Valeant Pharmaceuticals International Inc. and Sprout Pharmaceuticals Inc. have entered into a definitive agreement under which a wholly-owned subsidiary of Valeant will acquire Sprout for approximately $1 billion plus a share of future profits based upon the achievement of certain milestones.

The deal comes on the heels of Sprout’s approval from the U.S. Food and Drug Administration (FDA) for its women’s sexual health drug flibanserin, which will be marketed as Addyi in the U.S. Addyi has demonstrated improvements in desire for sex, reducing distress from the loss of sexual desire and increasing the number of satisfying sexual events. Sprout also has global rights for flibanserin. Valeant will leverage its global scale to register flibanserin internationally.

Sprout has focused solely on the delivery of a treatment option for premenopausal women with acquired, generalized hypoactive sexual desire disorder (HSDD) as characterized by low sexual desire that causes marked distress or interpersonal difficulty and is not due to a co-existing medical or psychiatric condition, problems within the relationship, or the effects of a medication or other drug substance. 

Valeant expects Addyi to be available in the U.S. in the fourth quarter of 2015.

Following the closing of the acquisition, Sprout will remain headquartered in Raleigh, NC and become a division of Valeant. Cindy Whitehead, chief executive officer of Sprout, will join Valeant to lead this division dedicated to the introduction and global commercialization of Addyi.

“Delivering a first-ever treatment for a commonly reported form of female sexual dysfunction gives us the perfect opportunity to establish a new portfolio of important medications that uniquely impact women,” said Valeant’s chairman and chief executive officer, J. Michael Pearson.

Sprout’s chief executive, Cindy Whitehead, said, “I am extremely proud of the commitment and passion of our 34 employees who have been mission driven to get to this breakthrough first for women. This partnership with Valeant allows us the capacity to now ensure broader, more affordable access to all the women who have been waiting for this treatment. Beyond building this in the U.S., Valeant also offers us a global footprint that could eventually bring Addyi to women across the globe.”