Valeant Signs Agreement to Acquire Sprout Pharmaceuticals

Addyi, also known as flibanserin, was studied in more than 11,000 women before it was approved. Today, the company announced it is being acquired for $1 billion in cash by Valeant Pharmaceuticals, a multinational firm.

Stay tuned for an in-depth look at the issues surrounding Addyi, sales and market uptake expectations, and more on Friday. They include a boxed warning that highlights the risks of low blood pressure and fainting in patients who drink alcohol while taking the drug, as well as a requirement that doctors complete a training course before being allowed to prescribe it. The drug has been controversial due to modest benefits and serious side effects, and was caught up in a debate about whether male sexual dysfunction has received more attention.

By working on neurotransmitters such as dopamine and norepinephrine that the brain uses to transmit information, the drug enhances sexual desire. Previously the same drug had been rejected approval twice.

Prior to flibanserin, there had been no FDA-approved treatments for Hypoactive Sexual Desire Disorder, first described in medical literature in 1977.

Sprout Pharmaceuticals accepted the offer from Valeant Pharmaceuticals. While Viagra treats erectile dysfunction, which is a physical problem, and does not induce sexual desire, Addyi treats the central nervous system.

If these side effects are really affecting the women’s general condition, is it safe for Addyi to be approved for that segment of the market that reacts positively to it and welcomes the slightest change in sexual relations with their partners? The company got a good price for a drug that’s the first of its kind in what could be a large market, he said.

“I think whether or not this is ultimately the right choice for women is a story that will be told in the marketplace”, Sprout Pharmaceuticals CEO Cindy Whitehead told Co.

Valeant’s sheer size and global reach also paves the way for the drug to be distributed around the world. Under the terms of the agreement, Valeant (NYSE: VRX) will pay Sprout about $500 million upon closing, with the balance to be paid in the first quarter of 2016. “Just like with any medication – adult women in conjunction with their physician can make an informed decision about whether this is an appropriate therapy for them”, said Dr. Holly Thacker, an obstetrician gynecologist at The Cleveland Clinic.