On March 28, 2016, Aralez Pharmaceuticals Inc (NASDAQ:ARLZ) announced the FDA acceptance of its NDA for its lead pipeline candidate, Yosprala. For those not familiar with the company, or the drug in question, both have a bit of a volatile history – something we will address shortly. Those that are, however, will understand the gravity of the acceptance, and how much of a milestone it represents for Aralez in light of the aforementioned volatility. So, with this said, here’s a potted history of the company and the drug, and a look at what to expect, and when to expect it, moving forward.

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So, the story behind where things currently stand. Back when Yosprala was first submitted to the FDA, Aralez was called Pozen (again, we’ll get to this in a little more detail shortly) and it was March, 2013. Nearly six months later, however, the FDA issued a CRL citing issues regarding the drug’s manufacturing facility. Pozen addressed the issues (or so it thought) and resubmitted the NDA in June 2014. Just before the year closed out, however, the agency once again issued a CRL – for exactly the same reasons. In early 2015, Pozen merged with a Canadian company called Tribute, and the two companies changed their name to Aralez. At the end of the year, the newly named Aralez announced it would resubmit the NDA with an altered active ingredient supplier, and it did just that earlier this month. Which brings us to today, and the DA’s announcement that it had finally accepted the NDA, and that it has set a shortened review period (based on the new manufacturing facility).

Now, let’s look at the drug. It’s designed to be a secondary preventative therapy for cardiovascular patients – i.e. patients who have suffered heart attacks. The theory behind its MOA is as follows: currently, patients in this population take daily aspirin as a preventative measure against further heart attacks. This constant aspirin intake, however, increases stomach acid production and – in turn – results in gastric ulcers. This is where Yosprala comes in to the picture. The drug is an aspirin compound, with a layer of another drug called Omeprazole wrapped around it. Omeprazole is what’s called a proton pump inhibitor, and it works to reduce the amount of stomach acid a patient’s system produces. This reduction in stomach acid leads to a reduction in the forming of gastric ulcers. It’s not a new concept. Physicians will generally administer a proton pump inhibitor alongside a daily aspirin dosage to help solve the issue in question. What is new, however, is Aralez’s combination of the two drugs as one, which allows for a simpler dosing regimen and – in turn – improved patient compliance. It’s this improved compliance that forms the basis of Aralez’s justification for FDA approval behind the drug’s approval to the FDA.

And that’s where things stand. The company has finally managed to get a drug to the accepted NDA stage, after a three year dragged out period during which it changed manufacturers, submitted three NDAs and received two CRLs, and rebranded entirely under a different name and renewed focus. It’s down nearly 45% on March highs, and markets haven’t really responded to the submission – at the close of the session before which Aralez announced the FDA’s acceptance the company was down nearly 3% on the open price.

Whether there will be any sort of positive ramifications near term of the latest announcement remains to be seen – but longer term, the company could be set for a reversal in fortunes. The market potential for its drug is large (a study conducted by the company suggested nearly 40% of physicians would replace their current double dose administration with Yosprala if the FDA approved the drug in 2016) and the upside in the company’s market capitalization would be considerable if it came close to this target penetration.

What are we looking at going forward? Well, trials to data have shown there should be no issue with safety and tolerability, and efficacy looks solid, so it will likely come down to the manufacturing and supply side of things from a chances of an approval perspective. PDUFA is set for September 14, 2016, so keep an eye out for any updates (we don’t expect an advisory panel, but this doesn’t negate the chances of one completely during mid to late August) as PDUFA approaches.