ARALEZ PHARMACEUTICALS INC. (NASDAQ:ARLZ) Files An 8-K Entry into a Material Definitive AgreementItem 1.01- Entry Into a Material Definitive Agreement
On September18, 2018, Aralez Pharmaceuticals Inc. (the “Company”) and certain of its subsidiaries entered into two purchase agreements with Nuvo Pharmaceuticals Inc. (“Nuvo”) and its affiliates for aggregate consideration of $110,000,000:
· the Company and Aralez Pharmaceuticals Canada Inc., a subsidiary of the Company (“Aralez Canada”), entered into a Share Purchase Agreement (the “Nuvo Share Purchase Agreement”) with Nuvo for the sale of the Company’s Canadian operations through the purchase of all of the shares of Aralez Canada by Nuvo for approximately $62,500,000; and
· Aralez Pharmaceuticals Trading DAC (“Aralez Ireland”) and POZEN Inc., both subsidiaries of the Company, entered into an Asset Purchase Agreement (the “Nuvo Asset Purchase Agreement,” and together with the Nuvo Share Purchase Agreement, the “Nuvo Purchase Agreements”) with Nuvo Pharmaceuticals (Ireland) Limited (“Nuvo Ireland”) for the sale of the Company’s VIMOVO® and TREXIMET® royalties and related intellectual property to Nuvo Ireland for approximately $47,500,000.
The purchase price payable under the Nuvo Share Purchase Agreement (the “SPA Purchase Price”) is subject to working capital and net debt adjustments as well as reductions for other specified liabilities of Aralez Canada, in each case as of immediately prior to closing. The SPA Purchase Price is also subject to a customary post-closing adjustment.
Also on September18, 2018, Aralez Ireland entered into an Asset Purchase Agreement (the “Deerfield Purchase Agreement”) with Toprol Acquisition LLC (“Deerfield SPV”), a subsidiary of Deerfield Management Company, L.P., for the sale of the Company’s TOPROL-XL® franchise to Deerfield SPV for approximately $130,000,000 as a credit bid.
The Nuvo Share Purchase Agreement, Nuvo Asset Purchase Agreement and Deerfield Purchase Agreement each contain customary representations, warranties, covenants, and conditions, including completion of a bidding process and auction, with respect to the Nuvo Share Purchase Agreement, as provided for by the Ontario Superior Court of Justice (Commercial List) under the Companies’ Creditors Arrangement Act (the “CCAA”) and, with respect to the Nuvo Asset Purchase Agreement and Deerfield Purchase Agreement, as provided for by the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court,” and together with the CCAA, the “Bankruptcy Courts”) and, in each case, final approval of the Bankruptcy Courts. As previously disclosed, on August10, 2018, the Company and Aralez Canada commenced voluntary restructuring proceedings (the “CCAA Proceedings”) under the CCAA. In connection with these proceedings, the Company’s subsidiaries incorporated in the United States and Ireland, Aralez Pharmaceuticals US Inc., Aralez Pharmaceuticals Management Inc., POZEN Inc., Aralez Pharmaceuticals R&D Inc., Halton Laboratories LLC, Aralez Pharmaceuticals Holdings Limited and Aralez Ireland, filed voluntary petitions for relief (the “Chapter 11 Proceedings,” and together with the CCAA Proceedings, the “Restructuring Proceedings”) under chapter 11 of the United States Code in the U.S. Bankruptcy Court. Closing of the sale to the Nuvo Share Purchase Agreement is conditioned upon the closing of the transactions contemplated by the Nuvo Asset Purchase Agreement, and vice versa. There can be no assurance that the Company’s efforts to consummate these transactions will be successful.
The foregoing descriptions of the Nuvo Share Purchase Agreement, Nuvo Asset Purchase Agreement, and Deerfield Purchase Agreement, and the transactions contemplated thereby, do not purport to be complete and are qualified in their entirety by reference to the Nuvo Share Purchase Agreement, Nuvo Asset Purchase Agreement, and Deerfield Purchase Agreement, which are attached hereto as Exhibits 2.1, 2.2 and 2.3, respectively.
Item 8.01 — Other Events
On September19, 2018, the Company issued a press release announcing the entry into the Nuvo Purchase Agreements and the Deerfield Purchase Agreement. A copy of the press release is attached hereto as Exhibit99.1 and is incorporated herein by reference. The information set forth under this Item 8.01, including the press release