Date: 2015-08-20
Type of information: Company acquisition
Acquired company: Sprout Pharmaceuticals (USA - NC)
Acquiring company: Valeant Pharmaceuticals (Canada)
Amount: $1 billion in cash, plus a share of future profits based upon the achievement of certain milestones
Terms: * On August 20, 2015, Valeant Pharmaceuticals and Sprout Pharmaceuticals announced that they have entered into a definitive agreement under which a wholly-owned subsidiary of Valeant will acquire Sprout, on a debt-free basis, for approximately $1 billion in cash, plus a share of future profits based upon the achievement of certain milestones. Following the closing of the acquisition, Sprout will remain headquartered in Raleigh, N.C. 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®, reporting to Anne Whitaker, Executive Vice President and Company Group Chairman. Under terms of the acquisition agreement, Valeant will pay approximately $500 million, subject to customary purchase price adjustments, upon the closing of the transaction and an additional payment in the amount of $500 million, payable in the first quarter of 2016, plus a share of future profits based upon the achievement of certain milestones. Valeant expects no impact to 2015 earnings, and moderate accretion to 2016 earnings. The transaction is subject to customary closing conditions and regulatory approval, including Hart-Scott-Rodino antitrust clearance. The transaction is expected to close in the third quarter of 2015. Skadden, Arps, Slate, Meagher & Flom LLP served as Valeant\'s legal counsel. Sprout was advised by Sullivan & Cromwell LLP as its legal counsel and Perella Weinberg Partners as its financial advisor.
Details: Sprout Pharmaceuticals is focused solely on the delivery of a treatment option for women with Hypoactive Sexual Desire Disorder (HSDD). On Tuesday, August 18, 2015, Sprout received approval from the FDA on its New Drug Application (NDA) for 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. Valeant expects Addyi to be available in the United States in the fourth quarter of 2015 through prescribers and pharmacies that have been certified under the U.S. FDA\'s comprehensive Risk Evaluation and Mitigation Strategy (REMS) program to assure safe use. Following the closing of the transaction, Valeant, under the REMS, will offer physicians and pharmacists the required certification programs for prescribing and dispensing Addyi.
Related: Women health
