Novartis Withdraws Xiidra Application in Europe, Costing Takeda $200 Million Milestone Payment

In May 2019, Novartis acquired assets associated with Xiidra (lifitegrast ophthalmic solution) from Takeda Pharmaceutical. Xiidra is used to treat both signs and symptoms of dry eye by inhibiting inflammation. The deal included $3.4 billion upfront with milestones of up to $1.9 billion.

But now Novartis has withdrawn its filing with the European Medicines Agency (EMA) for Xiidra after issues with the application.

In the documents provided by the EMA, the agency said, “Based on the review of the data, including consultations with experts in the field of eye diseases and the company’s response to the Agency’s questions, at the time of the withdrawal, the Agency had some concerns and its provisional opinion was that Xiidra could not have been authorized for the treatment of dry eye disease in adults for whom treatment with artificial tears has not been sufficient to improve the condition.”

The EMA did not believe the effectiveness of the drug had been shown across different dry eye disease symptoms. Although there was some effect, the agency did not believe it was clinically significant. The EMA also expressed concerns about how patients with more severe disease were selected and that the studies that compared Xiidra with a placebo “had not used artificial tears in an optimal way.”

While Novartis is deciding what to do next, Takeda wrote down the value of Xiidra, which was part of Shire’s portfolio of drugs. Takeda indicated that it was unlikely to receive the full sales milestones, although it was still eligible for the $1.9 billion from the Novartis deal.

However, Takeda is recognizing a reported loss of approximately $200 million for the quarter, which will result in a net loss of about $150 million for the quarter.

Novartis may not have totally abandoned Xiidra in Europe. The company indicated it plans to evaluate its plans, saying, “We will determine the best route forward following further internal assessment.”

Xiidra was initially approved in the U.S. for dry eye disease in July 2016, while in Shire’s portfolio. Then it became part of Takeda when Takeda acquired Shire for $59 billion. Then Takeda sold Xiidra to Novartis for a total of $5.3 billion, which included the $1.9-million milestone cut. Takeda indicated at the time that the drug wasn’t part of the therapeutic areas it was focusing on.

The primary competitor for Xiidra is Restasis, which was developed and sold by Allergan, which is now a part of AbbVie. In 2019, Restasis brought in $1.14 billion in the U.S., which actually was a decrease from $1.20 billion in 2018.

In April 2018, Allergan also withdrew its marketing application in Europe for Restasis.

Today, Novartis announced that its Tabrecta (capmatinib), an oral MET inhibitor for MET exon 14 skipping mutation-positive advanced and/or recurrent unresectable non-small cell lung cancer (NSCLC), had been approved by the Japanese Ministry of Health, Labour and Welfare (MHLW). The drug is approved for first-line and previously treated patients, regardless of previous treatment type.

“With the remarkable overall response rates seen both in treatment-naïve and previously treated patients, we are thrilled that MHLW has added Tabrecta as a new treatment option for patients with advanced NSCLC with METex14,” said Brian Gladsden, president of Novartis Oncology Japan. “Today’s approval reinforces the potential benefit this new MET inhibitor can bring to thousands of patients diagnosed in Japan each year and is a positive step in our journey to transform the lives of patients with lung cancer.”

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