Aralez Pharmaceuticals Inc. (NASDAQ:ARLZ) announced that its subsidiary, Aralez Pharmaceuticals Trading DAC (Aralez Ireland), has completed its acquisition of the U.S. rights to Toprol-XL® (metoprolol succinate) and its Authorized Generic (AG) from AstraZeneca. In connection with the transaction, the parties entered into a Supply Agreement pursuant to which AstraZeneca will continue to manufacture and supply Toprol-XL and the AG to Aralez Ireland for at least ten years. AstraZeneca will also continue to distribute the product on behalf of Aralez Ireland until the product is transferred, which could be up to nine months following the closing under a transitional services agreement.
In accordance with the terms of the asset purchase agreement, the upfront amount of $175 million was paid at closing. The transaction was financed through a previously committed senior secured debt facility with Deerfield Management. In addition to the $175 million upfront payment to AstraZeneca, upon the closing of the transaction, Aralez borrowed funds under this credit facility to replenish $25 million that was previously paid from cash on hand in connection with the recently completed ZONTIVITY®acquisition. In addition, Deerfield has agreed to provide Aralez access to up to an additional $250 million in capital to fund future mutually agreeable acquisitions.
“We are pleased to announce the completion of the acquisition of the U.S. rights to Toprol-XL and its AG, which bolsters our position in the treatment of cardiovascular disease and significantly enhances our financial wherewithal with a more diversified revenue stream,” said Adrian Adams, Chief Executive Officer of Aralez. “The strong cash flow from the transaction is expected to accelerate our profitability to 2017 on an adjusted basis, while also offsetting launch costs for both YOSPRALA™ and ZONTIVITY. As a result of our strengthened financial profile following this transaction, together with the recent launch of YOSPRALA and planned relaunch of ZONTIVITY in 2017, we believe that we are nicely positioned drive long-term organic growth.” (Original Source)
Shares of Aralez are currently trading at $4.06, down $0.04 or -0.97%. ARLZ has a 1-year high of $6.80 and a 1-year low of $3.10. The stock’s 50-day moving average is $5.18 and its 200-day moving average is $4.27.
On the ratings front, Aralez has been the subject of a number of recent research reports. In a report issued on October 11, Chardan analyst Keay Nakae reiterated a Buy rating on ARLZ, with a price target of $10, which implies an upside of 144% from current levels. Separately, on October 10, Guggenheim’s Louise Chen maintained a Buy rating on the stock and has a price target of $12.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Keay Nakae and Louise Chen have a yearly average loss of 30.8% and 15.9% respectively. Nakae has a success rate of 23% and is ranked #4010 out of 4178 analysts, while Chen has a success rate of 27% and is ranked #4006.
Aralez Pharmaceuticals, Inc. operates as a pharmaceutical company. The company focuses on developing cardiovascular and pain therapies.