Aralez Pharmaceuticals announced it has begun using cost saving programs to provide additional financial flexibility.
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.