- Valeant Pharmaceuticals reportedly is cutting the sales force for Addyi, a female libido drug the company paid $1 billion for last year in its acquisition of Sprout Pharmaceuticals. The drug has struggled since its launch in October 2015, and Valeant CEO Michael Pearson recently told investors. Valeant has significantly reduced its sales forecast for the drug this year.
- The company plans to relaunch the drug later this year with an internal sales team, according to a person familiar with the matter. The current agreement with the contract sales organization marketing Addyi ends April 15, the same person said.
- Investors in Sprout recently have pressured Valeant to provide assurances it was fulfilling its commercialization obligations for Addyi, one of which is to maintain a roughly 150-person sales force.
Valeant will also cut about 140 employees in its dermatology, gastrointestinal, and women's health units, in addition to the contract sales force for Addyi, Bloomberg reports.
In response to the Sprout investors' concerns, Valeant spokeswoman Laurie Little had previously said, "Valeant remains strongly committed to Addyi and intends to comply with all of its obligations under our agreement with the former shareholders of Sprout, including as they relate to commercialization efforts, marketing spend, number of sales reps, and post-marketing studies.”
While there has been some recent pick up in the percentage of Addyi prescriptions being filled, the drug's launch has been a major disappointment. Its lackluster sales have put further pressure on Valeant as the drugmaker tries to pivot from a disastrous mid-March business update.
Valeant stock fell by over 60% after the company cut revenue projections for 2016 by $1.5 billion and warned of a potential default on some loan obligations. It has to file an annual report with the Securities and Exchange Commission before April 29 in order to avoid triggering a default on its loan obligations.
Last week, the company asked its creditors for an extension on its credit facility in the event it can't file by April 29th. But there may be some challenges on that front as well. Creditors are asking for better terms in return for granting Valeant's request for an extension on its loans, according to a separate Bloomberg report.
The delay in filing is due to an ongoing investigation by an ad hoc committee of the board of directors into accounting practices tied to its relationship with specialty pharmacy Philidor.