Valeant Pharmaceuticals: Canada’s hottest stock after purchase of Addyi
It’s been the most talked about topic in the world of pharma as of late: the FDA has approved the first ever prescription drug treatment to boost low sex drives in women.
The FDA had rejected the drug twice before, called flibanserin, in 2010 and 2013, but this past June an advisory panel voted to recommend approval on the condition that the drug’s manufacturer, Sprout Pharmaceuticals, develops a plan to limit safety risks.
Expected to hit the market in mid-October under the name of Addyi, the drug can cause low blood pressure, nausea, drowsiness and dizziness—especially when combined with alcohol.
But that didn’t stop Valeant Pharmaceuticals (NYSE: VRX) from striking a deal with Sprout Pharmaceuticals last week.
Valeant will pay roughly USD$1 billion in cash to buy Sprout Pharmaceuticals, marking their seventh acquisition this year.
The Canadian drugmaker has traditionally grown through acquisitions of companies in the dermatology, vision and neurology fields, but the Sprout purchase will expand Valeant’s portfolio into woman’s health.
The market for men’s erectile dysfunction is $4.3 billion and includes blockbuster drugs such as Pfizer’s Viagra, Eli Lilly’s Cialis, and Bayer’s Levitra, according to 2014 sales data by Symphony. The market for women’s sexual-dysfunction could expand just as quickly, and Valeant will be the first to enter.
“I think you can look to the market for erectile dysfunction to be somewhat similar in terms of size, which is a multibillion-dollar market on global basis,” Valeant’s chief executive Mike Pearson told The Boston Globe. “It will take time to develop the market.”
The Valeant deal is big news for pharma investors. As the first drug designed to treat low libido in women, Addyi will have no competition when it hits the market. That’s a huge win for Valeant, which is expecting revenue between USD$10.7 billion and USD$11 billion for 2015.
In the last four quarters, Valeant has beaten earnings estimates by an average of 12.5 percent. Year to date, Valeant stock is up nearly 69 percent, according to ETF Daily News.
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Just as with any deal, this one comes with risks.
The FDA has required Addyi to carry a warning label alerting doctors and patients to the risks of dangerously low blood pressure and fainting. Under the safety plan, doctors will be able to prescribe Addyi only after completing an online certification process that requires counseling patients about the drug’s risks. Add in that the drug must be taken once daily to receive effects, and it may limit patient appeal.
But Valeant has been known to be a drug marketing company rather than a drug development company, and the company’s sales expertise will be able to get Addyi to market quickly, according to analysts.
Will all that being said, Valeant Pharmaceuticals is a stock that is being watched very closely by investors, along with the pharmaceutical sector that has just been created.
Dexcom: changing the lives of people with type 1 diabetes
It is estimated that 9.3% of adults around the world are living with type 1 diabetes, which amounts to a total of 463 million people. A further 1.1 million children and adolescents under the age of 20 are living with the condition.
Unlike the more prevalent type 2 diabetes, where the body still produces insulin and symptoms develop slowly, people with type 1 diabetes need regular insulin injections or pumps, and must monitor their sugar levels frequently.
In recent years a number of remote glucose monitoring systems have become available that patients can use at home. These work with a sensor, usually placed under the skin, that measures glucose levels every few minutes. This information is then transmitted wirelessly to a device like a smartphone or tablet, which can then be shared with their clinician.
British actress Nina Wadia's son Aidan, 14, has type 1 diabetes, and has been managing his condition using Dexcom, a glucose monitoring system used by patients all over the world. Here Wadia explains how Dexcom has improved their lives.
As a parent of someone with type 1 diabetes, what is your day-to-day life like?
Being able to take a breath, think and pivot constantly without getting frustrated becomes an essential mindset because sometimes it feels like each day is determined to be different from the day before. Whatever worked yesterday is going to misfire today.
Which areas of yours and Aidan’s life are most impacted by diabetes?
The one thing that you have to fight hard to reclaim is spontaneity, especially when it comes to food and exercise. It’s only when this is taken do you realise how essential each one is. You can be flexible and there are no real limits, but only in the sense that a great athlete can be flexible without limits because they’ve trained super hard to be that way. So we’ve all had to become athletes when it comes to being spontaneous.
How has Dexcom helped you and Aidan?
Dexcom has brought future science fiction to real life today. The continuous glucose monitoring system is tiny, sits discreetly on his body and gives him a ten-day breather between sensor changes, so it's goodbye finger-pricking seven times daily.
Dexcom is totally active at a grass roots level and for Diabetes Awareness has pledged to donate £2,000 if #DexcomDiabetesStories and/or #DexcomWarriorStories is shared 200 times! I’ll be sharing more on social media and would love to hear how other families are winning their fights.
Maybe most importantly Dexcom is trying to introduce a reimbursement programme for type 1 diabetes patients which will give greater access to modern, life changing hi-tech. I want to spread the word on the importance of accessing it through this campaign.
If you compared your life today with how it was before Aidan was using Dexcom, what has changed?
It's always working, which lets him take his mind off diabetes for longer stretches. It also lets me get off his back. We both receive alerts so I no longer have to pester him by asking him what his number is, and especially importantly, I don’t have to wake him at night to prick his finger if I’m worried. Dexcom gave us back our sleep!