NEW YORK (The Deal) --Valeant Pharmaceuticals (VRX) said Thursday it was paying $1 billion for Sprout Pharmaceuticals, the maker of a drug developed to treat women who experience low sexual desire.

Raleigh, N.C.-based Sprout will be acquired by the Laval, Quebec-based pharmaceutical giant for $1 billion in cash, along with a share of future profits based upon meeting certain milestones.

Under the terms of the acquisition, Valeant will pay $500 million upon the closing of the transaction as well as $500 million in the first quarter of 2016. Valeant said it expects a moderate accretion from the transaction to 2016 earnings.

Sprout recently received approval from the U.S. Food and Drug Administration on its new drug application for its product flibanserin, which will be known as Addyi in the US. The drug has demonstrated improvements in desire for sex in women and reducing distress from the loss of sexual desire. The company has stated the drug is focused as a treatment option for premenopausal women with hypoactive sexual disorder, which is characterized by having low sexual desire.

Valeant noted in a statement that it expects Addyi to be available in the U.S. during the fourth quarter of this year. It will be available under the FDA's comprehensive risk evaluation and mitigation strategy program to assure safe use. Addyi has a boxed warning noting that using alcohol while taking the drug could cause severe hypertension or fainting, according to a statement.

Sprout CEO Cindy Whitehead will remain on board once the deal closes, after which the company will become a division of Valeant. Whitehead previously co-founded and led operational functions at Slate Pharmaceuticals, which commercialized the first FDA long-acting testosterone preparation for men in the field of sexual medicine. Sprout was spun out of Slate, which was then sold to sponsor GTCR LLC and Actient Pharmaceuticals in December 2011. Actient was acquired by Auxilium Pharmaceuticals in April 2013, which was bought by Endo International (ENDP) - Get Endo International Plc Report earlier this year.

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Valeant noted in its statement that the acquisition of Sprout could serve as a jumping off point to establish a new portfolio of drugs that uniquely affect women. The acquisition is expected to close in the third quarter of 2015.

"I am extremely proud of the commitment and passion of our 34 employees who have been mission driven to get to this breakthrough first for women," said Whitehead in a statement following the announcement of the purchase. "This partnership with Valeant allows us the capacity to now ensure broader, more affordable access to all the women who have been waiting for this treatment. Beyond building this in the U.S., Valeant also offers us a global footprint that could eventually bring Addyi to women across the globe."

The drug, which has received a tidal wave of media attention, has been coined as the "female Viagra," referring to the Pfizer (PFE) - Get Pfizer Inc. Report drug that treats male erectile dysfunction.

The deal is the latest in a long line for Valeant. In July it announced it would purchase Egypt-based Amoun Pharmaceuticals for $800 million as a means to grow in the Middle East and North Africa. In March, Valeant snapped up Salix Pharmaceuticals for $15.8 billion after its attempt to purchase Botox maker Allergan failed last year. Allergan was eventually purchased by Actavis in November of last year for $66 billion. Actavis then took the name Allergan (AGN) - Get Allergan plc Report.

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