This May 27, 2013, file photo, shows the head office and logo of Valeant Pharmaceuticals International Inc. in Laval, Quebec, Canada. Valeant Pharmaceuticals International Inc. reports earnings, Tuesday, May 9, 2017. (Ryan Remiorz/The Canadian Press via AP)
Valeant Pharmaceuticals announced plans to sell off a controversial acquisition.
The company will sell Sprout Pharmaceuticals, the firm that developed Addyi which is a little pink pill labeled as the “female Viagra” to a buyer affiliated with former shareholders of Sprout. This decision comes on the heels of buying the company two years ago for an estimated $1 billion.
“Returning Sprout to its former owners will enable us to further streamline our portfolio and reduce complexity in our business,” said Valeant’s chairman and CEO Joseph Papa in a statement. “As we transform Valeant, we are focusing our resources on our core businesses to best serve our shareholders, customers and patients. These areas include eye health, gastroenterology and dermatology.”
Valeant would receive a six percent royalty on global sales of Addyi starting 18 months from the signing of the sale agreement, but will be released from ongoing obligations of the original transaction to split future profits with former stakeholders along with other provisions.
The U.S. Food and Drug Administration approved Addyi for generalized hypoactive sexual desire disorder (HSDD) in premenopausal women in August 2015. The agency defined HSDD as being characterized by low sexual desire induced by marked distress or interpersonal difficulty that are unrelated to co-existing medical or psychiatric conditions, problems with a relationship, or side effects of a medication.
Addyi had previously been rejected by the FDA twice before gaining acceptance on the third try.
Analysts had believed this could become a possible blockbuster drug for a potential market worth over $2 billion, according to Reuters.
However, sales of the pill were sluggish and Valeant was sued on behalf of former Sprout investors due to its, “alleged failure to market Addyi successfully.”
Valeant will provide this new company linked to the Sprout investors with a $25 million loan to help fund initial operating expenses.
The sale is expected to close before the end of 2017.
Filed Under: Drug Discovery
