Valeant to buy ‘Female Viagra’ firm

The FDA followed that recommendation earlier this week, approving Addyi with a boxed warning and other safety measures to address side effects like dizziness, low blood pressure and fainting. “I’m hopeful not only for what it could mean for women in which it could work, but also for women at large”, she said.

Further health insurers may not cover the drug, he added.

The acquisitive drug firm is buying Sprout Pharmaceuticals, the maker of Addyi, the so-called “female Viagra” that received U.S. Food and Drug Administration approval for treating low sexual desire in premenopausal women just two days ago.

As per the terms of the agreement, Valeant will pay approximately $500 million upon the closing of the deal while $500 million will be payable in the first quarter of 2016. As per the reports, the company has been a serial buyer and in 2014, its deals took its revenue to over $8 billion.

Addyi’s prospects are anything but certain, said Raghuram Selvaraju, managing director of brokerage Wainwright & Co.

Moreover, Valeant has extra assets than Sprout to distribute Addyi to markets in and out of doors of america.

Privately held Sprout, which was spun off from Slate Pharmaceuticals, has been focused exclusively on developing a treatment for hypoactive sexual desire disorder.

Sprout has not set a price for Addyi yet and is waiting for word on reimbursement from health insurers. Addyi is expected to be available in the U.S. from the fourth quarter of 2015. The deal is still subject to regulator approval, but could be completed by the end of September.

With Addyi, Valeant is establishing a new portfolio of medications that uniquely impact women, a business it hopes to grow either with acquisitions or through the development of new products.

Consumer group Public Citizen argued strongly against approval of Addyi as it “presents serious dangers to women, with little benefit, and recklessly disregards the worrisome risk information in the agency’s briefing package to the advisory committees that met on June 4 to review the drug”.

By working on neurotransmitters such as dopamine and norepinephrine that the brain uses to transmit information, the drug enhances sexual desire.

Many analysts underestimated Viagra’s sales potential before its introduction in 1998, he said. Viagra – a “blockbuster” in drug industry parlance – generated sales of about $1.7 billion in 2014.

Pearson was asked what the trigger will be that will drive the revenues from the drug to billions.

Valeant shares were up 0.2 percent at $245.47 in pre-market trade on the New York Stock Exchange.