MONTREAL – Faced with sagging sales, Valeant Pharmaceuticals plans to relaunch its Addyi female sexual dysfunction drug and will cut it sales representatives for the product.
In a letter to Valeant’s 22,000 employees, CEO Michael Pearson said the Quebec-based company will take another shot at introducing Addyi, which entered the U.S. market in October.
Valeant acquired Addyi when it bought Sprout Pharmaceuticals last year for US$1 billion cash, plus a share of future profits.
The purchase was announced a few days after Sprout received U.S. approval on Aug. 18 for marketing Addyi as a way for premenopausal women to enhance their libidos and improve their sex lives.
The drug, taken at bedtime, sells for US$800 per month.
“Despite our best efforts with respect to commercialization, sales of Addyi have not met our expectations yet,” Pearson wrote in letter Monday obtained by The Canadian Press.
Valeant said last month that it won’t achieve its earlier forecast for US$100 million to US$150 million of Addyi sales per year. Pearson, who has announced he’s stepping down from the company, said Valeant would boost its sales and marketing plans for the drug in the coming months.
The contract with an outside sales organization, organized by Sprout, will end April 15. Valeant plans to build and train its own sales team to sell the drug and “educate” doctors about the “unique benefits of this important product.”
Until the relaunch, Addyi will remain available for consumers, including through its partnership with U.S. pharmacy giant Walgreens.
Analyst Doug Miehm of RBC Capital Markets said Addyi has faced “significant headwinds” related to ensuring that physicians and pharmacists are certified to prescribe and distribute the drug.
Along with the 140 Addyi contract workers, Valeant is also firing about 140 employees, including 85 that work in dermatology, 45 in gastrointestinal and 13 in women’s health.
Meanwhile, Valeant’s battered shares got a lift Tuesday after it said a five-month internal accounting review of its relationship with defunct mail-order pharmacy Philidor has not turned up any new details that would require further restatements of its financial results.
Valeant’s 12 independent directors will now oversee completion of a restatement of financial results for 2014 and parts of 2015 as well as an assessment of internal controls.
It hopes to submit its restated financial statements for 2015 to regulators by April 29 to avoid defaulting on its debt agreements.
On the Toronto Stock Exchange, Valeant’s (TSX:VRX) shares closed up 10 per cent to $37.77 in Tuesday trading. The stock is down from an all-time peak of $347.84 set in August.
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