Valeant to Acquire Sprout Pharmaceuticals for $1 Bn
Valeant Pharmaceuticals International, Inc. has agreed to acquire Sprout Pharmaceuticals, Inc. for approximately $1 billion in cash, plus a share of future profits based upon the achievement of certain milestones. Under the acquisition agreement, Valeant will pay approximately $500 million, subject to customary purchase price adjustments, upon the closing of the transaction and an additional payment in the amount of $500 million, payable in the first quarter of 2016, plus a share of future profits based upon the achievement of certain milestones.
The acquisition proposal follows approval by the US Food and Drug Administration (FDA) of Sprout Pharmaceuticals’ for Addyi (flibanserin) for treating acquired, generalized hypoactive sexual desire disorder (HSDD) in premenopausal women. Prior to Addyi's approval, there were no FDA-approved treatments for sexual desire disorders in men or women. Sprout also has global rights for flibanserin. Valeant said it will register flibanserin internationally.
Addyi was approved with a Boxed Warning. Use of Addyi with alcohol increases the risk of severe hypotension and syncope; therefore, alcohol use is contraindicated. Severe hypotension and syncope occurs when Addyi is used with moderate or strong CYP3A4 inhibitors or in patients with hepatic impairment; therefore use of Addyi in patients with hepatic impairment is also contraindicated. Hypotension, syncope and central nervous system (CNS) depression can occur with Addyi alone. The most common adverse reactions are dizziness, somnolence, nausea, fatigue, insomnia, and dry mouth.
Valeant expects Addyi to be available in the United States in the fourth quarter of 2015 through prescribers and pharmacies that have been certified under the FDA’s comprehensive Risk Evaluation and Mitigation Strategy (REMS) program to assure safe use. Following the closing of the transaction, Valeant, under the REMS, will offer physicians and pharmacists the required certification programs for prescribing and dispensing Addyi.
Following the closing of the acquisition, Sprout will remain headquartered in Raleigh, North Carolina and become a division of Valeant. Cindy Whitehead, chief executive officer of Sprout, will join Valeant to lead this division dedicated to the introduction and global commercialization of Addyi, reporting to Anne Whitaker, executive vice president and company group chairman.
The transaction is subject to customary closing conditions and regulatory approval, including Hart-Scott-Rodino antitrust clearance. The transaction is expected to close in the third quarter of 2015.
Source: Valeant Pharmaceuticals