Valeant Agrees to Sell Sprout to former shareholders of Sprout Pharmaceuticals

Valeant Pharmaceuticals International announced that its affiliate has entered into an agreement to divest the Sprout Pharmaceuticals subsidiary (“Sprout”) to a buyer affiliated with former shareholders of Sprout in exchange for a 6% royalty on global sales of ADDYI (flibanserin) beginning 18 months from the signing of the sale agreement. In connection with the completion of the sale, Valeant will be released from the ongoing obligations of the original transaction to split future profits with the former shareholders, as well as certain related provisions, including the obligations to make certain marketing and other expenditures.

Additionally, in connection with the completion of the sale, the existing litigation against the Company brought on behalf of the former shareholders of Sprout will be dismissed with prejudice.

“Returning Sprout to its former owners will enable us to further streamline our portfolio and reduce complexity in our business,” said Joseph C. Papa, chairman and CEO, Valeant. “As we transform Valeant, we are focusing our resources on our core businesses to best serve our shareholders, customers and patients. These areas include eye health, gastroenterology and dermatology.”

ADDYI is the only approved and commercialized product of Sprout.

In connection with the sale, Valeant will provide a $25 million loan to fund initial operating expenses. The sale is expected to close before the end of 2017, subject to certain closing conditions, including the approval of the requisite portion of the former shareholders to the amendments to the original transaction described above.