The firm signed a deal Tuesday with Quebec's EndoCeutics to develop the treatment, provisionally named Vaginorm, which will boost the steroid DHEA in women's bodies.
DHEA levels naturally drop as people age. For women, that can mean vaginal tissues change and become drier, which can lead to discomfort or even pain during sex.
The deal covers the Phase III clinical development, and the marketing, of the new drug.
With the baby boomer generation nearing retirement age, pharmaceutical companies are keen to find a treatment for sexual dysfunction in older women to match the success of Viagra and other drugs for men.
EndoCeutics said it hoped to improve the quality of life of some 360 million women worldwide aged 50 or older who it said have vaginal atrophy or dryness.