Viatris, a global health care company, announced it is acquiring Oyster Point Pharma, maker of Tyrvaya nasal spray, for $11 per share in cash, plus contingent payments up to $2 per share based on the achievement of specified performance targets.

The acquisition of Oyster Point will serve as the foundation of Viatris' new ophthalmology franchise. Concurrently, Viatris said it also expects to acquire Famy Life Sciences, which has a complementary ophthalmology portfolio. Together, the two acquisitions have an aggregate purchase price of approximately $700-$750 million which Viatris expects to fund with cash.

Viatris anticipates these acquisitions have the potential to add at least $1 billion in sales by 2028. As a result of the expected strong topline growth, Viatris  anticipates it will also add at least $500 million in adjusted EBITDA by 2028.

View EyewireTV's coverage of the deal here.

The amount (if any) payable under the contingent value right (CVR) will be based on the following performance targets to be achieved by Oyster Point Pharma for full year 2022:

• An additional $1 per share in cash if Oyster Point Pharma generates equal to or greater than $21.6 million of net product revenues and 131,822 total prescriptions of Tyrvaya; or
• An additional $2 per share in cash if Oyster Point Pharma generates equal to or greater than $24 million of net revenue and 146,469 total prescriptions of Tyrvaya.

Viatris is targeting to close the acquisition of Oyster Point in Q1 2023, subject to customary closing conditions, including receipt of regulatory approval. The transaction was unanimously approved by the Oyster Point Pharma Board of Directors.

The ophthalmology franchise will function as a separate division within the company and will be led by current Oyster Point CEO, Jeff Nau, PhD, upon the closing of the transaction.

“Oyster Point Pharma brings to Viatris the strength of Tyrvaya nasal spray, the first and only FDA-approved nasal spray for dry eye in the US, an eye care focused pipeline, and a very experienced team that possesses extensive knowledge of the ophthalmology space from a clinical, medical, regulatory and commercial perspective,” Michael Goettler, chief executive officer of Viatris, said in a company news release. “Together, we believe we are setting the foundation for the next global ophthalmology leader, accelerating efforts to address the unmet needs of patients with ophthalmic disease and the eye care professionals who treat them, and positioning Viatris for growth.”

“We are pleased to announce Viatris’ proposed acquisition of Oyster Point Pharma, recognizing the exciting opportunities that lie ahead of us,” said Dr. Nau, president and chief executive officer of Oyster Point Pharma. “Through our efforts to license our innovations globally, we recognized that Viatris would be an optimal partner with its Global Healthcare Gateway. With Viatris’ global capabilities and commitment to ophthalmology, we expect to be able to expand Tyrvaya's impact on the dry eye landscape and accelerate our exciting pipeline. With our combined sector expertise, innovation, scale, pipeline and global commercial reach, we expect to build a world-class ophthalmology business to meaningfully shape the future of eye care, to the benefit of patients.”

In November 2021, Oyster Point Pharma launched Tyrvaya, the first and only FDA-approved nasal spray for the treatment of the signs and symptoms of dry eye disease. Oyster Point Pharma also has a pipeline of clinical and preclinical programs aimed at delivering transformative innovation for ocular surface diseases. In addition to Tyrvaya, Oyster Point Pharma has three drug candidates in its pipeline: two investigational therapies for neurotrophic keratopathy, a severe degenerative condition affecting the nerves of the cornea, and another for vernal/atopic keratoconjunctivitis, a severe allergic condition of the eyes.

The transaction is anticipated to close during the first quarter of 2023.