Palatin Technologies has sold its struggling female libido drug Vyleesi for $12 million to another New Jersey drugmaker Cosette Pharmaceuticals, in a deal that indicates the medicine is unlikely to ever make a significant impact in the market.
Cosette also is on the hook for $159 million in contingent, sales-based milestones for the drug which was approved by the FDA in 2019.
As one of two drugs hailed to potentially become the “female Viagra,” Vyleesi has not lived up to expectations. In September, when Palatin revealed its quarterly earnings, it reported fiscal-year sales of $12.5 million, compared to $5.8 million in the previous fiscal year.
While Palatin CEO Carl Spana, Ph.D., said in a release that he was “excited” that Vyleesi’s net product revenue of $4.9 million for the year “continues to exceed Vyleesi quarterly operating expenses,” the results are far short of what the company and some experts had expected.
Upon its approval, Barclays’ analyst Balaji Prasad pegged Byleesi’s potential sales in 2025 at $108 million.
“The divestiture of Vyleesi is consistent with our strategic decision to concentrate on our robust development and clinical pipeline,” Spana said in a release. “Our focus now is solely on developing novel therapeutics that modulate the melanocortin receptor system.”
Those candidates include a dry eye disease hopeful, which recently completed enrollment in a phase 3 study, and an ulcerative colitis drug which is in phase 2.
Cosette CEO Apurva Saraf called Vyleesi an “important addition to our rapidly expanding women’s health platform.”
Cosette will further compensate Palatin if it can push sales of Vyleesi to more than $15 million and up to $200 million. Palatin also is eligible for milestone payments of up to $10.5 million associated with previous licensing of Vyleesi to companies in China (Fosun) and South Korea (Kwangdong).
Vyleesi is administered as a subcutaneous self-injection in a prefilled disposable autoinjector pen for use in anticipation of a sexual encounter. It was the first as-needed treatment approved by the FDA for premenopausal women with acquired, generalized hypoactive sexual desire disorder (HSDD).
In 2017, Palatin made a licensing agreement with AMAG Pharmaceuticals, which took over North America rights to the treatment. Three years later, the companies mutually agreed to terminate the agreement with AMAG paying Palatin $12 million upfront, plus a $4.3 million payment to Palatin on March 31, 2021.
Sprout Pharmaceuticals was first with an answer for HSDD, winning approval for Addyi in 2015. Bausch Health, then Valeant, paid $1 billion to acquire the treatment and then sold it back to Sprout in 2017 in a 6% royalty agreement.
Editor's Note: An earlier version of this story incorrectly stated that Palatin paid $12 million to regain the North American rights to Vyleesi in 2020.