-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
732-754-2545
nochsner@aralez.com
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SOURCE Aralez Pharmaceuticals Inc.