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Source: Valeant Pharmaceuticals.

After previously rejecting privately held Sprout's Addyi, a treatment for female sexual disorder, the FDA has acquiesced and approved the once-daily pill. Because no drug has previously been approved to treat sexual desire, and an estimated 10% of women suffer from some form of female sexual desire disorder, it's anyone's guess how much money this drug may eventually bring in. In Valeant Pharmaceuticals' (NYSE:VRX) estimation, Addyi is worth at least $1 billion, which is the amount it is spending to acquire Sprout to get its hands on the drug.

Some obstacles to overcome
In order for Valeant to make money on Addyi, it will need to overcome concerns that doctors and patients may have related to its safety. Although Addyi is being commonly referred to as the female version of Viagra, it's a much different drug than Viagra, with a much different safety profile.

While Addyi targets neurotransmitters in the brain that can bump up libido, Viagra targets enzymes that improve blood flow, not desire. Because Addyi works differently than Viagra, its use can lead to potentially risky side effects that aren't common with Viagra, including unconsciousness -- especially when taken with alcohol.

In a dedicated alcohol interaction study, 17% of 25 patients taking Addyi, and drinking the equivalent of two five-ounce glasses of wine over a 10-minute period, required therapeutic intervention, such as smelling salts. Although there were no such occurrences when Addyi or alcohol was taken alone in this study, a separate study found that 0.4% of Addyi patients, and 0.2% of placebo patients, also suffered from unconsciousness when taking Addyi without drinking any alcohol. As a result, the FDA is including a black-box warning for unconsciousness and low blood pressure on Addyi's label.

Additionally, the FDA is requiring a risk evaluation and mitigation strategy, or REMS, for Addyi that mandates doctors and pharmacies get certified before prescribing or dispensing it, and that patient's get thoroughly educated on the risks associated with Addyi before using it. These include the risks associated with taking it and drinking alcohol.

Touting the benefits
Valeant's willingness to fork over a 10-figure purchase price to acquire Addyi suggests it's confident it can manage Addyi's risks, and turn Addyi into a top seller. That could be true given that Valeant is one of the biggest and most successful drugmakers on the planet with a vast amount of experience in launching and marketing medicine, while managing patient risks. If Valeant can leverage its experience to reduce or avoid instances of unconsciousness, then doctors and patients can focus more attention on Addyi's benefits, including findings of more frequent and satisfying sex.

In clinical trials, Addyi patients reported between 0.5 and 1 more sexually satisfying encounters per month than patients taking placebo. Additionally, Addyi increased patients' sexual desire score by 0.3 to 0.4, and decreased a sexual distress score by 0.3 to 0.4 versus placebo.

Those results may not sound significant, but for patients diagnosed with hypoactive sexual desire disorder, they may be, and that means that they shouldn't be dismissed, especially given the total number of women that Addyi may help.

If doctors and patients decide that Addyi's benefits outweigh its risks, then Valeant's big bet on Addyi may be particularly satisfying for investors, too. Although pricing hasn't been officially set, it's cost could be similar to Viagra. If so, then Valeant could bring in hundreds of dollars per month per patient, depending on the willingness of insurers to pay for it.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends Valeant Pharmaceuticals. The Motley Fool owns shares of Valeant Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.