Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) (TSX: ARZ) ("Aralez" or the "Company") today announced financial results for the fourth quarter and year ended December 31, 2017. The Company also highlighted certain recent corporate and commercial updates and provided 2018 full-year financial guidance. All figures are in U.S. dollars.
"We are pleased to close out 2017 with a strong financial performance and our second consecutive quarter of positive Adjusted EBITDA," said Adrian Adams, Chief Executive Officer of Aralez. "We believe 2018 has the potential to be an important year for Aralez as we transition into a company that generates significant Adjusted EBITDA. As we continue to execute on our business objectives, we will also evaluate strategic business opportunities throughout the year, including to potentially refinance our debt, to drive value for Aralez and our shareholders."
Recent Corporate & Commercial Updates:
During the course of 2017, the Company began implementing the previously announced financial improvements designed to streamline the U.S. business, deliver profitability and support growth, as well as extend the cash runway at least through the next twelve months. These improvements include a reduction in SG&A announced in April 2017 and as well as incremental expense reductions announced in November 2017. These expense reductions will significantly reduce the Company's overall costs and are expected to produce significant EBITDA on an adjusted basis.
Zontivity® New Prescriptions (NRx's), Total Prescriptions (TRx's) and Retail Prescription Equivalent's (RPE's) (pill count divided by 30, which is a more accurate reflection of use), grew 22%, 32% and 39%, respectively from the third quarter of 2017 to the fourth quarter of 2017. For December 2017, weekly NRx's, TRx's and RPE's grew 219%, 146% and 178%, respectively when compared to May 2017, the month prior to the Aralez full relaunch of Zontivity.
In the first year of promotion, BLEXTEN™ achieved approximately a 4.4% market share during 2017. The Company estimates that the 2017 prescription antihistamine market in Canada is valued at approximately $37 million.
Aralez announced today it intends to discontinue Yosprala in the U.S. The Company would like to thank both Yosprala patients and healthcare practitioners for their loyalty, however, with rapidly changing market dynamics and increased pricing pressures, it proved difficult to justify continuing with the product despite significant commercial and financial effort in 2017. This decision has been factored into the Company's financial guidance for 2018.
Financial Summary
Aralez's financial results for the three months and year ended December 31, 2016 include the operations of Tribute Pharmaceuticals Canada Inc. ("Tribute"), now known as Aralez Pharmaceuticals Canada Inc., from February 5, 2016, the closing date of the Pozen Inc. and Tribute merger transaction (the "Tribute Merger"), the results of Zontivity from September 6, 2016, and the results of the Toprol-XL Franchise from October 31, 2016, the dates of their respective acquisitions.
Aralez's financial results for the three months and year ended December 31, 2017 include the results of Aralez Pharmaceuticals Canada Inc. (formerly known as Tribute), Zontivity and the Toprol-XL Franchise for each full period. Revenues for Zontivity were previously recorded in other revenues net of related cost of product revenues and fees paid during the transition service period, which expired on March 31, 2017. Effective March 31, 2017, revenues for Zontivity are recorded in net product revenues. Revenues for the Toprol-XL Franchise were recorded in other revenues net of related cost of product revenues and fees paid during the transition service period, which expired on December 31, 2017. However, certain revenues from sales of the Toprol-XL AG made under the Distribution and Supply Agreement with Lannett Company, Inc. (the "Lannett Toprol-XL AG Agreement") were recorded on a gross basis in net product revenues upon contract execution in November 2017. Beginning in 2018, all revenues for the Toprol-XL Franchise will be recorded in net product revenues.
Fourth Quarter 2017 Financial Results
Total revenues fo...
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