jefferieshealthcare conference “corporate overview & strategic … · 2017-06-15 · 2...
TRANSCRIPT
“CorporateOverview&StrategicVision”Jefferies HealthcareConference
June7, 2017
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DisclaimerThispresentationincludescertainstatementsthatconstitute“forward-lookingstatements”withinthemeaningofapplicablesecuritieslaws.Forward-lookingstatementsinclude,butarenotlimitedto,statementsregardinggrowingrevenuebaseandgeographicfootprintacrossNorthAmericaandEurope;buildingonanchorpositions incardiovasculardiseaseandpainmanagementandopportunisticallyexpandingintootherspecialtytherapeuticareas;accessinghighpotentialgrowthopportunitiesthroughaggressivebutdisciplinedBD&LandstrategicM&A;royaltiesandpatentprotectionwithrespecttoVimovo®;theZontivity®opportunity,includingitspatentprotection,thePADandMItargetpopulations,;thesuccessfulexecutionoftherelaunchofZontivity,includingthatthephasedlaunchteamhaveshownimmediateresultsafterjustfiveweeksofdata,andthatZontivityisnicelypositionedforthefullscalelaunch;statementsregardingmanagedcareprogressforZontivity;thebenefitsofYosprala®;theYospralaopportunity,includingpatentprotection;therefinedcommercialstrategyforYosprala,includingcontinuedsalesforce promotionalongsideZontivity,supportforYospralawithdirectsellingeffortsonly,leveragingourmanagedcareposition,focusonimprovingpatientaccessandgrowingthebrand,andtheboldnewcompetitivepricingstrategyforYospralaessentialfordrivinggrowthandaimedatallowingallpatientstoaccessYospralaforonly$10permonth;Yospralacoverageonformularies;Yospralaprescriptiontrends; thebenefitsoftheToprol-XL®transaction,includingthatitcontinuestogeneralsignificantrevenueandprovidescashflowanditmeetsthestatedgoalofaddingimmediaterevenueandEBITDA(onan adjustedbasis);thatthetransitionoftheToprol-XLfranchisefromAstraZenecaisprogressingwellandexpectedtobecompletedDecember31,2017;statementsregardingtheVANationalContract forToprol-XL;effectivelymanagingtheToprol-XLfranchise;Canadianportfolioperformance,includingthatthebusinesscontinuestobeaprofitablesegmentonanadjustedEBITDAbasis,portfoliogrowthdriversincludingCambia®,Soriatane®andBlexten™,andadditionalfutureorganicgrowthdriverswiththepotentiallaunchofZontivityandYospralaregulatorysubmissioninCanada;strongearly launchperformanceforBlexten inCanada;our2017guidanceonAdjustedEBITDAandnetrevenues;maximizingfinancialflexibilitywithcontinuedfocusoncostandcashmanagement;exploringbothstrategicandfinancingoptionswithacontinuedfocusontransformativeM&A;andotherstatementsthatarenothistoricalfacts,andsuchstatementsaretypicallyidentifiedbyuseoftermssuchas“may,”“will,”“would,”“should,”“could,”“expect,”“plan,”“intend,”“anticipate,”“believe,”“estimate,”“predict,”“likely,”“potential,”“continue”orthenegativeorsimilarwords,variationsofthesewordsorothercomparablewordsorphrases,althoughsomeforward-lookingstatementsareexpresseddifferently.Youshouldbeawarethattheforward-lookingstatementsincludedhereinrepresentmanagement’scurrentjudgmentandexpectations,andarebasedoncurrentestimatesandassumptionsmadebymanagementinlightofitsexperienceandperceptionofhistoricaltrends,currentconditionsandexpectedfuturedevelopments,aswellasotherfactorsthatitbelievesareappropriateandreasonableunderthecircumstances,buttherecanbenoassurancethatsuchestimatesandassumptionswillprovetobecorrectand,asa result,theforward-lookingstatementsbasedonthoseestimatesandassumptionscouldprovetobeincorrect.Accordingly,actualresults,levelofactivity,performanceorachievementsorfutureeventsordevelopmentscoulddiffermateriallyfromthoseexpressedorimpliedintheforward-lookingstatements.Materialfactors,risksorassumptionsthatwereappliedortakenintoaccountinprovidingfinancialguidancefortheyearendingDecember31,2017,includingwithrespecttothestatementsthatAralez’s netrevenuesareexpectedtobeintherangeof$80millionto$100millionandAdjustedEBITDAisexpectedtobeintherangeof$(5)millionto$5million,include,butarenotlimitedto,thematerialfactorsandassumptionsoutlinedinthispresentationandunderthecaption“CautionaryNoteRegardingForward-LookingStatements”inourpressreleasedatedMay9,2017announcingresultsforthefirstquarterendedMarch31,2017.Readersarecautionedthatouractualfutureoperatingresultsandeconomicperformancearesubjecttoanumberofrisksanduncertainties,including,amongotherthings,thosedescribedbelow,andcoulddiffermateriallyfromwhatiscurrentlyexpected assetoutinthispresentation.Inaddition,ouroperationsand2017financialguidanceinvolverisksanduncertainties,manyofwhichareoutsideofourcontrol,andanyoneoranycombinationoftheserisksanduncertaintiescouldalsoaffectwhethertheforward-lookingstatementsultimatelyprovetobecorrectandcouldcauseouractualresults,levelofactivity,performanceorachievementsorfutureeventsordevelopmentstodiffermateriallyfromthoseexpressedorimpliedbytheforward-lookingstatements.Theserisksanduncertaintiesinclude,withoutlimitation,ourinabilitytomaintainasalesforceofsufficientscaleforthecommercializationofourproductsinatimelyandcost-effectivemanner;ourfailuretosuccessfullycommercializeourproductsandproductcandidates;competition,includingincreasedgenericcompetition;costsanddelaysinthedevelopmentand/orapprovalofourproductcandidates,includingasaresultoftheneed to conductadditionalstudiesorduetoissueswiththird-partyAPIorfinishedproductmanufacturers,orthefailuretoobtainsuchapprovalofourproductcandidatesforallexpectedindications,includingasaresultofchangesinregulatorystandardsortheregulatoryenvironmentduringthedevelopmentperiodofanyofourproductcandidates;withrespecttocertainproducts,dependenceonreimbursement fromthird-partypayors andthepossibilityofafailuretoobtaincoverageorreductionintheextentofreimbursement;theinabilitytomaintainorenterinto,andtherisksresultingfromourdependenceupon,collaborationorcontractualarrangementsnecessaryforthedevelopment,manufacture,commercialization,marketing,salesanddistributionofanyproducts,includingourdependenceonAstraZenecaABandHorizonPharmaUSA,Inc.forthesalesandmarketingofVimovo,ourdependenceonPatheon PharmaceuticalsInc.forthemanufactureofYosprala,ourdependenceonSchering-Plough(Ireland)CompanyforthesupplyofZontivityandourdependenceonAstraZenecaABforthemanufactureandsupplyofToprol-XLanditscurrentlymarketedauthorizedgeneric(AG);ourdependenceon maintainingandrenewingcontractswithcustomers,distributorsandothercounterparties(certainofwhichmaybeundernegotiationfromtimetotime),includingourinabilitytorenewexisting contractsonfavorableterms,andtherisksthatwemaynotbeabletomaintainourexistingtermswithcertaincustomers,distributorsandothercounterparties;ourabilitytoprotectourintellectualpropertyanddefendourpatents;regulatoryobligationsandoversight;failuretosuccessfullyidentify,execute,integrate,maintainandrealizeexpectedbenefitsfromnewacquisitions,suchastheacquisitionsofTributePharmaceuticalsCanadaInc.,ZontivityandToprol-XLanditsAG;failuretorealizetheexpectedbenefitsofourinitiativestoreducecostsandimproveprofitability;fluctuationsinthevalue ofcertainforeigncurrencies,includingtheCanadiandollar,inrelationtotheU.S.dollar,andotherworldcurrencies;changesinlawsandregulations,includingtaxlawsandunanticipatedtaxliabilitiesand regulationsregardingthepricingofpharmaceuticalproducts;risksrelatedtoourfinancingandliquidity;generaladverseeconomic,marketandbusinessconditions;andthoserisksdetailedfromtime-to-timeunderthecaption“RiskFactors”andelsewhereinourSecuritiesandExchangeCommission(SEC)filingsandreportsandCanadiansecuritieslawfilings,includinginourAnnualReportonForm10-KfortheyearendedDecember31,2016andourQuarterlyReportonForm10-QforthequarterendedMarch31,2017,whichareavailableonEDGARatwww.sec.gov,onSEDARatwww.sedar.com,andonourwebsiteatwww.aralez.com,andthosedescribedfromtimetotimeinourfuturereportsfiledwiththeSECandapplicablesecuritiesregulatoryauthoritiesinCanada.Youshouldnotplaceundueimportanceonforward-lookingstatementsandshouldnotrelyuponthisinformationasofanyotherdate.Weundertakenoobligationtopubliclyupdateorreviseanyforward-lookingstatements,whetherasaresultofnewinformation,futureeventsorotherwise,unlessrequiredbylaw.ThispresentationwasprovidedonJune7,2017aspartofanoralpresentationandisqualifiedthereby.
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TheAralez InvestmentThesis
Aralez isanemergingglobalspecialtypharmaceuticalcompanydesignedto:• Maximizethevalueofabroadenedportfolio,growingrevenuebaseandgeographicfootprintacrossNorthAmericaandEurope• Buildonanchorpositionsincardiovasculardiseaseandpainmanagementandopportunisticallyexpandintootherspecialtytherapeuticareas• AccesshighpotentialgrowthopportunitiesthroughaggressivebutdisciplinedBD&LandstrategicM&A• Buildvalueorganicallyandleveragecompetitiveplatformtoacceleratetransformationandexecutegrowthstrategy• Maintainalean,nimbleandperformance-orientedoperatingmodel• Alignwithshareholderinterestswithastrongfocusoncreatingshareholdervalue
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OurJourneySoFar
CompletedthemergertoformAralezRe-launchedandgrewFibricor®useintheU.S.BuiltsalesforceuponFDAapprovalofYospralaLaunchedYosprala®inOctober2016intheU.S.Acquiredtwonewcardiovascularproducts– Zontivity®andToprol-XL®anditsAuthorizedGeneric(AG)Exceededoriginal 2016financialguidanceLaunchedBlexten™inDecember2016inCanadaSubmittedYospralaforEUapprovalinJanuary2017InitiatedZontivityphasedlaunchofZontivityinApril2017
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Aralez:OurBaseBusiness
• CanadianRevenueBase– KeycontributorsincludeCambia®,Soriatane®andBlexten™
•U.S.RevenueBase– OngoingroyaltystreamonsalesofVimovo®;potentialpatentprotectionuntillate2031
– Fibricor®promotionbeganApril2016
– Zontivity®acquiredfromMerckonSept.6,2016;Compositionofmatterpatentto2024,potentialpatenttermextensionthrough2027
– Yosprala® launchedonOct.3,2016;Patentedtolate2032withpossibletermextensionto2033
– Toprol-XL® acquiredfromAstraZenecaonOct.31,2016
Note:2015proformarevenuesincludeproformarevenuesforTributeNote:2016proformarevenuesincludeTributerevenuesforfullyear2016,includingtheperiodJanuary1sttoFebruary5th,the dateofthemerger,aswellasactualnetrevenuesforZontivity,fromSeptember6,2016,andToprol-XL,fromOctober31,2016
AllnumbersU.S.$M
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2015ProFormaRevenues
(Pozen&Tribute)
2016ProFormaRevenues
AralezProFormaRevenues
$45.1M
$56.3M
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Zontivity:NowFullyLaunched
Importantsafetyinformationavailableathttp://aralez.com/Portfolio/zontivity/
Zontivity isaprotease-activatedreceptor-1(PAR-1)antagonistindicatedforthereductionof
thromboticcardiovasculareventsinpatientswithahistoryofmyocardialinfarction(MI)orwithperipheral
arterialdisease(PAD)
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AntiplateletPrescribingInformationHighlights
ZONTIVITY Clopidogrel(Plavix®)
Ticagrelor(Brilinta®)
Prasugrel(Effient®)
Indicated Patients PADorhistory ofMIACS,recentMI,recentstrokeorestablishedPAD
ACSorhistoryofMI ACSpatientsmanagedwithPCI
Dose 1tabletoncedaily 1tabletoncedaily 1tablettwicedaily 1tabletoncedaily
Mechanism ofAction PAR-1 inhibitor P2Y12platelet
inhibitorP2Y12plateletinhibitor
P2Y12plateletinhibitor
Other AntiplateletUse
UsewithASA and/orclopidogrel
MayusewithorwithoutASA
UsewithASA75-100mg
UsewithASA75-325mg
BoxedWarning Yes Yes Yes Yes
Contraindications
Historyofstroke,TIA, orICH;Active
pathologicalbleeding
Activepathologicalbleeding;
Hypersensitivity
History ofICH;Activepathological
bleeding;Hypersensitivity
Activepathologicalbleeding;PriorTIA
orstroke;Hypersensitivity
AdverseReactions(Highlights)
Bleeding,includinglifethreatening andfatalbleeding,isthemostcommonlyreportedAE.
Bleeding,includinglifethreatening andfatalbleeding,is
themostcommonlyreportedAE.
The mostcommonadversereactionsarebleeding12%anddyspnea14%.
Bleeding,includinglifethreatening andfatalbleeding,is
themostcommonlyreportedAE.
Informationfromprescribinginformationhighlightsonly.Thesedrugswerenottestedincomparisontooneanother.MI-myocardialinfarction;PAD-peripheralarterydisease;ACS-acutecoronarysyndrome;TIA-transientischemicattack;ICH-intracranialhemorrhagePCI-percutaneouscoronaryintervention;ASA-aspirin;AE-adverseeventImportantsafetyinformationavailableathttp://aralez.com/Portfolio/zontivity/
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PADonlyplusPAD&MI3,5,6,7
Zontivity:PADandMITargetPopulations
MIPrevalencew/oPAD(>20years)2
6.8M
Smoking(66%)and/orDiabetic(24%)Patients1,8
7.4M
1Pandeetal.,SecondaryPreventionandMortalityinPeripheralArteryDiseaseNationalHealthandNutritionExaminationStudy,1999to2004,2011.2MozaffarianD,BenjaminEJ,GoAS,etal.Heartdiseaseandstrokestatistics—2016update.3Bonacaetal.,Ticagrelorforpreventionofischemiceventsaftermyocardialinfarctioninpatientswithperipheralarterydisease,2016.4Wallentinetal,TicagrelorversusClopidogrelinPatientswithAcuteCoronarySyndromes,2009.5Comparisonofglobalestimatesofprevalenceandriskfactorsforperipheralarterydiseasein2000and2010:asystematicreviewandanalysis,2013.6USDepartmentofHealthandHumanServices,FactsaboutPeripheralArteryDisease,2006.7USPSTF:(PAD)andCVDinAdults:RiskAssessmentwithABI,2013.8HeartDiseaseandStrokeStatistics—2016UpdateImportantsafetyinformationavailableathttp://aralez.com/Portfolio/zontivity/
4.8M
Smoking(24%for20-60yrs,23%for60+yrs)and/orDiabetic(43%for20-60yrs,71%for
60+)1,8
4.2M
MarketOpportunity(LabeledPopulation)
14.2M
PersistentRisk(FocalPopulation)
9M
ZontivitywillbepositionedforPADpatientsand/orpost-MIpatientswithafocusonpersistentriskpatients
9
0
20
40
60
80
100
5WeeksPre 5WeeksPost
NRxGrowthTargetedHCPs
Zontivity:Phase1oftheLaunch
• Phase1commencedonApril24th:15repsdeployedtohighvolumetargetswhotreatpost-MIandPADpatients• ThePhasedLaunchTeamhaveshownimmediateresultsafterjust5weeks• 195HCPshavebeencalledonbytheteamofwhich86werepriorwritersofZontivity• Salesforceadded18newwritersforZontivityduringthelast5weeks• 65%ofnewwriterswerecardiologists• Ofthe75NRxinthelast5weeks,42%camefromthenewwritersandarethedriverofpostlaunchgrowth
HCPdatathruweekending5/12187TargetedHCPs
+98% Growth 5 Weeks Post
Phased Launch
10
0
20
40
60
80
100
120
140
NRX
ZontivityWeeklyNRx
Zontivity:NicelyPoisedforFullScaleLaunch
MerckStoppedPromotion
SamplingWriters
PhasedLaunch
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Zontivity:ManagedCareProgressUpdate
ManagedCareUpdate• Enhancedmanagedcarecoveragesinceacquisition• Zontivityiscoveredfor~85%ofCommercialLives*• The4largestPBMsintheU.S.arecoveringZontivity,withthemajorityofdownstreamclientsdoingsowithoutaPriorAuthorization– Lessthan15%ofcommercialliveswithaPA;expectedtodropto7-8%inthenearfuture
– MajorityofexistingPA’saretolabel• MixofTier2andTier3coveragewithcopaymitigationprogramsinplace• DiscussionsareongoingwiththefewremainingPayerstoenhanceZontivity’sformularyposition
*ExcludesMedicaidandothergovernmentprograms
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Yosprala:CommercialStrategy
U.S.MarketOpportunityYosprala:Single,OnceDailyTablet
FormulatedtoMinimizeAspirin-RelatedGIToxicityWhileDeliveringaComparableDoseofAspirinviatheProprietaryIntelli-COAT™System
MarketOpportunity• ~26.2Msecondarypreventionpatients1
– ~18.3Mor70%takeaspirin2
– ~6.3MtakeaspirinplusaPPI/H23
RefinedCommercialStrategy• ContinuesalesforcepromotionofYospralaalongsideZontivity• Leverageourimprovingmanagedcareposition• Focusonimprovingpatientaccessandgrowingthebrand• BoldnewcompetitivepricingstrategyforYospralaisessentialtodrivegrowth– Aimedatallowingallpatientstoaccess
Yospralaforonly$10permonth
1Mozaffarian D,HeartDiseaseandStrokeStatistics– 2015Update.2FangJ,UseofLow-doseAspirinasSecondaryPreventionofAtheroscleroticCVDamongUSadults(FromtheNationalHealthInterviewSurvey,2012),2015.3Tran-DuyA,ShouldPatientsPrescribedLong-termLow-DoseAspirinReceiveProtonPumpInhibitors?ASystematicReviewandMeta-analysis,2015.
Importantsafetyinformationavailableatwww.yosprala.com
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YospralaPerformance&ManagedCareUpdate
1Source:SymphonyHealth,RPE=RetailPrescriptionEquivalent
• SupportYospralawithdirectsellingeffortsonlyandleveragemanagedcareposition• Numberofrejectionsdownfromover60%to~30%
75%
39%
11%
14%
61%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
Commercial MedicareCo
veredLives
Covered Covered(PA/ST) NotCovered
ManagedMarketsInsights&Technology 2CoverageonFormularies
2CommercialSource:MMITFebruary20173 MedDSource:InternalEstimateBasedonCommittedPartDLivesas%ofTotalPartDLives
30
500
1,000
1,500
2,000
2,500
YospralaPrescriptionsRolling4WeekSum
RPE NRx TRx
NewPricingStrategy
Announced
1
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Toprol-XL:SignificantFinancialBenefits
StrategicRationale&Benefits:• Establishedbeta-blockerwithstableprescriptionbase• MeetsstatedgoalofaddingimmediaterevenueandEBITDA*
Transition&ProductPerformanceUpdate:• TransitionprogressingwellandcompletionexpectedinDecember31,2017• Aralezrecordsrevenuesnetofcostofsalesandtransitionservicesfeesduringthetransitionperiod• VAhasexerciseditsoptiontorenewtheNationalContract;extendedtoApril28,2018atreducedpricingprovidingstable,brandedVAbusinessfortheduration
ImportantSafetyInformationAvailableatToprol-XL.com
*Onanadjustedbasis
ContinuestoGenerateSignificantRevenueandProvidesCashFlow
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Aralez:CanadianPortfolioPerformance
• CanadianbusinesscontinuestobeaprofitablesegmentofourbusinessonanadjustedEBITDAbasis• PortfoliogrowthdriversincludeCambia,Soriatane,andBlexten grew~39%in1Q17vs1Q16*• Blexten launchexceedingexpectations• AdditionalpossiblefutureorganicgrowthdriverswiththepotentialZontivity launchandYospralaregulatorysubmission
AllnumbersU.S.$M
CanadianPortfolioNetRevenue
31%
$5.7M
GrowthProductsOtherProducts
*Reflectsfullquarterofnetproductrevenueson(aproformabasis)fromCanadianproductsin1Q16
69%
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Blexten:StrongEarlyLaunchPerformance
0
142
829
2,107
3,897
6,025
141804
1,947
3,348
5,059
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017
BlextenTRx BlextenNRx
Source:QIMSCompuScript Apr-2017
• Blexten launchedinCanadaonDecember19,2016• IndicatedforthetreatmentofthesymptomsofSeasonalAllergicRhinitis(SAR)and
ChronicSpontaneousUrticaria (CSU)(suchasitchinessandhives)
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$4.5 $3.7
$3.3 $5.7
$16.6
$0
$5
$10
$15
$20
$25
$30
Q12016 Q12017
Amou
ntsinUS$M
VimovoRoyalties CanadianProducts CoreBusiness
$8.1M
1Q2017RevenueGrowth
$26.0M
Note1:Q12016NetProductRevenuesof$3.6millionconsistedofnetrevenuesfromthesaleofCanadianproducts($3.3million)andFibricor($0.3M)fortheperiodFebruary5,2016(dateoftheTributeacquisition)throughMarch31,2016.
Note2:CoreBusinessincludesnetrevenuesfromZontivityandToprol-XL(anditsAG),whicharereportednetofcostsandtransitionservicesfeesduringthetransitionperiod,andnetproductsalesfromFibricorandYosprala.
(Option2)
+$17.9M
$0.3
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2017FinancialGuidance
Measure 2016Actuals 2017Guidance
NetRevenues $54M $80Mto $100M
Adjusted EBITDA* ($47M) $(5M)to$5M
*AdjustedEBITDAisdefinedasnetincome(loss)beforeincometaxes,interestexpenseandfinancingcosts,depreciationandamortization,stock-basedcompensation,gainsorlossesrelatedtowarrants,changestothefairvalueofcontingentconsideration,restructuringcosts,retentionandseverancecosts,impactofanacquisitionofabusinessorproduct,includingtransactioncosts,acquiredin-processR&D,taxequalizationpayments,interestincome,theimpactofchangesinforeigncurrencyrates,assetimpairmentcharges,lossesorgainsonsaleofassets,lossesorgainsonextinguishmentormodificationofdebtandtheimpactofasaleordispositionofabusinessorproduct,includingdiscontinuedoperations.
GAAPtoNon-GAAPreconciliationsareincludedwithinthetablesaccompanyingourpressreleaseattachedasanexhibittoourCurrentReportonForm8-KfiledonMay9,2017,copiesofwhichareavailableonEDGARatwww.sec.gov,onSEDARatwww.sedar.com andonourwebsiteatwww.Aralez.com.
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Aralez– CorporateFocusGoingForward
•Maximizingourfinancialflexibilitywithcontinuedfocusoncostandcashmanagement
•SuccessfulexecutionofZontivityrelaunch•StrongercommercialexecutionwithYosprala
•EffectivelymanageToprol-XLfranchise
•WeareexploringbothstrategicandfinancingoptionswithacontinuedfocusontransformativeM&A
ShareholderValueCreation
“CorporateOverview&StrategicVision”Jefferies HealthcareConference
June7, 2017