- Announced Today the Resubmission to the FDA of the NDA for YOSPRALA-
- Expects 2016 Net Revenues to be in a Range of $48 Million to $58 Million-
MILTON, Ontario, March 15, 2016 /PRNewswire/ -- Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) (TSX: ARZ) ("Aralez" or the "Company"), today announced results for the fourth quarter and full-year ended December 31, 2015. The Company also highlighted important corporate, commercial, and regulatory updates. All figures are in U.S. dollars.
Corporate Updates:
- On February 5, 2016, POZEN Inc. ("POZEN") and Tribute Pharmaceuticals Canada Inc. ("Tribute") announced the completion of their merger transaction, with the combined business now operating as Aralez.
- During the fourth quarter of 2015, the Company continued its transformation into a fully operational commercial organization with marketing, sales, trade, managed markets, training and other core functions in place. The Company also completed qualitative and quantitative market research validating its positioning of YOSPRALA as a potential "gold standard" CV aspirin therapy.
- On March 14, 2016, the Company resubmitted the New Drug Application ("NDA") to the U.S. Food and Drug Administration ("FDA") for its investigational candidate, YOSPRALA, for the secondary prevention of cardiovascular disease in patients at risk for aspirin-induced gastric ulcers. In accordance with regulations, the FDA is expected to notify Aralez within 30 days of receipt of the NDA whether or not the submission will be accepted, and if accepted, what the new Prescription Drug User Fee Act ("PDUFA") date will be.
- The Company believes it is well prepared for the April 2016 launch of Fibricor® with a new 25 person sales force whose objectives include developing a "relationship springboard" ahead of and supporting the anticipated launch of YOSPRALA, pending FDA approval.
Financial Results
The Company has detailed the financial results of POZEN for the fourth quarter and for the year ended December 31, 2015 in this release. Aralez, the successor company to POZEN for U.S. securities law purposes, will file an 8-K later today that provides the 2015 results of Tribute and provides pro forma financial statements of Aralez on a consolidated basis as of and for the year ended December 31, 2015. The Company will discuss the results of POZEN, Tribute, and the pro forma financial statements during its conference call this morning.
POZEN - Fourth Quarter 2015 Financial Results
Total revenues for the three months ended December 31, 2015 were $6.0 million compared to $9.9 million for the three months ended December 31, 2014, which included $4.3 million of amortization of upfront licensing fees. VIMOVO® royalties for the three months ended December 31, 2015 were $6.0 million, which was an increase of 6% compared to $5.6 million for the three months ended December 31, 2014.
Total operating expenses were $20.1 million for the three months ended December 31, 2015 compared to $3.1 million for the three months ended December 31, 2014. The variance is primarily driven by $6.9 million of higher pre-commercialization costs incurred in anticipation of a planned launch of YOSPRALA, pending FDA approval, in the fourth quarter of 2016, $2.5 million of higher research and development (R&D) costs incurred related to YOSPRALA, $4.2 million of new staff costs as the Company builds out the Aralez infrastructure and $3.1 million of merger-related costs.
The net loss for the three months ended December 31, 2015 was $13.3 million or $0.40 loss per share on a diluted basis compared to net income of $7.0 million or $0.21 income per share on a diluted basis for the three months ended December 31, 2014.
Balance Sheet
As of December 31, 2015, POZEN had cash and cash equivalents of $24.8 million. Subsequent to December 31, 2015 and in connection with the completion of the merger between POZEN and Tribute, the Company completed a transaction that provided, among other things, $75 million from the issuance of equity, $75 million from the issuance of convertible debt and access to $200 million of committed capital eligible for acquisitions.
POZEN Full-Year 2015 Financial Results
Total revenues for the year ended December 31, 2015 were $21.4 million compared to $32.4 million for the year ended December 31, 2014, which included $11.3 million of amortization of upfront license fees. VIMOVO royalties for the year ended December 31, 2015 were $21.4 million compared to $21.1 million for the year ended December 31, 2014.
Total operating expenses for the year ended December 31, 2015 were $58.9 million compared to $15.8 million for the year ended December 31, 2014. The increase in operating expenses in 2015 was primarily due to discrete costs of $20.7 million, including transaction and severance-related costs, YOSPRALA-related pre-commercialization costs of $10.4 million, $2.8 million of increased R&D costs related to YOSPRALA and $9.1 million of new staff costs, including $4.1 million of non-cash stock-based compensation, as POZEN began to build out the Aralez infrastructure.
Other income was $3.2 million lower for the year ended December 31, 2015 compared to the year ended December 31, 2014 primarily due to the non-recurrence of the 2014 receipt and valuation of warrants for Pernix stock, which totaled $2.6 million.
Net loss for the year ended December 31, 2015 was $37.8 million or $1.16 loss per share on a diluted basis compared to net income for the year ended December 31, 2014 of $19.7 million, or $0.60 income per share on a diluted basis.
"I am very pleased that we were able to complete our merger and launch our new company Aralez Pharmaceuticals," said Adrian Adams, Chief Executive Officer of Aralez. "We have transformed the company into a commercial organization with a new strategic direction, lean operating model and broadened product portfolio in our therapeutic anchors, cardiovascular and pain management. The advancement of the NDA resubmission for YOSPRALA marks an exciting milestone and we have made significant progress on marketing preparations, pending potential FDA approval. As we look into 2016, the business combination provides financial flexibility with an efficient platform for growth as we continue to actively pursue business development opportunities throughout the year."
2016 Financial Guidance
Aralez's estimates are based on projected results of the combined company for the year ending December 31, 2016 and reflect management's current beliefs about, among other things, prescription trends, pricing levels, inventory levels, and the anticipated timing of future product launches and events. The Company's 2016 guidance on non-GAAP selling, general and administrative (SG&A) expenses and non-GAAP R&D expenses includes, among other things, YOSPRALA launch costs, including the hiring of a total of approximately 110 sales professionals (inclusive of the 25 sales professionals hired to market Fibricor), costs incurred in connection with the pending FDA approval of YOSPRALA, and the costs to build the necessary infrastructure in the U.S. and Ireland. It excludes share-based compensation expense and discrete costs, including merger and acquisition-related expenses. The Company's 2016 guidance on net revenues includes revenues from Tribute from February 6, 2016 through December 31, 2016 only. See "Cautionary Note Regarding Forward-Looking Statements" below.
For the year ending December 31, 2016, assuming foreign currency exchange rates remain at or near current levels, the Company currently expects:
- 2016 net revenues to be in the range of $48 million to $58 million;
- 2016 non-GAAP SG&A expenses to be in a range of $85 million to $100 million; and
- 2016 non-GAAP R&D expenses to be in a range of $8 million to $12 million.
Fourth Quarter and Full Year Results Webcast
Aralez will host a webcast this morning, March 15, 2016 at 8:30 a.m. ET to present fourth quarter and full-year 2015 results and management's 2016 financial guidance. The webcast can be accessed live and will be available for replay at www.aralez.com.
Conference Call Details
Date: Tuesday, March 15, 2016
Time: 8:30 a.m. ET
Dial-in (U.S.): 877-407-8037
Dial-in (International): 201-689-8037
About Aralez Pharmaceuticals Inc.
Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) (TSX: ARZ) is a global specialty pharmaceutical company focused on delivering meaningful products to improve patients' lives while focusing on creating shareholder value by acquiring, developing and commercializing products primarily in cardiovascular, pain and other specialty areas. Aralez's Global Headquarters is in Ontario, Canada, the U.S. Headquarters is planned to be in Princeton, NJ and the Irish Headquarters is in Dublin, Ireland. More information about Aralez can be found at www.aralez.com.
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures, including 2016 guidance on non-GAAP SG&A expenses and non-GAAP R&D expenses. These non-GAAP financial measures exclude certain amounts, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with GAAP financial statements, because it provides greater transparency regarding the Company's operating performance by excluding (i) non-cash expenses that are substantially dependent on changes in the market price of our common stock and (ii) discrete items, such as merger and acquisition-related costs, including transaction fees and severance, that may not be consistently recurring. Management uses these measures, among other factors, to assess and analyze operational results and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the Company's operating results as reported under GAAP, not as a substitute for GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. A reconciliation between non-GAAP financial measures and the most comparable GAAP financial measures are included in the tables accompanying this press release.
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 statements about the expected benefits of the merger transaction between Tribute and POZEN, including growth potential and financial flexibility, the anticipated April 2016 launch of Fibricor, the anticipated launch of YOSPRALA and pending FDA approval, including timing thereof, transforming Aralez into a global specialty pharmaceutical company, 2016 financial guidance, our ability to successfully identify, execute and consummate business or product acquisitions, prospective products or product approvals, the outlook for the Company's future business and financial performance, our strategies, plans, objectives, goals, prospects, future performance or results of current and anticipated products, 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 assumptions could prove to be incorrect.
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