The ink was barely dry on the FDA’s approval of Sprout Pharma’s controversial ‘little pink pill’ Addyi before Valeant announced a $1bn deal to buy the company.
Valeant expects the cash deal to close in the third quarter and Addyi (flibanserin) to reach the market before the end of the year as the first-ever approved therapy for female sexual disorder, with Sprout shareholders in line for a share of future profits from the new drug.
The agreement looks set to accelerate the roll-out of Addyi outside the US, with Valeant pledging to “leverage its global scale to register flibanserin internationally”.
Addyi can only be launched in the US once measures are in place to ensure it can be used safely, including a prescriber certification programme and an 18-month ban on consumer advertising.
The drug can cause potentially serious side effects such as low blood pressure hypotension and fainting when taken alongside alcohol and some medications.
That risk has led to criticism of the FDA’s approval of the drug in some quarters, with the agency accused of caving into lobbying by the pharma company and allowing it onto the market despite rejecting it on two earlier occasions.
Consumer group Public Citizen argued strongly against approval of Addyi as it “presents serious dangers to women, with little benefit, and recklessly disregards the worrisome risk information in the agency’s briefing package to the advisory committees that met on June 4 to review the drug.”
“We haven’t heard the last of this drug,” said Public Citizen’s founder Sidney Wolfe. “Expect future news to include stories of women who are harmed needlessly by flibanserin and the eventual agency call for the manufacturer to pull it from pharmacy shelves.”
Valeant is however undaunted by the controversy, and under the terms of the deal will pay $500m when the deal closes, and another $500m in the first quarter of 2016. Sprout will become an operating division of the Canadian firm run by current chief executive Cindy Whitehead.
The Canadian firm sees Addyi as the first step in establishing “a new portfolio of important medications that uniquely impact women,” said its CEO Michael Pearson.
Valeant has historically grown its business through serial acquisitions and has accelerated that activity after being blocked from taking over Allergan, aiming to become a top five pharma company by the end of 2016.
The Sprout deal comes after its $11bn purchase of gastrointestinal drug specialist Salix as well as smaller deals such as the $800m purchase of Egyptian drugmaker Amoun Pharma and cancer vaccine specialist Dendreon, bought in February for $495m.