Valeant to divest Sprout Pharmaceuticals to former owners

The buyer will pay Valeant a 6% royalty on worldwide sales of libido drug Addyi (flibanserin), beginning 18 months from the signing of the sale agreement.

In August 2015, Valeant made a deal to acquire Sprout for nearly $1bn to enter the sexual health market. The acquisition offer came just after Sprout had secured the US Food and Drug Administration (FDA) for flibanserin 100mg which was subsequently branded as Addyi.

It was approved by the FDA for the treatment of acquired, generalized hypoactive (low) sexual desire disorder (HSDD) in women who have not gone through menopause.

Valeant chairman and CEO Joseph Papa said: “Returning Sprout to its former owners will enable us to further streamline our portfolio and reduce complexity in our business.

“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.”

Addyi comes with certain health warnings like causing severe low blood pressure and fainting. Also, a woman should not consume alcohol if she takes the libido drug.

The drug is the only product of Sprout to be approved and available for sale.

Valeant says that after the completion of the divestiture, it will not have any obligations relating to the original transaction made in 2015. This includes sharing of the drug’s future profits with the former shareholders of Sprout.

The Canadian company also said that the ongoing litigation brought on behalf of the former Sprout shareholders will be terminated with prejudice.

The divestiture is anticipated to be completed by the year end, subject to certain closing conditions.

Image: Valeant to sell libido pills manufacturer Sprout Pharmaceuticals. Photo: courtesy of zole4/Freedigitalphotos.net.