Valeant Pharmaceuticals International on Monday shared plans to sell the female libido business it purchased in 2015 back to its original owners for a fraction of the price, reports Bloomberg.
Valeant acquired the company, Sprout Pharmaceuticals, two years ago for $1 billion. At the time, Valeant executives had high hopes for Sprout's female libido drug, Addyi. However, the drug has seen weak sales, spurring former Sprout investors to sue Valeant over the marketing for Addyi.
Through the new deal, Valeant will return Sprout — and the rights to Addyi —to its former shareholders and give the company a $25 million loan to fund initial operating expenses. Valeant will receive a 6 percent royalty on global sales of the drug beginning 18 months after finalizing the deal with Sprout.
"Returning Sprout to its former owners will enable us to further streamline our portfolio and reduce complexity in our business," said Valeant CEO Joe Papa, adding that the company aims to focus on core business areas such as eye health, gastroenterology and dermatology.
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