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Aralez Pharmaceuticals Announces Its First Drug Acquisition

Summary

On September 7, 2016 ARLZ announced that it had acquired both US and Canadian Rights to ZONTIVITY from Merck.

ZONTIVITY should fit in well strategically with Aralez's other cardiology products Fibricor and Yosprala (when approved by the FDA).

Highly likely that Yosprala will be approved by the FDA by its September 14, 2016 PDUFA date. If approved, Yosprala's commercial launch with 110 sales reps expected in Q4 2016.

ARLZ data by YCharts

Summary (currency references are in US dollars)

Shares outstanding: 64 million

Trading Symbols: (NASDAQ: ARLZ) (TSX: ARZ.TO)

Share price at close on September 7, 2016: $5.64

52 Week Share price range: $3.10 to $6.45

Market Cap: $349.65 million

Cash position (June 30, 2016): $93 million

Unused line of credit: $200 million

Debt (convertible debenture, 2.5% interest): $75 million

Effective tax rate approximately: 17%

Since writing my article on SA on August 18, 2016, Aralez Pharmaceuticals Inc.: Upcoming Catalysts Create Tremendous Upside, Aralez announced (yesterday) that it acquired the U.S. and Canadian rights to ZONTIVITY TM from Merck. This is the first acquisition made by Aralez since the merger between Tribute Pharmaceuticals and Pozen, now called Aralez Pharmaceuticals Inc., which began trading as a separate entity on February 5, 2016.

This first acquisition, albeit relatively small, appears to be an excellent strategic fit for Aralez's cardiology division, and particularly a good fit with Yosprala (once approved by the FDA, hopefully next week) and FIBRICOR TM. ZONTIVITY TM is a relatively new drug, having obtained FDA approved in 2014, and is prescribed in combination with daily aspirin (which happens to fit almost perfectly with Yosprala).

Yosprala itself is a combination of aspirin/omeprazole in a proprietary delayed release tablet form. Yosprala is taken just once a day and has a coordinated delivery mechanism composed of an enteric-coated aspirin (81 mg or 325 mg core) surrounded by immediate-release omeprazole (40 mg) for the secondary prevention of heart attack and stroke for patients at risk for aspirin-induced ulcer and other GI problems. Yosprala is prescribed for patients for the prevention of cardiovascular events who take aspirin but experience aspirin-induced ulcers and other GI problems. About 6.3 million patients in any one year take aspirin plus a proton pump inhibitor ("PPI") to address gastrointestinal ("GI") ulcers and other GI complications from taking aspirin.

From the description of ZONTIVITY TM in...


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