Sprout Investors Say Valeant Overcharging for Female Libido Pill

Investors in Sprout, the female libido pill maker bought by Valeant Pharmaceuticals International Inc. for $1 billion last year, said Valeant has failed to successfully commercialize the treatment by setting the price too high and neglecting to market it, putting the drugmaker at risk of violating the merger agreement.

The group, representing all Sprout shareholders at the time of the acquisition, sent Valeant a letter on March 14 requesting materials showing that the drugmaker can fulfill its obligations under the deal going forward. Among the documents, the investors are seeking evidence that Valeant plans to spend $200 million for marketing and research and development for 2016 and half of 2017, as part of the agreement. They also ask for assurance that Valeant will keep a sales force of 150 to distribute the drug, called Addyi, which has posted disappointing sales since its introduction five months ago.