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TheStreet Open House

Merck Sells Eye Products to Japan's Santen

Stocks in this article: MRK

NEW YORK (The Deal) -- Merck (MRK - Get Report) is selling its ophthalmology product portfolio for Japan and other markets in the Asia Pacific region and Europe to Japan's Santen Pharmaceutical.

Osaka-based Santen is making an up-front payment of about $600 million with more to come based on sales milestones, Merck said Tuesday.

Santen is a specialty pharma with a portfolio of in the ophthalmic and anti-rheumatic fields. It is No. 1 in market share for prescription ophthalmic pharmaceuticals in Japan.

"This transaction strengthens Santen's lineup of glaucoma products, significantly expands Santen's footprint in Japan, Asia and Europe and is an important step in achieving its long-term corporate vision to become a specialized pharmaceutical company with a global presence by 2010," Akira Kurokawa, president and CEO, said in a statement.

Products within the agreement had annual sales of about $400 million. They include ophthalmic solutions Cosopt, Cosopt PF (preservative-free), Trusopt, Trusopt PF, Timoptic, Timoptic PF, Timoptic XE, Saflutan and Taptiqom, a product in development.

Santen also agreed to purchase supplies of the products from Merck for two to five years, the companies said.

"The decision to divest our ophthalmics business is part of our ongoing strategy to sharpen our commercial focus and improve our operational effectiveness," Merck's Jay Galeota, president, Hospital and Specialty Care, said in a statement.

Whitehouse Station, N.J.-based Merck, known as MSD outside the U.S. and Canada, will continue to sell the products in Africa, Australia, Canada, Latin America, the Middle East and other markets.

Merck recently divested its ophthalmology business in the U.S. to Lake Forest, Ill.'s Akorn Pharmaceuticals Inc.

The Santen deal is expected to close within the next few months in most markets. It is subject to antitrust clearance in Japan and other closing conditions in specific markets or regions affected.

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