|View printer-friendly version|
Aralez Announces New Strategic Direction
-Focus on Canadian Operations, supported by Toprol-XL® Franchise Revenues and Vimovo® Royalties-
-Discontinuation of U.S. Commercial Operations, with Significant Reductions in Operating Expenses-
-Actively Exploring Strategic Alternatives for Business-
Despite a successful launch of Zontivity® in the U.S., the Company has concluded that the momentum from Zontivity alone is insufficient to sustain the U.S. commercial infrastructure. Additionally, the disappointing launch and subsequent discontinuation of Yosprala® as well as capital constraints impeding our ability to execute strategic business development have also contributed to our inability to fully leverage the cost of our U.S. sales force. Consequently, decisive actions are being taken to wind down our U.S. commercial business immediately and ultimately close the U.S. operations.
Aralez Canada has demonstrated solid revenue performance and continues to generate positive Adjusted EBITDA1. Going forward, Aralez Canada will focus on driving organic growth in
While these changes are intended to improve the financial profile of the Company, the Company cautions that it has very recently experienced increased generic competition with respect to the Toprol-XL Franchise, with a new generic entrant to the market, which may have a negative impact on future business. In response, the Company is evaluating market dynamics and exploring opportunities to mitigate this risk.
The Company also continues to explore and evaluate a range of strategic business opportunities to enhance liquidity, including (i) active discussions for the continued commercialization of Zontivity with a focus on divesting or out-licensing the U.S. rights, (ii) active discussions to divest the U.S. rights to Yosprala, Fibricor® and Bezalip® SR, and (iii) broader strategic and refinancing alternatives for its business. To this end,
"We have developed a comprehensive restructuring plan focused on optimizing our Canadian portfolio and significantly reducing our cost base, strengthening the organization, and improving our balance sheet and cash flow," said
Further details will be provided on the Company's webcast later this morning,
The Company expects to record a restructuring charge because of the implementation of this plan in 2018, mainly related to severance costs and contract termination costs related to the shutdown of the U.S. commercial business, with additional charges possible following decisions on divestments and closures of office locations.
About Aralez Pharmaceuticals Inc.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain statements that constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, statements regarding new strategic direction for the Company, including a focus on the Company's strong Canadian business, supported by Toprol-XL Franchise as well as Vimovo royalties; wind down of the U.S. commercial business immediately and ultimate closure of the U.S. business; solid revenue and positive Adjusted EBITDA of Aralez Canada; focus on driving organic growth in
You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, and are based on current estimates and assumptions made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that it believes are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct and, as a result, the forward-looking statements based on those estimates and assumptions could prove to be incorrect. Accordingly, actual results, level of activity, performance or achievements or future events or developments could differ materially from those expressed or implied in the forward-looking statements.
In addition, the Company's operations involve risks and uncertainties, many of which are outside of the Company's control, and any one or any combination of these risks and uncertainties could also affect whether the forward-looking statements ultimately prove to be correct and could cause the Company's actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include, without limitation, risks related to the Company's implementation of new strategic direction, including restructuring costs associated therewith and timing thereof; failure to realize the expected benefits of the Company's initiatives to reduce costs and improve profitability, including from new strategic direction; the Company's financing and liquidity; competition, including increased generic competition (including with respect to the Toprol-XL Franchise); strategic alternatives not being available on reasonable terms, or at all; the Company's inability to maintain key personnel necessary to manage the business; the Company's failure to successfully commercialize its products and product candidates; costs and delays in the development and/or approval of the Company's product candidates, including as a result of the need to conduct additional studies or due to issues with third-party API or finished product manufacturers, or the failure to obtain such approval of the Company's product candidates for all expected indications or in all targeted territories; with respect to certain products, dependence on reimbursement from third-party payors and the possibility of a failure to obtain coverage or reduction in the extent of reimbursement; the inability to maintain or enter into, and the risks resulting from the Company's dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products, including the Company's dependence on
Executive Director, Investor Relations & Corporate Communications
1 As defined in our earnings press release for the quarter ended
2 Cash operating expenses, a non-GAAP measure, includes SG&A expenses excluding stock-based compensation, depreciation and restructuring and transaction related costs.
View original content with multimedia:http://www.prnewswire.com/news-releases/aralez-announces-new-strategic-direction-300644130.html