Valeant Acquires Female Sex Drive Drug Maker Sprout for $1 Billion
August 20, 2015
By Alex Keown, BioSpace.com Breaking News Staff
QUEBEC -- Sprout Pharmaceuticals continues to remain atop the news cycles just days after the U.S. Food and Drug Administration (FDA) approved the first female sex-drive drug, Addyi. Today Canadian-based Valeant Pharma announced it was acquiring the now Raleigh, N.C.-based company for $1 billion in cash, plus a share of future profits based upon the achievement of certain milestones.
Valeant is moving quickly to bring the 34-employee company under its umbrella. The transaction is expected to be completed by the end of the third-quarter of this year. Under terms of the deal, Valeant will pay approximately $500 million upon the closing of the transaction and an additional $500 million in the first quarter of 2016, plus a share of future profits based upon the achievement of certain milestones, the company said in a statement.
J. Michael Pearson, Valeant’s chief executive officer, said the acquisition of Sprout will allow Valeant to “establish a new portfolio of important medications that uniquely impact women.”
Addyi was approved by the FDA for a low sex drive, called hypoactive sexual desire disorder (HSDD) in premenopausal women, after being rejected twice by the regulatory agency in 2010 and 2013. Unlike the drug’s oft-compared male counterpart Viagra, Addyi addresses desire, not performance. Another difference between male erectile dysfunction drugs, Addyi is a once-daily dose that takes some time before the patient begins to see a difference in sexual desire. In clinical trials, patients began to show desire after about four weeks.
HSDD is defined as a persistent absence of sexual thoughts, fantasies, responsiveness and willingness to engage in sexual activity that causes personal or relationship distress and cannot be accounted for by another medical condition or substance.
The drug is expected to become commercially available Oct. 17 and Sprout is also looking to expand markets beyond the borders of the U.S., including Canada and Europe, although when or if regulatory agencies in those areas will approve the medication will have to wait to be seen. Raghuram Selvaraju, managing director of brokerage H.C. Wainwright & Co, has estimated peak sales of $100 million a year for Addyi, Reuters reported.
Cindy Whitehead, the chief executive officer of Sprout, said becoming part of Valeant will provide a seasoned distribution line that can provide women across the globe access to Addyi.
Sprout will remain headquartered in Raleigh and Whitehead will remain in charge of the company she co-founded, but now as a division of Valeant.
One unanswered question is whether or not this acquisition will change Sprout’s plans to expand its employment to about 200 people. During a conference call on Wednesday, Whitehead announced her intention to bring in more employees to support the launch of Addyi as well as focus on educating health care providers about the drug and “setting realistic expectations” for the drug.
Patients who will take the drug will have to be aware of some serious side effects associated with Addyi. The medication comes with a “black box warning” label due to serious side effects, including severely low blood pressure that can cause individuals to pass out. The side effects are increased if alcohol is consumed. When the drug is commercially available, it will only be able to be prescribed by pharmacies certified by Sprout and will require training on counseling patients on the risks and side effects, especially the interaction with alcohol. Additional side effects include dizziness, drowsiness, nausea, fatigue, insomnia and dry mouth.