Total Revenues Increased 10% to $412
Million
Launched Vyxeos in the U.S. in August
2017
Vyxeos EU Marketing Authorization Application Submission
Completed, Accelerated Assessment Granted, Promising Innovative
Medicine Designation Granted in UK
DUBLIN, Nov. 7, 2017
/PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today
announced financial results for the third quarter of 2017 and
updated financial guidance for 2017.
"The third quarter of 2017 was highlighted by the approval and
strong launch of Vyxeos in the U.S. for the treatment of adult
patients with newly-diagnosed high-risk AML, leading to our
increase in 2017 Vyxeos sales guidance," said Bruce Cozadd, chairman and chief executive
officer of Jazz Pharmaceuticals. "While Xyrem has experienced lower
than expected growth in 2017, and we are slightly decreasing our
annual sales guidance accordingly, we remain confident in our
ability to address the key drivers impacting Xyrem to position the
product for solid future growth."
GAAP net income for the third quarter of 2017 was $63.5 million, or $1.03 per diluted share, compared to $89.8 million, or $1.45 per diluted share, for the third quarter of
2016. GAAP net income for the third quarter of 2017 included an
upfront payment of $75.0 million to
ImmunoGen, Inc. related to a collaboration and option
agreement.
Adjusted net income for the third quarter of 2017 was
$197.6 million, or $3.22 per diluted share, compared to $161.2 million, or $2.61 per diluted share, for the third quarter of
2016.
The tax provision and the effective tax rate for the third
quarter of 2017 on both a GAAP and non-GAAP basis were favorably
impacted by certain tax benefits. For further information, see
"Operating Expenses and Income Tax Provision" below.
Reconciliations of applicable GAAP reported to non-GAAP adjusted
information are included at the end of this press release.
Financial Highlights
|
Three Months
Ended
September 30,
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
(In thousands, except
per share amounts and percentages)
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Total
revenues
|
$
|
411,855
|
|
|
$
|
374,181
|
|
|
10
|
%
|
|
$
|
1,182,294
|
|
|
$
|
1,091,352
|
|
|
8
|
%
|
GAAP net
income
|
$
|
63,526
|
|
|
$
|
89,828
|
|
|
(29)
|
%
|
|
$
|
255,641
|
|
|
$
|
280,142
|
|
|
(9)
|
%
|
Adjusted net
income
|
$
|
197,649
|
|
|
$
|
161,153
|
|
|
23
|
%
|
|
$
|
496,225
|
|
|
$
|
461,525
|
|
|
8
|
%
|
GAAP EPS
|
$
|
1.03
|
|
|
$
|
1.45
|
|
|
(29)
|
%
|
|
$
|
4.17
|
|
|
$
|
4.51
|
|
|
(8)
|
%
|
Adjusted
EPS
|
$
|
3.22
|
|
|
$
|
2.61
|
|
|
23
|
%
|
|
$
|
8.09
|
|
|
$
|
7.43
|
|
|
9
|
%
|
Total Revenues
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
(In
thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Xyrem® (sodium
oxybate) oral solution
|
$
|
303,870
|
|
|
$
|
285,907
|
|
|
$
|
874,222
|
|
|
$
|
816,412
|
|
Erwinaze® / Erwinase®
(asparaginase Erwinia chrysanthemi)
|
49,173
|
|
|
42,986
|
|
|
149,585
|
|
|
143,907
|
|
Defitelio® (defibrotide sodium) /
defibrotide
|
31,213
|
|
|
28,137
|
|
|
97,351
|
|
|
79,280
|
|
VyxeosTM (daunorubicin and
cytarabine) liposome for injection
|
9,719
|
|
|
—
|
|
|
9,719
|
|
|
—
|
|
Prialt® (ziconotide)
intrathecal infusion
|
7,930
|
|
|
8,783
|
|
|
21,303
|
|
|
23,065
|
|
Other
|
6,066
|
|
|
5,808
|
|
|
19,124
|
|
|
21,983
|
|
Product sales,
net
|
407,971
|
|
|
371,621
|
|
|
1,171,304
|
|
|
1,084,647
|
|
Royalties and
contract revenues
|
3,884
|
|
|
2,560
|
|
|
10,990
|
|
|
6,705
|
|
Total
revenues
|
$
|
411,855
|
|
|
$
|
374,181
|
|
|
$
|
1,182,294
|
|
|
$
|
1,091,352
|
|
Net product sales increased 10% in the third quarter of 2017
compared to the same period in 2016 primarily due to an increase in
net product sales of our lead marketed products.
Xyrem net product sales increased 6% in the third quarter of
2017 compared to the same period in 2016. Xyrem net product
sales growth in the 2017 period was negatively impacted by payer
mix, one fewer shipping day, and operational changes that delayed
some prescription fulfillment.
Erwinaze/Erwinase net product sales increased 14% in the third
quarter of 2017 compared to the same period in 2016. The company
experienced supply disruptions during both periods; however, net
product sales were higher in the third quarter of 2017 compared to
the same period in 2016 due to the timing of product availability.
The company expects that additional supply disruptions may occur in
2017 and into 2018.
Defitelio/defibrotide net product sales increased 11% in the
third quarter of 2017 compared to the same period in 2016 primarily
due to an increase in U.S. net product sales. The company expects
continued inter-quarter variability in Defitelio net sales given
that veno-occlusive disease is an ultra-rare disease.
Vyxeos net product sales in the third quarter of 2017 were
$9.7 million. Vyxeos launched in the
U.S. on August 11, 2017.
Operating Expenses and Income Tax Provision
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
(In thousands, except
percentages)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP:
|
|
|
|
|
|
|
|
Cost of product
sales
|
$
|
31,203
|
|
|
$
|
24,311
|
|
|
$
|
84,940
|
|
|
$
|
71,730
|
|
Gross
margin
|
92.4
|
%
|
|
93.5
|
%
|
|
92.7
|
%
|
|
93.4
|
%
|
Selling, general and
administrative
|
$
|
124,523
|
|
|
$
|
124,368
|
|
|
$
|
401,106
|
|
|
$
|
375,751
|
|
% of total
revenues
|
30.2
|
%
|
|
33.2
|
%
|
|
33.9
|
%
|
|
34.4
|
%
|
Research and
development
|
$
|
47,362
|
|
|
$
|
47,796
|
|
|
$
|
132,447
|
|
|
$
|
118,139
|
|
% of total
revenues
|
11.5
|
%
|
|
12.8
|
%
|
|
11.2
|
%
|
|
10.8
|
%
|
Acquired in-process
research and development
|
$
|
75,000
|
|
|
$
|
15,000
|
|
|
$
|
77,000
|
|
|
$
|
23,750
|
|
Income tax
provision
|
$
|
1,239
|
|
|
$
|
26,437
|
|
|
$
|
65,914
|
|
|
$
|
100,888
|
|
Effective tax
rate
|
1.9
|
%
|
|
22.7
|
%
|
|
20.5
|
%
|
|
26.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
(In thousands, except
percentages)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Non-GAAP
adjusted:
|
|
|
|
|
|
|
|
Cost of product
sales
|
$
|
29,630
|
|
|
$
|
22,963
|
|
|
$
|
80,594
|
|
|
$
|
68,620
|
|
Gross
margin
|
92.7
|
%
|
|
93.8
|
%
|
|
93.1
|
%
|
|
93.7
|
%
|
Selling, general and
administrative
|
$
|
103,620
|
|
|
$
|
94,534
|
|
|
$
|
333,524
|
|
|
$
|
296,633
|
|
% of total
revenues
|
25.2
|
%
|
|
25.3
|
%
|
|
28.2
|
%
|
|
27.2
|
%
|
Research and
development
|
$
|
42,712
|
|
|
$
|
43,323
|
|
|
$
|
118,796
|
|
|
$
|
106,847
|
|
% of total
revenues
|
10.4
|
%
|
|
11.6
|
%
|
|
10.0
|
%
|
|
9.8
|
%
|
Income tax
provision
|
$
|
24,410
|
|
|
$
|
38,500
|
|
|
$
|
104,307
|
|
|
$
|
129,663
|
|
Effective tax
rate
|
11.0
|
%
|
|
19.3
|
%
|
|
17.4
|
%
|
|
21.9
|
%
|
Operating expenses changed over the prior year period primarily
due to the following:
- Selling, general and administrative (SG&A) expenses
increased in the third quarter of 2017 compared to the same period
in 2016 on a GAAP and on a non-GAAP adjusted basis due to higher
headcount and other expenses resulting from the expansion of the
company's business, including the launch of Vyxeos in the U.S.
SG&A expenses in the third quarter of 2016 on a GAAP basis
included transaction and integration costs of $10.3 million.
- Research and development (R&D) expenses were consistent on
a GAAP and on a non-GAAP adjusted basis in the third quarter of
2017 compared to the same period in 2016. R&D expenses in the
third quarter of 2017 reflected an increase in expenses related to
the company's ongoing clinical development programs and regulatory
activities, including an increase in headcount, and a decrease in
JZP-110 costs following the completion of three Phase 3 studies
this year.
The tax provision and the effective tax rate for the third
quarter of 2017 on both a GAAP and non-GAAP basis were favorably
impacted by the release of a valuation allowance held against
certain foreign net operating losses and the release of reserves
related to uncertain tax positions upon the expiration of a statute
of limitation.
Cash Flow and Balance Sheet
As of September 30,
2017, cash, cash equivalents and investments were $452.6 million, and the outstanding principal
balance of the company's long-term debt was $1.8 billion. In the third quarter of 2017, the
company sold $575.0 million aggregate
principal amount of 1.50% exchangeable senior notes due 2024 and
used the net proceeds to repay $500.0
million of outstanding borrowings under the company's
revolving credit facility. During the nine months ended
September 30, 2017, the company repaid a total of $850.0 million of borrowings under the company's
revolving credit facility, made an upfront payment of $75.0 million to ImmunoGen, Inc. and used
$56.4 million to repurchase
approximately 398,000 ordinary shares under the company's share
repurchase program at an average cost of $141.73 per ordinary share.
Recent Developments
- In August 2017, the company and
ImmunoGen, Inc. entered into a collaboration and option agreement
granting the company rights to opt into exclusive, worldwide
licenses to develop and commercialize two early-stage,
hematology-related antibody-drug conjugate (ADC) programs, as well
as an additional program to be designated during the term of the
agreement. The programs covered under the agreement include
IMGN779, a CD33-targeted ADC for the treatment of acute myeloid
leukemia (AML) in Phase 1 testing, and IMGN632, a CD123-targeted
ADC for hematological malignancies expected to enter clinical
testing before the end of the year.
- In November 2017, the company
submitted a Marketing Authorization Application (MAA) for Vyxeos to
the European Medicines Authority (EMA) for the treatment of
high-risk AML patients. Separately, the EMA granted Vyxeos an
accelerated assessment review and the UK Medicines and Healthcare
Products Regulatory Agency granted Vyxeos the Promising Innovative
Medicine designation.
2017 Financial Guidance
Jazz Pharmaceuticals is
updating its full year 2017 financial guidance as follows (in
millions, except per share amounts and percentages):
Revenues
|
$1,600-$1,650
|
Total net product
sales
|
$1,590-$1,630
|
-Xyrem net
sales
|
$1,180-$1,200
|
-Erwinaze/Erwinase
net sales
|
$200-$215
|
-Defitelio/defibrotide net sales
|
$130-$150
|
-Vyxeos net
sales
|
$20-$30
|
GAAP gross margin
%
|
93%
|
Non-GAAP adjusted
gross margin %1,4
|
93%
|
GAAP SG&A
expenses
|
$521-$551
|
Non-GAAP adjusted
SG&A expenses2,4
|
$440-$460
|
GAAP R&D
expenses
|
$180-$200
|
Non-GAAP adjusted
R&D expenses3,4
|
$165-$180
|
GAAP net income per
diluted share
|
$5.30-$6.30
|
Non-GAAP adjusted net
income per diluted share4
|
$10.70-$11.20
|
|
|
|
|
1.
|
Excludes
$5 million of share-based compensation expense from estimated
GAAP gross margin.
|
2.
|
Excludes $75-$85
million of share-based compensation expense and $6 million of
expenses related to certain legal proceedings and restructuring
from estimated GAAP SG&A expenses.
|
3.
|
Excludes $15-$20
million of share-based compensation expense from estimated GAAP
R&D expenses.
|
4.
|
See "Non-GAAP
Financial Measures" below. Reconciliations of non-GAAP adjusted
guidance measures are included above and in the table titled
"Reconciliation of GAAP to Non-GAAP Adjusted 2017 Net Income
Guidance" at the end of this press release.
|
Conference Call Details
Jazz Pharmaceuticals will host
an investor conference call and live audio webcast today at
4:30 p.m. EST (9:30 p.m. GMT) to provide a business and
financial update and discuss its 2017 third quarter results. The
live webcast may be accessed from the Investors section of the
company's website at www.jazzpharmaceuticals.com. Please connect to
the website prior to the start of the conference call to ensure
adequate time for any software downloads that may be necessary.
Investors may participate in the conference call by dialing
+1 855 353 7924 in the U.S., or +1 503 343 6056
outside the U.S., and entering passcode 95499424.
A replay of the conference call will be available through
November 14, 2017 by dialing +1 855
859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and
entering passcode 95499424. An archived version of the webcast will
be available for at least one week in the Investors section of the
company's website at www.jazzpharmaceuticals.com.
About Jazz Pharmaceuticals plc
Jazz Pharmaceuticals
plc (Nasdaq: JAZZ) is an international biopharmaceutical company
focused on improving patients' lives by identifying, developing and
commercializing meaningful products that address unmet medical
needs. The company has a diverse portfolio of products and product
candidates with a focus in the areas of sleep and
hematology/oncology. In these areas, Jazz Pharmaceuticals markets
Xyrem® (sodium oxybate) oral solution, Erwinaze® (asparaginase
Erwinia chrysanthemi), Defitelio® (defibrotide sodium) and
Vyxeos™ (daunorubicin and cytarabine) liposome for injection in the
U.S. and markets Erwinase® and Defitelio® (defibrotide) in
countries outside the U.S. For more information, please visit
www.jazzpharmaceuticals.com.
Non-GAAP Financial Measures
To supplement Jazz
Pharmaceuticals' financial results and guidance presented in
accordance with U.S. generally accepted accounting principles
(GAAP), the company uses certain non-GAAP (also referred to as
adjusted or non-GAAP adjusted) financial measures in this press
release and the accompanying tables. In particular, the company
presents non-GAAP adjusted net income (and the related per share
measure) and its line item components, as well as certain non-GAAP
adjusted financial measures derived therefrom, including non-GAAP
adjusted gross margin percentage, non-GAAP adjusted income tax
provision and non-GAAP adjusted effective tax rate. Non-GAAP
adjusted net income (and the related per share measure) and its
line item components exclude from reported GAAP net income (and the
related per share measure) and its line item components certain
items, as detailed in the reconciliation tables that follow, and in
the case of non-GAAP adjusted net income (and the related per share
measure), adjust for the income tax effect of non-GAAP adjustments.
In this regard, the components of non-GAAP adjusted net income,
including non-GAAP cost of product sales, non-GAAP selling, general
and administrative expenses and non-GAAP research and development
expenses, are income statement line items prepared on the same
basis as, and therefore components of, the overall non-GAAP
adjusted net income measure.
The company believes that each of these non-GAAP financial
measures provides useful supplementary information to, and
facilitates additional analysis by, investors and analysts. In
particular, the company believes that each of these non-GAAP
financial measures, when considered together with the company's
financial information prepared in accordance with GAAP, can enhance
investors' and analysts' ability to meaningfully compare the
company's results from period to period and to its forward-looking
guidance, and to identify operating trends in the company's
business. In addition, these non-GAAP financial measures are
regularly used by investors and analysts to model and track the
company's financial performance. Jazz Pharmaceuticals' management
also regularly uses these non-GAAP financial measures internally to
understand, manage and evaluate the company's business and to make
operating decisions, and compensation of executives is based in
part on certain of these non-GAAP financial measures. Because these
non-GAAP financial measures are important internal measurements for
Jazz Pharmaceuticals' management, the company also believes that
these non-GAAP financial measures are useful to investors and
analysts since these measures allow for greater transparency with
respect to key financial metrics the company uses in assessing its
own operating performance and making operating decisions.
These non-GAAP financial measures are not meant to be considered
in isolation or as a substitute for comparable GAAP measures;
should be read in conjunction with the company's condensed
consolidated financial statements prepared in accordance with GAAP;
have no standardized meaning prescribed by GAAP; and are not
prepared under any comprehensive set of accounting rules or
principles. In addition, from time to time in the future there may
be other items that the company may exclude for purposes of its
non-GAAP financial measures; and the company has ceased, and may in
the future cease, to exclude items that it has historically
excluded for purposes of its non-GAAP financial measures. Likewise,
the company may determine to modify the nature of its adjustments
to arrive at its non-GAAP financial measures. Because of the
non-standardized definitions of non-GAAP financial measures, the
non-GAAP financial measures as used by Jazz Pharmaceuticals in this
press release and the accompanying tables have limits in their
usefulness to investors and may be calculated differently from, and
therefore may not be directly comparable to, similarly titled
measures used by other companies.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
This press release contains
forward-looking statements, including, but not limited to,
statements related to Jazz Pharmaceuticals' future financial and
operating results, including 2017 financial guidance, the company's
ability to address the key drivers impacting Xyrem to position the
product for solid future growth, the company's expectation for
future Erwinaze supply disruptions, the company's expectation for
continued inter-quarter variability in Defitelio net sales, the
company's expectation that IMGN632 will enter clinical testing and
the timing thereof and other statements that are not historical
facts. These forward-looking statements are based on the
company's current plans, objectives, estimates, expectations and
intentions and inherently involve significant risks and
uncertainties. Actual results and the timing of events could
differ materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which
include, without limitation, risks and uncertainties associated
with: maintaining or increasing sales of and revenue from Xyrem,
such as the potential U.S. introduction of a generic version of
Xyrem before the entry dates specified in the company's settlements
with certain companies that had filed abbreviated new drug
applications with the U.S. Food and Drug
Administration seeking approval to market a generic version of
Xyrem or on terms that are different from those contemplated by the
settlements; ongoing patent litigation and related proceedings;
effectively commercializing the company's other products and
product candidates; the time-consuming and uncertain regulatory
approval process, including the risk that the company's regulatory
submissions, including the Vyxeos MAA, may not be approved by
applicable regulatory authorities in a timely manner or at all;
protecting and enhancing the company's intellectual property
rights; delays or problems in the supply or manufacture of the
company's products and product candidates; complying with
applicable U.S. and non-U.S. regulatory requirements; government
investigations and other actions; obtaining and maintaining
appropriate pricing and reimbursement for the company's products;
pharmaceutical product development and the uncertainty of clinical
success, including risks related to failure or delays in initiating
or completing clinical trials; identifying and acquiring,
in-licensing or developing additional products or product
candidates, financing these transactions and successfully
integrating acquired businesses; potential restrictions on the
company's ability and flexibility to pursue share repurchases and
future strategic opportunities as a result of its substantial
outstanding debt obligations; the ability to achieve expected
future financial performance and results; and other risks and
uncertainties affecting the company, including those described from
time to time under the caption "Risk Factors" and elsewhere in Jazz
Pharmaceuticals plc's Securities and Exchange Commission filings
and reports (Commission File No. 001-33500), including the
company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2017 and future filings and
reports by the company, including the company's Quarterly Report on
Form 10-Q for the quarter ended September
30, 2017. Other risks and uncertainties of which the
company is not currently aware may also affect the company's
forward-looking statements and may cause actual results and timing
of events to differ materially from those anticipated. The
forward-looking statements herein are made only as of the date
hereof or as of the dates indicated in the forward-looking
statements, even if they are subsequently made available by the
company on its website or otherwise. The company undertakes
no obligation to update or supplement any forward-looking
statements to reflect actual results, new information, future
events, changes in its expectations or other circumstances that
exist after the date as of which the forward-looking statements
were made.
JAZZ
PHARMACEUTICALS PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
Product sales,
net
|
$
|
407,971
|
|
|
$
|
371,621
|
|
|
$
|
1,171,304
|
|
|
$
|
1,084,647
|
|
Royalties and
contract revenues
|
3,884
|
|
|
2,560
|
|
|
10,990
|
|
|
6,705
|
|
Total
revenues
|
411,855
|
|
|
374,181
|
|
|
1,182,294
|
|
|
1,091,352
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of product sales
(excluding amortization of intangible assets)
|
31,203
|
|
|
24,311
|
|
|
84,940
|
|
|
71,730
|
|
Selling, general and
administrative
|
124,523
|
|
|
124,368
|
|
|
401,106
|
|
|
375,751
|
|
Research and
development
|
47,362
|
|
|
47,796
|
|
|
132,447
|
|
|
118,139
|
|
Acquired in-process
research and development
|
75,000
|
|
|
15,000
|
|
|
77,000
|
|
|
23,750
|
|
Intangible asset
amortization
|
47,313
|
|
|
26,453
|
|
|
99,164
|
|
|
75,832
|
|
Total operating
expenses
|
325,401
|
|
|
237,928
|
|
|
794,657
|
|
|
665,202
|
|
Income from
operations
|
86,454
|
|
|
136,253
|
|
|
387,637
|
|
|
426,150
|
|
Interest expense,
net
|
(19,192)
|
|
|
(18,498)
|
|
|
(56,330)
|
|
|
(42,811)
|
|
Foreign exchange
loss
|
(2,224)
|
|
|
(749)
|
|
|
(9,115)
|
|
|
(1,568)
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
(638)
|
|
|
—
|
|
|
(638)
|
|
Income before income
tax provision and equity in loss of investees
|
65,038
|
|
|
116,368
|
|
|
322,192
|
|
|
381,133
|
|
Income tax
provision
|
1,239
|
|
|
26,437
|
|
|
65,914
|
|
|
100,888
|
|
Equity in loss of
investees
|
273
|
|
|
103
|
|
|
637
|
|
|
103
|
|
Net income
|
$
|
63,526
|
|
|
$
|
89,828
|
|
|
$
|
255,641
|
|
|
$
|
280,142
|
|
|
|
|
|
|
|
|
|
Net income per
ordinary share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.06
|
|
|
$
|
1.49
|
|
|
$
|
4.26
|
|
|
$
|
4.62
|
|
Diluted
|
$
|
1.03
|
|
|
$
|
1.45
|
|
|
$
|
4.17
|
|
|
$
|
4.51
|
|
Weighted-average
ordinary shares used in per share calculations - basic
|
60,108
|
|
|
60,437
|
|
|
60,030
|
|
|
60,692
|
|
Weighted-average
ordinary shares used in per share calculations - diluted
|
61,436
|
|
|
61,795
|
|
|
61,360
|
|
|
62,150
|
|
JAZZ
PHARMACEUTICALS PLC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
September 30, 2017
|
|
December
31, 2016
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
252,615
|
|
|
$
|
365,963
|
|
Investments
|
200,000
|
|
|
60,000
|
|
Accounts receivable,
net of allowances
|
258,616
|
|
|
234,244
|
|
Inventories
|
41,344
|
|
|
34,051
|
|
Prepaid
expenses
|
29,249
|
|
|
24,501
|
|
Other current
assets
|
49,120
|
|
|
29,310
|
|
Total current
assets
|
830,944
|
|
|
748,069
|
|
Property and
equipment, net
|
159,386
|
|
|
107,490
|
|
Intangible assets,
net
|
3,019,035
|
|
|
3,012,001
|
|
Goodwill
|
941,428
|
|
|
893,810
|
|
Deferred tax assets,
net, non-current
|
23,662
|
|
|
15,060
|
|
Deferred financing
costs
|
8,149
|
|
|
9,737
|
|
Other non-current
assets
|
16,420
|
|
|
14,060
|
|
Total
assets
|
$
|
4,999,024
|
|
|
$
|
4,800,227
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
29,972
|
|
|
$
|
22,415
|
|
Accrued
liabilities
|
179,890
|
|
|
193,268
|
|
Current portion of
long-term debt
|
36,094
|
|
|
36,094
|
|
Income taxes
payable
|
13,603
|
|
|
4,506
|
|
Deferred
revenue
|
8,618
|
|
|
1,123
|
|
Total current
liabilities
|
268,177
|
|
|
257,406
|
|
Deferred revenue,
non-current
|
18,270
|
|
|
2,601
|
|
Long-term debt, less
current portion
|
1,543,819
|
|
|
1,993,531
|
|
Deferred tax
liability, net, non-current
|
540,964
|
|
|
556,733
|
|
Other non-current
liabilities
|
158,497
|
|
|
112,617
|
|
Total shareholders'
equity
|
2,469,297
|
|
|
1,877,339
|
|
Total liabilities and
shareholders' equity
|
$
|
4,999,024
|
|
|
$
|
4,800,227
|
|
JAZZ
PHARMACEUTICALS PLC
|
SUMMARY OF CASH
FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Nine Months
Ended September 30,
|
|
2017
|
|
2016
|
Net cash provided by
operating activities
|
$
|
488,528
|
|
|
$
|
411,696
|
|
Net cash used in
investing activities
|
(237,072)
|
|
|
(1,749,296)
|
|
Net cash provided by
(used in) financing activities
|
(369,127)
|
|
|
713,032
|
|
Effect of exchange
rates on cash and cash equivalents
|
4,323
|
|
|
2,350
|
|
Net decrease in cash
and cash equivalents
|
$
|
(113,348)
|
|
|
$
|
(622,218)
|
|
JAZZ
PHARMACEUTICALS PLC
|
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP reported net
income
|
$
|
63,526
|
|
|
$
|
89,828
|
|
|
$
|
255,641
|
|
|
$
|
280,142
|
|
Intangible asset
amortization
|
47,313
|
|
|
26,453
|
|
|
99,164
|
|
|
75,832
|
|
Share-based
compensation expense
|
27,126
|
|
|
24,874
|
|
|
79,579
|
|
|
74,490
|
|
Upfront and milestone
payments
|
75,000
|
|
|
15,000
|
|
|
75,000
|
|
|
23,750
|
|
Transaction and
integration related costs
|
—
|
|
|
10,781
|
|
|
—
|
|
|
12,970
|
|
Expenses related to
certain legal proceedings and restructuring
|
—
|
|
|
—
|
|
|
6,000
|
|
|
6,060
|
|
Non-cash interest
expense
|
7,855
|
|
|
5,642
|
|
|
19,234
|
|
|
16,418
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
638
|
|
|
—
|
|
|
638
|
|
Income tax effect of
adjustments (1)
|
(23,171)
|
|
|
(12,063)
|
|
|
(38,393)
|
|
|
(28,775)
|
|
Non-GAAP adjusted net
income
|
$
|
197,649
|
|
|
$
|
161,153
|
|
|
$
|
496,225
|
|
|
$
|
461,525
|
|
|
|
|
|
|
|
|
|
GAAP reported net
income per diluted share
|
$
|
1.03
|
|
|
$
|
1.45
|
|
|
$
|
4.17
|
|
|
$
|
4.51
|
|
Non-GAAP adjusted net
income per diluted share
|
$
|
3.22
|
|
|
$
|
2.61
|
|
|
$
|
8.09
|
|
|
$
|
7.43
|
|
Weighted-average
ordinary shares used in diluted per share calculations
|
61,436
|
|
|
61,795
|
|
|
61,360
|
|
|
62,150
|
|
|
|
|
|
|
|
(1)
|
The income tax effect
of the adjustments between GAAP reported and non-GAAP adjusted net
income takes into account the tax treatment and related tax rate(s)
that apply to each adjustment in the applicable tax
jurisdiction(s).
|
JAZZ
PHARMACEUTICALS PLC
|
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
|
CERTAIN LINE ITEMS
AND OTHER INFORMATION
|
(In thousands,
except per share amounts and percentages)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
|
GAAP
Reported
|
|
Adjustments
|
|
Non-GAAP
Adjusted
|
|
GAAP
Reported
|
|
Adjustments
|
|
Non-GAAP
Adjusted
|
Total
revenues
|
$
|
411,855
|
|
|
$
|
—
|
|
|
$
|
411,855
|
|
|
$
|
374,181
|
|
|
$
|
—
|
|
|
$
|
374,181
|
|
Cost of product sales
(excluding amortization of intangible assets)
|
31,203
|
|
|
(1,573)
|
|
(a)
|
29,630
|
|
|
24,311
|
|
|
(1,348)
|
|
(a)
|
22,963
|
|
Selling, general and
administrative
|
124,523
|
|
|
(20,903)
|
|
(b)
|
103,620
|
|
|
124,368
|
|
|
(29,834)
|
|
(b)
|
94,534
|
|
Research and
development
|
47,362
|
|
|
(4,650)
|
|
(c)
|
42,712
|
|
|
47,796
|
|
|
(4,473)
|
|
(c)
|
43,323
|
|
Acquired in-process
research and development
|
75,000
|
|
|
(75,000)
|
|
|
—
|
|
|
15,000
|
|
|
(15,000)
|
|
|
—
|
|
Intangible asset
amortization
|
47,313
|
|
|
(47,313)
|
|
|
—
|
|
|
26,453
|
|
|
(26,453)
|
|
|
—
|
|
Interest expense,
net
|
19,192
|
|
|
(7,855)
|
|
(d)
|
11,337
|
|
|
18,498
|
|
|
(5,642)
|
|
(d)
|
12,856
|
|
Foreign currency
loss
|
2,224
|
|
|
—
|
|
|
2,224
|
|
|
749
|
|
|
—
|
|
|
749
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
638
|
|
|
(638)
|
|
|
—
|
|
Income before income
tax provision and equity in loss of investees
|
65,038
|
|
|
157,294
|
|
(e)
|
222,332
|
|
|
116,368
|
|
|
83,388
|
|
(e)
|
199,756
|
|
Income tax
provision
|
1,239
|
|
|
23,171
|
|
(f)
|
24,410
|
|
|
26,437
|
|
|
12,063
|
|
(f)
|
38,500
|
|
Effective tax rate
(g)
|
1.9
|
%
|
|
|
|
11.0
|
%
|
|
22.7
|
%
|
|
|
|
19.3
|
%
|
Equity in loss of
investees
|
273
|
|
|
—
|
|
|
273
|
|
|
103
|
|
|
—
|
|
|
103
|
|
Net income
|
$
|
63,526
|
|
|
$
|
134,123
|
|
(h)
|
$
|
197,649
|
|
|
$
|
89,828
|
|
|
$
|
71,325
|
|
(h)
|
$
|
161,153
|
|
Net income per
diluted share
|
$
|
1.03
|
|
|
|
|
$
|
3.22
|
|
|
$
|
1.45
|
|
|
|
|
$
|
2.61
|
|
JAZZ
PHARMACEUTICALS PLC
|
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
|
CERTAIN LINE ITEMS
AND OTHER INFORMATION
|
(In thousands,
except per share amounts and percentages)
|
(Unaudited)
|
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
|
GAAP
Reported
|
|
Adjustments
|
|
Non-GAAP
Adjusted
|
|
GAAP
Reported
|
|
Adjustments
|
|
Non-GAAP
Adjusted
|
Total
revenues
|
$
|
1,182,294
|
|
|
$
|
—
|
|
|
$
|
1,182,294
|
|
|
$
|
1,091,352
|
|
|
$
|
—
|
|
|
$
|
1,091,352
|
|
Cost of product sales
(excluding amortization of intangible assets)
|
84,940
|
|
|
(4,346)
|
|
(i)
|
80,594
|
|
|
71,730
|
|
|
(3,110)
|
|
(i)
|
68,620
|
|
Selling, general and
administrative
|
401,106
|
|
|
(67,582)
|
|
(j)
|
333,524
|
|
|
375,751
|
|
|
(79,118)
|
|
(j)
|
296,633
|
|
Research and
development
|
132,447
|
|
|
(13,651)
|
|
(k)
|
118,796
|
|
|
118,139
|
|
|
(11,292)
|
|
(k)
|
106,847
|
|
Acquired in-process
research and development
|
77,000
|
|
|
(75,000)
|
|
|
2,000
|
|
|
23,750
|
|
|
(23,750)
|
|
|
—
|
|
Intangible asset
amortization
|
99,164
|
|
|
(99,164)
|
|
|
—
|
|
|
75,832
|
|
|
(75,832)
|
|
|
—
|
|
Interest expense,
net
|
56,330
|
|
|
(19,234)
|
|
(d)
|
37,096
|
|
|
42,811
|
|
|
(16,418)
|
|
(d)
|
26,393
|
|
Foreign currency
loss
|
9,115
|
|
|
—
|
|
|
9,115
|
|
|
1,568
|
|
|
—
|
|
|
1,568
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
638
|
|
|
(638)
|
|
|
—
|
|
Income before income
tax provision and equity in loss of investees
|
322,192
|
|
|
278,977
|
|
(l)
|
601,169
|
|
|
381,133
|
|
|
210,158
|
|
(l)
|
591,291
|
|
Income tax
provision
|
65,914
|
|
|
38,393
|
|
(f)
|
104,307
|
|
|
100,888
|
|
|
28,775
|
|
(f)
|
129,663
|
|
Effective tax rate
(g)
|
20.5
|
%
|
|
|
|
17.4
|
%
|
|
26.5
|
%
|
|
|
|
21.9
|
%
|
Equity in loss of
investees
|
637
|
|
|
—
|
|
|
637
|
|
|
103
|
|
|
—
|
|
|
103
|
|
Net income
|
$
|
255,641
|
|
|
$
|
240,584
|
|
(m)
|
$
|
496,225
|
|
|
$
|
280,142
|
|
|
$
|
181,383
|
|
(m)
|
$
|
461,525
|
|
Net income per
diluted share
|
$
|
4.17
|
|
|
|
|
$
|
8.09
|
|
|
$
|
4.51
|
|
|
|
|
$
|
7.43
|
|
|
Explanation of
Adjustments and Certain Line Items (in thousands):
|
|
|
(a)
|
Share-based
compensation expense of $1,573 and $1,307 and transaction and
integration related costs of $0 and $41 for the three months ended
September 30, 2017 and 2016, respectively.
|
(b)
|
Share-based
compensation expense of $20,903 and $19,511 and transaction and
integration related costs of $0 and $10,323 for the three months
ended September 30, 2017 and 2016, respectively.
|
(c)
|
Share-based
compensation expense of $4,650 and $4,056 and transaction and
integration related costs of $0 and $417 for the three months ended
September 30, 2017 and 2016, respectively.
|
(d)
|
Non-cash interest
expense associated with debt discount and debt issuance costs for
the respective three- and nine-month periods.
|
(e)
|
Sum of adjustments
(a) through (d) plus the adjustments for acquired in-process
research and development, intangible asset amortization and loss on
extinguishment and modification of debt for the respective
three-month period.
|
(f)
|
Income tax effect of
the adjustments between GAAP reported and non-GAAP adjusted net
income takes into account the tax treatment and related tax rate(s)
that apply to each adjustment in the applicable tax jurisdiction(s)
for the respective three- and nine-month periods.
|
(g)
|
Income tax provision
divided by income before income tax provision and equity in loss of
investees for the respective three- and nine-month
periods.
|
(h)
|
Net of adjustments
(e) and (f) for the respective three-month period.
|
(i)
|
Share-based
compensation expense of $4,346 and $2,959, expenses related to
certain legal proceedings and restructuring of $0 and $110 and
transaction and integration related costs of $0 and $41 for the
nine months ended September 30, 2017 and 2016,
respectively.
|
(j)
|
Share-based
compensation expense of $61,582 and $60,664, expenses related to
certain legal proceedings and restructuring of $6,000 and $5,950
and transaction and integration related costs of $0 and $12,504 for
the nine months ended September 30, 2017 and 2016,
respectively.
|
(k)
|
Share-based
compensation expense of $13,651 and $10,867 and transaction and
integration related costs of $0 and $425 for the nine months ended
September 30, 2017 and 2016, respectively.
|
(l)
|
Sum of adjustments
(i), (j), (k) and (d) plus the adjustments for acquired in-process
research and development, intangible asset amortization and loss on
extinguishment and modification of debt, as applicable, for the
respective nine-month period.
|
(m)
|
Net of adjustments
(l) and (f) for the respective nine-month period.
|
JAZZ
PHARMACEUTICALS PLC
|
RECONCILIATION OF
GAAP TO NON-GAAP ADJUSTED 2017 NET INCOME GUIDANCE
|
(In millions,
except per share amounts)
|
(Unaudited)
|
|
GAAP net
income
|
$325 -
$385
|
Intangible asset
amortization
|
130 - 165
|
Share-based
compensation expense
|
95 - 110
|
Upfront and milestone
payments
|
75
|
Expenses related to
certain legal proceedings and restructuring
|
6
|
Non-cash interest
expense
|
30 - 35
|
Income tax effect of
adjustments
|
(50) -
(60)
|
Non-GAAP adjusted net
income
|
$655 -
$685
|
|
|
GAAP net income per
diluted share
|
$5.30-$6.30
|
Non-GAAP adjusted net
income per diluted share
|
$10.70-$11.20
|
|
|
Weighted-average
ordinary shares used in per share calculations
|
61
|
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