-32% Reduction in the U.S. Sales Force-
-Strategic Realignment of Resources with an Emphasis on the Zontivity® Launch-
-Support Yosprala® with Direct Selling Efforts Only-
-Company Commences Spend Reductions Across Business-
MISSISSAUGA, Ontario, April 5, 2017 /CNW/ -- Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) (TSX: ARZ) (Aralez or the Company) today announced that it has begun implementing a program of cost savings initiatives with the immediate aim of providing additional financial flexibility while maximizing the value of its assets. The plan includes a 32% reduction in the U.S. sales force and realignment of certain financial resources to support a successful phased launch of Zontivity® that is expected to begin in mid-April, together with a significant decrease in marketing spend on Yosprala®. The Company has also commenced other initiatives that are expected to reduce spending across the business, some of which were already assumed in the Company's previously issued financial guidance, and is in the process of finalizing its overall cost savings plan. The Company intends to communicate details of this plan in its first quarter 2017 earnings release to be issued in early May 2017.
"We are committed to proactively addressing the current challenges of our business, while maximizing the potential value of our commercial portfolio, with a growing emphasis on Zontivity," said Adrian Adams, Chief Executive Officer of Aralez. "The reduction in our sales force is a necessary, but difficult measure and we are grateful for the contributions of the employees who will be leaving Aralez. We plan to reallocate a portion of our financial resources to make measured investments into Zontivity, which we believe is an increasingly attractive asset. By decreasing our operating costs and continuing to carefully manage our cash, I am confident that we will better position Aralez for long-term value creation for our shareholders."
Corporate Sales Force Reduction
The Company is in the process of completing a 32% reduction in the U.S. sales force. The reduction in sales force is intended to improve the Company's cost structure and preserve financial flexibility. The Company also continues to assess business development opportunities that could provide accretion and an enhanced platform for creating value.
The reduction in sales force is expected to reduce the current annual run rate of operating expenses by approximately $7.5 million. As a result of this sales force reduction, the Company anticipates it will incur cash severance costs of approximately $0.6 million in the second quarter of 2017. The sales force restructuring is expected to yield savings for 2017 and beyond.
About Aralez Pharmaceuticals Inc.
Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ and TSX: ARZ) is a global specialty pharmaceutical company focused on delivering meaningful products to improve patients' lives while creating shareholder value by acquiring, developing and commercializing products primarily in cardiovascular, pain and other specialty areas. Aralez's Global Headquarters is in Mississauga, Ontario, Canada, its U.S. Headquarters is in Princeton, New Jersey and the Ireland Headquarters is in Dublin, Ireland. More information about Aralez can be found at www.aralez.com.
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 the Company's implementation of a program of cost savings initiatives with the immediate aim of providing additional financial flexibility while maximizing the value of its assets, other initiatives that are expected to reduce spending across the business, some of which were already assumed in the Company's previously issued financial guidance, the development and timing of announcement of an overall cost savings plan, the Company's commitment to proactively addressing the current challenges to its business, the growing emphasis on Zontivity, Zontivity as an increasingly attractive asset, the successful launch of Zontivity, including the timing thereof, the planned reallocation of financial resources, including the intention to make measured investments into Zontivity and a significant decrease in marketing spend on Yosprala, support for Yosprala with direct selling efforts only, decreasing the Company's operating costs while carefully managing cash to better position the Company for long-term value creation for shareholders, the reduction in sales force and related improvements of the Company's cost structure and related financial flexibility, the identification of business development opportunities that could provide accretion and an enhanced platform for creating value, the expected reduction in the current annual run rate by approximately $7.5 million as a result of the sales force reduction, cash severance costs of approximately $0.6 million anticipated to be incurred in the second quarter of 2017 in relation to the sales force reduction, and that the sales force restructuring is expected to yield savings for 2017 and beyond, and other statements that are not historical facts, and such statements are typically identified by use of terms such as "may," "will," "would," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "likely," "potential," "continue" or the negative or similar words, variations of these words or other comparable words or phrases, although some forward-looking statements are expressed differently.
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.
Our operations involve risks and uncertainties, many of which are outside of our 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 our 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, our inability to maintain a sales force of sufficient scale for the commercialization of our products in a timely and cost-effective manner; our failure to successfully commercialize our products and product candidates; competition, including increased generic competition; costs and delays in the development and/or approval of our product candidates (including Yosprala in the EU), 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 our product candidates for all expected indications, including as a result of changes in regulatory standards or the regulatory environment during the development period of any of our product candidates; 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 our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products, including our dependence on AstraZeneca AB and Horizon Pharma USA, Inc. for the sales and marketing of VIMOVO®, our dependence on Patheon Pharmaceuticals Inc. for the manufacture of Yosprala, our dependence on Schering-Plough (Ireland) Company for the supply of Zontivity and our dependence on AstraZeneca AB for the manufacture and supply of Toprol-XL® and its currently marketed authorized generic (AG); our dependence on maintaining and renewing contracts with customers, distributors and other counterparties (certain of which are currently under negotiation), including our inability to renew existing contracts on favorable terms, and the risks that we may not be able to maintain our existing terms with certain customers, distributors and other counterparties; our ability to protect our intellectual property and defend our patents; regulatory obligations and oversight; failure to successfully identify, execute, integrate, maintain and realize expected benefits from new acquisitions, such as the acquisitions of Tribute Pharmaceuticals Canada Inc., Zontivity and Toprol-XL and its AG; fluctuations in the value of certain foreign currencies, including the Canadian dollar, in relation to the U.S. dollar, and other world currencies; changes in laws and regulations, including tax laws and unanticipated tax liabilities and regulations regarding the pricing of pharmaceutical products; risks related to our financing; general adverse economic, market and business conditions; and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company's filings and reports with the U.S. Securities and Exchange Commission (SEC) and Canadian securities law filings, including in our Annual Report on Form 10-K for the year ended December 31, 2016, which is available on EDGAR at www.sec.gov, on SEDAR at www.sedar.com, and on the Company's website at www.aralez.com, and those described from time to time in our future reports filed with the SEC and applicable securities regulatory authorities in Canada. You should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.
Aralez Pharmaceuticals US Inc. Contact:
Nichol L. Ochsner
Executive Director, Investor Relations & Corporate Communications
SOURCE Aralez Pharmaceuticals Inc.