UPDATE 5-Valeant to buy 'female Viagra' maker Sprout Pharma

Thu Aug 20, 2015 2:36pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Deal for $1 bln in cash, plus milestone payments

* Plans to expand Addyi sales to Canada, Europe

* Valeant shares fall (Adds comments from Valeant, Spruce; analyst reaction)

By Natalie Grover, Caroline Humer and Ransdell Pierson

Aug 20 (Reuters) - Canada's Valeant Pharmaceuticals International Inc said on Thursday it would buy Sprout Pharmaceuticals, which makes a controversial new drug to treat low sexual desire in women, for about $1 billion.

Valeant shares fell about 5 percent as Wall Street questioned whether the acquisition would be too risky for the big drugmaker, which has done six other deals this year.

The U.S. Food and Drug Administration approved Sprout's Addyi on Tuesday after rejecting it twice. The pink pill proved only marginally effective in clinical trials and carries a strong warning about potentially dangerous low blood pressure and fainting, especially when taken with alcohol.

"Although the drug has a potentially large addressable patient population and will benefit from the marketing scale of Valeant's sales force, acceptance of this product may ultimately be limited," Morningstar Research analyst Michael Waterhouse said. Health insurers may not cover the drug, he added.

While Addyi has been nicknamed "female Viagra," it works differently from Pfizer Inc's product, which was introduced nearly two decades ago as the first drug for erectile dysfunction. Addyi is meant to activate sexual impulses in the brain and is taken daily, while Viagra affects blood flow and is taken as needed.   Continued...