Valeant Pharmaceuticals International Inc. shares rose 2.4% premarket on Monday after the company said it will divest its Sprout Pharmaceuticals subsidiary, which makes the “female Viagra” drug Addyi, to “a buyer affiliated with former shareholders of Sprout.” Under the deal, Valeant will receive a 6% royalty on worldwide sales of Addyi beginning 18 months from the sale agreement’s signing, Valeant will no longer — as required under the original transaction — have to split future profits with the former shareholders or pay for marketing and other expenditures. Valeant bought Addyi in 2015 for $1 billion, but the product has not sold as well as expected, and Valeant announced a plan to relaunch the drug earlier this year. Some have said Addyi, which is supposed to treat low sexual desire in women, didn’t sell well because Valeant didn’t market the drug aggressively enough, while others have said that the drug simply doesn’t work for women. Litigation against Valeant will also be dismissed, the company said. Valeant will also provide a $25 million loan to fund initial operating expenses for the deal, which is expected to close by the end of the year. Valeant shares have dropped 24% over the last three months, compared with a 4% rise in the S&P 500 .
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