UPDATE 1-Valeant to cut Addyi, dermatology sales forces -memo

Mon Apr 4, 2016 7:03pm EDT
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(Adds details of memo)

By Caroline Humer

NEW YORK, April 4 (Reuters) - Valeant Pharmaceuticals International Inc will cut its sales force for Addyi, a treatment aimed at female sexual dysfunction, as well as some employees who sell dermatology products, according to an internal memo seen by Reuters.

The memo said that the company's contract with an outside sales force ends on April 15 and will not be renewed. Addyi, which Valeant acquired as part of its $1 billion acquisition of Sprout Pharmaceuticals, has had slow sales since it was launched last fall.

The memo from Chief Executive Officer Michael Pearson to company employees said that Valeant plans to relaunch the product "later this year" with a new marketing and sales plan and an internal sales force. Addyi will remain on the market in the interim.

Pearson also wrote in the memo that in dermatology, Valeant received feedback from doctors that "it had too many people calling on them to discuss closely related products." It planned cuts in that internal sales force as a result.

Those cuts affect about 140 current Valeant employees and would leave about 250 sales representatives for the dermatology business, according to a source familiar with the situation. The Addyi cuts affect about 140 contractors, said the source, who was not authorized to speak about the move.

Valeant dermatology sales have suffered since the company cut ties with Philidor Rx Services, a mail-order pharmacy. It missed its fourth-quarter earnings targets, has said it will restate financials for 2014 and 2015 and delayed filing its annual report, putting it in danger of defaulting on $30 billion in debt.

Bloomberg first reported the cuts earlier on Monday.

(Editing by Chris Reese and Matthew Lewis)