Aralez Pharmaceuticals (ARLZ) 10-Q 8 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 03, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Aralez Pharmaceuticals Inc.
Entity Central Index Key	1,660,719
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		65,427,017
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 56,533	$ 24,816
Accounts receivable, net	8,109	5,966
Inventory	4,735
Prepaid expenses and other current assets	2,965	1,225
Total current assets	72,342	32,007
Property and equipment, net	2,527	251
Goodwill	77,039
Other intangible assets, net	127,724
Other long-term assets	686
Total assets	280,318	32,258
Current liabilities:
Accounts payable	1,965	4,557
Accrued expenses	23,557	11,932
Short-term contingent consideration	600
Other current liabilities	3,993
Total current liabilities	30,115	16,489
Long-term debt, net	74,520
Long-term contingent consideration	18,900
Deferred tax liability	6,064
Other long-term liabilities	171	986
Total liabilities	129,770	17,475
Commitments and Contingencies
Preferred shares, no par value; unlimited shares authorized, issuable in series; none outstanding
Common shares, no par value, unlimited shares authorized, 65,357,300 shares issued and outstanding at September 30, 2016; common stock, $0.001 par value, 33,259,407 issued and outstanding at December 31, 2015		33
Additional paid-in capital	349,013	149,438
Accumulated other comprehensive income	8,085
Accumulated deficit	(206,550)	(134,688)
Total stockholders' equity	150,548	14,783
Total liabilities and stockholders' equity	$ 280,318	$ 32,258

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares outstanding (in shares)	0	0
Common shares, no par value (in dollars per share)	$ 0
Common stock, par value (in dollars per share)		$ 0.001
Common stock, shares issued (in shares)	65,357,300	33,259,407
Common stock, shares outstanding (in shares)	65,357,300	33,259,407

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Product revenues, net	$ 8,058		$ 18,998
Other revenues	5,570	$ 5,820	15,265	$ 15,425
Total revenues, net	13,628	5,820	34,263	15,425
Costs and expenses:
Cost of product sales (exclusive of amortization shown separately below)	3,362		9,260
Amortization of intangible assets	2,418		5,824
Selling, general and administrative	25,445	12,207	85,635	33,663
Research and development	2,037	1,806	7,923	5,091
Total costs and expenses	33,262	14,013	108,642	38,754
Loss from operations	(19,634)	(8,193)	(74,379)	(23,329)
Interest expense	(495)		(1,395)
Other (expense) income, net	(173)	17	4,354	(154)
Loss before income taxes	(20,302)	(8,176)	(71,420)	(23,483)
Provision for (benefit from) income taxes	297	(27)	442	974
Net loss	$ (20,599)	$ (8,149)	$ (71,862)	$ (24,457)
Basic net loss per common share (in dollars per share)	$ (0.32)	$ (0.25)	$ (1.19)	$ (0.75)
Diluted net loss per common share (in dollars per share)	$ (0.32)	$ (0.25)	$ (1.26)	$ (0.75)
Shares used in computing basic net loss per common share	65,229,055	32,732,686	60,598,676	32,476,358
Shares used in computing diluted net loss per common share	65,229,055	32,732,686	60,676,332	32,476,358

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (20,599)	$ (8,149)	$ (71,862)	$ (24,457)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(2,062)		8,085
Other comprehensive (loss) income	(2,062)		8,085
Total comprehensive loss	$ (22,661)	$ (8,149)	$ (63,777)	$ (24,457)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating Activities
Net loss	$ (71,862)	$ (24,457)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6,019	13
Amortization of debt issuance costs	59
Loss on investments in warrants		200
Unrealized foreign currency transaction gain	(43)
Loss of sale of property and equipment	200
Change in fair value of warrants liability	(4,722)
Share-based compensation expense	9,202	5,673
Benefit from deferred income taxes	(1,261)
Changes in operating assets and liabilities:
Accounts receivable	2,135	(191)
Inventory	(926)
Prepaid expenses and other current assets	(563)	186
Accounts payable	(2,554)	521
Accrued expenses	(3,260)	10,903
Other liabilities	(1,088)
Net cash used in operating activities	(68,664)	(7,152)
Investing activities
Acquisitions of businesses, net of cash acquired	(42,887)
Payments for intangible assets	(520)
Purchases of property and equipment	(2,014)	(7)
Change in restricted cash balance	(281)
Proceeds from sale of warrants		2,479
Net cash (used in) provided by investing activities	(45,702)	2,472
Financing activities
Proceeds from issuance of convertible debt	75,000
Proceeds from issuance of common stock	75,000	1,684
Payment of debt and equity issuance costs	(673)
Repayment of convertible note	(3,922)
Proceeds (payments) related to net settlement of stock awards	338	(595)
Net cash provided by financing activities	145,743	1,089
Net increase (decrease) in cash and cash equivalents	31,377	(3,591)
Effect of change in foreign exchange rates on cash and cash equivalents	340
Cash and cash equivalents at beginning of period	24,816	40,582
Cash and cash equivalents at end of period	56,533	$ 36,991
Supplemental non-cash investing activities:
Fair value of assets acquired and liabilities assumed through acquisition of business	115,136
Fair value of contingent consideration payable in connection with acquisition of business	19,500
Non-cash additions to intangible assets	$ 415

ORGANIZATION, BASIS OF PRESENTA

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2016
ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES
ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES	1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES Organization Aralez Pharmaceuticals Inc., together with its wholly-owned subsidiaries (“Aralez”, the “Company”, “we,” “us,” or similar pronouns), is a global specialty pharmaceutical company focused on delivering meaningful products to improve patients’ lives while creating shareholder value by acquiring, developing and commercializing products primarily in cardiovascular, pain and other specialty areas. Aralez’s global headquarters is located in Mississauga, Ontario, Canada, its U.S. headquarters will be located in Princeton, New Jersey, and its Irish headquarters is located in Dublin, Ireland. The Company’s common shares are listed on the NASDAQ Global Market under the trading symbol “ARLZ” and on the Toronto Stock Exchange under the trading symbol “ARZ.” Aralez was formed for the purpose of facilitating the business combination of POZEN Inc., a Delaware corporation (“Pozen”), and Tribute Pharmaceuticals Canada Inc., a corporation incorporated under the laws of the Province of Ontario, Canada (“Tribute”), which closed on February 5, 2016. On February 5, 2016, pursuant to an Agreement and Plan of Merger and Arrangement between Aralez Pharmaceuticals Inc., Pozen, Tribute and other related parties (as amended, the “Merger Agreement”), Aralez completed the acquisition of Tribute by way of a court approved plan of arrangement in a stock transaction with a purchase price of $137.6 million made up of (i) $115.1 million related to Tribute shares, equity awards and certain warrants outstanding and (ii) $22.5 million in repayments of Tribute indebtedness. In connection with this transaction, Pozen and Tribute were combined under and became wholly-owned subsidiaries of Aralez Pharmaceuticals Inc. (the “Merger”). Pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended, Aralez Pharmaceuticals Inc. is the successor issuer to Pozen. The Merger provides the combined company with increased financial strength and product portfolio diversity and is expected to meaningfully accelerate our operating strategies. On September 6, 2016, Aralez Pharmaceuticals Trading DAC, a wholly-owned subsidiary of Aralez (“Aralez Ireland”), acquired the U.S. and Canadian rights to ZONTIVITY ® (vorapaxar), pursuant to an asset purchase agreement (the “ZONTIVITY Asset Purchase Agreement”) with Schering-Plough (Ireland) Company, an Irish private unlimited company and an affiliate of Merck & Co., Inc. (“Merck”). Basis of Presentation and Consolidation For financial reporting and accounting purposes, Pozen was the acquirer of Tribute pursuant to the Merger in a business combination. The condensed consolidated financial statements for the three and nine months ended September 30, 2015 reflect the results of operations and financial position of Pozen, but do not include the results of operations of Tribute because the Merger was completed on February 5, 2016. Aralez’s results of operations for the three and nine months ended September 30, 2016 include the results of Tribute from the closing date of the Merger. Aralez’s results of operations for the three and nine months ended September 30, 2016 also include the results of ZONTIVITY from its acquisition date (See Note 2). The accompanying condensed consolidated financial statements are unaudited and have been prepared by Aralez in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and pursuant to, and in accordance with, the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet at December 31, 2015 was derived from audited financial statements, but certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015, which are contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and with applicable Canadian securities regulators on SEDAR on March 15, 2016 (“2015 Form 10-K”). The condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. Certain reclassifications with respect to the presentation of accrued expenses were made to prior year figures to conform with current year presentation. The accompanying condensed consolidated financial statements include the accounts of Aralez Pharmaceuticals Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future period or the entire fiscal year. Use of Estimates The preparation of financial statements in conformity with GAAP requires the extensive use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. The most significant assumptions are employed in estimates used in determining values of: inventories; long-lived assets, including goodwill, in-process research and development (“IPR&D”), and other intangible assets; accrued expenses; contingent consideration; income taxes; share-based compensation expense; as well as estimates used in accounting for contingencies and revenue recognition. Actual results could differ from these estimates. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, including money market funds. Our investment policy places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash and cash equivalents to the extent recorded on the balance sheet. We are also subject to credit risk from our accounts receivable related to product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in Canada and the United States, and to other international distributors. Customer creditworthiness is monitored and collateral is not required. Cash and Cash Equivalents Cash and cash equivalents consists of cash and short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase. Inventory Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Cost is determined to be the purchase price for raw materials and the production cost, including materials, labor and indirect manufacturing costs, for work-in-process and finished goods. The Company analyzes its inventory levels quarterly and writes-down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value, inventory in excess of expected sales requirements or inventory that fails to meet commercial sale specifications to cost of product revenues. Expired inventory is disposed of and the related costs are written off to cost of product revenues. Intangible Assets Goodwill Goodwill relates to amounts that arose in connection with the acquisitions of Tribute and ZONTIVITY. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. Goodwill is not amortized but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. IPR&D IPR&D acquired in a business combination is capitalized as indefinite-lived assets on the Company's condensed consolidated balance sheets at its acquisition-date fair value. Until the underlying project is completed, these assets are accounted for as indefinite-lived intangible assets and are subject to impairment testing. Once the project is completed, the carrying value of the IPR&D is reclassified to other intangible assets, net and is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses related to the IPR&D projects are expensed as incurred. We acquired approximately $3.2 million of IPR&D assets with the acquisition of Tribute, of which $2.8 million was subsequently reclassified to other intangible assets upon receipt of regulatory approval for the related project. The remaining carrying value of IPR&D is included within other long-term assets on our condensed consolidated balance sheets at September 30, 2016. IPR&D is tested for impairment on an annual basis or more frequently if impairment indicators are present. If IPR&D becomes impaired, the carrying value of the IPR&D is written down to its revised fair value with the related impairment charge recognized in the period in which the impairment occurs. Other Intangible Assets, net Other intangible assets consist of acquired technology rights. The Company amortizes its intangible assets using the straight-line method over their estimated economic lives. Costs to obtain, maintain and defend the Company's patents are expensed as incurred. We will evaluate the potential impairment of other intangible assets if events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Events giving rise to impairment are an inherent risk in our industry and many factors cannot be predicted. Factors that we consider in deciding when to perform an impairment review include significant changes in our forecasted projections for the asset or asset group for reasons including, but not limited to, significant under-performance of a product in relation to expectations, significant changes or planned changes in our use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group and its eventual disposition to the carrying value of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the statements of operations. Such impairment charges may be material to our results. Contingent Consideration Certain of the Company’s business acquisitions involve the potential for future payment of consideration that is contingent upon the achievement of operational and commercial milestones and royalty payments on future product sales. The fair value of contingent consideration liabilities is determined at the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is remeasured at current fair value with changes recorded in our condensed consolidated statements of operations. Changes in any of the inputs may result in a significantly different fair value adjustment. Revenue Recognition Principal sources of revenue are (i) product sales from the product portfolio acquired with our acquisition of Tribute and (ii) royalty revenues from sales of VIMOVO ® by our commercialization partners. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, and collectibility of the resulting receivable is reasonably assured. Product Revenues, net Revenues from the sale of products are recorded net of discounts, wholesaler fees, chargebacks, rebates, returns and allowances, and are recognized when legal title to the goods and risk of ownership has been passed to the customer. A customer’s obligation to pay the Company for products is not contingent upon the resale of those products. We have a product returns policy on some of our products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. Our estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis of the level of inventory in the distribution channel, if any. We believe that the reserves we have established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amount for reserves to vary. If actual results vary with respect to our reserves, we may need to adjust our estimates, which could have a material effect on our results of operations in the period of adjustment. Other revenues Other revenues include revenues from licensing arrangements with other biopharmaceutical companies, including milestones payments and royalties. Revenue from royalties is recognized when the Company has fulfilled the terms in accordance with contractual agreements and has no future obligation, and the amount of the royalty fee is determinable. Royalty revenue that is reasonably estimable and determinable is recognized based on estimates utilizing information reported to us by our commercialization partners. Other revenues also include revenues from sales of ZONTIVITY from its acquisition date, recognized net of related cost of product revenues and fees paid to Merck under a transition services agreement in effect for up to twelve months from the date of acquisition. Income Taxes We account for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax basis assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate changes. A valuation allowance is required when it is “more-likely-than-not” that all or a portion of deferred tax assets will not be realized. Since our inception, we have incurred substantial cumulative losses and may incur substantial and recurring losses in future periods. The utilization of the loss carryforwards to reduce future income taxes will depend on our ability to generate sufficient taxable income prior to the expiration of the loss carryforwards. In addition, the maximum annual use of net operating loss and research credit carryforwards is limited in certain situations where changes occur in stock ownership. Aralez files federal and state income tax returns, as applicable, with the tax authorities in various jurisdictions including Canada, Ireland and the United States. Pozen is no longer subject to U.S. federal or North Carolina state income tax examinations by tax authorities for years before 2012. Tribute is no longer subject to Canadian income tax examinations by tax authorities for years before 2011. However, the loss and credit carryforwards generated by Pozen and Tribute may still be subject to change to the extent these losses and credits are utilized in a year that is subject to examination by tax authorities. ASC 740 prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense. Share-Based Compensation We expense the fair value of employee share-based compensation over the employees' service periods, which are generally the vesting period of the equity award. For awards with performance conditions granted, we recognize compensation cost over the expected period to achieve the performance conditions, provided achievement of the performance conditions are deemed probable. Awards with market-based conditions are expensed over the service period regardless of whether achievement of the market condition is deemed probable or is ultimately achieved. Compensation expense is measured using the fair value of the award at the grant date, adjusted for estimated forfeitures. In order to determine the fair value of option awards on the grant date, we use the Black-Scholes option pricing model. Inherent in this model are assumptions related to expected share price volatility, estimated option life, risk-free interest rate and dividend yield. Our expected share price volatility assumption is based on the historical volatility of our stock, which is obtained from public data sources. The expected life represents the weighted average period of time that share-based awards are expected to be outstanding giving consideration to vesting schedules, historical exercise patterns and post-vesting cancellations for terminated employees that have been exhibited historically, adjusted for specific factors that may influence future exercise patterns. The risk-free interest rate is based on factual data derived from public sources. We use a dividend yield of zero as we have no intention to pay cash dividends in the foreseeable future. For performance-based awards with market conditions, the Company used a Monte Carlo simulation model to determine the fair value of awards as of the grant date. We estimate forfeitures based on our historical experience of pre-vesting cancellations for terminated employees. An estimated forfeiture rate is applied to all equity awards, which includes option awards and restricted stock units, including performance share units. We believe that our estimates are based on outcomes that are reasonably likely to occur. To the extent actual forfeitures differ from our estimates, such amounts will be recorde d as a cumulative adjustment in the period estimates are revised. Determining the appropriate amount to expense for awards with performance conditions based on the achievement of stated goals requires judgment, including forecasting future performance results. The estimate of expense is revised periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate. The cumulative impact of any revisions is reflected in the period of change. If any applicable financial performance goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires detailed disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. This standard classifies these inputs into the following hierarchy: · Level 1 Inputs — Quoted prices for identical instruments in active markets. · Level 2 Inputs — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. · Level 3 Inputs — Instruments with primarily unobservable value drivers. The fair value hierarchy level is determined by asset class based on the lowest level of significant input. In periods of market inactivity, the observability of prices and inputs may be reduced for certain instruments. This condition could cause an instrument to be reclassified between levels. The carrying amount of our cash and cash equivalents approximates its fair value due to the short-term nature of these amounts. The warrants liability is carried at fair value and is included within other current liabilities on our condensed consolidated balance sheet at September 30, 2016. We utilized Level 3 inputs to estimate the fair value of the warrants liability. The contingent consideration liability is also carried at fair value, and is recorded as separate short and long-term balances on the condensed consolidated balance sheet at September 30, 2016. We utilized Level 3 inputs to estimate the fair value of the contingent consideration liability. Foreign Currency Our reporting currency is the U.S. dollar. The assets and liabilities of our subsidiaries that have a functional currency other than the U.S. dollar, primarily the Canadian dollar, are translated into U.S. dollars at the exchange rates in effect at the balance sheet date with the results of operations of subsidiaries translated at average exchange rates for the period. The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income within shareholders’ equity. Transactions in foreign currencies are remeasured into the functional currency of the relevant subsidiary at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Resulting gains and losses are recorded in other income (expense), net within the condensed consolidated statements of operations. Accumulated Other Comprehensive Income A company is required to present, either on the face of the statement where net income is presented, in a separate statement of comprehensive income or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. There were no amounts reclassified out of accumulated other comprehensive income for the three and nine months ended September 30, 2016 and 2015. Other comprehensive income for the three and nine months ended September 30, 2016 related to foreign currency translation adjustments. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , which requires revenue recognition based on the transfer of promised goods or services to customers in an amount that reflects consideration Aralez expects to be entitled to in exchange for goods or services. In August 2015, the FASB issued updated guidance deferring the effective date of the revenue recognition standard. The new rules supersede prior revenue recognition requirements and most industry-specific accounting guidance. In March, April and May 2016, the FASB issued additional updated guidance, which clarifies certain aspects of the ASU and the related implementation guidance issued by the FASB-IASB Joint Transition Resource Group for Revenue Recognition. The ASU will be effective for Aralez in the first quarter of 2018, with either full retrospective or modified retrospective application required. We have not yet selected a transition method and are evaluating the impact of the ASU on our financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10) , which requires equity investments to be measured at fair value with changes in fair value recognized in net income. It allows an entity to choose to measure equity investments that do not have readily determinable fair values at cost minus impairment. It also simplifies the impairment assessment of equity investments without readily determinable fair values and eliminates the requirements to disclose the methods used to estimate fair value for instruments measured at amortized cost on the balance sheet. The amendments in the ASU are effective for Aralez in the first quarter of 2018. We do not expect the adoption to have a material impact to our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes current lease accounting guidance. The primary difference between current GAAP and the new standard is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. The standard requires a modified retrospective approach upon adoption, with practical expedients that may be available to elect. The standard is effective for Aralez in the first quarter of 2019 and early adoption is permitted. We are evaluating the impact of the ASU on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718) , which simplifies several aspects of the accounting for share-based payment transactions, such as the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments include the requirement to recognize excess tax benefits and tax deficiencies as income tax expense or benefit, and to recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. It also allows an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The amendments in the ASU are effective for Aralez in the first quarter of 2017, and early adoption is permitted. We are evaluating the impact of the ASU on our financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815) , which clarifies the steps required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts. The ASU clarifies that when a call (put) option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) is related to interest rates or credit risks. The ASU is intended to eliminate diversity in practice in assessing embedded contingent call (put) options in debt instruments. The amendments in the ASU are effective for Aralez in the first quarter of 2017, and early adoption is permitted. We do not expect the adoption to have a material impact to our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , providing additional guidance on eight specific cash flow classification issues. The goal of the ASU is to reduce diversity in practice of classifying certain items. The amendments in the ASU are effective for Aralez in the first quarter of 2018 using a retrospective transition method, and early adoption is permitted. We are evaluating the impact of the ASU on our financial statements.

BUSINESS COMBINATIONS AND ACQUI

BUSINESS COMBINATIONS AND ACQUISITIONS	9 Months Ended
	Sep. 30, 2016
BUSINESS COMBINATIONS AND ACQUISITIONS
BUSINESS COMBINATIONS AND ACQUISITIONS	2. BUSINESS COMBINATIONS AND ACQUISITIONS Acquisition of Tribute On February 5, 2016, Aralez completed its acquisition of Tribute. The transaction provided Aralez with increased financial strength and product portfolio diversity with several marketed products and product candidates acquired. Pursuant to the transaction, Tribute shareholders received 0.1455 common shares of Aralez, no par value per share (the “Aralez Shares”) in exchange for each common share of Tribute, no par value per share (the “Tribute Shares”) held by such shareholders. At the effective time of the Merger, each share of Pozen common stock, $0.001 par value per share, was cancelled and automatically converted into the right to receive one Aralez Share. We valued the entire issued and to be issued share capital of Tribute at approximately $115.1 million based on Pozen’s closing share price of $5.94 on February 5, 2016 and an exchange ratio of 0.1455. Upon the close of the transaction, (a) each outstanding Tribute warrant entitled its respective holders the right to purchase 0.1455 fully-paid and non-assessable Aralez Shares for no additional consideration beyond that set out in the respective Tribute warrant; (b) each Tribute employee stock option entitled the respective holders of the option to either (i) exchange their Tribute option for a Tribute common share immediately prior to the Merger or (ii) convert into Aralez options entitling the holder to purchase that number of Aralez Shares equivalent to 0.1455 Aralez Shares for each Tribute Share originally issuable (with the exercise price of each Aralez option equal to the original exercise price adjusted for the 0.1455 conversion); and (c) each Tribute compensation option, previously granted to certain investors of Tribute in connection with private placement financings, entitled its respective holders the right to purchase 0.1455 fully-paid and non-assessable Aralez Shares, as well as 0.1455 one-half warrants for Aralez Shares, for no additional consideration beyond that set out in the respective compensation option certificate. As a result of the Merger, the warrants, employee stock options and compensation options are fully-vested and exercisable at any time prior to their respective expiration dates. The acquisition-date fair value of the consideration transferred is as follows: At February 5, 2016 (in thousands) Equity consideration $ Repayment of Tribute indebtedness Total consideration $ The acquisition-date fair value of total consideration transferred above excludes approximately $0.5 million related to the accelerated vesting of certain equity awards of Tribute pursuant to the Merger Agreement, which was included in share-based compensation expense during the three months ended March 31, 2016. The transaction was accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. The goodwill recognized is attributable primarily to strategic opportunities related to leveraging Tribute’s existing infrastructure. Goodwill is not deductible for tax purposes. The following table summarizes the estimated preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition: At February 5, 2016 (as adjusted) (in thousands) Cash $ Accounts receivable Inventory Prepaid expenses and other current assets Property, plant and equipment Intangible assets In-process research and development Accounts payable and accrued expenses Note payable Warrants liability Other liabilities Deferred tax liability Total net assets acquired $ Goodwill Total consideration $ The purchase price allocation has been prepared on a preliminary basis and is subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the February 5, 2016 acquisition date. During the nine months ended September 30, 2016, we recorded immaterial measurement period adjustments. The fair values of intangible assets and IPR&D were determined using an income approach, including a discount rate applied to the projected net cash flows. We believe the assumptions are representative of those a market participant would use in estimating fair value. The preliminary fair value of intangible assets included the following: Preliminary Fair Value (as adjusted) (in thousands) Marketed products: Fiorinal $ Proferrin Fibricor Uracyst and Neovisc Cambia Other marketed products Total acquired technology rights $ The deferred tax liability of $6.9 million relates primarily to the temporary differences associated with the identifiable intangible assets, which are not deductible for tax purposes. The operating results of Tribute for the period from February 5, 2016 to September 30, 2016, including revenues of $19.0 million, have been included in our condensed consolidated financial statements as of and for the period ended September 30, 2016. The net loss attributable solely to Tribute is not practicably determinable for the nine months ended September 30, 2016 given the integration of Tribute’s operations within the combined company. We incurred a total of $7.7 million in transaction costs in connection with the acquisition, which were included in selling, general and administrative expenses within our condensed consolidated statements of operations for the nine months ended September 30, 2016. Acquisition of ZO NTIVITY On September 6, 2016, Aralez Ireland acquired the U.S. and Canadian rights to ZONTIVITY (vorapaxar), pursuant to the ZONTIVITY Asset Purchase Agreement with Merck. ZONTIVITY represents an addition to the Company’s product portfolio in cardiovascular disease and is the first and only approved therapy shown to inhibit the protease-activated receptor-1 (PAR-1), the primary receptor for thrombin, which is considered to be the most potent activator of platelets. The purchase price for ZONTIVITY consists of (i) a payment of $25 million by Aralez Ireland to Merck, which was made on the closing date of the acquisition, (ii) certain milestone payments to be payable by Aralez Ireland subsequent to the closing of the acquisition upon the occurrence of certain milestone events based on the annual aggregate net sales of ZONTIVITY, any combination product containing vorapaxar sulphate and one or more other active pharmaceutical ingredients or any line extension thereof, which in no event will exceed $80 million in the aggregate, and (iii) certain royalty payments based on the annual aggregate net sales of ZONTIVITY, any combination product containing vorapaxar sulphate and one or more other active pharmaceutical ingredients or any line extension thereof. In connection with the ZONTIVITY Asset Purchase Agreement, Aralez Pharmaceuticals Inc., Pozen, Tribute (collectively, the “Credit Parties”) and certain lenders party to the Second Amended and Restated Debt Facility Agreement (“Facility Agreement”) consented to Aralez Ireland entering into the ZONTIVITY Asset Purchase Agreement and consummation of the transactions contemplated thereby. Pursuant to the terms of such consent, until December 31, 2016, subject to the satisfaction of certain conditions set forth in the Facility Agreement, the Credit Parties were permitted to borrow under the credit facility to finance the $25 million payment previously made on the closing date of the ZONTIVITY acquisition. See Note 13, “Subsequent Events,” for additional information. The acquisition-date fair value of the consideration transferred is as follows: At September 6, 2016 (in thousands) Cash $ Contingent consideration Total consideration $ As of September 30, 2016, the fair value of the short-term and long-term contingent consideration liability in the accompanying condensed consolidated balance sheets was $0.6 million and $18.9 million, respectively. Pursuant to the terms of the ZONTIVITY Asset Purchase Agreement and certain ancillary agreements entered into in connection with the acquisition, Merck has agreed to supply ZONTIVITY to Aralez Ireland for a period of up to three years following the closing of the acquisition. Merck will also provide certain transition services to Aralez Ireland following the closing of the acquisition to facilitate the transition of the supply, sale and distribution of ZONTIVITY, including distributing ZONTIVITY on behalf of Aralez Ireland in exchange for compensation specified in the transition services agreement. While the transition services agreement is in effect, at the end of each quarter, Merck will remit a net margin amount to Aralez Ireland, which will include a fee for its services. This net amount is included in other revenues on our condensed consolidated statements of operations. In addition, in connection with the foregoing transactions, Merck granted Aralez Ireland, among other things, (i) an exclusive and royalty-free license to certain trademarks solely to exploit ZONTIVITY in the U.S. and Canada and their respective territories, and (ii) an exclusive and royalty-free license to certain know-how solely in connection with the manufacture of ZONTIVITY for exploitation in the U.S. and Canada and their respective territories. The transaction was accounted for as a business combination under the acquisition method of accounting. Accordingly, the identifiable intangible asset acquired was recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. The goodwill recognized is attributable primarily to strategic and synergistic opportunities . The following table summarizes the estimated preliminary fair value of the asset acquired at the date of acquisition: At September 6, 2016 (in thousands) Intangible asset $ Total net asset acquired Goodwill Total consideration $ The purchase price allocation has been prepared on a preliminary basis and is subject to change as additional information becomes available concerning the fair value and tax basis of the asset acquired. Any adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the September 6, 2016 acquisition date. The operating results of ZONTIVITY for the period from September 6, 2016 to September 30, 2016, including net revenues of $0.2 million, have been included in the condensed consolidated financial statements as of and for the three months ended September 30, 2016. The Company incurred a total of $0.4 million in product acquisition-related costs in connection with the acquisition, which were included in selling, general and administrative expenses within our condensed consolidated statements of operations for the three and nine months ended September 30, 2016. Pro Forma Impact of Business Combinations The following supplemental unaudited pro forma information presents Aralez’s financial results as if the acquisitions of Tribute and ZONTIVITY had occurred on January 1, 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except per share data) Total revenues, net $ $ $ $ Net loss $ $ $ $ Basic and diluted net loss per share $ $ $ $ The above unaudited pro forma information was determined based on the historical GAAP results of Aralez, Tribute, and ZONTIVITY. The historical results of ZONTIVITY for the nine months ended September 30, 2015 include an intangible asset impairment charge of $289.7 million. The pro forma financial statements also include the financial results of Medical Futures Inc. (“MFI”), a company that Tribute acquired in June 2015, which included revenues of $3.8 million and net loss of $0.5 million, for the nine months ended September 30, 2015. The unaudited pro forma condensed consolidated results are provided for informational purposes only and are not necessarily indicative of what Aralez’s consolidated results of operations actually would have been if the acquisition was completed on January 1, 2015 or what the consolidated results of operations will be in the future. The pro forma condensed consolidated net loss includes pro forma adjustments relating to the following significant recurring and non-recurring items directly attributable to the business combination, net of the pro forma tax impact utilizing applicable statutory tax rates, which were eliminated from the three and nine months ended September 30, 2016, and included in the three and nine months ended September 30, 2015, respectively: (i) $0.4 million and $13.1 million of transaction costs incurred by the combined Company for the three and nine months ended September 30, 2016, respectively; (ii) $0.0 million and $12.0 million of expense for excise tax equalization payments for the three and nine months ended September 30, 2016, respectively; (iii) $0.0 million and $4.0 million of severance charges for the three and nine months ended September 30, 2016, respectively; (iv) $ 0.0 million and $1.5 million of the inventory fair value step-up for the three and nine months ended September 30, 2016, respectively; (v) elimination of $0.1 million and the addition of $0.9 million in costs associated with the ZONTIVITY transition services agreement for the three and nine months ended September 30, 2016, respectively, and the addition of $1.3 million and $2.0 million in costs associated with the ZONTIVITY transition services agreement for the three and nine months ended September 30, 2015, respectively; as well as (vi) elimination of $0.4 million and $1.8 million of amortization for the three months ended September 30, 2016 and 2015, respectively, and $3.1 million and $12.5 million for the nine months ended September 30, 2016 and 2015, respectively, and the addition of amortization of finite-lived intangible assets acquired of $0.3 million and $2.4 million for the three months ended September 30, 2016 and 2015, respectively, and $3.1 million and $7.3 million for the nine months ended September 30, 2016 and 2015, respectively.

BUSINESS AGREEMENTS

BUSINESS AGREEMENTS	9 Months Ended
	Sep. 30, 2016
BUSINESS AGREEMENTS
BUSINESS AGREEMENTS.	3. BUSINESS AGREEMENTS Agreements with Merck for ZONTIVITY On September 6, 2016, Aralez Ireland acquired the U.S. and Canadian rights to ZONTIVITY from Merck pursuant to the ZONTIVITY Asset Purchase Agreement. Pursuant to the ZONTIVITY Asset Purchase Agreement, the purchase price for ZONTIVITY consists of (i) a payment of $25 million by Aralez Ireland to Merck, which was made on the closing date of the acquisition, (ii) certain milestone payments payable by Aralez Ireland subsequent to the closing of the acquisition upon the occurrence of certain milestone events based on the annual aggregate net sales of ZONTIVITY, any combination product containing vorapaxar sulphate and one or more other active pharmaceutical ingredients or any line extension thereof, which in no event will exceed $80 million in the aggregate, and (iii) certain royalty payments based on the annual aggregate net sales of ZONTIVITY, any combination product containing vorapaxar sulphate and one or more other active pharmaceutical ingredients or any line extension thereof. Pursuant to the terms of the ZONTIVITY Asset Purchase Agreement and certain ancillary agreements entered into in connection with the acquisition, Merck has agreed to supply ZONTIVITY to Aralez Ireland for a period of up to three years following the closing of the acquisition. Merck will also provide certain transition services to Aralez Ireland following the closing of the acquisition to facilitate the transition of the supply, sale and distribution of ZONTIVITY, including distributing ZONTIVITY on behalf of Aralez Ireland in exchange for compensation specified in the transition services agreement. In addition, in connection with the foregoing transactions, Merck granted Aralez Ireland, among other things, (i) an exclusive and royalty-free license to certain trademarks solely to exploit ZONTIVITY in the U.S. and Canada and their respective territories, and (ii) an exclusive and royalty-free license to certain know-how solely in connection with the manufacture of ZONTIVITY for exploitation in the U.S. and Canada and their respective territories. Agreements with Sun Pharma and Frontida for Fibricor ® In May 2015, Tribute Pharmaceuticals International Inc. (“TPII”), a Barbados corporation and a wholly-owned subsidiary of Tribute, acquired the U.S. rights to Fibricor and its related authorized generic (collectively, the “Fibricor Products”) from a wholly-owned step-down subsidiary of Sun Pharmaceutical Industries Ltd. (“Sun Pharma”). Financial terms include a total payment of $10.0 million of which approximately $3.0 million was included as a liability assumed in the Merger and subsequently paid in May 2016. In connection with its acquisition of Fibricor, TPII also entered into a supply agreement with Sun Pharma pursuant to which Sun Pharma agreed to manufacture and supply the Fibricor Products to TPII. On June 3, 2016, Sun Pharma assigned the supply agreement to Frontida BioPharm, Inc. On June 30, 2016, TPII assigned its interest in the Fibricor Products to Aralez Ireland. Agreements with Novartis for Fiorinal ® In 2014, Tribute entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Novartis AG and Novartis Pharma AG (collectively, “Novartis”) pursuant to which Tribute acquired from Novartis the Canadian rights to manufacture, market, promote, distribute and sell Fiorinal, Fiorinal C, Visken ® and Viskazide ® for the relief of pain from headache and for the treatment of cardiovascular conditions (the “Novartis Products”), as well as certain other assets relating to the Novartis Products, including certain intellectual property, marketing authorizations and related data, medical, commercial and technical information, and the partial assignment of certain manufacturing and supply agreements and tenders with third parties (the “Acquired Assets”). Tribute also assumed certain liabilities arising out of the Acquired Assets and the Licensed Assets (as defined below) after the acquisition, including product liability claims or intellectual property infringement claims by third parties relating to the sale of the Novartis Products by Tribute in Canada. In connection with the acquisition of the Acquired Assets, and pursuant to the terms of the Asset Purchase Agreement, Tribute concurrently entered into a license agreement with Novartis AG, Novartis Pharma AG and Novartis Pharmaceuticals Canada Inc., under which the Novartis entities agreed to license to Tribute certain assets relating to the Novartis Products, including certain intellectual property, marketing authorizations and related data, and medical, commercial and technical information (the “Licensed Assets”). Agreement with Faes for BLEXTEN TM In 2014, Tribute entered into an exclusive license and supply agreement with Faes Farma, S.A. (“Faes”), a Spanish pharmaceutical company, for the exclusive right to sell bilastine, a product for the treatment of allergic rhinitis and chronic idiopathic urticaria (hives) in Canada, which is now named BLEXTEN. The exclusive license is inclusive of prescription and non-prescription rights for BLEXTEN, as well as adult and pediatric presentations in Canada. On March 31, 2016, Tribute assigned its interest in BLEXTEN to Aralez Ireland. Regulatory approval to sell BLEXTEN in Canada was received from Health Canada in April 2016. We will owe sales-based milestone payments of $1.7 million to Faes if certain sales targets are met. Agreement with Nautilus for Cambia ® In 2010, Tribute signed a license agreement with Nautilus Neurosciences, Inc. (“Nautilus”) for the exclusive rights to develop, register, promote, manufacture, use, market, distribute and sell Cambia in Canada. In 2011, Tribute and Nautilus executed the first amendment to the license agreement and in 2012 executed the second amendment to the license agreement. Up to $6.0 million in sales-based milestone payments may be payable over time. Royalty rates are tiered and payable at rates ranging from 22.5% to 25.0% of net sales. Agreement with Actavis for Bezalip ® SR and Soriatane ® In 2008, Tribute signed a Sales, Marketing and Distribution Agreement with Actavis Group PTC ehf (“Actavis”) to perform certain sales, marketing, distribution, finance and other general management services in Canada in connection with the importation, marketing, sales and distribution of Bezalip SR and Soriatane (the “Actavis Products”). In 2010, a first amendment was signed with Actavis to grant Tribute the right and obligation to more actively market and promote the Actavis Products in Canada. In 2011, a second amendment was signed with Actavis that extended the term of the agreement, modified certain of the other terms of the agreement and increased Tribute’s responsibilities to include the day-to-day management of regulatory affairs, pharmacovigilance and medical information relating to the Actavis Products. Tribute pays Actavis a sales and distribution fee based on a percentage of the aggregate net sales of the products. In 2011, Tribute signed a Product Development and Profit Share Agreement with Actavis to develop, obtain regulatory approval of and market Bezalip SR in the United States. Aralez may owe a milestone payment of $5.0 million to Actavis in the event that we pursue and obtain regulatory approval to market Bezalip SR in the U.S. Agreement with AstraZeneca/Horizon regarding VIMOVO ® In August 2006, we entered into a collaboration and license agreement, effective September 7, 2006 (the “Original AZ Agreement”), with AstraZeneca AB (“AstraZeneca”) regarding the development and commercialization of proprietary fixed dose combinations of the proton pump inhibitor (“PPI”) esomeprazole magnesium with the non-steroidal anti-inflammatory drug (“NSAID”) naproxen in a single tablet for the management of pain and inflammation associated with conditions such as osteoarthritis and rheumatoid arthritis in patients who are at risk for developing NSAID-associated gastric ulcers. Under the terms of the Original AZ Agreement, we granted to AstraZeneca an exclusive, fee-bearing license, in all countries of the world except Japan, under our patents and know-how relating to combinations of gastroprotective agents and NSAIDs (other than aspirin and its derivatives). We retained responsibility for the development and filing of the New Drug Application (“NDA”) for the product in the United States, while AstraZeneca was responsible for all development activities outside the United States, as well as for all manufacturing, marketing, sales and distribution activities worldwide. We agreed to bear all expenses related to certain specified U.S. development activities. AstraZeneca agreed to pay all other development expenses, including all manufacturing-related expenses. The Original AZ Agreement established joint committees with representation of both AstraZeneca and us to manage the development and commercialization of the product. If consensus could not be reached between AstraZeneca and us, we generally would have the deciding vote with respect to development activities required for marketing approval of the product in the United States, and AstraZeneca generally would have the deciding vote with respect to any other matters. Pursuant to the terms of the Original AZ Agreement, we received an upfront license fee of $40.0 million from AstraZeneca. The Company entered into an amendment to the Original AZ Agreement, effective as of September 6, 2007 (the “Amendment to the Original AZ Agreement”). Under the terms of the Amendment to the Original AZ Agreement, AstraZeneca agreed to pay us up to $345.0 million, in the aggregate, in milestone payments upon the achievement of certain development, regulatory and sales events. To date we have received an aggregate of $85.0 million in milestone payments including an upfront payment and payments for development and regulatory milestones. An additional $260.0 million is potentially payable to us as sales performance milestones if certain aggregate sales thresholds are achieved. Pursuant to the Original AZ Agreement, as amended, we receive a flat, low double-digit royalty rate during the royalty term on annual net sales of products made by AstraZeneca, its affiliates and sublicensees in the United States and royalties ranging from the mid-single digits to the high-teens on annual net sales of products made by AstraZeneca, its affiliates and sublicensees outside of the United States. The royalty rate may be reduced due to the loss of market share as a result of generic competition inside and outside of the United States. Our right to receive royalties from AstraZeneca for the sale of such products expires on a country-by-country basis upon the later of (a) expiration of the last-to-expire of certain patent rights relating to such products in that country, and (b) ten years after the first commercial sale of such products in such country. Unless earlier terminated in accordance with its terms, the Original AZ Agreement, as amended, will expire upon the payment of all applicable royalties for the products commercialized under the agreement. Either party has the right to terminate by notice in writing to the other party upon or after any material breach of the agreement by the other party, if the other party has not cured the breach within 90 days after written notice to cure has been given, with certain exceptions. The parties also can terminate for cause under certain defined conditions. In addition, AstraZeneca can terminate at any time, at will, for any reason or no reason, in its entirety or with respect to countries outside the United States, upon 90 days’ notice. If terminated at will, AstraZeneca will owe us a specified termination payment or, if termination occurs after the product is launched, AstraZeneca may, at its option, under and subject to the satisfaction of conditions specified in the Original AZ Agreement, elect to transfer the product and all rights to us. During 2013, AstraZeneca decided to cease promotion and sampling of VIMOVO in certain countries, including the United States and all countries in Europe, other than Spain and Portugal, which have pre-existing contractual relationships with third parties. In September 2013, we and AstraZeneca entered into a third amendment to the Original AZ Agreement which made clarifications to certain intellectual property provisions of the Original AZ Agreement to clarify that AstraZeneca’s rights under those provisions do not extend to products which contain acetylsalicylic acid. In September 2013, we and AstraZeneca also executed a letter agreement whereby we agreed that in the event that AstraZeneca divested its rights and obligations to market VIMOVO in the United States to a third-party, AstraZeneca would be relieved of its obligations under the Original AZ Agreement, as amended, with respect to the United States as of the effective date of such divestiture, including its obligation under the Original AZ Agreement, as amended, to guarantee the performance of such assignee and/or sublicensee. In November 2013, AstraZeneca divested of all of its rights, title and interest to develop, commercialize and sell VIMOVO in the United States to Horizon Pharma USA, Inc. (“Horizon”). In connection with this divestiture, in November 2013, we and AstraZeneca entered into an Amended and Restated Collaboration and License Agreement for the United States (the “U.S. Agreement”) and an Amended and Restated License and Collaboration Agreement for outside the United States (the “ROW Agreement”), which agreements collectively amended and restated the Original AZ Agreement. With our consent pursuant to a letter agreement among us, AstraZeneca and Horizon, AstraZeneca subsequently assigned the U.S. Agreement to Horizon in connection with the divestiture. Further, the letter agreement establishes a process for AstraZeneca and Horizon to determine if sales milestones set forth in the Original AZ Agreement are achieved on a global basis and provides other clarifications and modifications required as a result of incorporating the provisions of the Original AZ Agreement into the U.S. Agreement and the ROW Agreement or as otherwise agreed by the parties. Pursuant to an amendment of the U.S. Agreement (the “Amendment to the U.S. Agreement”) between us and Horizon, we are guaranteed an annual minimum royalty amount of $7.5 million each calendar year, provided that the patents owned by us which cover VIMOVO are in effect and no generic forms of VIMOVO are in the marketplace. The Amendment to the U.S. Agreement also provides that Horizon has assumed AstraZeneca’s right to lead the on-going Paragraph IV litigation relating to VIMOVO currently pending in the United States District Court for the District of New Jersey and will assume all patent-related defense costs relating to such litigation, including reimbursement up to specified amounts of the cost of any counsel retained by us, amends certain time periods for Horizon’s delivery of quarterly sales reports to us, and provides for quarterly update calls between the parties to discuss performance of VIMOVO and Horizon’s commercialization efforts. Agreements with GSK, Pernix and CII regarding MT 400 (including Treximet ® ) In June 2003, we entered into an agreement with Glaxo Group Limited, d/b/a GlaxoSmithKline (“GSK”) for the development and commercialization of proprietary combinations of a triptan (5-HT1B/1D agonist) and a long-acting NSAID (the “GSK Agreement”). The combinations covered by the GSK Agreement are among the combinations of MT 400 (including Treximet). Under the terms of the GSK Agreement, GSK had exclusive rights in the United States to commercialize all combinations which combine GSK’s triptans, including Imitrex ® (sumatriptan succinate) or Amerge ® (naratriptan hydrochloride), with a long-acting NSAID. We were responsible for development of the first combination product, while GSK provided formulation development and manufacturing. Pursuant to the terms of the GSK Agreement, we received an initial $25.0 million payment from GSK and an aggregate of $55.0 million in milestone payments associated with the development and approval of Treximet. In addition, Pernix Therapeutics Holdings, Inc. (“Pernix”), as assignee of GSK, will pay two sales performance milestones totaling up to $80.0 million if certain sales thresholds are achieved. Pernix, as assignee of GSK, will pay royalties on all net sales of marketed products until at least the expiration of the last-to-expire issued applicable patent based upon the scheduled expiration of currently issued patents. Pernix may reduce, but not eliminate, the royalty payable to us if generic competitors attain a pre-determined share of the market for the combination product, or if Pernix owes a royalty to one or more third parties for rights it licenses from such third parties to commercialize the product. In November 2011, we entered into a purchase agreement with CPPIB Credit Investments Inc. (“CII”), pursuant to which we sold, and CII purchased, our right to receive future royalty payments arising from U.S. sales of MT 400, including Treximet. By virtue of the agreement, we will receive a 20% interest in royalties, if any, paid on net sales of Treximet and such other products in the United States to CII relating to the period commencing in the second quarter of 2018. In May 2014, we, GSK, CII and Pernix, entered into certain agreements in connection with GSK’s divestiture of all of its rights, title and interest to develop, commercialize and sell Treximet in the United States to Pernix. Upon the closing of the transaction in August 2014, with our consent, GSK assigned the GSK Agreement to Pernix. Immediately following the closing of the transaction, we entered into an amendment to the GSK Agreement with Pernix. This amendment, among other things, amends the royalty provisions to provide for a guaranteed quarterly minimum royalty of $4 million for the calendar quarters commencing in January 2015 and ending in March 2018 and requires that Pernix continue certain of GSK’s ongoing development activities and to undertake certain new activities, for which we will provide reasonable assistance. This amendment to the GSK Agreement also eliminates restrictions in the GSK Agreement on our right to develop and commercialize certain dosage forms of sumatriptan/naproxen combinations outside of the United States and permits us to seek approval for these combinations on the basis of the approved NDA for Treximet. Pernix also granted us a warrant to purchase 500,000 shares of Pernix common stock at an exercise price equal to $4.28 per share, which represented the closing price of Pernix common stock as reported on the NASDAQ Global Market on May 13, 2014. In the first quarter of 2015, the Company sold the warrant for $2.5 million. In July 2014, we and Pernix entered into a second amendment of the GSK Agreement, effective upon the closing of the transaction in August 2014, which permits Pernix’s Irish affiliate (to which Pernix assigned its rights) to further assign the GSK Agreement without our prior written consent as collateral security for the benefit of certain lenders.

FAIR VALUE

FAIR VALUE	9 Months Ended
	Sep. 30, 2016
FAIR VALUE
FAIR VALUE.	4. FAIR VALUE The following tables set forth the Company’s assets and liabilities that are measured at fair value on a recurring basis at: September 30, 2016 Financial Instruments Carried at Fair Value Significant Quoted prices in other Significant active markets for observable unobservable identical items inputs inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents $ $ — $ — $ Liabilities: Contingent consideration $ — $ — $ $ Warrants liability — — December 31, 2015 Financial Instruments Carried at Fair Value Significant Quoted prices in other Significant active markets for observable unobservable identical items inputs inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents $ $ ― $ — $ Warrants Liability In connection with the acquisition of Tribute, the Company assumed a liability for warrants that are treated as derivatives under accounting guidance for derivatives and hedging as they were issued with exercise prices denominated in a currency different than the Company’s reporting currency. Approximately 46,000 of the total 0.9 million common shares underlying the warrants outstanding as of September 30, 2016 are classified as liabilities. The warrants liability is valued using a Black-Scholes valuation model, which incorporates Level 3 assumptions including the volatility of the underlying share price and the expected term. The change in the fair value of the warrants liability of $4.7 million is included within other (expense) income, net in the condensed consolidated statements of operations for the nine months ended September 30, 2016. There was no change in the fair value of the warrants liability for the three months ended September 30, 2016. A majority of our liability-classified warrants expired in the third quarter of 2016. See Note 9, “Shareholders’ Equity and Earnings Per Share,” for additional information. Contingent Consideration In connection with the acquisition of ZONTIVITY, the Company recorded a short-term and long-term contingent consideration liability for future cash payments based on the occurrence of certain milestone events and royalty payments. The contingent consideration is based on the annual aggregate net sales of ZONTIVITY, any combination product containing vorapaxar sulphate and one or more other active pharmaceutical ingredients or any line extension thereof, not to exceed $80 million in the aggregate, and certain royalty payments based on the annual aggregate net sales of ZONTIVITY, any combination product containing vorapaxar sulphate and one or more other active pharmaceutical ingredients or any line extension thereof. The contingent consideration liability is valued using a model, which incorporates Level 3 assumptions, including the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. There was no change in the fair value of the contingent consideration liability between the ZONTIVITY acquisition date and September 30, 2016. See Note 2, “Business Combinations and Acquisitions,” for additional information. Level 3 Disclosures The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 inputs at September 30, 2016: (in thousands) Valuation technique Unobservable Inputs Inputs Utilized Warrants liability $ Black-Scholes Volatility 65% Expected term in years 0.6 Contingent consideration Monte Carlo Volatility 43% Discount rate 13% The significant unobservable inputs used in the fair value measurement of our warrants liability include the volatility of our share price and the expected term. Significant increases or decreases in the volatility and expected term utilized would result in a significantly higher or lower fair value measurement, respectively. The significant unobservable inputs used in the fair value measurement of our contingent consideration liability include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to calculate the present value of the probability-weighted cash flows. The table below provides a roll-forward of the warrants liability fair value balances that used Level 3 inputs (in thousands): Balance at December 31, 2015 $ — Warrants liability assumed in Merger Change in fair value during the period Impact of foreign exchange Balance at September 30, 2016 $ The table below provides a roll-forward of the contingent consideration liability fair value balances that used Level 3 inputs (in thousands): Balance at December 31, 2015 $ — Contingent consideration recorded in ZONTIVITY acquisition Change in fair value during the period — Balance at September 30, 2016 $

INVENTORY

INVENTORY	9 Months Ended
	Sep. 30, 2016
INVENTORY
INVENTORY	5. INVENTORY Inventory consisted of the following at: September 30, 2016 December 31, 2015 (in thousands) Raw materials $ $ — Work-in-process — Finished goods — Total Inventory $ $ —

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS, NET	9 Months Ended
	Sep. 30, 2016
GOODWILL AND OTHER INTANGIBLE ASSETS, NET
GOODWILL AND OTHER INTANGIBLE ASSETS, NET.	6. GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The table below provides a roll-forward of our goodwill balances (as adjusted, in thousands): Goodwill balance at December 31, 2015 $ — Goodwill from acquisition of Tribute Goodwill from acquisition of ZONTIVITY Impact of foreign exchange Goodwill balance at September 30, 2016 $ There were no accumulated impairment losses to goodwill at September 30, 2016. Other Intangible Assets, Net Other intangible assets, net consisted of the following at: September 30, 2016 Weighted Gross Carrying Accumulated Net Carrying Average Amount Amortization Amount Life (in thousands) (in years) Acquired technology rights $ $ $ 11 The gross carrying amount of acquired technology rights from the Merger increased $8.8 million between the Merger closing date and September 30, 2016 due to (i) the addition of $2.8 million reclassified from acquired IPR&D for BLEXTEN, which was approved in April 2016, (ii) approximately $1.0 million in regulatory milestones due to Faes as a result of the approval of BLEXTEN, and (iii) $5.0 million from the impact of foreign currency translation adjustments between the Canadian and U.S. dollars. The gross carrying amount of acquired technology rights at September 30, 2016 also includes $40.8 million recorded in the ZONTIVITY acquisition. Amortization expense was $2.4 million and $5.8 million for the three and nine months ended September 30, 2016, respectively. There was no amortization expense for the three and nine months ended September 30, 2015. The estimated aggregate amortization of intangible assets as of September 30, 2016, for each of the five succeeding years and thereafter is as follows: Estimated Amortization For the Years Ending December 31, Expense (in thousands) Remainder of 2016 $ Thereafter Total amortization expense $

ACCRUED EXPENSES

ACCRUED EXPENSES	9 Months Ended
	Sep. 30, 2016
ACCRUED EXPENSES
ACCRUED EXPENSES	7. ACCRUED EXPENSES Accrued expenses consisted of the following at: September 30, 2016 December 31, 2015 (in thousands) Accrued professional fees $ $ Accrued marketing fees — Accrued revenue reserves — Accrued royalties — Accrued pre-commercialization expense — Accrued employee-related expenses Other accrued liabilities Total accrued expenses $ $ Exit and Disposal Activities In connection with the Merger, the Company incurred certain exit costs, primarily severance benefits to former Pozen and Tribute employees. The Company incurred severance expense of $0.6 million and $2.1 million during the three and nine months ended September 30, 2016, respectively, which is primarily included within selling, general and administrative expenses in the condensed consolidated statements of operations. The following table summarizes the exit activity within accrued expenses and other long-term liabilities in the condensed consolidated balance sheets (in thousands): Accrued severance balance at December 31, 2015 $ Accrued severance liability assumed in the Merger Severance expense Cash payments Impact of foreign exchange Accrued severance balance at September 30, 2016 $ Of the accrued severance amounts, the Company expects to pay $2.6 million in 2016 and $0.9 million in 2017.

DEBT

DEBT	9 Months Ended
	Sep. 30, 2016
DEBT
DEBT	8. DEBT Convertible Notes On February 5, 2016, Aralez issued $75.0 million aggregate principal of 2.5% senior secured convertible notes due February 2022 (“2022 Notes”) resulting in net proceeds to Aralez, after debt issuance costs, of $74.5 million in connection with the Facility Agreement, which was executed in December 2015 among the Credit Parties and certain lenders. The 2022 Notes are convertible into common shares of Aralez at an initial conversion premium of 32.5%, subject to adjustment upon certain events, which is equivalent to an initial conversion price of approximately $8.28 per common share. Holders of the 2022 Notes may convert the 2022 Notes at any time and the 2022 Notes are not pre-payable by Aralez. Interest is payable to the note holders quarterly in arrears on the first business day of each January, April, July and October. Interest expense for the three and nine months ended September 30, 2016 was $0.5 million and $1.3 million, respectively, which includes the amortization of debt issuance costs. We estimated the fair value of the $75.0 million aggregate principal amount of the outstanding 2022 Notes to be approximately $64.9 million as of September 30, 2016, using a bond plus call option model that utilizes Level 3 fair value inputs. The carrying amount of the 2022 Notes was $74.5 million as of September 30, 2016, which is the principal amount outstanding, net of $0.5 million of unamortized debt issuance costs to be amortized over the remaining term of the 2022 Notes. Credit Facility Under the terms of the Facility Agreement, Aralez also had the ability to borrow from the lenders up to $200 million under a credit facility until April 30, 2017. The credit facility can be drawn upon for permitted acquisitions and is to be repaid on the sixth anniversary from each draw. Amounts drawn under the credit facility will bear an interest rate of 12.5% per annum and shall be prepayable in whole or in part at any time following the end of the sixth month after the funding date of each draw. The Facility Agreement contains various representations and warranties, and affirmative and negative covenants, customary for financings of this type, including, among other things, limitations on asset sales, mergers and acquisitions, indebtedness, liens and dividends. There were no outstanding borrowings under the credit facility as of September 30, 2016. On October 31, 2016, Aralez drew down $25 million under the credit facility to replenish the Company’s cash balance for the initial upfront payment of $25 million in cash previously paid at the closing of the ZONTIVITY acquisition in September 2016 and drew down an additional $175 million to finance the upfront cash payment for the acquisition of Toprol-XL. In addition, pursuant to a consent to the Facility Agreement entered into in connection with the acquisition of Toprol-XL, the lenders under the Facility Agreement agreed that they and/or affiliated funds will have available sufficient capital to make additional loans to Aralez in an aggregate amount of up to $250 million for the payment of the purchase price of any acquisitions permitted by the terms of the Facility Agreement (as modified by such consent) with respect to target businesses mutually approved by, and as otherwise mutually agreed upon, by Aralez and the lenders, subject to the satisfaction of certain conditions set forth in the Facility Agreement. MFI Note On June 16, 2015, Tribute acquired MFI. As part of the consideration paid, Tribute issued a one-year unsecured convertible promissory note in the aggregate amount of C$5.0 million ($3.9 million) to the prior owner of MFI (“MFI Note”). The MFI Note had an interest rate of 8% per annum and was convertible in whole or in part at the holder’s option during the term into Aralez common shares at a conversion rate of approximately C$12.21 per Aralez common share. The MFI Note was repaid in full along with accrued interest at its maturity date of June 16, 2016, for a total payment of approximately $4.2 million.

SHAREHOLDERS_ EQUITY AND EARNIN

SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2016
Stockholders' Equity Note and Earnings Per Share [Abstract]
Shareholders' Equity and Earnings Per Share [Text Block]	9. The following table presents a reconciliation of our beginning and ending balances in shareholders’ equity for the nine months ended September 30, 2016 (in thousands): Shareholders' equity at January 1, 2016 $ Issuance of common shares in connection with Merger with Tribute Issuance of common shares to investors, net of equity issue costs Warrants exercised Payments related to net settlement of share awards Non-cash share-based compensation expense Foreign currency translation adjustment Net loss Shareholders' equity at September 30, 2016 $ Shareholders’ equity at September 30, 2016 included (i) $115.1 million related to the issuance of 18.5 million shares as consideration for the acquisition of Tribute on February 5, 2016, and (ii) $74.9 million related to the issuance of 12.0 million shares immediately prior to the consummation of the acquisition to certain investors in connection with the Amended and Restated Subscription Agreement, net of equity issue costs. Refer to Note 1 to the Aralez financial statements included in our 2015 Form 10-K for additional information. Basic and Diluted Net Loss Per Common Share Basic net loss per common share has been computed by dividing net loss by the weighted average number of shares outstanding during the period. Except where the result would be antidilutive to income from continuing operations, diluted net loss per common share is computed assuming the conversion of convertible obligations and the elimination of the interest expense related to the 2022 Notes, the exercise of options to purchase common shares, the exercise of warrants, and the vesting of restricted stock units (“RSUs”), as well as their related income tax effects. Diluted net loss per common share differs from basic net loss per common share for the nine months ended September 30, 2016 given potential common shares underlying the warrants liability are dilutive when considering the unrealized gain recognized for the change in the fair value of the warrants during the period. Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except share and per share data) Net loss, basic $ $ $ $ Effect of dilutive securities: Change in fair value of warrants liability — — — Net loss, diluted $ $ $ $ Shares used in calculating basic net loss per common share Effect of dilutive securities: Warrants to purchase common shares - liability-classified — — — Shares used in calculating diluted net loss per common share Net loss per common share, basic $ $ $ $ Net loss per common share, diluted $ $ $ $ Potential common shares excluded from the calculation of diluted net loss per common share as their inclusion would have been antidilutive were: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Options to purchase common shares, RSUs and PSUs Warrants to purchase common shares — — 2022 Notes convertible into common shares — — The Company assumed outstanding warrants in connection with the acquisition of Tribute. The warrants are classified either as a liability, if the exercise price is denominated in Canadian dollars, or as equity if the exercise price is denominated in U.S. dollars. The following is a summary of warrants outstanding and exercisable as of September 30, 2016, and grouped in accordance with their respective expiration dates, with Canadian dollar exercise prices translated to U.S. dollars at the foreign exchange rate in effect at September 30, 2016: No. of Warrants Weighted-Average Quarterly period of expiration Outstanding Exercise Price Q2 2017 Q1 2018 Q3 2018 Q4 2019 Q3 2020 Q1 2021 $

SHARE - BASED COMPENSATION

SHARE - BASED COMPENSATION	9 Months Ended
	Sep. 30, 2016
SHARE-BASED COMPENSATION.
SHARED-BASED COMPENSATION	10. SHARE-BASED COMPENSATION Summary of Share-Based Compensation Plans In December 2015, our Board of Directors adopted the Aralez Pharmaceuticals 2016 Long-Term Incentive Plan (the “2016 Plan”), which became effective on February 5, 2016, upon consummation of the Merger. The 2016 Plan is the only existing plan in which we are authorized to grant equity-based awards. The 2016 Plan provides for grants of stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based awards to employees, directors, and consultants. Under the 2016 Plan, the Company initially reserved 2,300,000 common shares for grant plus (i) the number of shares available for issuance under both the Pozen Inc. 2010 Equity Compensation Plan and the Amended and Restated Option Plan of Tribute Pharmaceuticals Canada Inc. that were not subject to outstanding awards upon the effective date and (ii) the number of shares required to cover each stock option granted in substitution of stock options held by employees of Tribute, as required to consummate the Merger. At September 30, 2016, there were 2,163,991 common shares remaining available for grant under the 2016 Plan. Summary of Share-Based Compensation Expense Share-based compensation expense recorded in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015, was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Selling, general and administrative $ $ $ $ Research and development — Total non-cash share-based compensation expense $ $ $ $ Included in the table above is approximately $0.5 million of share-based compensation expense related to the accelerated vesting of certain Tribute equity awards upon consummation of the Merger, which was recorded as selling, general and administrative expense for the nine months ended September 30, 2016. Options to Purchase Common Shares A summary of option activity for the nine months ended September 30, 2016 is as follows: Weighted- Underlying Average Shares Exercise Stock Option Awards (in thousands) Price Outstanding at December 31, 2015 $ Granted Exercised Forfeited or expired Outstanding at September 30, 2016 $ The weighted average grant date fair value for option awards granted during the nine months ended September 30, 2016 was $2.54 per option. RSUs and PSUs A summary of RSU, including performance restricted stock units (“PSUs”), activity for the nine months ended September 30, 2016, is as follows: Weighted- Underlying Average Shares Grant Date Restricted Stock Units, including PSUs (in thousands) Fair Value Nonvested restricted stock units at December 31, 2015 $ Granted Vested Forfeited or expired Nonvested restricted stock units at September 30, 2016 $ During the nine months ended September 30, 2016, 654,737 PSUs with both market-based and service conditions were granted with an aggregate grant-date fair value of $2.8 million. The PSUs vest at the end of a three-year performance period based on the achievement of pre-determined market-based performance goals.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	11. COMMITMENTS AND CONTINGENCIES Operating Leases We lease office space and certain equipment under cancellable and non-cancelable operating lease agreements. Rent expense was approximately $0.2 million and $0.5 million for the three and nine months ended September 30, 2016, respectively. Future minimum payments under our non-cancelable lease agreements at September 30, 2016 were as follows (in thousands): Remainder of 2016 $ Thereafter Total minimum payments $ On March 31, 2016, the lease relating to approximately 17,009 square feet of office space located at Exchange Office Building, Chapel Hill, North Carolina, expired in accordance with its terms, as amended. In April 2016, we entered into an agreement to lease approximately 36,602 square feet of office space for our U.S. headquarters in Princeton, New Jersey. Pursuant to the lease agreement, we issued a letter of credit in the amount of $0.3 million to the property owner as a security deposit, which we have classified as restricted cash and included within other current assets on the condensed consolidated balance sheet as of September 30, 2016. Supply Agreements We have various supply, license, distribution and manufacturing agreements with third parties that include purchase minimums or minimum royalties. Pursuant to these agreements, we have minimum future obligations of approximately $4.9 million as of September 30, 2016. Legal Proceedings We are currently party to legal proceedings arising in the normal course of business, principally patent litigation matters. We have assessed such legal proceedings and do not believe that it is probable that a liability has been incurred or that the amount of any potential liability or range of losses can be reasonably estimated. As a result, we have not recorded any loss contingencies for any of these matters as of September 30, 2016. While it is not possible to determine the outcome of these matters, in the event of an adverse outcome or outcomes, our business could be materially harmed. We intend to vigorously defend our intellectual property rights. VIMOVO ® ANDA Litigation Between March 14, 2011 and May 16, 2013, Pozen, now a subsidiary of the Company, received Paragraph IV Notice Letters from Dr. Reddy’s Laboratories (“DRL”), Lupin Ltd. (“Lupin”), Watson Laboratories, Inc. – Florida (“Watson”), and Mylan Pharmaceuticals Inc. (“Mylan”), stating that each had filed an Abbreviated New Drug Application (“ANDA”) with the Food and Drug Administration (“FDA”) seeking regulatory approval to market a generic version of our VIMOVO product before the expiration of U.S. Patent No. 6,926,907 (the “907 patent”). On November 20, 2012, Pozen received a second Notice Letter from DRL stating that DRL had filed a second ANDA with the FDA seeking regulatory approval to market a different generic formulation of the VIMOVO product before the expiration of the ‘907 patent . The ‘907 patent is assigned to Pozen and listed for the VIMOVO product in the FDA’s publication titled “Approved Drug Products with Therapeutic Equivalence Evaluations” (also known as the “Orange Book”). On April 21, 2011, Pozen filed suit against the first ANDA filer, DRL, in the United States District Court for the District of New Jersey (the “District Court”), asserting infringement of the ‘ 907 patent. Pozen subsequently filed suit against the other three ANDA filers within 45 days of receipt of their respective Paragraph IV Notice Letters. Horizon , our current marketing partner for the VIMOVO product in the U.S. , is Pozen’s co-plaintiff in each suit. The first suit against DRL is considered the lead case and has been consolidated with other suits for the purpose of pre-trial and discovery. On December 19, 2012, the District Court conducted a pre-trial Markman hearing to determine the proper claim construction of certain claims disputed by the parties. On May 1, 2013, the District Court issued a Markman Order construing the disputed claims. A scheduling order for the consolidated suits was issued by the District Court on June 27, 2014. On October 15, 2013, the United States Patent & Trademark Office (“USPTO”) issued to Pozen U.S. Patent No. 8,557,285 (the “‘285 patent”). The ‘285 patent is listed in the Orange Book for the VIMOVO product and is related to the ‘907 patent. On October 23, 2013, Pozen filed suits against DRL, Lupin, Watson and Mylan in the District Court asserting infringement of the ‘285 patent. These suits have each been consolidated with the above referenced suits involving the ‘907 patent . On May 12, 2016, the court granted DRL’s motion for summary judgment of non-infringement of the ‘907 patent with respect DRL’s second ANDA. The ruling does not apply to DRL’s first-filed ANDA, nor does it apply to the other patents asserted against DRL’s second ANDA. The suits involving the ‘907 and ‘285 patents have been consolidated for trial, which has been scheduled by the District Court to begin December 7, 2016. On October 7, 2014, the USPTO issued to Pozen U.S. Patent No. 8,852,636 (the “‘636 patent”). On October 14, 2014, the USPTO issued to Pozen U.S. Patent No. 8,858,996 (the “‘996 patent”). In addition, on October 21, 2014, the USPTO issued to Pozen U.S. Patent No. 8,865,190 (the “190 patent”). The ‘636, ‘996 and ‘190 patents are each listed in the Orange Book for the VIMOVO product and are each related to the ‘907 and ‘285 patents. On February 3, 2015, the USPTO issued to Pozen U.S. Patent No. 8,945,621 (the “‘621 patent”). The ‘621 patent is listed in the Orange Book for the VIMOVO product. On May 13, 2015, Pozen and Horizon filed suit against DRL, Lupin, Actavis (formerly known as Watson) and Mylan in the District Court asserting infringement of the ‘636 and ‘996 patents. On June 18, 2015, Pozen filed Amended Complaints in each of the suits to assert infringement of the ‘190 patent. On October 20, 2015, the USPTO issued to Pozen U.S. Patent No. 9,161,920 (the “‘920 patent”). On December 1, 2015, the USPTO issued to Pozen U.S. Patent No. 9,198,888 (the “‘888 patent”). The ‘920 and ‘888 patents are each listed in the Orange Book for the VIMOVO product and are each related to the ‘907 and ‘285 patents. On December 29, 2015, the USPTO issued to Pozen U.S. Patent No. 9,220,698 (the “‘698 patent”). The ‘698 patent is listed in the Orange Book for the VIMOVO product. On May 24, 2016, the USPTO issued to Pozen U.S. Patent No. 9,345,695 (the “‘695 patent”). The ‘695 patent is listed in the Orange Book for the VIMOVO product and is related to the ‘907 and ‘285 patents. On January 25, 2016, Pozen and Horizon filed suit against Actavis in the District Court asserting infringement of the ‘920 and ‘888 patents. On March 16, 2016, the District Court consolidated this suit with the suit filed against Actavis on May 13, 2015. On February 10, 2016, Pozen filed Amended Complaints against DRL, Lupin and Mylan to assert infringement of the ‘920 and ‘888 patents. On August 10, 2016, Pozen and Horizon filed suit against DRL, Lupin, Actavis and Mylan in the District Court asserting infringement of the ’621, ’698, and ’695 patents. These suits are in the initial phase and a full schedule has not yet been set by the District Court. As with any litigation proceeding, we cannot predict with certainty the outcome of the patent infringement suits against DRL, Lupin, Mylan and Actavis relating to generic versions of VIMOVO. Furthermore, while Horizon is responsible for this litigation, including the costs of same, we nevertheless will have to incur additional expenses in connection with the lawsuits relating to VIMOVO, which may be substantial. Moreover, responding to and defending pending litigation results in a significant diversion of management’s attention and resources and an increase in professional fees. Inter Partes Review DRL filed a Petition for review (“IPR Petition”) of the ‘285 patent with the Patent Trial and Appeal Board (“PTAB”) of the USPTO on February 24, 2015, which was denied on October 9, 2015. The Coalition for Affordable Drugs VII L.L.C. (“CFAD”) filed IPR Petitions of the ‘907 patent, the ‘996 patent and the ‘636 patent with the PTAB on May 21, 2015, June 5, 2014 and August 7, 2015, respectively, each of which was denied on December 8, 2015, December 17, 2015 and February 11, 2016, respectively. On August 12, 2015, CFAD filed an IPR Petition of the ‘621 patent with the PTAB. On February 22, 2016 the PTAB instituted review of the claims of the ‘621 patent. Pozen and Horizon filed a response on June 23, 2016. CFAD filed a reply to this response on September 22, 2016. Oral argument before the PTAB is set in this matter for November 16, 2016. On August 19, 2015, Lupin filed three separate IPR Petitions of the ‘996, ‘636 and ‘190 patents with the PTAB. On March 1, 2016 the PTAB denied Lupin’s petition for review of the ‘636 patent and instituted review of a limited number of the claims in each of the ‘996 and ‘190 patents. Pozen and Horizon filed responses to the petitions for review of the ‘996 and ‘190 patents on June 27, 2016. Lupin filed replies to these responses on September 16, 2016. Oral arguments before the PTAB for these matters are scheduled for November 29, 2016. On November 12, 2015, Gray Square Pharmaceuticals, LLC (formerly known as Graybar Pharmaceuticals, LLC) filed an IPR Petition of U.S. Patent No. 7,332,183 (the “‘183 patent”) with the PTAB. The ‘183 patent is assigned to Pozen and listed with respect to Treximet in the Orange Book. Pozen and our marketing partner Pernix filed a Preliminary Response to Gray Square’s petition on February 16, 2016. On May 6, 2016, the PTAB denied Gray Square’s petition. Canada VIMOVO ® Litigation On January 20, 2015, our Canadian licensee, AstraZeneca Canada Inc. (“AstraZeneca Canada”) received a Notice of Allegation from Mylan Pharmaceuticals ULC (“Mylan Canada”) informing them that Mylan Canada has filed an Abbreviated New Drug Submission in Canada (“ANDS”) for approval of its naproxen/esomeprazole magnesium tablets and alleging non-infringement of some of the claims and invalidity of Pozen’s Canadian Patent No. 2,449,098 (the “‘098 patent”). A Notice of Allegation is served pursuant to the Patented Medicines (Notice of Compliance) Regulations in Canada and is similar to a Paragraph IV Notice Letter in the United States. In response, Pozen and AstraZeneca Canada commenced a proceeding in the Federal Court of Canada (the “Canada Court”) in relation to the ‘098 patent on March 5, 2015 seeking to prohibit Health Canada from approving Mylan Canada’s generic naproxen/esomeprazole product. The Canadian proceeding is summary in nature and expected to be completed before March 5, 2017. In accordance with the schedule approved by the Canada Court, affidavit evidence of AstraZeneca Canada and Pozen was served on September 11, 2015 and affidavit evidence of Mylan Canada on January 8, 2016. The parties have completed cross-examinations on the affidavit evidence on April 29, 2016, as required by the schedule. The written record of AstraZeneca Canada and Pozen, for the hearing, was served and filed with the Court on July 13, 2016. Mylan Canada’s written record was served and filed on September 14, 2016. A three-day hearing of the matter has been scheduled, commencing on November 21, 2016. The proceeding will decide whether approval for Mylan Canada’s naproxen/esomeprazole magnesium tablets will be prohibited until the expiry of the ‘098 patent because none of Mylan Canada’s allegations in respect of the ‘098 patent are justified; however, the proceeding will not finally decide ‘098 patent validity or infringement. The ‘098 patent expires on May 31, 2022. On March 23, 2016, AstraZeneca Canada received another Notice of Allegation from Mylan Canada in respect of the ‘098 patent, informing them that Mylan Canada has filed a supplemental submission for one of the strengths of its naproxen/esomeprazole magnesium tablets. This Notice of Allegation states that Mylan Canada withdrew from its ANDS the 375/20 mg strength and re-filed a supplemental submission for this strength. In this circumstance, Mylan is required to file, and has provided another Notice of Allegation in respect of the ‘098 patent. The allegations in respect of the ‘098 patent are identical to those asserted in the first Notice of Allegation. In response, Pozen and AstraZeneca Canada commenced another proceeding in the Federal Court of Canada on May 5, 2016 seeking to prohibit Health Canada from approving Mylan Canada’s 375/20 mg strength naproxen/esomeprazole magnesium tablet until the expiry of the ‘098 patent. As the allegations made in respect of the ‘098 patent are identical, on the parties’ consent, the Court has stayed the proceeding and the parties have agreed that the outcome of the first proceeding discussed above, will determine the outcome for this new proceeding. YOSPRALA Paragraph IV Certification On November 4, 2016, the FDA website indicated that an ANDA for a generic version of YOSPRALA 81mg/40mg was submitted on October 14, 2016. The Company expects to receive a Paragraph IV certification notice relating to this matter in the near future. The ANDA procedure under the Federal Food, Drug and Cosmetic Act allows drug manufacturers to seek approval to market a “generic” form of an approved drug through an abbreviated process that does not require new clinical trial data to establish safety and efficacy. Where approved drugs are covered by one or more patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”), the ANDA filer must provide a so-called Paragraph IV Certification to the FDA, in which the ANDA filer asserts that the patents listed in the Orange Book covering the approved drug are invalid, unenforceable and/or will not be infringed by the manufacture, use, or sale of the generic product. A patent holder who receives notice of a Paragraph IV Certification may then choose to sue the ANDA filer for patent infringement. Under the FDA’s rules and regulations, if the Company initiates a patent infringement suit to defend the patents identified in any Paragraph IV notice it may receive, within 45 days after the receipt of such notice, the FDA is prevented from approving the ANDA until the earlier of: (1) 30 months; (2) the expiration of the patents at issue; or (3) a decision in the infringement case that all of such patents are not infringed or invalid. In addition, any FDA approval of the generic will be subject to expiration of the 3-year data exclusivity period granted to the Company upon approval of YOSPRALA by the FDA, which data exclusivity period will expire September 14, 2019.

SEGMENT INFORMATION

SEGMENT INFORMATION	9 Months Ended
	Sep. 30, 2016
SEGMENT INFORMATION
SEGMENT INFORMATION	12. SEGMENT INFORMATION Aralez has one operating segment , the acquisition, development and commercialization of products primarily in cardiovascular, pain and other specialty areas for the purpose of delivering meaningful products to improve patients’ lives while focusing on creating shareholder value. The Company’s entire business is managed by a single management team, which reports to the Chief Executive Officer.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	13. SUBSEQUENT EVENTS On October 31, 2016, Aralez Ireland acquired the U.S. rights to Toprol-XL ® (metoprolol succinate) and the currently marketed authorized generic (the “Authorized Generic”) pursuant to an asset purchase agreement (the “Toprol-XL Asset Purchase Agreement”) entered into between AstraZeneca, Aralez Ireland and Aralez Pharmaceuticals Inc. Toprol-XL is a cardioselective beta-blocker indicated for the treatment of hypertension, alone or in combination with other antihypertensives; the long term treatment of angina pectoris and treatment of stable, symptomatic (NYHA class II or III) heart failure of specific origins. The purchase price payable under the Toprol-XL Asset Purchase Agreement consists of (i) a payment of $175 million by Aralez Ireland to AstraZeneca, paid on the closing date of the transaction; (ii) certain milestone payments payable by Aralez Ireland subsequent to the closing of the transaction upon the occurrence of certain milestone events based on the annual aggregate net sales of Toprol-XL and the Authorized Generic and other contingent events, which in no event will exceed $48 million in the aggregate; (iii) royalty payments of (A) 15% of total quarterly net sales of Toprol-XL and any other authorized or owned generic version of Toprol-XL that is marketed, distributed or sold by or on behalf of, or under a license or sublicense from, Aralez (other than the Authorized Generic), and (B) 15% of quarterly net sales of the Authorized Generic, but for purposes of royalty payments and clause (B) only, net sales do not include the supply price paid for the Authorized Generic by Aralez Ireland to AstraZeneca under the supply agreement entered into between Aralez Ireland and AstraZeneca in respect of the applicable period and (iv) a payment for the value of the finished inventory of Toprol-XL and the Authorized Generic at closing of the transaction, not to exceed a cap specified in the Toprol-XL Asset Purchase Agreement. On October 31, 2016, in connection with the Toprol-XL acquisition, Aralez Ireland entered into a Supply Agreement (the “Toprol-XL Supply Agreement”) with AstraZeneca. Pursuant to the terms of the Toprol-XL Supply Agreement and except as otherwise expressly set forth therein, AstraZeneca will be the exclusive manufacturer and supplier to Aralez Ireland of Toprol-XL and the Authorized Generic, each in finished bottled form for exploitation and commercialization in the U.S. The initial term of the Toprol-XL Supply Agreement is 10 years (the “Toprol-XL Supply Initial Term”). The Toprol-XL Supply Agreement will continue indefinitely following the expiration of the Toprol-XL Supply Initial Term unless terminated in accordance with its terms. Except in the case of certain uncured material breaches of the Toprol-XL Supply Agreement by Aralez Ireland or certain insolvency related events affecting Aralez Ireland, AstraZeneca may not terminate the Toprol-XL Supply Agreement unless it satisfies certain conditions related to, among other things, the transfer of technology. In addition to termination rights upon certain uncured material breaches of the Toprol-XL Supply Agreement by AstraZeneca or certain insolvency related events affecting AstraZeneca, Aralez Ireland may terminate the Toprol-XL Supply Agreement at any time following the Toprol-XL Supply Initial Term upon providing 12 months prior written notice to AstraZeneca. In connection with the Toprol-XL Asset Purchase Agreement, on October 3, 2016, the Credit Parties and certain lenders party to the Facility Agreement entered into a Limited Consent (the “Credit Agreement Consent”) pursuant to which such lenders consented to Aralez Ireland entering into the Toprol-XL Asset Purchase Agreement and to the consummation of the transactions contemplated thereby. Pursuant to the terms of the Credit Agreement Consent, the Credit Parties were permitted to borrow under the Facility Agreement to finance the $175 million closing date payment to be made in connection with the Toprol-XL acquisition. The Credit Agreement consent also provided that in the event the Company borrowed loans under the Facility Agreement to finance the $175 million payment (the “Toprol-XL Loans”), the Company may also elect to concurrently borrow loans under the Facility Agreement in an aggregate principal amount of $25 million to replenish the Company’s cash balance for the initial upfront payment of $25 million in cash previously paid at the closing of the ZONTIVITY acquisition on September 6, 2016 (the “ZONTIVITY Loans”). However, if the Company borrowed the Toprol-XL Loans at the closing of the Toprol-XL acquisition, but did not elect to concurrently borrow the ZONTIVITY Loans, the Company would no longer be permitted to borrow, and the lenders would have no further obligation to fund, the ZONTIVITY Loans or any other acquisition loans under the Facility Agreement. On October 31, 2016, the Company borrowed both the Toprol-XL Loans and the ZONTIVITY Loans. In addition, pursuant to the Credit Agreement Consent, the lenders agreed that they and/or affiliated funds will have available sufficient capital to make additional loans to the Credit Parties in an aggregate amount of up to $250 million for the payment of the purchase price of any acquisitions permitted by the terms of the Facility Agreement (as modified by the Credit Agreement Consent) with respect to target businesses mutually approved by, and as otherwise mutually agreed upon, by the Company and the lenders, subject to the satisfaction of certain conditions set forth in the Facility Agreement. Any such loans (to the extent made available) may be borrowed in one or more advances at any time prior to April 3, 2018. On October 3, 2016, the requisite lenders to the Facility Agreement and the Credit Parties also entered into an Amendment to Second Amended and Restated Facility Agreement (the “Credit Agreement Amendment”) which amends certain provisions of the Facility Agreement if the Credit Parties elected to borrow under such facility to finance the $175 million closing date payment in connection with the Toprol-XL acquisition. As discussed above, on October 31, 2016, the closing date of the Toprol-XL acquisition, the Company borrowed a total of $200 million under the Facility Agreement. As such, pursuant to the Credit Agreement Amendment, the Facility Agreement was amended to contain additional financial performance thresholds, including a minimum adjusted EBITDA threshold and a minimum specified revenue threshold relating to net sales of Toprol-XL and the Authorized Generic received by the Company. In the event of the failure to meet both such additional financial performance thresholds, the lenders may elect to have the then outstanding principal balance of certain term loans under the Facility Agreement amortize quarterly through the maturity thereof.

ORGANIZATION, BASIS OF PRESEN20

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2016
ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation For financial reporting and accounting purposes, Pozen was the acquirer of Tribute pursuant to the Merger in a business combination. The condensed consolidated financial statements for the three and nine months ended September 30, 2015 reflect the results of operations and financial position of Pozen, but do not include the results of operations of Tribute because the Merger was completed on February 5, 2016. Aralez’s results of operations for the three and nine months ended September 30, 2016 include the results of Tribute from the closing date of the Merger. Aralez’s results of operations for the three and nine months ended September 30, 2016 also include the results of ZONTIVITY from its acquisition date (See Note 2). The accompanying condensed consolidated financial statements are unaudited and have been prepared by Aralez in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and pursuant to, and in accordance with, the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet at December 31, 2015 was derived from audited financial statements, but certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015, which are contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and with applicable Canadian securities regulators on SEDAR on March 15, 2016 (“2015 Form 10-K”). The condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. Certain reclassifications with respect to the presentation of accrued expenses were made to prior year figures to conform with current year presentation. The accompanying condensed consolidated financial statements include the accounts of Aralez Pharmaceuticals Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future period or the entire fiscal year.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires the extensive use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. The most significant assumptions are employed in estimates used in determining values of: inventories; long-lived assets, including goodwill, in-process research and development (“IPR&D”), and other intangible assets; accrued expenses; contingent consideration; income taxes; share-based compensation expense; as well as estimates used in accounting for contingencies and revenue recognition. Actual results could differ from these estimates.
Concentration of Risk	Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, including money market funds. Our investment policy places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash and cash equivalents to the extent recorded on the balance sheet. We are also subject to credit risk from our accounts receivable related to product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in Canada and the United States, and to other international distributors. Customer creditworthiness is monitored and collateral is not required.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents consists of cash and short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase.
Inventory	Inventory Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis. Cost is determined to be the purchase price for raw materials and the production cost, including materials, labor and indirect manufacturing costs, for work-in-process and finished goods. The Company analyzes its inventory levels quarterly and writes-down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value, inventory in excess of expected sales requirements or inventory that fails to meet commercial sale specifications to cost of product revenues. Expired inventory is disposed of and the related costs are written off to cost of product revenues.
Intangible Assets	Goodwill Goodwill relates to amounts that arose in connection with the acquisitions of Tribute and ZONTIVITY. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. Goodwill is not amortized but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. IPR&D IPR&D acquired in a business combination is capitalized as indefinite-lived assets on the Company's condensed consolidated balance sheets at its acquisition-date fair value. Until the underlying project is completed, these assets are accounted for as indefinite-lived intangible assets and are subject to impairment testing. Once the project is completed, the carrying value of the IPR&D is reclassified to other intangible assets, net and is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses related to the IPR&D projects are expensed as incurred. We acquired approximately $3.2 million of IPR&D assets with the acquisition of Tribute, of which $2.8 million was subsequently reclassified to other intangible assets upon receipt of regulatory approval for the related project. The remaining carrying value of IPR&D is included within other long-term assets on our condensed consolidated balance sheets at September 30, 2016. IPR&D is tested for impairment on an annual basis or more frequently if impairment indicators are present. If IPR&D becomes impaired, the carrying value of the IPR&D is written down to its revised fair value with the related impairment charge recognized in the period in which the impairment occurs. Other Intangible Assets, net Other intangible assets consist of acquired technology rights. The Company amortizes its intangible assets using the straight-line method over their estimated economic lives. Costs to obtain, maintain and defend the Company's patents are expensed as incurred. We will evaluate the potential impairment of other intangible assets if events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Events giving rise to impairment are an inherent risk in our industry and many factors cannot be predicted. Factors that we consider in deciding when to perform an impairment review include significant changes in our forecasted projections for the asset or asset group for reasons including, but not limited to, significant under-performance of a product in relation to expectations, significant changes or planned changes in our use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group and its eventual disposition to the carrying value of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the statements of operations. Such impairment charges may be material to our results.
Contingent Consideration	Contingent Consideration Certain of the Company’s business acquisitions involve the potential for future payment of consideration that is contingent upon the achievement of operational and commercial milestones and royalty payments on future product sales. The fair value of contingent consideration liabilities is determined at the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is remeasured at current fair value with changes recorded in our condensed consolidated statements of operations. Changes in any of the inputs may result in a significantly different fair value adjustment.
Revenue Recognition	Revenue Recognition Principal sources of revenue are (i) product sales from the product portfolio acquired with our acquisition of Tribute and (ii) royalty revenues from sales of VIMOVO ® by our commercialization partners. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, and collectibility of the resulting receivable is reasonably assured. Product Revenues, net Revenues from the sale of products are recorded net of discounts, wholesaler fees, chargebacks, rebates, returns and allowances, and are recognized when legal title to the goods and risk of ownership has been passed to the customer. A customer’s obligation to pay the Company for products is not contingent upon the resale of those products. We have a product returns policy on some of our products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. Our estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis of the level of inventory in the distribution channel, if any. We believe that the reserves we have established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amount for reserves to vary. If actual results vary with respect to our reserves, we may need to adjust our estimates, which could have a material effect on our results of operations in the period of adjustment. Other revenues Other revenues include revenues from licensing arrangements with other biopharmaceutical companies, including milestones payments and royalties. Revenue from royalties is recognized when the Company has fulfilled the terms in accordance with contractual agreements and has no future obligation, and the amount of the royalty fee is determinable. Royalty revenue that is reasonably estimable and determinable is recognized based on estimates utilizing information reported to us by our commercialization partners. Other revenues also include revenues from sales of ZONTIVITY from its acquisition date, recognized net of related cost of product revenues and fees paid to Merck under a transition services agreement in effect for up to twelve months from the date of acquisition.
Income Taxes	Income Taxes We account for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax basis assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate changes. A valuation allowance is required when it is “more-likely-than-not” that all or a portion of deferred tax assets will not be realized. Since our inception, we have incurred substantial cumulative losses and may incur substantial and recurring losses in future periods. The utilization of the loss carryforwards to reduce future income taxes will depend on our ability to generate sufficient taxable income prior to the expiration of the loss carryforwards. In addition, the maximum annual use of net operating loss and research credit carryforwards is limited in certain situations where changes occur in stock ownership. Aralez files federal and state income tax returns, as applicable, with the tax authorities in various jurisdictions including Canada, Ireland and the United States. Pozen is no longer subject to U.S. federal or North Carolina state income tax examinations by tax authorities for years before 2012. Tribute is no longer subject to Canadian income tax examinations by tax authorities for years before 2011. However, the loss and credit carryforwards generated by Pozen and Tribute may still be subject to change to the extent these losses and credits are utilized in a year that is subject to examination by tax authorities. ASC 740 prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.
Share-Based Compensation	Share-Based Compensation We expense the fair value of employee share-based compensation over the employees' service periods, which are generally the vesting period of the equity award. For awards with performance conditions granted, we recognize compensation cost over the expected period to achieve the performance conditions, provided achievement of the performance conditions are deemed probable. Awards with market-based conditions are expensed over the service period regardless of whether achievement of the market condition is deemed probable or is ultimately achieved. Compensation expense is measured using the fair value of the award at the grant date, adjusted for estimated forfeitures. In order to determine the fair value of option awards on the grant date, we use the Black-Scholes option pricing model. Inherent in this model are assumptions related to expected share price volatility, estimated option life, risk-free interest rate and dividend yield. Our expected share price volatility assumption is based on the historical volatility of our stock, which is obtained from public data sources. The expected life represents the weighted average period of time that share-based awards are expected to be outstanding giving consideration to vesting schedules, historical exercise patterns and post-vesting cancellations for terminated employees that have been exhibited historically, adjusted for specific factors that may influence future exercise patterns. The risk-free interest rate is based on factual data derived from public sources. We use a dividend yield of zero as we have no intention to pay cash dividends in the foreseeable future. For performance-based awards with market conditions, the Company used a Monte Carlo simulation model to determine the fair value of awards as of the grant date. We estimate forfeitures based on our historical experience of pre-vesting cancellations for terminated employees. An estimated forfeiture rate is applied to all equity awards, which includes option awards and restricted stock units, including performance share units. We believe that our estimates are based on outcomes that are reasonably likely to occur. To the extent actual forfeitures differ from our estimates, such amounts will be recorde d as a cumulative adjustment in the period estimates are revised. Determining the appropriate amount to expense for awards with performance conditions based on the achievement of stated goals requires judgment, including forecasting future performance results. The estimate of expense is revised periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate. The cumulative impact of any revisions is reflected in the period of change. If any applicable financial performance goals are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.
Fair Value Measurements	Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and requires detailed disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. This standard classifies these inputs into the following hierarchy: · Level 1 Inputs — Quoted prices for identical instruments in active markets. · Level 2 Inputs — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. · Level 3 Inputs — Instruments with primarily unobservable value drivers. The fair value hierarchy level is determined by asset class based on the lowest level of significant input. In periods of market inactivity, the observability of prices and inputs may be reduced for certain instruments. This condition could cause an instrument to be reclassified between levels. The carrying amount of our cash and cash equivalents approximates its fair value due to the short-term nature of these amounts. The warrants liability is carried at fair value and is included within other current liabilities on our condensed consolidated balance sheet at September 30, 2016. We utilized Level 3 inputs to estimate the fair value of the warrants liability. The contingent consideration liability is also carried at fair value, and is recorded as separate short and long-term balances on the condensed consolidated balance sheet at September 30, 2016. We utilized Level 3 inputs to estimate the fair value of the contingent consideration liability.
Foreign Currency	Foreign Currency Our reporting currency is the U.S. dollar. The assets and liabilities of our subsidiaries that have a functional currency other than the U.S. dollar, primarily the Canadian dollar, are translated into U.S. dollars at the exchange rates in effect at the balance sheet date with the results of operations of subsidiaries translated at average exchange rates for the period. The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income within shareholders’ equity. Transactions in foreign currencies are remeasured into the functional currency of the relevant subsidiary at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Resulting gains and losses are recorded in other income (expense), net within the condensed consolidated statements of operations.
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income A company is required to present, either on the face of the statement where net income is presented, in a separate statement of comprehensive income or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. There were no amounts reclassified out of accumulated other comprehensive income for the three and nine months ended September 30, 2016 and 2015. Other comprehensive income for the three and nine months ended September 30, 2016 related to foreign currency translation adjustments.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , which requires revenue recognition based on the transfer of promised goods or services to customers in an amount that reflects consideration Aralez expects to be entitled to in exchange for goods or services. In August 2015, the FASB issued updated guidance deferring the effective date of the revenue recognition standard. The new rules supersede prior revenue recognition requirements and most industry-specific accounting guidance. In March, April and May 2016, the FASB issued additional updated guidance, which clarifies certain aspects of the ASU and the related implementation guidance issued by the FASB-IASB Joint Transition Resource Group for Revenue Recognition. The ASU will be effective for Aralez in the first quarter of 2018, with either full retrospective or modified retrospective application required. We have not yet selected a transition method and are evaluating the impact of the ASU on our financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10) , which requires equity investments to be measured at fair value with changes in fair value recognized in net income. It allows an entity to choose to measure equity investments that do not have readily determinable fair values at cost minus impairment. It also simplifies the impairment assessment of equity investments without readily determinable fair values and eliminates the requirements to disclose the methods used to estimate fair value for instruments measured at amortized cost on the balance sheet. The amendments in the ASU are effective for Aralez in the first quarter of 2018. We do not expect the adoption to have a material impact to our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which supersedes current lease accounting guidance. The primary difference between current GAAP and the new standard is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current GAAP. The standard requires a modified retrospective approach upon adoption, with practical expedients that may be available to elect. The standard is effective for Aralez in the first quarter of 2019 and early adoption is permitted. We are evaluating the impact of the ASU on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718) , which simplifies several aspects of the accounting for share-based payment transactions, such as the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments include the requirement to recognize excess tax benefits and tax deficiencies as income tax expense or benefit, and to recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. It also allows an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The amendments in the ASU are effective for Aralez in the first quarter of 2017, and early adoption is permitted. We are evaluating the impact of the ASU on our financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815) , which clarifies the steps required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts. The ASU clarifies that when a call (put) option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) is related to interest rates or credit risks. The ASU is intended to eliminate diversity in practice in assessing embedded contingent call (put) options in debt instruments. The amendments in the ASU are effective for Aralez in the first quarter of 2017, and early adoption is permitted. We do not expect the adoption to have a material impact to our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , providing additional guidance on eight specific cash flow classification issues. The goal of the ASU is to reduce diversity in practice of classifying certain items. The amendments in the ASU are effective for Aralez in the first quarter of 2018 using a retrospective transition method, and early adoption is permitted. We are evaluating the impact of the ASU on our financial statements.

BUSINESS COMBINATIONS AND ACQ21

BUSINESS COMBINATIONS AND ACQUISITIONS (Tables)	9 Months Ended
	Sep. 30, 2016
Business Combinations and Acquisitions
Schedule of pro forma information	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except per share data) Total revenues, net $ $ $ $ Net loss $ $ $ $ Basic and diluted net loss per share $ $ $ $
Tribute, Acquired entity
Business Combinations and Acquisitions
Schedule of acquisition-date fair value of the consideration transferred	At February 5, 2016 (in thousands) Equity consideration $ Repayment of Tribute indebtedness Total consideration $
Schedule of estimated fair values of the assets acquired and liabilities assumed	At February 5, 2016 (as adjusted) (in thousands) Cash $ Accounts receivable Inventory Prepaid expenses and other current assets Property, plant and equipment Intangible assets In-process research and development Accounts payable and accrued expenses Note payable Warrants liability Other liabilities Deferred tax liability Total net assets acquired $ Goodwill Total consideration $
Schedule of preliminary fair value of intangible assets	Preliminary Fair Value (as adjusted) (in thousands) Marketed products: Fiorinal $ Proferrin Fibricor Uracyst and Neovisc Cambia Other marketed products Total acquired technology rights $
ZONTIVITY acquisition
Business Combinations and Acquisitions
Schedule of acquisition-date fair value of the consideration transferred	At September 6, 2016 (in thousands) Cash $ Contingent consideration Total consideration $
Schedule of estimated fair values of the assets acquired and liabilities assumed	At September 6, 2016 (in thousands) Intangible asset $ Total net asset acquired Goodwill Total consideration $

FAIR VALUE (Tables)

FAIR VALUE (Tables)	9 Months Ended
	Sep. 30, 2016
Schedule of assets and liabilities measured at fair value	September 30, 2016 Financial Instruments Carried at Fair Value Significant Quoted prices in other Significant active markets for observable unobservable identical items inputs inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents $ $ — $ — $ Liabilities: Contingent consideration $ — $ — $ $ Warrants liability — — December 31, 2015 Financial Instruments Carried at Fair Value Significant Quoted prices in other Significant active markets for observable unobservable identical items inputs inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents $ $ ― $ — $
Quantitative information associated with the fair value measurement of Level 3 inputs	(in thousands) Valuation technique Unobservable Inputs Inputs Utilized Warrants liability $ Black-Scholes Volatility 65% Expected term in years 0.6 Contingent consideration Monte Carlo Volatility 43% Discount rate 13%
Warrants liability
Roll-forward of fair value balances that used Level 3 inputs	The table below provides a roll-forward of the warrants liability fair value balances that used Level 3 inputs (in thousands): Balance at December 31, 2015 $ — Warrants liability assumed in Merger Change in fair value during the period Impact of foreign exchange Balance at September 30, 2016 $
Contingent consideration
Roll-forward of fair value balances that used Level 3 inputs	The table below provides a roll-forward of the contingent consideration liability fair value balances that used Level 3 inputs (in thousands): Balance at December 31, 2015 $ — Contingent consideration recorded in ZONTIVITY acquisition Change in fair value during the period — Balance at September 30, 2016 $

INVENTORY (Tables)

INVENTORY (Tables)	9 Months Ended
	Sep. 30, 2016
INVENTORY
Schedule of inventory	September 30, 2016 December 31, 2015 (in thousands) Raw materials $ $ — Work-in-process — Finished goods — Total Inventory $ $ —

GOODWILL AND OTHER INTANGIBLE24

GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables)	9 Months Ended
	Sep. 30, 2016
GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Schedule of goodwill	The table below provides a roll-forward of our goodwill balances (as adjusted, in thousands): Goodwill balance at December 31, 2015 $ — Goodwill from acquisition of Tribute Goodwill from acquisition of ZONTIVITY Impact of foreign exchange Goodwill balance at September 30, 2016 $
Schedule of other intangible assets, net	September 30, 2016 Weighted Gross Carrying Accumulated Net Carrying Average Amount Amortization Amount Life (in thousands) (in years) Acquired technology rights $ $ $ 11
Schedule of estimated aggregate amortization of intangible assets	Estimated Amortization For the Years Ending December 31, Expense (in thousands) Remainder of 2016 $ Thereafter Total amortization expense $

ACCRUED EXPENSES (Tables)

ACCRUED EXPENSES (Tables)	9 Months Ended
	Sep. 30, 2016
ACCRUED EXPENSES
Schedule of accrued expenses	September 30, 2016 December 31, 2015 (in thousands) Accrued professional fees $ $ Accrued marketing fees — Accrued revenue reserves — Accrued royalties — Accrued pre-commercialization expense — Accrued employee-related expenses Other accrued liabilities Total accrued expenses $ $
Schedule of exit activity within accrued expenses and other long-term liabilities	The following table summarizes the exit activity within accrued expenses and other long-term liabilities in the condensed consolidated balance sheets (in thousands): Accrued severance balance at December 31, 2015 $ Accrued severance liability assumed in the Merger Severance expense Cash payments Impact of foreign exchange Accrued severance balance at September 30, 2016 $

SHAREHOLDERS_ EQUITY AND EARN26

SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2016
Stockholders' Equity Note and Earnings Per Share [Abstract]
Reconciliation of beginning and ending balances in shareholders’ equity	The following table presents a reconciliation of our beginning and ending balances in shareholders’ equity for the nine months ended September 30, 2016 (in thousands): Shareholders' equity at January 1, 2016 $ Issuance of common shares in connection with Merger with Tribute Issuance of common shares to investors, net of equity issue costs Warrants exercised Payments related to net settlement of share awards Non-cash share-based compensation expense Foreign currency translation adjustment Net loss Shareholders' equity at September 30, 2016 $
Schedule of basic and diluted loss per share	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except share and per share data) Net loss, basic $ $ $ $ Effect of dilutive securities: Change in fair value of warrants liability — — — Net loss, diluted $ $ $ $ Shares used in calculating basic net loss per common share Effect of dilutive securities: Warrants to purchase common shares - liability-classified — — — Shares used in calculating diluted net loss per common share Net loss per common share, basic $ $ $ $ Net loss per common share, diluted $ $ $ $
Potential common shares excluded from the calculation of diluted net loss per share	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Options to purchase common shares, RSUs and PSUs Warrants to purchase common shares — — 2022 Notes convertible into common shares — —
Summary of warrants outstanding and exercisable	No. of Warrants Weighted-Average Quarterly period of expiration Outstanding Exercise Price Q2 2017 Q1 2018 Q3 2018 Q4 2019 Q3 2020 Q1 2021 $

SHARE - BASED COMPENSATION (Tab

SHARE - BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2016
SHARE-BASED COMPENSATION.
Summary of share-based compensation expense	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Selling, general and administrative $ $ $ $ Research and development — Total non-cash share-based compensation expense $ $ $ $
Summary of option activity	Weighted- Underlying Average Shares Exercise Stock Option Awards (in thousands) Price Outstanding at December 31, 2015 $ Granted Exercised Forfeited or expired Outstanding at September 30, 2016 $
Summary of RSU, including PSU, activity	Weighted- Underlying Average Shares Grant Date Restricted Stock Units, including PSUs (in thousands) Fair Value Nonvested restricted stock units at December 31, 2015 $ Granted Vested Forfeited or expired Nonvested restricted stock units at September 30, 2016 $

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2016
COMMITMENTS AND CONTINGENCIES.
Schedule of future minimum lease payments	Future minimum payments under our non-cancelable lease agreements at September 30, 2016 were as follows (in thousands): Remainder of 2016 $ Thereafter Total minimum payments $

ORGANIZATION, BASIS OF PRESEN29

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES - Organization (Details) - Tribute, Acquired entity $ in Thousands	Feb. 05, 2016USD ($)
Business Combinations and Acquisitions
Purchase price	$ 137,624
Equity consideration	115,136
Repayment of Tribute indebtedness	$ 22,488

ORGANIZATION, BASIS OF PRESEN30

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES - IPR&D (Details) - Tribute, Acquired entity - USD ($) $ in Thousands	8 Months Ended
	Sep. 30, 2016	Feb. 05, 2016
IPR&D
Intangible assets		$ 84,034
IPR&D
IPR&D
Intangible assets		$ 3,200
Other intangible assets, net | Acquired technology rights
IPR&D
Reclassified from acquired IPR&D	$ 2,800

ORGANIZATION, BASIS OF PRESEN31

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES - Revenue Recognition (Details)	Sep. 06, 2016
ZONTIVITY acquisition | Zontivity Transition Services Agreement | Maximum
Business agreements
Agreement term	12 months

ORGANIZATION, BASIS OF PRESEN32

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES - Share-Based Compensation (Details)	9 Months Ended
	Sep. 30, 2016
ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Dividend yield (as a percent)	0.00%

ORGANIZATION, BASIS OF PRESEN33

ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES - AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income
Accumulated other comprehensive income
Amounts reclassified out of accumulated other comprehensive income	$ 0	$ 0	$ 0	$ 0

BUSINESS COMBINATIONS AND ACQ34

BUSINESS COMBINATIONS AND ACQUISITIONS - Acquisition of Tribute (Details) $ / shares in Units, $ in Millions	Feb. 05, 2016USD ($)$ / sharesshares	Sep. 30, 2016$ / shares	Dec. 31, 2015$ / shares
Business Combinations and Acquisitions
Common shares, no par value (in dollars per share) | $ / shares	$ 0	$ 0
Par value (in dollars per share) | $ / shares			$ 0.001
Tribute, Acquired entity
Business Combinations and Acquisitions
Number of shares for each share exchanged | shares	0.1455
Number of shares for each outstanding warrant | shares	0.1455
Number of shares for each employee stock option | shares	0.1455
Number of shares for each compensation option | shares	0.1455
Number of one-half warrants for each compensation option (in shares) | shares	0.1455
Pozen
Business Combinations and Acquisitions
Par value (in dollars per share) | $ / shares	$ 0.001
Conversion ratio (as a percent)	1
Share price (in dollars per share) | $ / shares	$ 5.94
Tribute
Business Combinations and Acquisitions
Common shares, no par value (in dollars per share) | $ / shares	$ 0
Value of issued and to be issued share capital (in dollars) | $	$ 115.1

BUSINESS COMBINATIONS AND ACQ35

BUSINESS COMBINATIONS AND ACQUISITIONS - Tribute Consideration (Details) - Tribute, Acquired entity - USD ($) $ in Thousands	Feb. 05, 2016	Mar. 31, 2016	Sep. 30, 2016
Business Combinations and Acquisitions
Equity consideration	$ 115,136
Repayment of Tribute indebtedness	22,488
Total consideration	$ 137,624
Share-based compensation expense for accelerated vesting excluded from fair value of consideration		$ 500	$ 500

BUSINESS COMBINATIONS AND ACQ36

BUSINESS COMBINATIONS AND ACQUISITIONS - Tribute assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Feb. 05, 2016
Assets acquired and liabilities assumed
Goodwill	$ 77,039
Tribute, Acquired entity
Assets acquired and liabilities assumed
Cash		$ 4,601
Accounts receivable		3,790
Inventory		3,622
Prepaid expenses and other current assets		1,129
Property, plant and equipment		684
Intangible assets		84,034
In-process research and development		3,243
Accounts payable and accrued expenses		(10,295)
Note payable		(3,604)
Warrant liability		(4,618)
Other liabilities		(7,373)
Deferred tax liability		(6,913)
Total net assets acquired		68,300
Goodwill		69,324
Total consideration		$ 137,624

BUSINESS COMBINATIONS AND ACQ37

BUSINESS COMBINATIONS AND ACQUISITIONS - Tribute FV of intangible assets (Details) - Tribute, Acquired entity - USD ($) $ in Thousands	8 Months Ended
	Sep. 30, 2016	Feb. 05, 2016
Business Combinations and Acquisitions
Total intangible assets		$ 84,034
Deferred tax liability		6,913
Operating results
Revenue	$ 19,000
Fiorinal
Business Combinations and Acquisitions
Total intangible assets		26,954
Proferrin
Business Combinations and Acquisitions
Total intangible assets		9,513
Fibricor
Business Combinations and Acquisitions
Total intangible assets		10,018
Uracyst and Neovisc
Business Combinations and Acquisitions
Total intangible assets		9,874
Cambia
Business Combinations and Acquisitions
Total intangible assets		7,567
Other marketed products
Business Combinations and Acquisitions
Total intangible assets		20,108
IPR&D
Business Combinations and Acquisitions
Total intangible assets		$ 3,200
Selling, general and administrative.
Operating results
Product acquisition-related costs	$ 7,700

BUSINESS COMBINATIONS AND ACQ38

BUSINESS COMBINATIONS AND ACQUISITIONS - ZONTIVITY Consideration (Details) - USD ($) $ in Thousands	Sep. 06, 2016	Sep. 30, 2016
Facility Agreement
Business Combinations and Acquisitions
Maximum borrowing capacity		$ 200,000
ZONTIVITY acquisition
Business Combinations and Acquisitions
Contingent consideration, high end of range	$ 80,000
Cash	25,000	25,000
Contingent consideration	19,500
Total consideration	44,500
Short-term contingent consideration		600
Long-term contingent consideration		$ 18,900
ZONTIVITY acquisition | Facility Agreement
Business Combinations and Acquisitions
Maximum borrowing capacity	$ 25,000
ZONTIVITY acquisition | ZONTIVITY Asset Purchase Agreement and Ancillary Agreements with Merck
Business Combinations and Acquisitions
Maximum period following closing for Merck to supply ZONTIVITY	3 years

BUSINESS COMBINATIONS AND ACQ39

BUSINESS COMBINATIONS AND ACQUISITIONS - ZONTIVITY assets acquired (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 06, 2016
Assets acquired
Goodwill	$ 77,039
ZONTIVITY acquisition
Assets acquired
Intangible assets		$ 40,800
Total net assets acquired		40,800
Goodwill		3,700
Total consideration		$ 44,500
Operating results
Revenue	200
Product acquisition-related costs	$ 400

BUSINESS COMBINATIONS AND ACQ40

BUSINESS COMBINATIONS AND ACQUISITIONS - Pro forma (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pro forma information
Revenue	$ 13,628	$ 5,820	$ 34,263	$ 15,425
Net loss	20,599	8,149	71,862	24,457
Severance charges	600		2,100
Tribute and Zontivity
Pro forma information
Total revenues, net	14,572	13,800	39,622	37,233
Net loss	$ (22,831)	$ (23,055)	$ (70,990)	$ (453,885)
Basic net loss per share (in dollars per share)	$ (0.35)	$ (0.35)	$ (1.17)	$ (7.49)
Diluted net loss per share (in dollars per share)	$ (0.35)	$ (0.35)	$ (1.17)	$ (7.49)
Tribute and Zontivity | Pro Forma Adjustment
Pro forma information
Transaction costs	$ (400)	$ 300	$ (13,100)	$ 12,700
Expense for excise tax equalization payments	0	0	(12,000)	12,000
Severance charges	0	0	(4,000)	4,000
Inventory fair value step-up	0	0	(1,500)	1,500
Amortization expense	(400)	(1,800)	(3,100)	(12,500)
Amortization of finite-lived intangible assets acquired	300	2,400	3,100	7,300
ZONTIVITY acquisition | Pro Forma Adjustment
Pro forma information
Intangible asset impairment charge				289,700
ZONTIVITY acquisition | Pro Forma Adjustment | Zontivity Transition Services Agreement
Pro forma information
Transition service agreement fees	$ (100)	$ 1,300	$ 900	2,000
MFI, Acquired entity | Pro Forma Adjustment
Pro forma information
Revenue				3,800
Net loss				$ 500

BUSINESS AGREEMENTS - Merck Agr

BUSINESS AGREEMENTS - Merck Agreement (Details) - ZONTIVITY acquisition - USD ($) $ in Millions	Sep. 06, 2016	Sep. 30, 2016
Business agreements
Cash paid for acquisition	$ 25	$ 25
Contingent consideration, high end of range	$ 80
ZONTIVITY Asset Purchase Agreement and Ancillary Agreements with Merck
Business agreements
Maximum period following closing for Merck to supply ZONTIVITY	3 years

BUSINESS AGREEMENTS - Sun Pharm

BUSINESS AGREEMENTS - Sun Pharma Agreement (Details) - USD ($) $ in Millions	Sep. 06, 2016	May 31, 2016	May 31, 2015
ZONTIVITY acquisition
Business agreements
Consideration for assets acquired	$ 25
Sun Pharma rights agreement
Business agreements
Consideration for assets acquired			$ 10
Payment for liability assumed		$ 3

BUSINESS AGREEMENTS - Faes Agre

BUSINESS AGREEMENTS - Faes Agreement (Details) $ in Millions	12 Months Ended
	Dec. 31, 2014USD ($)
Faes agreement
Business agreements
Potential milestone payment	$ 1.7

BUSINESS AGREEMENTS - Nautilus

BUSINESS AGREEMENTS - Nautilus Agreement (Details) - Nautilus agreement $ in Millions	12 Months Ended
	Dec. 31, 2012USD ($)
Minimum
Business agreements
Royalty rate (as a percent)	22.50%
Maximum
Business agreements
Potential milestone payment	$ 6
Royalty rate (as a percent)	25.00%

BUSINESS AGREEMENTS - Actavis A

BUSINESS AGREEMENTS - Actavis Agreement (Details) $ in Millions	12 Months Ended
	Dec. 31, 2008USD ($)
Actavis product development and profit share agreement
Business agreements
Potential milestone payment	$ 5

BUSINESS AGREEMENTS - AZ Agreem

BUSINESS AGREEMENTS - AZ Agreement (Details) - USD ($) $ in Millions	Sep. 07, 2006	Sep. 30, 2016	Sep. 30, 2016	Sep. 06, 2007
Original AZ Agreement
Business agreements
Upfront license fee received	$ 40
Maximum milestone payments receivable				$ 345
Aggregate milestone payments			$ 85
Additional milestone payment to be made on achievement of sales thresholds		$ 260	$ 260
Agreement term		10 years
Period after written notice to cure breach		90 days
Notice period for termination		90 days
U.S. Agreement
Business agreements
Guaranteed annual minimum royalty		$ 7.5

BUSINESS AGREEMENTS - GSK, CII

BUSINESS AGREEMENTS - GSK, CII and Pernix Agreements (Details) $ / shares in Units, $ in Millions	1 Months Ended			3 Months Ended
	Jan. 31, 2015USD ($)	Nov. 30, 2011	Jun. 30, 2003USD ($)item	Mar. 31, 2015USD ($)	May 13, 2014$ / sharesshares
GSK Agreement
Business agreements
Initial payment received			$ 25
Aggregate milestone payments			$ 55
Potential number of sales performance milestone payments to be received | item			2
CII Purchase Agreement
Business agreements
Interest in royalties to be received (as a percent)		20.00%
Pernix Agreement
Business agreements
Guaranteed quarterly minimum royalty	$ 4
Warrant received (in shares) | shares					500,000
Exercise price of warrants received (in dollars per share) | $ / shares					$ 4.28
Proceeds from sale of warrant				$ 2.5
Maximum | GSK Agreement
Business agreements
Additional milestone payment to be made on achievement of sales thresholds			$ 80

FAIR VALUE - Recurring (Details

FAIR VALUE - Recurring (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets:
Cash and cash equivalents	$ 56,533	$ 24,816
Liabilities:
Contingent consideration	19,500
Warrant liability	47
Quoted prices in active markets for identical items (Level 1)
Assets:
Cash and cash equivalents	56,533	$ 24,816
Significant unobservable inputs (Level 3)
Liabilities:
Contingent consideration	19,500
Warrant liability	$ 47

FAIR VALUE - Warrants Liability

FAIR VALUE - Warrants Liability (Details) - Warrants liability $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016USD ($)shares	Sep. 30, 2016USD ($)shares
Warrants Liability
Number of warrants classified as liability (in shares) | shares	46,000	46,000
Warrants outstanding (in shares) | shares	900,000	900,000
Change in fair value during the period | $	$ 0	$ 4,721
Other (expense) income
Warrants Liability
Change in fair value during the period | $		$ 4,700

FAIR VALUE - Contingent Conside

FAIR VALUE - Contingent Consideration (Details) - ZONTIVITY acquisition - USD ($) $ in Millions	1 Months Ended
	Sep. 30, 2016	Sep. 06, 2016
Contingent consideration
Contingent consideration, high end of range		$ 80
Contingent consideration
Contingent consideration
Contingent consideration, high end of range		$ 80
Change in fair value during the period	$ 0

FAIR VALUE - Level 3 valuation

FAIR VALUE - Level 3 valuation (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Warrants liability
Fair value
Warrant liability	$ 47
Volatility	65.00%
Expected term	7 months 6 days
Contingent consideration
Fair value
Contingent consideration	$ 19,500
Volatility	43.00%
Discount rate	13.00%

FAIR VALUE - Level 3 disclosure

FAIR VALUE - Level 3 disclosures - Warrants liability (Details) - Warrants liability - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Roll-forward of fair value balances that used Level 3 inputs
Warrants liability assumed in Merger		$ 4,618
Change in fair value during the period	$ 0	(4,721)
Impact of foreign exchange		150
Balance at end of period	$ 47	$ 47

FAIR VALUE - Level 3 disclosu53

FAIR VALUE - Level 3 disclosures - Contingent consideration (Details) - Contingent consideration $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Roll-forward of fair value balances that used Level 3 inputs
Contingent consideration recorded in ZONTIVITY acquisition	$ 19,500
Balance at end of period	$ 19,500

INVENTORY (Details)

INVENTORY (Details) $ in Thousands	Sep. 30, 2016USD ($)
INVENTORY
Raw materials	$ 847
Work-in-process	345
Finished goods	3,543
Total Inventory	$ 4,735

GOODWILL AND OTHER INTANGIBLE55

GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Goodwill
Impact of foreign exchange	$ 4,015
Goodwill balance at end of period	77,039
Accumulated impairment losses	0
Tribute, Acquired entity
Goodwill
Goodwill from acquisition	69,324
ZONTIVITY acquisition
Goodwill
Goodwill from acquisition	$ 3,700

GOODWILL AND OTHER INTANGIBLE56

GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Other Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		8 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Other Intangible Assets, Net
Net Carrying Amount/Total amortization expense	$ 127,724		$ 127,724	$ 127,724
Acquired technology rights
Other Intangible Assets, Net
Amortization expense	2,400	$ 0		5,800	$ 0
ZONTIVITY acquisition | Acquired technology rights
Other Intangible Assets, Net
Gross Carrying Amount	40,800		40,800	40,800
Other intangible assets, net | Acquired technology rights
Other Intangible Assets, Net
Gross Carrying Amount	133,548		133,548	133,548
Accumulated Amortization	(5,824)		(5,824)	(5,824)
Net Carrying Amount/Total amortization expense	$ 127,724		127,724	$ 127,724
Weighted Average Life (in years)				11 years
Other intangible assets, net | Tribute, Acquired entity | Acquired technology rights
Other Intangible Assets, Net
Increase in gross carrying amount			8,800
Reclassified from acquired IPR&D			2,800
Regulatory milestones due to Faes			1,000
Foreign currency translation adjustments			$ 5,000

GOODWILL AND OTHER INTANGIBLE57

GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Amortization (Details) $ in Thousands	Sep. 30, 2016USD ($)
Estimated Amortization Expense
Remainder of 2016	$ 3,040
2,017	12,190
2,018	12,190
2,019	12,190
2,020	12,190
Thereafter	75,924
Net Carrying Amount/Total amortization expense	$ 127,724

ACCRUED EXPENSES - Schedule (De

ACCRUED EXPENSES - Schedule (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accrued liabilities
Accrued professional fees	$ 5,427	$ 3,012
Accrued marketing fees	1,747
Accrued revenue reserves	1,404
Accrued royalties	2,009
Accrued pre-commercialization expenses	1,505
Accrued employee-related expenses	7,704	5,229
Other accrued liabilities	3,761	3,691
Total accrued expenses	$ 23,557	$ 11,932

ACCRUED EXPENSES - Exit and Dis

ACCRUED EXPENSES - Exit and Disposal Activities (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Exit and Disposal Activities
Severance Costs	$ 600	$ 2,100
Accrued expenses and Other long-term liabilities
Exit activity
Accrued severance balance at beginning of period		3,986		$ 3,986
Cash payments		(5,194)
Impact of foreign exchange		54
Accrued severance balance at end of period	$ 3,474	3,474
Accrued severance liability assumed in the Merger | Plan
Exit activity
Cash payments			$ (900)	$ (2,600)
Accrued severance liability assumed in the Merger | Accrued expenses and Other long-term liabilities
Exit activity
Additional charges		2,484
Severance expense | Accrued expenses and Other long-term liabilities
Exit activity
Additional charges		$ 2,144

DEBT - Convertable Notes (Detai

DEBT - Convertable Notes (Details) - USD ($) $ / shares in Units, $ in Thousands	Feb. 05, 2016	Sep. 30, 2016	Sep. 30, 2016
Debt
Amortization of debt issuance costs			$ 59
2022 Notes
Debt
Aggregate amount of notes	$ 75,000	$ 75,000	75,000
Stated rate (as a percent)	2.50%
Proceeds from debt, net of issuance costs	$ 74,500
Conversion premium (as a percent)	32.50%
Conversion price (in dollars per share)	$ 8.28
Interest expense		500	1,300
Unamortized debt issuance costs		500	500
2022 Notes | Fair value.
Debt
Notes		64,900	64,900
2022 Notes | Carrying amount
Debt
Notes		$ 74,500	$ 74,500

DEBT - Credit Facility (Details

DEBT - Credit Facility (Details) - USD ($) $ in Millions	Oct. 31, 2016	Oct. 03, 2016	Sep. 06, 2016	Sep. 30, 2016
ZONTIVITY acquisition
Debt
Cash paid for acquisition			$ 25	$ 25
Toprol -XL and Authorized Generic acquisition | Subsequent Event
Debt
Cash paid for acquisition	$ 175
Facility Agreement
Debt
Maximum borrowing capacity				$ 200
Repayment period for each draw				6 years
Annual rate of interest				12.50%
Outstanding borrowings				$ 0
Facility Agreement | Subsequent Event
Debt
Draw on credit facility	200
Additional borrowing capacity		$ 250
Facility Agreement | ZONTIVITY acquisition
Debt
Maximum borrowing capacity			$ 25
Facility Agreement | ZONTIVITY acquisition | Subsequent Event
Debt
Maximum borrowing capacity		25
Draw on credit facility	25
Facility Agreement | Toprol -XL and Authorized Generic acquisition | Subsequent Event
Debt
Maximum borrowing capacity		$ 175
Draw on credit facility	$ 175

DEBT - MFI Note (Details)

DEBT - MFI Note (Details) - MFI Note CAD / shares in Units, CAD in Millions, $ in Millions	Jun. 16, 2016USD ($)	Jun. 16, 2015CAD	Feb. 05, 2016CAD / shares	Jun. 16, 2015USD ($)
Debt
MFI Note conversion rate (in dollars per share) | CAD / shares			CAD 12.21
Total payment | $	$ 4.2
Tribute, Acquired entity
Debt
Term		1 year
Aggregate amount of the MFI Note		CAD 5		$ 3.9
Stated rate (as a percent)		8.00%		8.00%

SHAREHOLDERS_ EQUITY AND EARN63

SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE - Shareholders' equity (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Stockholders' Equity Note and Earnings Per Share [Abstract]
Shareholders' equity at beginning of period		$ 14,783
Issuance of common shares in connection with Merger with Tribute		115,136
Issuance of common shares to investors, net of equity issue costs		74,866
Warrants exercised		636
Payments related to net settlement of share awards		(298)
Non-cash share-based compensation		9,202
Foreign currency translation adjustments	$ (2,062)	8,085
Net loss		(71,862)
Shareholders' equity at end of period	$ 150,548	$ 150,548
Shares issued as consideration for acquisition of Tribute (in shares)		18.5
Shares issued to certain investors (in shares)		12

SHAREHOLDERS_ EQUITY AND EARN64

SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Basic and diluted loss
Net loss, basic	$ (20,599)	$ (8,149)	$ (71,862)	$ (24,457)
Effect of dilutive securities:
Change in fair value of warrants liability			(4,721)
Net loss, diluted	$ (20,599)	$ (8,149)	$ (76,583)	$ (24,457)
Shares used in calculating basic net loss per common share	65,229,055	32,732,686	60,598,676	32,476,358
Effect of dilutive securities:
Warrants to purchase common shares - liability-classified			77,656
Shares used in calculating diluted net loss per common share	65,229,055	32,732,686	60,676,332	32,476,358
Net loss per common share, basic (in dollars per share)	$ (0.32)	$ (0.25)	$ (1.19)	$ (0.75)
Net loss per common share, diluted (in dollars per share)	$ (0.32)	$ (0.25)	$ (1.26)	$ (0.75)

SHAREHOLDERS_ EQUITY AND EARN65

SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE - Antidilutive securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Options to purchase common shares, RSUs and PSUs
Potential common shares excluded from the calculation of diluted net loss per share
Number of antidilutive shares	7,416	6,709	7,416	6,709
Warrants to purchase common shares
Potential common shares excluded from the calculation of diluted net loss per share
Number of antidilutive shares	930		883
2022 Notes convertible into common shares
Potential common shares excluded from the calculation of diluted net loss per share
Number of antidilutive shares	9,057		9,057

SHAREHOLDERS_ EQUITY AND EARN66

SHAREHOLDERS’ EQUITY AND EARNINGS PER SHARE - Warrants (Details)	Sep. 30, 2016$ / sharesshares
Warrants
Number of Warrants Outstanding | shares	929,749
Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 4.16
Period of expiration - Q2, 2017
Warrants
Number of Warrants Outstanding | shares	46,497
Period of expiration - Q2, 2017 | Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 4.82
Period of expiration - Q1, 2018
Warrants
Number of Warrants Outstanding | shares	599,278
Period of expiration - Q1, 2018 | Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 4.12
Period of expiration - Q3, 2018
Warrants
Number of Warrants Outstanding | shares	15,815
Period of expiration - Q3, 2018 | Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 3.78
Period of expiration - Q4, 2019
Warrants
Number of Warrants Outstanding | shares	107,670
Period of expiration - Q4, 2019 | Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 4.81
Period of expiration - Q3, 2020
Warrants
Number of Warrants Outstanding | shares	109,968
Period of expiration - Q3, 2020 | Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 4.09
Period of expiration - Q1, 2021
Warrants
Number of Warrants Outstanding | shares	50,521
Period of expiration - Q1, 2021 | Weighted Average
Warrants
Weighted Average Exercise Price | $ / shares	$ 2.97

SHARE - BASED COMPENSATION - Pl

SHARE - BASED COMPENSATION - Plan and Expenses (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2016	Mar. 31, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-Based Compensation
Total non-cash share-based compensation expense	$ 2,659		$ 1,967	$ 9,202	$ 5,673
Selling, general and administrative.
Share-Based Compensation
Total non-cash share-based compensation expense	$ 2,659		1,959	8,875	5,564
Research and development.
Share-Based Compensation
Total non-cash share-based compensation expense			$ 8	$ 327	$ 109
2016 Plan
Share-Based Compensation
Shares reserved	2,300,000			2,300,000
Shares available for grant	2,163,991			2,163,991
Tribute, Acquired entity
Share-Based Compensation
Share-based compensation expense for accelerated vesting		$ 500		$ 500

SHARE - BASED COMPENSATION - Op

SHARE - BASED COMPENSATION - Options (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Underlying Shares
Outstanding at beginning of period | shares	1,985
Granted | shares	2,140
Exercised | shares	(458)
Forfeited or expired | shares	(661)
Outstanding at end of period | shares	3,006
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 8.18
Granted (in dollars per share)	3.61
Exercised (in dollars per share)	3.19
Forfeited or expired (in dollars per share)	8.36
Outstanding at end of period (in dollars per share)	5.73
Aggregate Intrinsic Value
Weighted average grant date fair value of options granted (in dollars per share)	$ 2.54

SHARE - BASED COMPENSATION - RS

SHARE - BASED COMPENSATION - RSUs and PSUs (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)$ / sharesshares
RSUs and PSUs
Underlying Shares
Restricted stock awards outstanding at beginning of period (in shares)	4,042,000
Granted (in shares)	1,630,000
Vested and exercised (in shares)	(1,246,000)
Forfeited or expired (in shares)	(16,000)
Restricted stock awarded outstanding at end of period (in shares)	4,410,000
Weighted-Average Grant Date Fair Value
Restricted stock awards outstanding at beginning of period (in dollars per share) | $ / shares	$ 7.80
Granted (in dollars per share) | $ / shares	4.48
Vested and exercised (in dollars per share) | $ / shares	7.72
Forfeited or expired (in dollars per share) | $ / shares	5.59
Restricted stock awarded outstanding at end of period (in dollars per share) | $ / shares	$ 6.60
PSUs
Underlying Shares
Granted (in shares)	654,737
Weighted-Average Grant Date Fair Value
Aggregate grant date fair value (in dollars) | $	$ 2.8
Vesting period	3 years

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Operating leases (Details) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2016ft²	Sep. 30, 2016USD ($)	Mar. 31, 2016ft²	Sep. 30, 2016USD ($)
Operating Leases
Rent expense		$ 200		$ 500
Future minimum lease payments
Remainder of 2016		132		132
2,017		1,276		1,276
2,018		2,136		2,136
2,019		2,159		2,159
2,020		2,140		2,140
Thereafter		11,299		11,299
Total minimum payments		19,142		19,142
Office space lease, North Carolina, Expired March 31, 2016
Future minimum lease payments
Leased space (in square feet) | ft²			17,009
Office space lease, Princeton, New Jersey
Future minimum lease payments
Leased space (in square feet) | ft²	36,602
Office space lease, Princeton, New Jersey | Other current assets
Future minimum lease payments
Security deposit		$ 300		$ 300

COMMITMENTS AND CONTINGENCIES71

COMMITMENTS AND CONTINGENCIES - Supply Agreements (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)
Supply Agreements
Product purchase requirement	$ 4.9

COMMITMENTS AND CONTINGENCIES72

COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) - item	Nov. 04, 2016	Aug. 19, 2015	Sep. 30, 2016
VIMOVO® ANDA Litigation | Other three ANDA filers
Contingencies
Number of ANDA filers			3
Period within which entity filed suit asserting infringement of patent after receipt of each respective Paragraph IV Notice Letter			45 days
IPR Petition | Lupin
Contingencies
Number of IPR Petitions filed		3
YOSPRALA Paragraph IV Certification
Contingencies
Period after receipt of notice	45 days
Period for approval	30 months
Exclusivity period	3 years

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details)	9 Months Ended
	Sep. 30, 2016segment
SEGMENT INFORMATION
Number of operating segments	1

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) $ in Millions	Oct. 31, 2016USD ($)	Oct. 03, 2016USD ($)item	Sep. 06, 2016USD ($)	Sep. 30, 2016USD ($)
Facility Agreement
Subsequent Events
Maximum borrowing capacity				$ 200
ZONTIVITY acquisition
Subsequent Events
Cash paid for acquisition			$ 25	$ 25
Contingent consideration, high end of range			80
ZONTIVITY acquisition | Facility Agreement
Subsequent Events
Maximum borrowing capacity			$ 25
Subsequent Event | Facility Agreement
Subsequent Events
Draw on credit facility	$ 200
Additional borrowing capacity		$ 250
Subsequent Event | Minimum | Facility Agreement
Subsequent Events
Number of advances | item		1
Subsequent Event | Toprol -XL and Authorized Generic acquisition
Subsequent Events
Cash paid for acquisition	175
Contingent consideration, high end of range	48
Subsequent Event | Toprol -XL and Authorized Generic acquisition | Facility Agreement
Subsequent Events
Draw on credit facility	$ 175
Maximum borrowing capacity		$ 175
Subsequent Event | Toprol -XL and Authorized Generic acquisition | Product, Toprol-XL
Subsequent Events
Royalty payments as a percent of quarterly net sales	15.00%
Subsequent Event | Toprol -XL and Authorized Generic acquisition | Product, Authorized Generic
Subsequent Events
Royalty payments as a percent of quarterly net sales	15.00%
Subsequent Event | ZONTIVITY acquisition | Facility Agreement
Subsequent Events
Draw on credit facility	$ 25
Maximum borrowing capacity		$ 25
Subsequent Event | Toprol-XL Supply Agreement | Toprol -XL and Authorized Generic acquisition
Subsequent Events
Agreement term	10 years
Notice period for termination	12 months