But then having that same company you sold it to pretty much giving it back to the original shareholders — along with an additional $25 million to help with startup expenses, is something different altogether.
Put very simply, this is what happened to Cindy Whitehead, the co-founder and former CEO of Sprout Pharmaceuticals.
Now add to the above the fact Sprout developed the female ‘viagra’-style pill called Addyi, and this story has everything.
Two years ago, Valeant Pharmaceuticals acquired Sprout, the makers of the female libido pill, for $1 billion. Sprout only had the one drug, Addyi, which was approved in the US in 2015. Taken daily, it’s meant to activate sexual impulses in the brain. However, it carries some strong warnings regarding fainting and low blood pressure.
This week Valeant said they would be selling Sprout and its drug back to the original shareholders, with a press release on the sale stating that: “Returning Sprout to its former owners will enable us to further streamline our portfolio and reduce complexity in our business.”
According to Fortune, that sale is more like a giveaway, with Valeant expected to receive little more than 6% of future sales of its drug (following an 18 month period), as well as to be excused from any remaining acquisition obligations, or legal fights.
Valeant will also loan US$25 million to Sprout to help, “fund initial operating expenses”.
Although Fortune reports Whitehead is not confirmed as one of the shareholders listed as re-acquiring Sprout, it did suggest Whitehead’s the big winner from the deal.
Whitehead Tweeted this week that: “It always seems impossible until it’s done.”
It always seems impossible until it’s done. #MondayMotivation pic.twitter.com/WSUZ6Gfq9Q
— Cindy Whitehead (@cindypinkceo) November 6, 2017
Sales or the Addyi drug had been slow under Valeant’s management, with the company blaming a reluctance from women to take the drug when prescribed, claiming the majority — 82% of the drug’s prescriptions — were going unfilled. Valeant’s share price dropped. Its CEO was ousted. And a turnaround plan put in place, including the divesting of assets.
But some claim the problem may have been Valeant’s inability to connect with women.
Overall difficulties in marketing the product appear to have been a continued struggle for Valeant. A relaunch of Addyi earlier this year, including a new marketing strategy, failed to turn sales around.
Valeant was unable to deliver a portion of Addyi sales to the former Sprout owners, as part of its acquisition obligations. And some Sprout shareholders launched legal action against Valeant for not fulfilling the terms of the merger agreement, including marketing obligations, claiming the drug could not even manage to crack the $10 million in sales last year.
So Valeant appears to have decided it’d be better to give the company away, rather than figure out a costly strategy for marketing the product, and having to fight shareholders in court.
Hearing this story, I couldn’t help but take a look at the make-up of Valeant’s board of directors.
Yes, you guessed it. It’s more than 80% male.
Cindy Whitehead had a 22-year career in healthcare prior to the sale of Sprout. She’s since founded The Pink Ceiling, described as a cross between a VC firm, consulting enterprise and ‘pinkubator’. She’s described as the “Head Betty in Charge” at Pink, “self-made and stiletto strapping in, she’s built two businesses and sold them for record-setting returns.”
Recently, Whitehead told Fortune that she wants to make other women “really fucking rich.”
“I firmly believe that when women have money, they have the freedom to make decisions and invest in those things that matter to them.”
She described pitching the pill at a healthcare conference in January 2015, when the audience — “a sea of blue and gray suits” started to giggle. She had to rethink her pitch, and did so within the eight minutes that she had to speak.
On Tuesday, a day after Valeant announced the divestment, Whitehead tweeted: “Let silence speak volumes.”
Let silence speak volumes. #TuesdayThoughts pic.twitter.com/hiKp139sJr
— Cindy Whitehead (@cindypinkceo) November 7, 2017