Aralez Slashing 32% of U.S. Salesforce to Save Some Cash
April 5, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Aralez Pharmaceuticals , headquartered in Mississauga, Ontario, announced it has initiated a cost savings plan that will include cutting 32 percent of its U.S. salesforce.
The restructuring and layoffs are largely related to the pending phased launch of Zontivity in mid-April. It is also cutting back on its marketing expenses related to Yosprala.
“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, Aralez’s chief executive officer, in a statement. “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.”
The company completed its acquisition of the U.S. and Canadian rights to Zontivity on September 6, 2016. Zontivity is used to reduce thrombotic cardiovascular events in patients with a history of myocardial infarction (MI) or with peripheral artery disease (PAD).
On October 31, 2016, it finished buying the U.S. rights to Toprol-XL and its currently marketed Authorized Generic (AG). Toprol-XL is for the treatment of high blood pressure.
On December 19, 2016, it announced the Canadian commercial launch of Blexten to treat symptoms of Seasonal Allergic Rhinitis (SAR) and Chronic Spontaneous Urticaria (CSU).
On January 9, 2017, it submitted a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for its PA10040, which is currently marketed in the U.S. as Yosprala for the secondary prevention of cardiovascular disease in people at risk for aspirin-induced gastric ulcers.
Aralez indicates it expects to cut the annual run rate of its operating expenses by about $7.5 million as the result of the layoffs. It will have short-term cash severance costs of approximately $0.6 million in the second quarter of 2017.
On March 20, the company also announced that Adams had picked up an additional 500,000 shares of the company’s common stock in open-market purchases. They were bought at an average price of $2.46 per share for an aggregate price of about $1,230,000. As a result of the acquisition, Adams now owns 3,569,230 shares, including 1,541,562 restricted stock units subject to vesting. Of them, 1,500,000 were purchased by Adams on the open market. The rest were granted under the company’s equity incentive plan. He holds 105,251 options to acquire shares of company common stock.
“The purchase of these shares is a reflection of my confidence in the long-term value of Aralez and also represents my continued belief in the Company’s evolving business model, products and growth prospects,” Adams said in a statement. “Over the past week, I have listened closely to the concerns voiced by a number of our significant shareholders. Aralez is committed to swiftly addressing these concerns, including the development of a plan to improve our cost structure and balance sheet, maximizing and preserving our cash, and opportunistically evaluating M&A or other opportunities that provide accretion and an enhanced platform for creating value. We have an unwavering commitment to our shareholders and remain focused on building long-term value and intend to communicate our planned next steps and actions within the next few weeks.”
Aralez is currently trading for $2.12 (US).