Johnson & Johnson unloads eye drops line to acquisitive Bausch + Lomb as Brent Saunders' deal streak rolls on

During the first earnings call Brent Saunders led since his return at Bausch + Lomb, the CEO laid out what he believes is the company’s biggest issue: underutilization of existing infrastructure. Now, he is tackling the problem through M&A.

Bausch + Lomb has inked a $106.5 million deal to acquire Johnson & Johnson’s Blink product line of over-the-counter eye and contact lens drops.

The purchase comes days after Bausch + Lomb struck another deal to buy dry eye med Xiidra and other ophthalmology products from Novartis for up to $2.5 billion.

“There’s a growing need for relieving the symptoms of dry eyes and dry contact lenses, and OTC products are often the first option consumers choose,” John Ferris, Bausch + Lomb’s consumer health chief, said in a statement Thursday.

To describe the market Blink targets, Bausch + Lomb pointed to a 2022 Gallup study suggesting about a quarter of American adults use OTC lubricant drops to relieve eye dryness. Plus, of the 45 million contact lens users in the U.S., a third experience discomfort and dryness, according to the company.

The Blink line comprises six products. Blink belonged to Johnson & Johnson Vision under the company’s medtech division—not the Kenvue consumer health spinoff. Contact lenses currently make up the majority of J&J Vision’s business.

The addition of Blink expands Bausch + Lomb’s existing dry eye symptom relief portfolio, which also includes dry eye drops Biotrue, Soothe XP Emollient and Advanced Eye Relief.

Adding new complementary products could help Saunders address the “underutilization” problem at Bausch + Lomb. During Bausch + Lomb’s first-quarter earnings call in May, the returning CEO summarized the eye care specialist’s biggest issue as underutilization.

“We have a very broad commercial structure and supply chain touching almost every eye health professional in the world but not enough product quote to utilize it efficiently,” Saunders said.

As Saunders sees it, Bausch + Lomb has built a large global infrastructure and has “probably the most integrated and comprehensive portfolio” in eye care, but with little sales volume to show. He also lamented the lack of blockbuster or high-margin brands at the 170-year-old company.

Saunders pointed to sourcing innovation from outside as one way to solve the problem, alongside product launch excellence.

“We need more people seeking and searching,” Saunders said of Bausch + Lomb’s business development team. “We need more people connected to the innovation centers around the world in eye care, and there are a lot of them. So we need to be really best-in-class at doing that to bring more product flow into our business.”

“Small cuts” may also be around the corner, he warned. But Saunders also noted that Bausch + Lomb’s global infrastructure was built over a long time, including during his past tenure as CEO from 2010 to 2013. And that business setup offers a “huge competitive advantage.”