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Valeant is selling Sprout Pharmaceuticals. Photo: Allen G. Breed / AP

Embattled drug company Valeant Pharmaceuticals has agreed to sell Sprout Pharmaceuticals, the maker of "female Viagra" drug Addyi, back to Sprout's shareholders in exchange for a 6% royalty that starts 18 months from when the deal closes. A lawsuit accusing Valeant of botching the Addyi rollout and pricing also will be dropped.

The bottom line: Valeant's $1 billion deal for Sprout has been a major bust, considering analysts estimate sales of Addyi are less than $10 million this year. The drug itself received federal approval on questionable grounds, given its lack of clinical effectiveness and side effects.

Why it's a big deal: Because Valeant isn't getting a Canadian nickel in upfront payment here. It's actually loaning Sprout $25 million to fund initial operating expenses. Back of the envelope math puts the ROI at around 😱 .

Big picture: "The Sprout acquisition capped several years of frenzied debt-fueled deal-making under Michael Pearson, Valeant's former chief executive, and the group now has about $26 billion of net borrowings. The deal is seen as symbolic of the drug-maker's hubris." – David Crow, FT

Go deeper

Scoop: Biden weighs retired general Lloyd Austin for Pentagon chief

Lloyd Austin testifying before Congress in 2015. Photo: Chip Somodevilla/Getty Images

Joe Biden is considering retired four-star general Lloyd Austin as his nominee for Defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

Updated 24 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. World: Thailand, Philippines sign deal with AstraZeneca for vaccine.
  4. Economy: Safety nets to disappear in December Black Friday shopping across the U.S., in photosAmazon hires 1,400 workers a day throughout pandemic.
  5. Education: National standardized tests delayed until 2022.
1 hour ago - Health

WHO: AstraZeneca vaccine must be evaluated on "more than a press release"

A medical syringe and vial with fake coronavirus vaccine in front of the World Health Organization (WHO) logo. Photo Illustration: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Top scientists at the World Health Organization on Friday called for more detailed information on a coronavirus vaccine developed by AstraZeneca and the University of Oxford.

Why it matters: Oxford and AstraZeneca have said the vaccine was 90% effective in people who got a half dose followed by a full dose, and 62% effective in people who got two full doses. AstraZeneca has since acknowledged that the smaller dose received by some participants was the result of an error by a contractor, per the New York Times.

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