Is There A Market For Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ)’s New Drug?


Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) announced that it has acquired the U.S. and Canadian commercialization rights to Merck & Co., Inc. (NYSEMRK)’s drug known as ZONTIVITY. The drug asset that Aralez has acquired is approved as a therapy for the reduction of thrombotic cardiovascular events.

The specific targets of the drug are patients with a history of heart attack, also known as myocardial infarction, and those with peripheral arterial disease (PAD), which is characterized by narrowing of leg arteries.

For combating thrombotic cardiovascular events, ZONTIVITY is used in combination with aspirin. The drug can also be used together with clopidogrel for myocardial infarction and PAD indications, but that is an option.

Where is the market for the drug?

Aralez Pharmaceuticals Inc (NASDAQ: ARLZ) is paying $25 million upfront for the commercialization rights to ZONTIVITY in the U.S. and Canada. On top of the upfront payment, Merck will qualify for future milestone payments if certain sales targets are met. But what is Aralez getting from the purchase?

Keep in mind that Aralez and Merck did not immediately disclose historical revenue from ZONTIVITY sales. However, details emerged later that the drug brought in $2 million in revenue in 2015 and sales in 1H2016 were about $2 million.

Without guidance on the future sales of the drug, you can get clue of the drug’s revenue potential by looking at its addressable market. Heart attack is one of the leading killers in the U.S., with about 500,000 new cases and 200,000 recurrent cases annually. The condition is used by blood clot in a coronary artery and ZONTIVITY is designed to reduce the risk of blood clot. As for PAD, the condition affects more than 8.5 million people in the U.S.

That should provide a glimpse of ZONTIVITY’s revenue potentially.

Expanding portfolio – Aralez Pharmaceuticals Inc (NASDAQ: ARLZ)

Aralez Pharmaceuticals Inc (NASDAQ: ARLZ) is steadily expanding its drug products portfolio. ZONTIVITY now joins Aralez’s other approved cardiology drug known as FIBRICOR and the two will soon be joined by YOSPRALA. The FDA is set to make the final decision on Aralez’s new drug application for YOSPRALA on Sept. 14. The regulator is widely expected to clear the drug for commercialization.

Aralez Pharmaceuticals Inc (NASDAQ:ARLZ) models YOSPRALA peak sales to be at least $200 million annually.


Leave A Reply