Valeant Pharmaceuticals International has entered into a definitive agreement under which a wholly owned subsidiary of Valeant will acquire Sprout Pharmaceuticals on a debt-free basis for about $1 billion in cash, plus a share of future profits based upon the achievement of certain milestones.

Sprout has received approval from the FDA on its NDA for flibanserin, which will be marketed as Addyi in the U.S. Addyi has demonstrated improvements in desire for sex, reducing distress from the loss of sexual desire and increasing the number of satisfying sexual events. Sprout also has global rights for flibanserin. Valeant will leverage its global scale to register flibanserin internationally.

Valeant expects Addyi to be available in the U.S. in the fourth quarter of 2015 through prescribers and pharmacies that have been certified under the U.S. The FDA’s comprehensive Risk Evaluation and Mitigation Strategy (REMS) program to assure safe use.

Sprout will remain based in Raleigh, N.C., and become a division of Valeant. Cindy Whitehead, chief executive officer of Sprout, will join Valeant to lead this division dedicated to the introduction and global commercialization of Addyi, reporting to Executive Vice President and Company Group Chairman Anne Whitaker.

Valeant will pay about $500 million, subject to customary purchase price adjustments, upon the closing of the transaction and an additional payment in the amount of $500 million, payable in the first quarter of 2016, plus a share of future profits based upon the achievement of certain milestones. Valeant expects no impact to 2015 earnings, and moderate accretion to 2016 earnings.

The transaction is subject to customary closing conditions and regulatory approval, including Hart-Scott-Rodino antitrust clearance. The transaction is expected to close in the third quarter of 2015.