Valeant comes up with $1bn bid for libido specialist Sprout

Drug giant Valeant Pharmaceuticals has come up with a $1bn offer for "female viagra" maker Sprout Pharmaceuticals, the day after the company won regulatory approval for its Addyi libido-boosting drug.

Canada's Valeant said on Thursday that it will pay $0.5bn in cash for privately owned Sprout and the remainder early in 2016.

On Wednesday, Sprout was told by the US Food and Drug Administration (FDA) that the pink Addyi pills will only be available through certified health care professionals and pharmacies due to safety issues with the drug.

Having twice rejected the drug, the FDA warned that Addyi, which is the first drug to treat low sexual desire in women and has hence been slightly erroneously trumpeted as a "female viagra", had potentially dangerous low blood pressure and fainting side effects, especially when taken with alcohol.

Addyi, whose chemical name is flibanserin, is designed as a daily treatment for a condition known to doctors as hypoactive sexual desire disorder, or HSDD.

The acquisition could close in the third quarter, according to a source cited by the Wall Street Journal, which reported Wall Street whispers on Wednesday that the deal was nearing its climax.

The WSJ said Valeant will take on all of Sprout’s 25 employees, including its leadership team, as they ramp up ahead of expected first sales of the drug in October this year.

Quebec-based Valeant has been an active player on the M&A scene in recent years, successfully beating off rivals with a bid to woo rival Salix Pharmaceuticals in March, which came as some consolation for the disappointment of being spurned by Botox maker Allergan in 2014.

In 2013 it splashed the cash with an $8.7bn purchase of Bausch & Lomb, around a year after snapping up Medicis Pharmaceutical for $2.6bn.