|Valeant CEO J. Michael Pearson|
That didn't take long.
Just one day after Sprout Pharmaceuticals won a controversial FDA approval for new female libido drug Addyi (flibanserin), serial buyer Valeant ($VRX) has agreed to buy the company.
The Canadian dealmaker will shell out approximately $1 billion in cash plus milestone payments, it said Thursday--$500 million when the deal closes, and $500 million payable in next year's first quarter. Once the transaction wraps, Sprout will become a division of Valeant run by its current CEO, Cindy Whitehead, from its current North Carolina headquarters.
The way Valeant sees it, delivering Addyi, the first treatment of its kind, "gives us the perfect opportunity to establish a new portfolio of important medicines that uniquely impact women," CEO J. Michael Pearson said in a statement. It'll mark this year's third foray into a new therapeutic area for Valeant, which broke into GI with a pickup of North Carolina's Salix Pharmaceuticals, and before that bought its first cancer treatment, the flailing Provenge vaccine, from bankrupt Dendreon.
|Sprout Pharmaceuticals CEO Cindy Whitehead|
As for Sprout, which recently announced plans to expand its workforce from 34 employees to just over 200 as it sets out to market the drug, Valeant's scale and global reach "allows us the capacity to now ensure broader, more affordable access to all the women who have been waiting for this treatment," Whitehead added.
But while the pair is preparing to launch Addyi in October of this year, it has some waiting to do on the DTC marketing front--and plenty of critics to deal with. Part of Sprout's approval agreement with the FDA--which required a black-box safety warning on the twice-rejected med--was a vow not to market or advertise Addyi on radio or TV for 18 months.
And in the meantime, groups like consumer activist Public Citizen are spitting fire at Addyi's regulatory thumbs up. The FDA's decision to approve the therapy--which presented only "modest" efficacy, the agency acknowledged--"presents serious dangers to women, with little benefit," the group's founder, Sidney Wolfe, said in a Wednesday statement.
- read Valeant's release
- see the release from Public Citizen
Special Reports: Pharma's top 10 M&A deals of 2014 | The most influential people in biopharma today - 2014 - J. Michael Pearson - Valeant