MISSISSAUGA, Ontario, Aug. 9, 2016 /PRNewswire/ -- Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) (TSX: ARZ) ("Aralez" or the "Company") today announced financial results for the second quarter ended June 30, 2016. The Company also highlighted certain corporate, commercial, and regulatory updates. All figures are in U.S. dollars.
Corporate Updates:
- On April 25, 2016, the Company announced Health Canada's approval of BLEXTEN (bilastine 20 mg oral tablet) for the treatment of the symptoms of Seasonal Allergic Rhinitis ("SAR") and Chronic Spontaneous Urticaria ("CSU") (such as itchiness and hives).
- On April 20, 2016, the Company reported additional details regarding the steps that have been taken to support the re-submission of the YOSPRALA (PA8140/PA32540) New Drug Application ("NDA") that was submitted to the Food and Drug Administration ("FDA") on March 14, 2016, using a new primary aspirin supplier. The FDA has recently conducted a previously planned inspection of the new aspirin supplier, which concluded with no reported '483 compliance findings. The NDA for YOSPRALA was accepted by the FDA on March 25, 2016 with a Prescription Drug User Fee Act ("PDUFA") goal date for a decision of September 14, 2016.
- On April 20, 2016, the Company also announced the promotional launch of Fibricor® (fenofibric acid), comprised of both the branded product and the Authorized Generic, in the United States with a 25 person sales force whose key objectives include developing professional relationships with cardiologists. The sales force is fully operational and has already significantly increased new prescriptions among target high prescribers using a targeted approach to growing market share, a strategy that is anticipated to also be used for YOSPRALA, pending FDA approval.
Second Quarter 2016 Financial Results
On February 5, 2016, the Company completed its acquisition of Tribute Pharmaceuticals Canada Inc. ("Tribute") (the "Acquisition"). The accompanying financial information for the three and six months ended June 30, 2016 includes the operations of Tribute from the date of the Acquisition through June 30, 2016. The financial information for the three and six months ended June 30, 2015 reflects only the results of the Company's predecessor company, POZEN Inc. ("Pozen").
Total net revenues for the three months ended June 30, 2016 were $12.6 million compared to $5.2 million for the three months ended June 30, 2015. Net product revenues for the three months ended June 30, 2016 were $7.4 million, consisting entirely of revenues from products acquired through the Acquisition. VIMOVO® royalties were $5.2 million for the three months ended June 30, 2016, which is the same as compared to the prior year period. Royalty revenues for the three months ended June 30, 2016 include an increase in the royalty rate received on net sales outside of the U.S. from 6% to 10% commencing in 2016, offset by a decrease in U.S. net sales primarily due to lower net pricing recorded by our commercialization partner, Horizon Pharma USA, Inc.
GAAP selling, general and administrative ("SG&A") expenses were $22.7 million for the three months ended June 30, 2016 compared to $18.2 million for the three months ended June 30, 2015. The increase in SG&A expenses is primarily driven by increased commercialization costs incurred in the U.S., predominantly for the planned launch of YOSPRALA in the fourth quarter of 2016, pending FDA approval, and costs to support the Aralez global corporate structure. The increase in expenses were partially offset by a decrease in transaction fees and severance and retention expenses compared to the three months ended June 30, 2015. GAAP research and development ("R&D") expenses for the three months ended June 30, 2016 were $1.5 million compared to $2.3 million for the three months ended June 30, 2015. The decrease in R&D expenses for the three months ended June 30, 2016 compared to June 30, 2015 is primarily due to development costs incurred during 2015 for YOSPRALA.
Non-GAAP SG&A expenses, which represent our ongoing cash-based operating expenses and exclude transaction fees, severance and retention, and share-based compensation expense, were $19.5 million for the three months ended June 30, 2016 compared to $4.6 million for the three months ended June 30, 2015. The increase in non-GAAP SG&A expenses is primarily driven by commercialization costs incurred principally related to YOSPRALA and expenses incurred to support the Aralez global corporate structure. Non-GAAP R&D expenses, which exclude severance and retention and share-based compensation expense, were $1.1 million for the three months ended June 30, 2016 compared to $2.2 million for the three months ended June 30, 2015.
The GAAP net loss for the three months ended June 30, 2016 was $17.5 million, or $0.27 loss per share on a diluted basis, compared to a net loss of $16.3 million, or $0.50 loss per share on a diluted basis, for the three months ended June 30, 2015.
Balance Sheet
As of June 30, 2016, the Company had cash and cash equivalents of approximately $93 million and approximately 65 million of its common shares were issued and outstanding. The Company also has access to $200 million of committed debt capital eligible for acquisitions pursuant to a financing that was completed in connection with the Acquisition.
"We are delighted with the early productivity of our 25 person sales force currently promoting Fibricor in the United States, further reinforcing our belief in a focused and targeted commercialization strategy," said Adrian Adams, Chief Executive Officer of Aralez. "We look forward to the YOSPRALA PDUFA date of September 14, 2016, and pending FDA approval, plan to successfully launch the product in the fourth quarter of this year with a similar highly focused and targeted strategy. We remain confident in the existing and evolving Aralez business and are also actively evaluating business development opportunities with the goal of creating value for our shareholders."
Second Quarter Results Webcast
Aralez will host a webcast this morning, August 9, 2016 at 11:00 a.m. ET to present second quarter 2016 results. The webcast can be accessed live and will be available for replay at www.aralez.com.
Conference Call Details
Date: Tuesday, August 9, 2016
Time: 11:00 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 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, 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 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 shares, and (ii) discrete items, such as merger and acquisition-related costs, including transaction fees and severance and retention expenses, 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. Reconciliations 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 the projected PDUFA goal date for a decision in respect of the approval by the FDA of YOSPRALA, the anticipated successful launch of YOSPRALA in the fourth quarter of 2016, pending FDA approval, including timing thereof, the expected benefits of the promotional launch of Fibricor, the expected benefits of our commercialization strategies for Fibricor and YOSPRALA, if and when approved, our ability to successfully identify, execute and consummate business or product opportunities, acquisitions, prospective products or to obtain 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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