Oyster Point achieving certain goals. Viatris is paying about $300 million to acquire Famy Life Sciences, according to the Economic Times, a business newspaper in India, where Famy is based. The Times reported that the Taparia family, which owned the company, will keep retain the non-ophthalmic business. There’s history behind the transaction. In 2015, Mylan paid $750 million up front to acquire Famy Care, a women’s healthcare company started by the Taparias. Family members started Famy Life Sciences in 2017. According to a Viatris investor presentation, Famy’s five clinical-stage ophthalmic programs include Phase 3-ready assets for dry eye disease, blepharitis, and presbyopia. A drug candidate for dim light or night vision disturbances is already in Phase 3 testing; a Phase 3 test in rehydration of mydriasis is complete. The products and product candidates coming to the company in the acquisitions are projected to generate more than $1 billion in revenue by 2028, Viatris said in the presentation. “These acquisitions bring us an innovative growth asset, Tyrvaya, and five additional Phase 3 or Phase 3-ready programs that give us a significant head-start in creating a leading ophthalmology franchise,” Viatris CEO Michael Goettler said in a prepared statement. The Oyster Point acquisition is expected to close in the first quarter of 2023. When it does, Oyster Point CEO Jeff Nau will lead the new Viatris ophthalmology business, which will operate as a separate division within the larger company.
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