Damiana is a mood-elevating aromatic herb, helps calm anxiety and induces a relaxed state of mind, considered especially useful when anxiety and depression are discouraging sexual arousal.

Damiana ‘boosts circulation to the genital area and increases sensitivity to the nerve endings. This brings about an increase in sexual desire, is said to enhance sexual pleasure and stimulate the sexual performance. It is thought to work by gently irritating the urogenital tract to produce a stimulating effect. Those who have difficulty in achieving an erection and who have a loss of sex drive linked to a decrease in sensitivity are thought to benefit the most’.  
Ref: http://naturalhealthhealing.blogspot.com.au/2007/07/spice-up-your-sex-life-with-natural.html 

Aging causes an increase in aromatase levels, which increases estrogen and reduces testosterone.  A deficiency of testosterone causes “osteopenia, extreme fatigue, depression, insomnia, loss of aggressiveness and erectile dysfunction.”  These symptoms can be relieved by aromatase inhibitors.

An extract of Damiana showed anti-aromatase activity, especially by the damiana components, pinocembrin and acacetin. (Acacetin is structurally related to chrysin, which is an aromatase inhibitor.)  An extract showed weak estrogenic activity, especially by components apigenin 7-glucoside, Z-echinacin and pinocembrin.
… Damiana extract can produce weak estrogen activity in the body, but, may increase testosterone levels by blocking the aromatase enzyme, which is beneficial during aging. 

Ref: http://www.rainbow.coop/library/anti-aromatase-activity-of-damiana/