Valeant Bets $1 Billion on Burgeoning Women’s Libido Market

Valeant Pharmaceuticals International Inc.’s $1 billion purchase of the maker of the first U.S.-approved libido drug for women is a bet that demand for the drug will one day resemble the multibillion-dollar market to treat men’s sexual dysfunction.

It’s a risky proposition. The deal to acquire Sprout Pharmaceuticals Inc., which also includes undisclosed future payments based on profits, gives Valeant a drug that was only approved by regulators on Tuesday. The U.S. Food and Drug Administration is requiring the medication, Addyi, to carry a warning label, and the once-daily pill’s modest benefit may limit its appeal.