– 12% year-over-year revenue increase from
combined key growth drivers: Xywav®,
Epidiolex® and Rylaze® –
– Oncology revenues grew 13% year-over-year –
– Submitted zanidatamab BLA for 2L BTC; expect to launch in 2025 or
earlier –
– Top-line Phase 2b data from
suvecaltamide trial in essential tremor expected in late 1H24 –
– 2024 total revenue guidance affirmed at $4.0 to $4.2
billion –
DUBLIN, May 1, 2024 /PRNewswire/ -- Jazz Pharmaceuticals
plc (Nasdaq: JAZZ) today announced financial results for the first
quarter of 2024 and affirmed guidance for 2024.
"In the first quarter of 2024, we delivered combined
double-digit year-over-year growth from our key growth drivers:
Xywav, Epidiolex and Rylaze. We also
significantly advanced our zanidatamab program with the completion
of the BLA for 2L BTC," said Bruce
Cozadd, chairman and chief executive officer of Jazz
Pharmaceuticals. "We believe the robust growth in patients
benefitting from Xywav underscores the appreciation
physicians and patients have for the long-term health benefits of
reducing sodium and expect Xywav to remain the oxybate of
choice. We see continued demand for Rylaze as the only
non-E. coli asparaginase regimen that provides sustained
activity throughout the course of treatment, and we expect
continued growth of Epidiolex to be driven by geographic
expansion, optimized dosing and data demonstrating its
beyond-seizure benefits. Growing and durable revenues from
Xywav, Epidiolex and Rylaze, coupled with our
pipeline progress, drive our confidence in delivering on our
guidance and objectives for 2024."
Key Highlights
- Key growth drivers:
- Xywav net product sales grew 14% year-over-year.
- Epidiolex/Epidyolex® net product sales grew
5% year-over-year.
- Rylaze/Enrylaze® net product sales grew 20%
year-over-year.
- Zanidatamab:
- Completed the zanidatamab BLA submission seeking accelerated
approval in 2L BTC.
- Updated data with longer follow-up, including overall survival
(OS) findings, from the HERIZON-BTC-01 trial will be presented at
ASCO Annual Meeting 2024.
- Plan to initiate Phase 3 EMPOWHER trial in late-line HER2+
breast cancer in 2H24.
- Multiple near-term, late-stage pipeline catalysts anticipated:
- Suvecaltamide top-line data from Phase 2b trial in ET in late 1H24.
- Top-line data from Epidyolex Phase 3 trial in
Japan in 2H24.
- Top-line PFS data from zanidatamab in Phase 3 1L GEA targeted
for late 2024.
- Top-line data from Zepzelca® 1L SCLC Phase 3 trial
at the end of 2024 or early 2025.
- Affirmed 2024 total revenue guidance of $4.0 to $4.2
billion.
Business Updates
Key Commercial Products
Xywav (calcium, magnesium, potassium, and sodium
oxybates) oral solution:
- Xywav net product sales increased 14% to $315.3 million in 1Q24 compared to the same
period in 2023.
- As the only low-sodium oxybate and the only therapy approved to
treat idiopathic hypersomnia (IH), expect Xywav to remain
the oxybate of choice.
- There were approximately 12,950 active Xywav patients
exiting 1Q24, with 275 net patient adds in IH.
- Data presented at 2024 AAN Annual Meeting demonstrated the
real-world impacts of Xywav:
- Results from the RHYTHM study demonstrated patients
with IH experienced higher odds of comorbid conditions across
multiple clinical categories, including cardiovascular
conditions.
- A review of five clinical studies evaluating the impact of
once- and twice-nightly oxybates on sleep quality, sleep
architecture and measures of disrupted nighttime sleep in
narcolepsy found oxybate was effective in improving these measures
regardless of dosing.
Xywav for Narcolepsy:
- There were approximately 9,900 narcolepsy patients taking
Xywav exiting 1Q24.
Xywav for Idiopathic Hypersomnia (IH):
- There were approximately 3,050 IH patients taking
Xywav exiting 1Q24.
Xyrem® (sodium oxybate) oral
solution:
- Xyrem net product sales decreased 64% to
$64.2 million in 1Q24 compared to the
same period in 2023.
High-Sodium Oxybate Authorized Generic (AG)
Royalties:
- Royalties from high-sodium oxybate AGs were $49.9 million in 1Q24.
- The Company expects high-sodium oxybate AG royalty revenue to
exceed $200 million in 2024.
Epidiolex/Epidyolex (cannabidiol):
- Epidiolex/Epidyolex net product sales increased 5% to
$198.7 million in 1Q24 compared to
the same period in 2023. Epidiolex/Epidyolex growth was
negatively affected by inventory drawdown in 1Q24.
- Outside of the U.S., Epidyolex is approved in more than
35 countries with additional launches and reimbursements
anticipated through the end of 2024.
- Long-term and real-world data of treatment-resistant epilepsy
were presented at 2024 ANN Annual Meeting:
- Data from a long-term Expanded Access Program study
demonstrated Epidiolex was associated with a sustained
reduction in treatment-resistant, focal-onset seizures through 144
weeks, with an acceptable safety profile.
- Updated interim results of seizure and non-seizure outcomes
from the BECOME-TSC survey of caregivers of patients with
tuberous sclerosis complex (TSC) reported improvements in seizure
frequency and severity and in cognition, language and communication
in patients.
Rylaze/Enrylaze (asparaginase erwinia
chrysanthemi (recombinant)-rywn):
- Rylaze/Enrylaze net product sales increased 20% to
$102.8 million in 1Q24 compared
to the same period in 2023.
Zepzelca (lurbinectedin):
- Zepzelca net product sales increased 12% to $75.1 million in 1Q24 compared to the same period
in 2023.
- Enrollment in the Phase 3 trial evaluating first-line (1L) use
of Zepzelca in combination with Tecentriq®
(atezolizumab) in small cell lung cancer, in partnership with
Roche, was completed in 1Q24; expect top-line progression-free
survival (PFS) data readout at the end of 2024 or early 2025.
Key Pipeline Highlights
Zanidatamab:
- Completed the zanidatamab biologics license application (BLA)
seeking accelerated approval from the U.S. FDA for second-line (2L)
biliary tract cancer (BTC). If approved, zanidatamab would be the
first HER2-targeted treatment specifically approved for BTC in the
U.S.
- The Company's plans to submit a marketing authorization
application (MAA) to the European Medicines Agency (EMA) are
proceeding.
- Updated data with longer follow-up, including OS findings, from
the HERIZON-BTC-01 trial will be presented at the ASCO Annual
Meeting 2024.
- A confirmatory trial in 1L metastatic BTC is ongoing.
- The pivotal HERIZON-GEA-01 trial, evaluating zanidatamab in 1L
gastroesophageal adenocarcinoma (GEA), is ongoing and the Company
is targeting top-line PFS data in late 2024.
- The Company plans to initiate a Phase 3 trial, EMPOWHER, in the
second half of 2024 to evaluate zanidatamab plus chemotherapy or
trastuzumab plus chemotherapy in patients with HER2-positive breast
cancer whose disease has progressed on previous T-DXd
treatment.
Suvecaltamide (JZP385):
- Enrollment was completed in the Phase 2b essential tremor (ET) trial in 1Q24; top-line
data readout is anticipated late 1H24.
- A Phase 2 trial in patients with Parkinson's disease tremor is
ongoing.
Financial Highlights
|
Three Months
Ended
March
31,
|
(In thousands, except
per share amounts)
|
2024
|
|
2023
|
Total
revenues
|
$ 901,983
|
|
$ 892,812
|
GAAP net income
(loss)
|
$ (14,618)
|
|
$
69,420
|
Non-GAAP adjusted net
income
|
$ 182,215
|
|
$ 285,261
|
GAAP earnings (loss)
per share
|
$
(0.23)
|
|
$
1.04
|
Non-GAAP adjusted
EPS
|
$
2.68
|
|
$
3.95
|
GAAP net loss for 1Q24 was $(14.6) million, or $(0.23) per diluted share, compared to a GAAP net
income of $69.4 million, or
$1.04 per diluted share, for
1Q23.
Non-GAAP adjusted net income for 1Q24 was $182.2 million, or $2.68 per diluted share, compared to a Non-GAAP
adjusted net income of $285.3 million, or $3.95 per diluted share, for 1Q23.
Reconciliations of applicable GAAP reported to non-GAAP adjusted
information are included at the end of this press release.
Total Revenues
|
Three Months
Ended
March
31,
|
(In
thousands)
|
2024
|
|
2023
|
Xywav
|
$ 315,300
|
|
$ 277,761
|
Xyrem
|
64,232
|
|
178,130
|
Epidiolex/Epidyolex
|
198,716
|
|
188,909
|
Sativex
|
2,735
|
|
7,098
|
Total
Neuroscience
|
580,983
|
|
651,898
|
Rylaze/Enrylaze
|
102,750
|
|
85,927
|
Zepzelca
|
75,100
|
|
67,181
|
Defitelio/defibrotide
|
47,676
|
|
39,079
|
Vyxeos
|
32,023
|
|
36,700
|
Total
Oncology
|
257,549
|
|
228,887
|
Other
|
3,570
|
|
3,434
|
Product sales,
net
|
842,102
|
|
884,219
|
High-sodium oxybateAG
royalty revenue
|
49,947
|
|
2,096
|
Other royalty and
contract revenues
|
9,934
|
|
6,497
|
Total
revenues
|
$ 901,983
|
|
$ 892,812
|
Total revenues increased 1% in 1Q24 compared to the same period
in 2023, driven by higher Oncology product sales of 13%, primarily
due to continued growth in Rylaze/Enrylaze, which increased
20% to $102.8 million in 1Q24
compared to the same period in 2023, partially offset by lower
neuroscience revenues. Total neuroscience revenue, including
high-sodium oxybate AG royalty revenue, of $630.9 million decreased in 1Q24 compared to
the same period in 2023, primarily due to decreased Xyrem
revenues, reflecting the adoption of Xywav by existing
Xyrem patients, high-sodium oxybate competition and changes
to formulary coverage, partially offset by increased royalty
revenue received on net sales of high-sodium oxybate AG products
and increased Xywav and Epidiolex/Epidyolex net
product sales.
Operating Expenses and Effective Tax Rate
|
Three Months
Ended
March
31,
|
(In thousands, except
percentages)
|
2024
|
|
2023
|
GAAP:
|
|
|
|
Cost of product
sales
|
$
95,487
|
|
$ 128,644
|
Gross
margin
|
88.7 %
|
|
85.5 %
|
Selling, general and
administrative
|
$ 351,712
|
|
$ 297,917
|
% of total
revenues
|
39.0 %
|
|
33.4 %
|
Research and
development
|
$ 222,847
|
|
$ 189,410
|
% of total
revenues
|
24.7 %
|
|
21.2 %
|
Acquired in-process
research and development
|
$
10,000
|
|
$
1,000
|
Income tax expense
(benefit)1
|
$
11,669
|
|
$
(15,324)
|
Effective tax rate
1
|
(728.4) %
|
|
(27.8) %
|
_________________________
|
1.
|
The GAAP income tax
expense for 1Q24 primarily related to tax shortfalls from
share-based compensation. The GAAP income tax benefit for 1Q23
related primarily to taxes arising on pre-tax income and losses
across tax jurisdictions and deductions on subsidiary
equity.
|
|
Three Months
Ended
March
31,
|
(In thousands, except
percentages)
|
2024
|
|
2023
|
Non-GAAP
adjusted:
|
|
|
|
Cost of product
sales
|
$
64,148
|
|
$
64,728
|
Gross
margin
|
92.4 %
|
|
92.7 %
|
Selling, general and
administrative
|
$ 311,499
|
|
$ 260,515
|
% of total
revenues
|
34.5 %
|
|
29.2 %
|
Research and
development
|
$ 204,015
|
|
$ 173,918
|
% of total
revenues
|
22.6 %
|
|
19.5 %
|
Acquired in-process
research and development
|
$
10,000
|
|
$
1,000
|
Income tax
expense
|
$
65,796
|
|
$
40,197
|
Effective tax
rate1
|
26.4 %
|
|
12.3 %
|
_________________________
|
1.
|
The non-GAAP effective
tax rate increased in 1Q24 compared to the same period in 2023,
primarily due to the mix of pre-tax income and losses incurred
across tax jurisdictions.
|
Changes in operating expenses in 1Q24 over the prior year period
are primarily due to the following:
- Cost of product sales, on a GAAP basis, decreased in 1Q24
compared to the same period in 2023, primarily due to lower
acquisition accounting inventory fair value step-up expense. Cost
of product sales, on a non-GAAP adjusted basis, in 1Q24 was in line
with the same period in 2023.
- Selling, general and administrative (SG&A) expenses
increased in 1Q24 compared to the same period in 2023, on a GAAP
and on a non-GAAP adjusted basis, primarily due to increased
compensation-related expenses driven by higher headcount in support
of our key growth drivers, investment in our priority programs and
litigation costs.
- Research and development (R&D) expenses increased in 1Q24
compared to the same period in 2023, on a GAAP and on a non-GAAP
adjusted basis, primarily due to higher costs related to
zanidatamab, as well as our other key pipeline programs, and an
increase in compensation-related expenses driven by higher
headcount in support of our development programs.
- Acquired in-process research and development (IPR&D)
expense in 1Q24, on a GAAP and on a non-GAAP adjusted basis,
related to an upfront payment made in connection with our asset
purchase and collaboration agreement with Redx Pharma plc.
Cash Flow and Balance Sheet
As of March 31, 2024, cash, cash equivalents and
investments were $1.8 billion,
and the outstanding principal balance of the Company's long-term
debt was $5.8 billion. In
addition, the Company had undrawn borrowing capacity under a
revolving credit facility of $500.0
million. For the three months ended
March 31, 2024, the Company generated $267.2 million of cash from operations
reflecting strong business performance and continued financial
discipline.
2024 Financial Guidance
The Company is affirming its full year 2024 financial guidance
as follows:
(In
millions)
|
|
|
Guidance
|
Revenues
|
|
|
$4,000 -
$4,200
|
–Neuroscience
(includes royalties from high-sodium
oxybateAG)
|
|
|
$2,800 -
$2,950
|
–Oncology
|
|
|
$1,120 -
$1,220
|
|
(In millions, except
per share amounts and percentages)
|
GAAP
|
|
Non-GAAP
|
Gross margin
%
|
89 %
|
|
93%1,6
|
SG&A
expenses
|
$1,346 -
$1,426
|
|
$1,170 -
$1,2302,6
|
SG&A expenses
as % of total revenues
|
32% -
36%
|
|
28% -
31%
|
R&D
expenses
|
$877 - $935
|
|
$800 -
$8503,6
|
R&D expenses as
% of total revenues
|
21% -
23%
|
|
19% -
21%
|
Effective tax
rate
|
(22)% - (3)%
|
|
10% -
13%4,6
|
Net income
|
$385 - $530
|
|
$1,275 -
$1,3506
|
Net income per diluted
share5
|
$5.80 -
$7.70
|
|
$18.15 -
$19.356
|
Weighted-average
ordinary shares used in per share
calculations5
|
71
|
|
71
|
___________________________
|
1.
|
Excludes $125-$145
million of amortization of acquisition-related inventory fair value
step-up and $17-$19 million of share-based compensation
expense.
|
2.
|
Excludes $176-$196
million of share-based compensation expense.
|
3.
|
Excludes
$77-$85 million of share-based compensation
expense.
|
4.
|
Excludes 32%-16% from
the GAAP effective tax rate of (22)%-(3)% relating to the income
tax effect of adjustments between GAAP net income and non-GAAP
adjusted net income, resulting in a non-GAAP adjusted effective tax
rate of 10%-13%.
|
5.
|
Diluted EPS
calculations for 2024 include an estimated 6.4 million shares
related to the assumed conversion of the 2.00% exchangeable senior
notes due 2026, or the 2026 Notes, and the associated interest
expense, net of tax, add-back to net income of $20 million and
$18 million, on a GAAP and on a non-GAAP adjusted basis,
respectively, under the "if converted" method.
|
6.
|
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 2024 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.
ET (9:30 p.m. IST) to provide
a business and financial update and discuss its 2024 first quarter
results.
Audio webcast/conference call:
U.S. Dial-In Number: +1
800 715 9871
Ireland Dial-In Number: +353 1800 943 926
Additional global dial-in numbers are available here.
Passcode: 8991966
Interested parties may access the live audio webcast via the
Investors section of the Jazz Pharmaceuticals website at
www.jazzpharmaceuticals.com. To ensure a timely connection, it is
recommended that participants register at least 15 minutes prior to
the scheduled webcast.
A replay of the webcast will be available via the Investors
section of the Jazz Pharmaceuticals website at
www.jazzpharmaceuticals.com.
About Jazz Pharmaceuticals
Jazz Pharmaceuticals plc (NASDAQ: JAZZ) is a global
biopharmaceutical company whose purpose is to innovate to transform
the lives of patients and their families. We are dedicated to
developing life-changing medicines for people with serious diseases
— often with limited or no therapeutic options. We have a diverse
portfolio of marketed medicines, including leading therapies for
sleep disorders and epilepsy, and a growing portfolio of cancer
treatments. Our patient-focused and science-driven approach powers
pioneering research and development advancements across our robust
pipeline of innovative therapeutics in oncology and neuroscience.
Jazz is headquartered in Dublin,
Ireland with research and development laboratories,
manufacturing facilities and employees in multiple countries
committed to serving patients worldwide. Please visit
www.jazzpharmaceuticals.com for more information.
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 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 GAAP reported net income (loss) (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 the non-GAAP
adjustments. In this regard, the components of non-GAAP adjusted
net income, including non-GAAP adjusted cost of product sales,
SG&A expenses and R&D 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 and 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,
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 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 the reconciliation tables that follow. 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.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, statements related to: the Company's
growth prospects and future financial and operating results,
including the Company's 2024 financial guidance and the Company's
expectations related thereto and anticipated catalysts;
expectations that Xywav will remain the oxybate of choice;
expectations of high-sodium oxybate AG royalty revenue in 2024; the
future growth and durability of revenues; the Company's advancement
of pipeline programs and the timing of development activities,
regulatory activities and submissions related thereto; planned or
anticipated clinical trial events, including with respect to
initiations, enrollment and data read-outs, and the anticipated
timing thereof, including expectations of a potential launch of
zanidatamab in 2L BTC in 2025 or earlier, top line data from a
Phase 2b trial of suvecaltamide in
ET, initiating a Phase 3 trial of zanidatamab plus chemotherapy or
trastuzumab plus chemotherapy in patients with HER2-positive breast
cancer whose disease has progressed on previous T-DXd treatment,
top line PFS data from a Phase 3 trial of zanidatamab in 1L GEA,
top line data from a Phase 3 trial of Epidyolex in DS, LGS and TSC
in Japan and top line PFS data
from a Phase 3 trial of Zepzelca in 1L SCLC; and the Company's
development, regulatory and commercialization strategy, including
the Company's expectations to executing multiple Epidyolex launches
through 2024; the Company's expectations with respect to its
products and product candidates and the potential of the Company's
products and product candidates and the potential regulatory path
related thereto; the Company's capital allocation and corporate
development strategy; the potential successful future development,
manufacturing, regulatory and commercialization activities; the
Company's ability to realize the commercial potential of its
products; the Company's net product sales and goals for net product
sales from new and acquired products; the Company's views and
expectations relating to its patent portfolio, including with
respect to expected patent protection, as well as expectations with
respect to exclusivity; the Company's clinical trials confirming
clinical benefit or enabling regulatory submissions; planned or
anticipated regulatory submissions and filings, and the anticipated
timing thereof; potential regulatory approvals; 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, Xywav, Rylaze and
Epidiolex/Epidyolex and other marketed products; the introduction
of new products into the U.S. market that compete with, or
otherwise disrupt the market for the Company's products and product
candidates; effectively launching and commercializing the Company's
other products and product candidates; the successful completion of
development and regulatory activities with respect to the Company's
product candidates, obtaining and maintaining adequate coverage and
reimbursement for the Company's products; the time-consuming and
uncertain regulatory approval process, including the risk that the
Company's current and/or planned regulatory submissions may not be
submitted, accepted or approved by applicable regulatory
authorities in a timely manner or at all; the costly and
time-consuming pharmaceutical product development and the
uncertainty of clinical success, including risks related to failure
or delays in successfully initiating or completing clinical trials
and assessing patients; global economic, financial, and healthcare
system disruptions and the current and potential future negative
impacts to the Company's business operations and financial results;
geopolitical events, including the conflict between Russia and Ukraine and related sanctions; macroeconomic
conditions, including global financial markets, rising interest
rates and inflation and recent and potential banking disruptions;
regulatory initiatives and changes in tax laws; market volatility;
protecting and enhancing the Company's intellectual property rights
and the Company's commercial success being dependent upon the
Company obtaining, maintaining and defending intellectual property
protection and exclusivity for its products and product candidates;
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, including those governing the
research, development, manufacturing and distribution of controlled
substances; government investigations, legal proceedings and other
actions; identifying and consummating corporate development
transactions, financing these transactions and successfully
integrating acquired product candidates, products and businesses;
the Company's ability to realize the anticipated benefits of its
corporate development transactions and its collaborations and
license agreements with third parties; the sufficiency of the
Company's cash flows and capital resources; the Company's ability
to achieve targeted or expected future financial performance and
results and the uncertainty of future tax, accounting and other
provisions and estimates; the Company's ability to meet its
projected long-term goals and objectives, including as part of
Vision 2025, in the time periods that the Company anticipates, or
at all, and the inherent uncertainty and significant judgments and
assumptions underlying the Company's long-term goals and
objectives; fluctuations in the market price and trading volume of
the Company's ordinary shares; the timing and availability of
alternative investment opportunities; 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' Securities and Exchange Commission filings and
reports, including the Company's Annual Report on Form 10-K for the
year ended December 31, 2023, as
supplemented by our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2024, and future
filings and reports by the Company. 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 the timing of events to differ materially from those
anticipated.
JAZZ PHARMACEUTICALS
PLC
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
Revenues:
|
|
|
|
Product sales,
net
|
$
842,102
|
|
$
884,219
|
Royalties and contract
revenues
|
59,881
|
|
8,593
|
Total
revenues
|
901,983
|
|
892,812
|
Operating
expenses:
|
|
|
|
Cost of product sales
(excluding amortization of acquired developed
technologies)
|
95,487
|
|
128,644
|
Selling, general and
administrative
|
351,712
|
|
297,917
|
Research and
development
|
222,847
|
|
189,410
|
Intangible asset
amortization
|
155,730
|
|
149,786
|
Acquired in-process
research and development
|
10,000
|
|
1,000
|
Total operating
expenses
|
835,776
|
|
766,757
|
Income from
operations
|
66,207
|
|
126,055
|
Interest expense,
net
|
(66,116)
|
|
(74,147)
|
Foreign exchange gain
(loss)
|
(1,693)
|
|
3,193
|
Income (loss) before
income tax expense (benefit) and equity in loss of
investees
|
(1,602)
|
|
55,101
|
Income tax expense
(benefit)
|
11,669
|
|
(15,324)
|
Equity in loss of
investees
|
1,347
|
|
1,005
|
Net income
(loss)
|
$
(14,618)
|
|
$
69,420
|
|
|
|
|
Net income (loss) per
ordinary share:
|
|
|
|
Basic
|
$
(0.23)
|
|
$
1.09
|
Diluted
|
$
(0.23)
|
|
$
1.04
|
Weighted-average
ordinary shares used in per share calculations - basic
|
62,537
|
|
63,494
|
Weighted-average
ordinary shares used in per share calculations - diluted
|
62,537
|
|
73,771
|
JAZZ PHARMACEUTICALS
PLC
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$ 1,443,385
|
|
$ 1,506,310
|
Investments
|
375,000
|
|
120,000
|
Accounts receivable,
net of allowances
|
707,095
|
|
705,794
|
Inventories
|
577,321
|
|
597,039
|
Prepaid
expenses
|
122,562
|
|
185,476
|
Other current
assets
|
314,535
|
|
320,809
|
Total current
assets
|
3,539,898
|
|
3,435,428
|
Property, plant and
equipment, net
|
166,236
|
|
169,646
|
Operating lease
assets
|
61,637
|
|
65,340
|
Intangible assets,
net
|
5,235,496
|
|
5,418,039
|
Goodwill
|
1,739,495
|
|
1,753,130
|
Deferred tax assets,
net
|
507,749
|
|
477,834
|
Deferred financing
costs
|
5,784
|
|
6,478
|
Other non-current
assets
|
70,780
|
|
67,464
|
Total assets
|
$
11,327,075
|
|
$
11,393,359
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
80,976
|
|
$
102,750
|
Accrued
liabilities
|
826,530
|
|
793,914
|
Current portion of
long-term debt
|
605,375
|
|
604,954
|
Income taxes
payable
|
49,325
|
|
35,074
|
Total current
liabilities
|
1,562,206
|
|
1,536,692
|
Long-term debt, less
current portion
|
5,105,111
|
|
5,107,988
|
Operating lease
liabilities, less current portion
|
56,158
|
|
59,225
|
Deferred tax
liabilities, net
|
809,714
|
|
847,706
|
Other non-current
liabilities
|
97,425
|
|
104,751
|
Total shareholders'
equity
|
3,696,461
|
|
3,736,997
|
Total liabilities and
shareholders' equity
|
$
11,327,075
|
|
$
11,393,359
|
JAZZ PHARMACEUTICALS
PLC
SUMMARY OF CASH
FLOWS
(In
thousands)
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
Net cash provided by
operating activities
|
$
267,229
|
|
$
320,708
|
Net cash used in
investing activities
|
(271,904)
|
|
(4,822)
|
Net cash used in
financing activities
|
(56,552)
|
|
(29,788)
|
Effect of exchange
rates on cash and cash equivalents
|
(1,698)
|
|
331
|
Net increase (decrease)
in cash and cash equivalents
|
$
(62,925)
|
|
$
286,429
|
JAZZ PHARMACEUTICALS
PLC
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
Net Income
(Loss)
|
|
Diluted
EPS/(LPS)1
|
|
Net
Income
|
|
Diluted
EPS1
|
GAAP
reported
|
$
(14,618)
|
|
$
(0.23)
|
|
$
69,420
|
|
$
1.04
|
Intangible asset
amortization
|
155,730
|
|
2.23
|
|
149,786
|
|
2.03
|
Share-based
compensation expense
|
61,441
|
|
0.88
|
|
56,352
|
|
0.76
|
Acquisition accounting
inventory fair value step-up
|
28,943
|
|
0.41
|
|
60,458
|
|
0.82
|
Non-cash interest
expense2
|
4,846
|
|
0.07
|
|
4,766
|
|
0.06
|
Income tax effect of
above adjustments
|
(54,127)
|
|
(0.76)
|
|
(55,521)
|
|
(0.75)
|
Effect of assumed
conversion of Exchangeable Senior Notes1
|
—
|
|
0.08
|
|
—
|
|
(0.01)
|
Non-GAAP
adjusted
|
$
182,215
|
|
$
2.68
|
|
$
285,261
|
|
$
3.95
|
Weighted-average
ordinary shares used in diluted per share calculations -
GAAP1
|
62,537
|
|
|
|
73,771
|
|
|
Dilutive effect of
Exchangeable Senior Notes1
|
6,418
|
|
|
|
—
|
|
|
Dilutive effect of
employee equity incentive and purchase plans
|
788
|
|
|
|
—
|
|
|
Weighted-average
ordinary shares used in diluted per share calculations -
non-GAAP1
|
69,743
|
|
|
|
73,771
|
|
|
________________________________________________
|
Explanation of
Adjustments and Certain Line Items:
|
|
1.
|
Diluted EPS/(LPS) was
calculated using the "if-converted" method in relation to the 1.50%
exchangeable senior notes due 2024, or the 2024 Notes, and the 2026
Notes, which we refer to collectively as the Exchangeable Senior
Notes. In August 2023, we made an irrevocable election to fix the
settlement method for exchange of the 2024 Notes to a combination
of cash and ordinary shares of the Company with a specified cash
amount per $1,000 principal amount of the 2024 Notes of $1,000. As
a result, the assumed issuance of ordinary shares upon exchange of
the 2024 Notes has only been included in the calculation of diluted
net income per ordinary share, on a GAAP and on a non-GAAP adjusted
basis, in the three months ended March 31, 2023. The potential
issue of ordinary shares upon exchange of the 2026 Notes was
anti-dilutive and had no impact on GAAP reported net loss per
diluted share for the three months ended March 31, 2024. GAAP
reported net income per diluted share for the three months ended
March 31, 2023 included 9.0 million shares related to the assumed
conversion of the Exchangeable Senior Notes and the associated
interest expense, net of tax, add-back to GAAP net income of $7.0
million. Non-GAAP adjusted net income per diluted share for the
three months ended March 31, 2024 included 6.4 million shares
related to the assumed conversion of the 2026 Notes and the
associated interest expense, net of tax, add-back to non-GAAP
adjusted net income of $4.4 million. Non-GAAP adjusted net income
per diluted share for the three months ended March 31, 2023
included 9.0 million shares related to the assumed conversion of
the Exchangeable Senior Notes and the associated interest expense,
net of tax, add-back to non-GAAP adjusted net income of $6.3
million.
|
2.
|
Non-cash interest
expense associated with debt issuance costs.
|
JAZZ PHARMACEUTICALS
PLC
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS -
FOR THE THREE MONTHS ENDED MARCH 31, 2024 and 2023
(In thousands,
except percentages)
(Unaudited)
|
|
|
Three months ended
March 31, 2024
|
|
Cost of
product
sales
|
|
Gross
margin
|
|
Selling,
general and
administrative
|
|
Research
and
development
|
|
Intangible
asset
amortization
|
|
Acquired
IPR&D
|
|
Interest
expense,
net
|
|
Income
tax
expense
|
|
Effective
tax rate(1)
|
GAAP
Reported
|
$
95,487
|
|
88.7 %
|
|
$
351,712
|
|
$
222,847
|
|
$
155,730
|
|
$
10,000
|
|
$
66,116
|
|
$
11,669
|
|
(728.4) %
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
—
|
|
—
|
|
—
|
|
(155,730)
|
|
—
|
|
—
|
|
—
|
|
—
|
Share-based
compensation expense
|
(2,396)
|
|
0.3
|
|
(40,213)
|
|
(18,832)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Acquisition accounting
inventory fair value
step-up
|
(28,943)
|
|
3.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Non-cash interest
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,846)
|
|
—
|
|
—
|
Income tax effect of
above adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
54,127
|
|
754.8
|
Total of non-GAAP
adjustments
|
(31,339)
|
|
3.7
|
|
(40,213)
|
|
(18,832)
|
|
(155,730)
|
|
—
|
|
(4,846)
|
|
54,127
|
|
754.8
|
Non-GAAP
Adjusted
|
$ 64,148
|
|
92.4 %
|
|
$
311,499
|
|
$
204,015
|
|
$
—
|
|
$ 10,000
|
|
$ 61,270
|
|
$ 65,796
|
|
26.4 %
|
|
|
Three months ended
March 31, 2023
|
|
Cost of
product sales
|
|
Gross
margin
|
|
Selling,
general and
administrative
|
|
Research
and
development
|
|
Intangible
asset amortization
|
|
Acquired
IPR&D
|
|
Interest
expense,
net
|
|
Income
tax
expense
(benefit)
|
|
Effective
tax rate(1)
|
GAAP
Reported
|
$
128,644
|
|
85.5 %
|
|
$
297,917
|
|
$
189,410
|
|
$
149,786
|
|
$ 1,000
|
|
$
74,147
|
|
$
(15,324)
|
|
(27.8) %
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
—
|
|
—
|
|
—
|
|
(149,786)
|
|
—
|
|
—
|
|
—
|
|
—
|
Share-based
compensation expense
|
(3,458)
|
|
0.4
|
|
(37,402)
|
|
(15,492)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Non-cash interest
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,766)
|
|
—
|
|
—
|
Acquisition accounting
inventory fair value
step-up
|
(60,458)
|
|
6.8
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Income tax effect of
above adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
55,521
|
|
40.1
|
Total of non-GAAP
adjustments
|
(63,916)
|
|
7.2
|
|
(37,402)
|
|
(15,492)
|
|
(149,786)
|
|
—
|
|
(4,766)
|
|
55,521
|
|
40.1
|
Non-GAAP
Adjusted
|
$
64,728
|
|
92.7 %
|
|
$
260,515
|
|
$
173,918
|
|
$
—
|
|
$ 1,000
|
|
$
69,381
|
|
$
40,197
|
|
12.3 %
|
__________________________
|
(1)
|
The GAAP effective tax
rate for 1Q24 was derived from the income tax expense which arose
primarily from tax shortfalls from share-based compensation. The
GAAP effective tax rate for 1Q23 was derived from the income tax
benefit which arose as a result of taxes arising on pre-tax income
and losses across tax jurisdictions and deductions on subsidiary
equity.
|
JAZZ PHARMACEUTICALS
PLC
RECONCILIATION OF
GAAP TO NON-GAAP ADJUSTED 2024 NET INCOME AND DILUTED EPS
GUIDANCE
(In millions, except
per share amounts)
(Unaudited)
|
|
|
Net
Income
|
|
Diluted
EPS
|
GAAP
guidance
|
$385 -
$530
|
|
$5.80 -
$7.70
|
Intangible asset
amortization
|
605 - 645
|
|
8.55 - 9.15
|
Acquisition accounting
inventory fair value step-up
|
125 - 145
|
|
1.75 - 2.05
|
Share-based
compensation expense
|
270 - 300
|
|
3.80 - 4.25
|
Non-cash interest
expense
|
20 - 30
|
|
0.30 - 0.40
|
Income tax effect of
above adjustments
|
(205) -
(225)
|
|
(2.90) -
(3.20)
|
Effect of assumed
conversion of 2026 Notes
|
-
|
|
(0.05)
|
Non-GAAP
guidance
|
$1,275 -
$1,350
|
|
$18.15 -
$19.35
|
|
|
|
|
Weighted-average
ordinary shares used in per share calculations - GAAP and
non-GAAP
|
71
|
|
|
Contacts:
Investors:
Andrea N.
Flynn, Ph.D.
Vice President, Head, Investor Relations
Jazz Pharmaceuticals plc
InvestorInfo@jazzpharma.com
Ireland +353 1 634 3211
U.S. +1 650 496 2717
Media:
Kristin
Bhavnani
Head of Global Corporate Communications
Jazz Pharmaceuticals plc
CorporateAffairsMediaInfo@jazzpharma.com
Ireland +353 1 637 2141
U.S. +1 215 867 4948
Logo -
https://mma.prnewswire.com/media/272253/Jazz_Pharmaceuticals_New_Logo.jpg
View original
content:https://www.prnewswire.co.uk/news-releases/jazz-pharmaceuticals-announces-first-quarter-2024-financial-results-and-affirms-2024-financial-guidance-302133439.html