Nov 7, 2017

Valeant sells low-selling female libido drug

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

Axios

Updated 45 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

Global: Total confirmed cases as of 9 a.m. ET: 31,092,895 — Total deaths: 961,301— Total recoveries: 21,274,210 — Map.
U.S.: Total confirmed cases as of 9 a.m. ET: 6,812,470 — Total deaths: 199,517 — Total recoveries: 2,590,671 — Total tests: 95,108,559 — Map.
Health: CDC updates guidances to say coronavirus can be spread through the air — Nursing homes are evicting unwanted patients.
Politics: Testing czar on Trump's CDC contradictions: "Everybody is right."
Education: College students give failing grade on return to campus.
Business: Unemployment concerns are growing.
World: "The Wake-Up Call" warns the West about the consequences of mishandling a pandemic.

Go deeper (<1 min. read)

Ben Geman, author of Generate

1 hour ago - Energy & Environment

The climate stakes of the Supreme Court fight

Illustration: Aïda Amer/Axios

Ruth Bader Ginsburg's death and the battle over her vacant Supreme Court seat have real implications for energy and climate policy.

Why it matters: If President Trump replaces her, the court will likely become more skeptical of regulations that claim expansive federal power to regulate carbon under existing law, and perhaps new climate statutes as well.

Go deeper (2 min. read)

Dion Rabouin, author of Markets

1 hour ago - Economy & Business

The tech war between the U.S. and China escalates

Illustration: Aïda Amer/Axios

Economic tension between the U.S. and China continues to escalate but is shifting in focus — away from the tit-for-tat trade war and toward a more direct confrontation over the future of technology at the heart of the conflict between the world's two largest economies.

Why it matters: The battle between the U.S. and China was always about tech supremacy and the direct confrontation could result in an accelerated splintering of global supply chains and a significant reduction of international commerce.