, Columnist
Valeant's Sprout Deal Is Not a Healthy Sign
For a formerly $1 billion asset, it gets a legal deal and an accounting headache.
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Investors have cheered many of Valeant Pharmaceuticals International Inc.'s recent efforts to whittle down its debt by selling assets. Its latest sale doesn't deserve much celebration.
The struggling drugmaker is selling Addyi, a female libido treatment it bought for $1 billion in 2015, back to former shareholders of the company that developed it, Sprout Pharmaceuticals Inc. They get the drug and a $25 million loan from Valeant, which gets a 6 percent royalty on Addyi sales, which so far have not been meaningful. Perhaps more importantly, the deal ends a lawsuit by Sprout shareholders accusing Valeant of botching Addyi's launch and spending less than promised to market it.