Valeant to Buy 'Female Viagra' Maker Sprout Pharma

Canada's Valeant Pharmaceuticals International Inc said it would buy privately owned Sprout Pharmaceuticals, whose drug became the first approved treatment this week for low sexual desire in women, for about $1 billion plus milestone payments.

Valeant will pay $500 million in cash upfront and another installment next year for Sprout and its controversial pink pill, Addyi.

Addyi was approved on Tuesday by the U.S. Food and Drug Administration for pre-menopausal women, after being rejected twice over effectiveness concerns.

Addyi carries a strong warning about potentially dangerous low blood pressure and fainting side effects, especially when taken with alcohol.

Addyi, nicknamed the "female Viagra", does not work like Pfizer Inc's blockbuster drug. Unlike Viagra, which affects blood flow to the genitals, Addyi activates sexual impulses in the brain.

Valeant, which has long fueled its growth via acquisitions, expects the deal to close in the third quarter and Addyi to be available in the United States in the fourth quarter.

The Wall Street Journal first reported the deal on Wednesday. (http://on.wsj.com/1K7qXds) (Reporting by Natalie Grover and Supriya Kurane in Bengaluru; Editing by Anupama Dwivedi and Kirti Pandey)