Viatris sees Vision Drugs as key to growth and commits $750 million to two M&A deals - MedCity News

Viatris, which is undergoing a strategy shift designed to return the company to revenue growth, is acquiring two companies that together offer one commercialized product and five programs ready for pivotal testing or already in Phase 3 development.

The new assets at 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 closing the merger that formed Viatris, merging generic drug giant Mylan with Upjohn, Pfizer’s generic and off-patent drug division. In its new incarnation, Viatris aimed to offer a portfolio of drugs expected to reach over $3 billion in global revenue. The Canonsburg, Pennsylvania-based company will soon change course.

In February, Viatris announced it has agreed to sell its biosimilars business to Biocon Biologics for $3.3 billion. This transaction is the result of a strategic review undertaken to streamline the business and better position it for growth. “Non-core” assets such as biosimilars will be sold. Viatris’ remaining business will focus on three therapeutic areas: ophthalmology, gastrointestinal and dermatology. At the time the deal was announced, Viatris also revealed 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 drug approved last year which the biotech company developed into a nasal spray formulation. The drug works by binding to certain receptors, activating them to stimulate the cells and glands involved in the production of the tear film covering the eye. For the first half of this year, the Princeton, New Jersey-based company reported that the drug generated $7.3 million in revenue. The Oyster Point project includes two preclinical gene therapies in development for certain diseases of the ocular surface.

Under the financial terms of the deal, Viatris will pay $11 in cash for each Oyster Point share. 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 payment of $2 per share that is tied to the achievement of certain objectives by Oyster Point.

Viatris pays 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 owns the company, will retain the non-ophthalmology business. There is a story behind the deal. In 2015, Mylan paid $750 million upfront to acquire Famy Care, a women’s health care company founded by 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 in dry eye disease, blepharitis and presbyopia. A drug candidate for low-light or night vision disturbances is now in Phase 3 testing; the phase 3 trial in mydriasis rehydration has been completed. 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 lead in building a leading ophthalmology franchise,” Viatris CEO Michael Goettler said in a prepared statement.

The acquisition of Oyster Point is expected to close in the first quarter of 2023. When it does, Oyster Point CEO Jeff Nau will lead Viatris’ new ophthalmology business, which will operate as a separate division within the larger company.

Photo: mikdam, Getty Images

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