In most ways, Valeant Pharmaceutical International’s gamble on Addyi has been a major failure.
The company purchased the drug — designed to boost female libido — from Sprout Pharmaceuticals for $1 billion in 2015. But after reporting abysmal sales, the company announced it will hand the medication back to Sprout, along with a $25 million loan to cover “initial operating expenses” associated with the drug. In return, Sprout has agreed to give Valeant 6 percent of the drugs royalties, starting in 2019. And perhaps more importantly, it will drop a lawsuit against Valeant claiming the company was contractually obligated to spend $200 million marketing and selling Addyi.
It’s been a rocky road for Addyi from the start. The drug was denied FDA approval twice before a coalition of women’s advocates and patients with hypoactive sexual desire disorder — the condition Addyi is designed to treat — helped turn the tide in its favor.
The FDA mandated, however, that the drug would come with a host of strict restrictions due to its possible side effects. One such risk — hypotension, or dangerously low blood pressure — meant that women were told they couldn’t drink at all while taking the drug, which is a daily medication.
In addition, many insurers and drug benefit managers wouldn’t cover the medication, leaving users to foot the $800-a-month bill.
The sale of Addyi back to Sprout is expected to close by the end of this year, pending approval from Sprout’s shareholders.
Valeant will report more about its Q3 performance in an earnings call later this week.
Filed Under: Drug Discovery
