Takeda to make $200m loss after Novartis’ dry-eye drug hits trouble in Europe

Novartis’ decision to withdraw a European filing for its dry-eye drug Xiidra is to have a knock-on effect on Takeda, causing it to make a loss of $200 million this quarter. 

Takeda decided to sell Xiidra to Novartis after it acquired Shire for around $62 billion in January last year, and needed to pay off the huge bank loans it took out to finance the deal. 

Already approved in the US since 2016, Novartis paid $3.4 billion up front for the drug, plus $1.9 billion when it achieves certain sales targets.

But those targets look unlikely to be met after Novartis pulled its EU filing for Xiidra after it ran into trouble with regulators from the European Medicines Agency’s CHMP scientific committee. 

In documents posted on its website late last week, the EMA said Novartis had withdrawn its marketing authorisation application because the data presented did not show a “clinically significant” reduction in dry eye symptoms. 

There were also concerns about patient selection used in the studies and a lack of evidence over the drug’s long-term effects. 

While Novartis has said that it is determining what steps to take next Takeda has decided to write down the value of Xiidra, which was part of Shire’s portfolio of drugs. 

According to Takeda the probability of receiving sales milestones has been reduced, although it could still receive the $1.9 billion stipulated in the deal with Novartis. 

The Japanese pharma anticipates it will recognise a reported loss of about $200 million in the quarter ending tomorrow. 

This will result in a net loss of around $150 million in the quarter, although the company noted that as this is a divested product it will not affect core operating or net profits. 

Takeda said it will continue to assess the impact of the withdrawal and will update its financial forecast for the year accordingly. 

The company said it still aims to divest around $10 billion in non-core assets it continues to pay off its merger debts. 

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