Entrepreneurs

The woman behind 'female Viagra' sold her company for $1 billion — then got it back for free

Jillian Clark

In 2015, Cindy Eckert (then Whitehead) made headlines after landing a billion-dollar deal for the company she co-founded, Sprout Pharmaceuticals, which developed female libido-boosting drug Addyi. It was far from a fairy-tale exit though; the company that acquired Sprout was plagued with problems and, ultimately, the business was given back to Eckert and its former shareholders — for free.

Now, Eckert and Sprout are getting something rare in the world of start-ups: a second chance.

"People think I had a billion-dollar exit, there was a billion-dollar happy ending. Well, it didn't go that way," Eckert, 44, tells CNBC Make It. "But it taught me the power of my own resolve."

Eckert co-founded Sprout Pharmaceuticals with her then-husband Robert Whitehead in 2011 to acquire a medication called flibanserin. With it, Sprout developed Addyi, dubbed "female Viagra," to treat hypoactive sexual desire disorder in premenopausal women (10 percent of all women suffer from HSDD). Eckert was named the CEO in January 2015 and, just days after Addyi won FDA approval that August, public company Valeant Pharmaceuticals acquired Sprout Pharmaceuticals for $1 billion.

"To sell a company is both exhilarating and excruciating," says Eckert. "And the excruciating piece is, it's in so many ways part of you, and to be able to step out of that and watch it, is difficult, and often heartbreaking." Like when things go wrong.

The sale soured. Valeant became mired in a scandal concerning its accounting practices, and Addyi, the price of which Valeant had doubled, was denied coverage by many insurers (despite Viagra coverage), while also taking heat for its questionable effectiveness. In 2016, Eckert and former Sprout shareholders sued the pharma giant, alleging that it failed to market the pill successfully and overcharged consumers.

In November, Valeant gave Sprout back to its original shareholders for nearly nothing in exchange for them dropping the lawsuit. Valeant also provided the shareholders with a $25 million kickstart loan, according to Bloomberg, with Valeant to receive a 6 percent royalty on global sales of Addyi beginning in 2019.

Now, Eckert — who says she is the largest shareholder in Sprout — is back as CEO (she was pushed out after the sale to Valeant). And she's using round two to implement ambitious plans for "little pink pill" Addyi, including making the drug more accessible to women who suffer from low libido.

"That means the right price, that means insurance coverage and, frankly, that means a path to have a conversation that has been stigmatized and shameful for so long," Eckert says.

First, Eckert slashed the price. In November, Bloomberg reported that Addyi was retailing for around $800 to $850 for 30 tablets. Now, the price is $400, and Addyi's website states customers with commercial prescription insurance coverage will pay $25 or less a month out of pocket; those without coverage, no more than $99 a month.

"The reality is that this price puts it at equal footing to the erectile dysfunction drugs," says Eckert.

Eckert has also opened new avenues through which women can get a prescription, like a telemedicine option, which connects customers to a network of U.S.-licensed doctors certified to prescribe Addyi over the phone.

"Women can go and speak to a doctor in the privacy of their own home, and not have to stand there in line at the pharmacy and have their name called," she says.

But Addyi still has its troubles. The pill, which was rejected twice before receiving FDA approval in 2015, comes with a warning, reportedly the FDA's strictest, which requires women to sign an agreement acknowledging the risks of drinking while taking Addyi, like fainting and potentially dangerous low blood pressure.

And while the changes made to Addyi have been praised by some — like women's health advocates — others have concerns that making the controversial pill easier to get will cause more harm than good, not only because of its side effects and potential off-label uses, but because of inherent issues with online prescriptions.

Only time will tell whether the pill's relaunch will be successful, but whatever happens, Eckert is savoring Sprout 2.0.

"I think when you sell a company, you wake up every day and you still think about it," Eckert says. "Founders — their products, their companies — become part of their DNA, so it's very hard to sit on the sidelines.

"There was no version of me that was going to the beach and drinking a tropical drink with a little pink straw…there's still work to do. There's still so much work to do."

When asked whether she shares the belief of so many Silicon Valley founders — that failure is key to success — Eckert says she thinks entrepreneurs may celebrate failure a bit too much, calling the idea "a little tired."

Still, she does see the benefits of failing every now and then.

"Success is execution," Eckert says. "I think that in the sense of, does failure set you up for future success? Yeah, if you're self-aware [and] learning, for sure. You've got to step on the landmines to know next time if you should step left or right."

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