0001232524
false
Jazz Pharmaceuticals plc
0001232524
2024-05-01
2024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 1, 2024
Date of Report (Date of earliest event reported)
JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
Ireland 001-33500 98-1032470
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
Fifth Floor, Waterloo Exchange,
Waterloo Road,
Dublin 4,
Ireland
D04 E5W7
(Address of principal executive offices, including zip code)
011-
353
-
1
-
634-7800
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Ordinary shares, nominal value $0.0001 per share JAZZ The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Item 2.02. Results of Operations and Financial Condition.
On May 1, 2024, Jazz Pharmaceuticals plc (the "Company") issued a press
release (the "Press Release") announcing financial results for the Company for
the quarter ended March 31, 2024. A copy of the Press Release is furnished as
Exhibit 99.1 to this current report.
The information in this Item 2.02 and in the Press Release furnished as
Exhibit 99.1 to this current report shall not be deemed to be "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that Section or Sections 11 and
12(a)(2) of the Securities Act of 1933, as amended. The information contained
in this Item 2.02 and in the Press Release furnished as Exhibit 99.1 to this
current report shall not be incorporated by reference into any filing with the
U.S. Securities and Exchange Commission made by the Company whether made
before or after the date hereof, regardless of any general incorporation
language in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
Number
99.1 Press Release dated May 1, 2024.
104 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
By: /s/ Philip L. Johnson
Name: Philip L. Johnson
Title: Executive Vice President and Chief Financial Officer
Date: May 1, 2024
Exhibit 99.1
Jazz Pharmaceuticals Announces First Quarter 2024 Financial Results
and Affirms 2024 Financial Guidance
- 12% year-over-year revenue increase from combined key growth drivers:
Xywav
(R)
, Epidiolex
(R)
and Rylaze
(R)
-
- 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 -- 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
(R)
net product sales grew 5% year-over-year.
Rylaz
e/Enrylaze
(R)
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
(R)
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.
1
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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
(R)
(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.
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.
Enrollment in the Phase 3 trial evaluating first-line (1L) use of
Zepzelca
in combination with Tecentriq
(R)
(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.
3
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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 oxybate AG 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) $ 11,669 $ (15,324)
1
Effective tax rate (728.4)% (27.8)%
1
_________________________
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.
4
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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 rate 26.4% 12.3%
1
_________________________
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.
5
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2024 Financial Guidance
The Company is affirming its full year 2024 financial guidance as follows:
(In millions) Guidance
Revenues $4,000 - $4,200
-Neuroscience $2,800 - $2,950
(includes royalties from high-sodium oxybate AG)
-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 - $1,230
2,6
SG&A expenses as % of total revenues 32% - 36% 28% - 31%
R&D expenses $877 - $935 $800 - $850
3,6
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 - $1,350
6
Net income per diluted share $5.80 - $7.70 $18.15 - $19.35
5 6
Weighted-average ordinary shares used in per share calculations 71 71
5
___________________________
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
.
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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
7
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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
8
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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.
9
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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
10
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JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
2024 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
11
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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 Diluted Net Diluted
(Loss) EPS/(LPS) Income EPS
1 1
GAAP $ (14,618) $ (0.23) $ 69,420 $ 1.04
reported
Intangible asset 155,730 2.23 149,786 2.03
amortization
Share-based 61,441 0.88 56,352 0.76
compensation expense
Acquisition accounting 28,943 0.41 60,458 0.82
inventory fair value step-up
Non-cash 4,846 0.07 4,766 0.06
interest expense
2
Income tax effect of (54,127) (0.76) (55,521) (0.75)
above adjustments
Effect of assumed conversion - 0.08 - (0.01)
of Exchangeable Senior Notes
1
Non-GAAP $ 182,215 $ 2.68 $ 285,261 $ 3.95
adjusted
Weighted-average ordinary shares used in 62,537 73,771
diluted per share calculations - GAAP
1
Dilutive effect of 6,418 -
Exchangeable Senior Notes
1
Dilutive effect of employee equity 788 -
incentive and purchase plans
Weighted-average ordinary shares used in 69,743 73,771
diluted per share calculations - non-GAAP
1
________________________________________________
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.
12
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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 Gross Selling, Research Intangible Acquired Interest
of margin general and asset IPR&D expense,
product and development amortization net
sales administrative
GAAP $ 95,487 88.7 % $ 351,712 $ 222,847 $ 155,730 $ 10,000 $ 66,116
Reported
Non-GAAP
Adjustments:
Intangible - - - - (155,730) - -
asset
amortization
Share-based (2,396) 0.3 (40,213) (18,832) - - -
compensation
expense
Acquisition (28,943) 3.4 - - - - -
accounting
inventory
fair
value
step-up
Non-cash - - - - - - (4,846)
interest
expense
Income - - - - - - -
tax
effect
of
above
adjustments
Total (31,339) 3.7 (40,213) (18,832) (155,730) - (4,846)
of
non-GAAP
adjustments
Non-GAAP $ 64,148 92.4 % $ 311,499 $ 204,015 $ - $ 10,000 $ 61,270
Adjusted
Income Effective
tax tax
expense rate
(1)
$ 11,669 (728.4) %
- -
- -
- -
- -
54,127 754.8
54,127 754.8
$ 65,796 26.4 %
Three months ended March 31, 2023
Cost Gross Selling, Research Intangible Acquired Interest
of margin general and asset IPR&D expense,
product and development amortization net
sales administrative
GAAP $ 128,644 85.5 % $ 297,917 $ 189,410 $ 149,786 $ 1,000 $ 74,147
Reported
Non-GAAP
Adjustments:
Intangible - - - - (149,786) - -
asset
amortization
Share-based (3,458) 0.4 (37,402) (15,492) - - -
compensation
expense
Non-cash - - - - - - (4,766)
interest
expense
Acquisition (60,458) 6.8 - - - - -
accounting
inventory
fair
value
step-up
Income - - - - - - -
tax
effect
of
above
adjustments
Total (63,916) 7.2 (37,402) (15,492) (149,786) - (4,766)
of
non-GAAP
adjustments
Non-GAAP $ 64,728 92.7 % $ 260,515 $ 173,918 $ - $ 1,000 $ 69,381
Adjusted
Income Effective
tax tax
expense rate
(benefit) (1)
$ (15,324) (27.8) %
- -
- -
- -
- -
55,521 40.1
55,521 40.1
$ 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.
13
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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
14
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