The deal will see Valeant pay all cash, one $500m installment upfront and the remaining next year to Sprout, according to the Wall Street Journal.
Under the deal, Valeant is expected to take on all of Sprout’s 25 employees, including its leadership team, as they are set to begin sales of the drug this October.
The deal, which could be announced today, is expected to be closed in the third quarter of this year.
Addyi is a serotonin 1A receptor agonist and a serotonin 2A receptor antagonist which is taken once daily at bedtime.
The non-hormonal pill is designed to treat acquired, generalized hypoactive sexual desire disorder (HSDD) in premenopausal women.
HSDD is a constant absence of sexual thoughts, fantasies, responsiveness and willingness to participate in sexual activity.
The drug is claimed to be the first and only FDA-approved treatment for this sexual dysfunction, which affects up to one in ten women in the US.
The approval is based on three North American, Phase III, 24-week, randomized double blind, placebo-controlled, studies of premenopausal women with HSDD.
The trials revealed that the medicine provides improvements in desire for sex and reduce distress from the loss of sexual desire.
Image: Valeant will pay $1bn to Sprout for Addyi that aims to boost a woman’s libido. Photo: courtesy of Serge Bertasius Photography / FreeDigitalPhotos.net.