Aralez Pharmaceuticals To Enter Into Purchase Agreements To Sell Substantially All Assets

Aralez Pharmaceuticals Inc. (NASDAQ: ARLZ) (TSX: ARZ) ("Aralez" or the "Company") announced today that it intends to enter into purchase agreements with two separate stalking-horse purchasers to sell its main operating businesses:  an agreement to sell its VIMOVO® royalties and Canadian operations to Nuvo Pharmaceuticals Inc. ("Nuvo") in a transaction valued at U.S.$110 million and an agreement to sell its TOPROL-XL® Franchise to its secured lender, certain funds managed by Deerfield Management Company, L.P., in a transaction valued at U.S.$140 million. The Company is also engaged in ongoing efforts to sell the assets not being sold in either of the proposed transactions and intends to wind down its operations following the consummation of the sales.

The letters of intent signed with each of Nuvo and the Company's secured lender included the material terms of each of the proposed transactions. Each proposed transaction is subject to entry into mutually agreeable definitive agreements, and in the case of Nuvo, obtaining committed financing, which is expected to be provided by the Company's secured lender. Aralez has agreed to negotiate exclusively with Nuvo (with respect to the assets subject to the proposed transaction with Nuvo) until August 19, 2018. Closing of each proposed transaction is subject to the receipt of applicable regulatory approvals and the satisfaction or waiver of other customary closing conditions. The proposed transactions are not conditioned on one another and will be subject to approval by the applicable courts supervising the Restructuring Proceedings described below. 

To facilitate the transactions, Aralez, along with its Canadian subsidiary, Aralez Pharmaceuticals Canada Inc., has elected to commence voluntary proceedings under Canada's Companies' Creditor Arrangement Act (the "CCAA") in the Ontario Superior Court of Justice.  In connection with these proceedings, Aralez's subsidiaries incorporated in the United States and Ireland have elected to file voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York (together with the CCAA proceedings, the "Restructuring Proceedings").

"Following a thorough financial and strategic review, we believe that these sales, together with an auction process under court supervision are in the best interests of the Company and its stakeholders," said Adrian Adams, Chief Executive Officer of Aralez.

Aralez, together with its subsidiaries, intends to seek and obtain customary relief from the courts to permit it to continue to operate its business in the ordinary course without interruption during the sale process. In addition, Aralez has obtained commitments for debtor-in-possession ("DIP") financing of approximately U.S.$15 million, from its secured lender, which is s