Valeant Sells Back Previous $1-Billion Buy of Women’s Healthcare DrugBy
Valeant Pharmaceuticals has agreed to divest its women’s healthcare subsidiary, Sprout Pharmaceuticals, to former shareholders of Sprout in exchange for a 6% royalty on global sales of Sprout’s lead drug, Addyi (flibanserin), for treating hypoactive sexual desire disorder in women. Valeant acquired Sprout in 2015 for approximately $1 billion. Addyi remains the only approved and commercialized product of Sprout.
Valeant will receive the royalty sales beginning 18 months from the signing of the sale agreement. In connection with the completion of the sale, Valeant will be released from the ongoing obligations of the original transaction with respect to split future profits with the former shareholders as well as certain related provisions, including the obligations to make certain marketing and other expenditures. Additionally, in connection with the completion of the sale, existing litigation against Valeant brought on behalf of the former shareholders of Sprout will be dismissed with prejudice.
In connection with the sale, Valeant will provide a $25-million loan to fund initial operating expenses. The sale is expected to close before the end of 2017, subject to certain closing conditions.
Source: Valeant Pharmaceuticals