Novartis, which has been trying to fix its struggling Alcon eye unit, figures that process will be easier without a floundering eye medication in the portfolio. Accordingly, it has returned the rights to Jetrea to ThromboGenics.
The Leuven, Belgium-based ThromboGenics today said the companies had “mutually” agreed the drug would be better in the biotech’s hands. Novartis has sold Jetrea since 2012 outside of the the U.S. where it is approved as a treatment for vitreomacular traction.
As part of the unbundling, ThromboGenics will pick up some badly needed cash, a payment of €53.7 million. Novartis also agreed to invest another €10 million in the company’s shares, which the Belgium company said it would use to develop its portfolio of drugs for treating diabetic eye disease. The company reported a €15.2 million loss in H1.
RELATED: Why is ThromboGenics' strategic review urgent? Just look at recent Jetrea sales
“We intend to take time to evaluate how best to capitalize on the global opportunity that we now have with Jetrea. In the near term,” CEO Patrik De Haes said in a statement.
So far the opportunity for the drug has been small. At one time, analysts had projected it could hit about $500 million in annual sales, but in the first half of the year, ThromboGenics reported only about $3.2 million in Jetrea sales, including about $956,000 from Novartis royalties. Last year, the company recorded about $7.8 million in Jetrea sales.
RELATED: Novartis gets boost from an unexpected source—Alcon—as generic pricing sinks Sandoz sales
As for Alcon, the divestment comes as Novartis continues to figure out what to do with the unit, where sales have stagnated for years before showing a small jump in the last quarter, up 3% to $1.5 billion.
Some analysts remain skeptical that the first-quarter results are an indication of a sustained revival. Novartis CEO Joe Jimenez has said he would announce by year end what he thinks the company might do with the unit, indicating that if it could report a few quarters like that, a spin-off might be in order.
Of course, the ultimate decision may now fall to Vas Narasimhan, who this month was named to become Novartis CEO following Jimenez’s announcement that he would retire at the end of January. Narasimhan currently serves as Novartis’ head of drug development.