Valeant Pharmaceuticals International Inc said on Monday it will sell its female libido-pill business Sprout Pharmaceuticals back to its former owners, two years after buying the company for about $1 billion.
Addyi, the controversial pink pill made by Sprout, was touted as a possible blockbuster drug that would command much of what analysts had said could be a $2 billion market.
But sales of the pill has been sluggish and last year Valeant was sued on behalf of former Sprout investors over its alleged failure to market Addyi successfully.
The complaint had said that sales of the pill may have totaled less than $10 million in 2016, far short of the $1 billion targeted for July 2017.
Approved by the U.S. Food and Drug Administration in August 2015 under intense pressure from patient advocacy groups, Addyi is meant to activate sexual impulses in the brain and is taken daily.
But it carries a strong warning about potentially dangerous low blood pressure and fainting, especially when taken with alcohol.
Valeant said on Monday it would get 6 percent royalty on global sales of Addyi beginning 18 months from the signing of the deal, which is expected to close before the end of the year.
Valeant said it will provide a $25 million loan to fund initial operating expenses.
(Reporting by Ankur Banerjee in Bengaluru; Editing by Sayantani Ghosh)