Novartis Withdraws Xiidra EU Filing, Jeopardizing $1.9B Milestone Payment to Takeda

Compiled by S. Li

In May 2019, Novartis acquired Xiidra (lifitegrast ophthalmic solution, 5% concentration) from Takeda for an upfront payment of $3.4 billion and milestone payments of $1.9 billion to strengthen its ophthalmology portfolio. However, the deal now appears to have fallen short of expectations. Recently, the European Medicines Agency (EMA) released a letter from Novartis stating that, following the regulatory authority’s indication of a “probable negative opinion” and the assessment that outstanding issues could not be resolved within the established timeline, Novartis had voluntarily withdrawn its marketing authorization application for Xiidra.

In a statement, the company acknowledged, “We will determine the best path forward after further internal assessment.” When Novartis originally acquired the drug, Xiidra was reported to have generated $400 million in sales in 2018 and was considered a potential “blockbuster.” Now, with the temporary loss of EU approval, Xiidra’s growth trajectory faces significantly greater challenges, compelling the Swiss pharmaceutical giant to redouble its efforts to ensure the investment delivers value.

Xiidra is intended for the treatment of severe dry eye disease that cannot be relieved by artificial tears; however, the EMA expressed concerns about the difficulty in precisely identifying this patient population. Additionally, the agency questioned the use of a placebo, rather than an active comparator, as the control in Xiidra’s clinical trials. Furthermore, the lack of long-term study data submitted for this chronic condition also influenced the EMA’s decision.

Dry Eye Disease, also known as keratoconjunctivitis sicca, is a collective term for various conditions characterized by abnormal tear quality or quantity, or altered tear dynamics, due to any cause, leading to decreased tear film stability and accompanied by ocular discomfort and/or signs of ocular surface tissue damage. It is currently the most common ocular surface disorder, with artificial tears being the primary treatment modality. If the condition worsens in severity or remains untreated, dry eye disease can result in ocular pain, corneal ulceration or scarring, limited ocular motility, and reduced tolerance to dry environments.

Xiidra is a novel small-molecule integrin inhibitor that binds to lymphocyte function-associated antigen-1 (LFA-1), blocking its interaction with the cognate ligand intercellular adhesion molecule-1 (ICAM-1). In dry eye disease, ICAM-1 is overexpressed in corneal and conjunctival tissues. Consequently, the drug exerts an anti-inflammatory mechanism of action and is the first therapy approved for the treatment of both signs of ocular damage and symptoms in patients with dry eye disease.

Xiidra was acquired by Shire from the U.S. company SARcode Bioscience in 2013 for $160 million and received FDA approval in 2016 for the treatment of signs and symptoms associated with dry eye disease. Following Takeda’s acquisition of Shire, the drug became part of Takeda’s portfolio. Now, Xiidra has suffered a setback in Europe, which will not only impact future sales but also affect Takeda’s receipt of milestone payments.

Reference source: Novartis gives up on Xiidra's EU approval, endangering payoff from $3.4B Takeda buyout