WASHINGTON (AP) – Valeant Pharmaceuticals will pay about $1 billion to buy Sprout Pharmaceuticals, the maker of the first prescription drug intended to boost sexual desire in women.
The deal announced Thursday comes a day after U.S. regulators approved the pill.
Valeant expects the Sprout pill, Addyi, to be available in the United States in the fourth quarter. The deal to buy the company should close in this quarter.
The Food and Drug Administration's approval of Addyi on Wednesday was a milestone long sought by drugmakers, which have made billions off impotence drugs for men.
Sprout's drug is intended to treat women who report emotional stress due to a lack of libido. It acts on brain chemicals that affect mood and appetite. The approval of Addyi, known generically as flibanserin, marks a turnaround for the FDA, which previously rejected the drug twice due to lackluster effectiveness and side effects.
Sales of the drug are expected to be affected by a strong warning label attached to it and an FDA-imposed safety plan for prescribing. The warning will alert doctors and patients to the risks of dangerously low blood pressure and fainting, especially when the pill is combined with alcohol.
Under the safety plan, doctors will only be able to prescribe Addyi after completing an online certification process that requires counseling patients about the drug's risks. Pharmacists also will need certification and be required to remind patients not to drink alcohol while taking the drug.
Valeant plans to pay about $500 million at closing for Raleigh, North Carolina-based Sprout. The Canadian drugmaker will then make another milestone-based payment of around $500 million in the first quarter of next year.
U.S.-traded shares of Valeant Pharmaceuticals International Inc. climbed $1.09 to $246 Thursday before markets opened.
