Harrow Health, a pharmaceutical company focused on ophthalmic therapies, has signed an agreement to acquire rights to five ophthalmic products from the Swiss drugmaker Novartis for up to $175m.

The ophthalmic drugs to be acquired from Novartis include Ilevro, Nevanac, Vigamox, Maxidex, and Triesence which are approved by the US Food and Drug Administration (FDA).

Under the terms of the agreement, Harrow will make an upfront payment of $130m during the closing, along with an additional $45m milestone payment.

The milestone payment is contingent on the commercialisation of Triesence, which is expected in the second half of 2023.

Novartis will continue to sell the products in the US, during an estimated six-month NDA transfer period, and will transfer all net profits to Harrow.

After the NDA transfer period, Harrow will assume control over all US market activities and will begin a process to have the products manufactured by third parties.

Novartis will retain the rights to all five products outside of the US.

The transaction is expected to close in the first quarter of 2023, subject to certain customary closing conditions, including clearance under the Hart-Scott Rodino Act.

Harrow chairman and CEO Mark Baum said: “Following the satisfaction of the relevant closing conditions, these products will be immediately accretive to our revenues and excellently complement our current portfolio of ophthalmic prescription products.

“We know these products very well and have long appreciated and admired them for the value they have delivered to thousands of US eye care professionals and many millions of their patients.

“We believe the addition of these five products to our ophthalmic pharmaceutical portfolio, which includes newly FDA‑approved IHEEZO, MAXITROL 3.5mg/10,000 units/0.1%, IOPIDINE 1%, and the market-leading ImprimisRx compounded formulary, will be of tremendous value to our customers.”

Harrow said that the transaction will further expand and diversify its portfolio of branded pharmaceutical products and strengthen its position in the US ophthalmic treatments market.

Ilevro (nepafenac 0.3%) and Nevanac (nepafenac 0.1%) are indicated as anti-inflammatory eye drops for pain and inflammation related to cataract surgery.

Vigamox (moxifloxacin hydrochloride 0.5%) is a fluoroquinolone antibiotic eye drops indicated for bacterial conjunctivitis caused by susceptible strains of organisms.

Maxidex (dexamethasone 0.1%) is steroid eye drops for steroid-responsive inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior of the globe.

Triesence (triamcinolone acetonide) 40mg/ml injectable suspension, is a steroid injection indicated for certain ophthalmic diseases and visualisation during vitrectomy.

Baum added: “Based on US demographic growth, favourable competitive trends, and broad public and private payor reimbursement, revenue contribution from these products is expected to grow for many years.

“Harrow expects 2023 net revenues to be between $135m and $143m and adjusted EBITDA to be between $44m and $50m, with both net revenues and adjusted EBITDA ramping up during 2024 and beyond.”