Investors in Sprout, the female libido pill makerbought by Valeant Pharmaceuticals International Inc. for $1 billionlast year, said Valeant has failed to successfully commercializethe treatment by setting the price too high and neglecting tomarket it, putting the drugmaker at risk of violating the mergeragreement.

The group, representing all Sprout shareholders at the time ofthe acquisition, sent Valeant a letter on March 14 requestingmaterials showing that the drugmaker can fulfill its obligationsunder the deal going forward. Among the documents, the investorsare seeking evidence that Valeant plans to spend $200 million formarketing and research and development for 2016 and half of 2017,as part of the agreement. They also ask for assurance that Valeantwill keep a sales force of 150 to distribute the drug, calledAddyi, which has posted disappointing sales since its introductionfive months ago.

“Valeant predatorily priced Addyi at $800 a month even thoughSprout had established a price point of approximately $400 a monthfor the drug based on market research,” the investor group said inthe letter. “As a result of this predatory pricing, insurancecompanies refused to cover the drug, which has led to the drug notbeing affordable for millions of women.”

Continue Reading for Free

Register and gain access to:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.