Takeda To Sell Dry Eye Drug, Surgical Patch To Novartis, J&J For Up To $5.7 Bln

(RTTNews) - Takeda Pharmaceutical Company Limited (TKPYY.PK) said that it agreed to divest its dry eye drug Xiidra to Novartis AG (NVS) and its TachoSil, a surgical patch designed to control bleeding, to Johnson & Johnson's (JNJ) Ethicon.

The sale of the assets are as part of its strategy to focus on business areas core to its long-term growth and facilitate rapid deleveraging following its acquisition of Shire.

Takeda said it will receive $3.4 billion upfront in cash and up to an additional $1.9 billion in potential milestone payments from Novartis, and about $400 million upfront in cash from Ethicon.

Takeda expects to close the both agreements in the second half of calendar year 2019.

Takeda plans to use the proceeds from the divestitures to reduce its debt and accelerate deleveraging toward its target of 2.0x net debt/adjusted EBITDA in the medium term.

Takeda said it does not expect the divestitures to have a material impact on its fiscal year 2019 consolidated earnings forecast, scheduled to be announced on May 14th.

Takeda said it will focus on its key business areas - Gastroenterology, Rare Diseases, Plasma-Derived Therapies, Oncology and Neuroscience.

Upon closing of Xiidra deal, Takeda will transfer about 400 employees, who are based primarily in the U.S. and Canada, to Novartis.

Meanwhile, Ethicon will acquire the assets and licenses that support the manufacturing, licensing and commercialization of TachoSil, while Takeda will maintain ownership of the manufacturing facility in Linz, Austria.

Takeda reached a long-term manufacturing services agreement, under which it will continue to manufacture TachoSil products and supply them to Ethicon. Takeda will transfer about 80 employees to Ethicon.