Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Dec. 31, 2014	Feb. 18, 2015	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Registrant Name	Jazz Pharmaceuticals plc
Entity Central Index Key	0001232524
Trading Symbol	jazz
Entity Filer Category	Large Accelerated Filer
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		60,657,182
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 8,420,403,204

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 684,042	$ 636,504
Accounts receivable, net of allowances of $3,483 and $3,680 at December 31, 2014 and 2013, respectively	186,371	124,805
Inventories	30,037	28,669
Prepaid expenses	12,800	7,183
Deferred tax assets, net	48,440	33,613
Other current assets	21,322	33,843
Assets held for sale	32,833	0
Total current assets	1,015,845	864,617
Property and equipment, net	58,363	14,246
Intangible assets, net	1,437,435	812,396
Goodwill	702,713	450,456
Deferred tax assets, net, non-current	75,494	74,597
Deferred financing costs	33,174	14,605
Other non-current assets	15,931	7,304
Total assets	3,338,955	2,238,221
Current liabilities:
Accounts payable	25,126	21,005
Accrued liabilities	164,091	119,718
Current portion of long-term debt	9,428	5,572
Income taxes payable	7,588	336
Contingent consideration	0	50,000
Deferred tax liability, net	9,430	6,259
Deferred revenue	1,138	1,138
Total current liabilities	216,801	204,028
Deferred revenue, non-current	4,499	5,718
Long-term debt, less current portion	1,333,000	544,404
Deferred tax liability, net, non-current	375,054	168,497
Other non-current liabilities	38,393	20,040
Commitments and contingencies (Note 11)
Shareholders’ equity:
Ordinary shares, nominal value $0.0001 per share; 300,000 shares authorized; 60,643 and 57,854 shares issued and outstanding at December 31, 2014 and 2013, respectively	6	6
Non-voting euro deferred shares, €0.01 par value per share; 4,000 shares authorized, issued and outstanding at both December 31, 2014 and 2013	55	55
Capital redemption reserve	471	471
Additional paid-in capital	1,458,005	1,220,317
Accumulated other comprehensive income (loss)	(122,097)	56,153
Retained earnings	34,704	18,532
Total Jazz Pharmaceuticals plc shareholders’ equity	1,371,144	1,295,534
Noncontrolling interests	64	0
Total shareholders’ equity	1,371,208	1,295,534
Total liabilities and shareholders’ equity	$ 3,338,955	$ 2,238,221

Consolidated Balance Sheets (Parenthetical) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 EUR (€)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 EUR (€)
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 3,483		$ 3,680
Nonvoting Euro Deferred shares, par value (in euros per share)		€ 0.01		€ 0.01
Nonvoting Euro Deferred shares, number of shares authorized	4,000,000	4,000,000	4,000,000	4,000,000
Nonvoting Euro Deferred shares, number of shares issued	4,000,000	4,000,000	4,000,000	4,000,000
Nonvoting Euro Deferred shares, number of shares outstanding	4,000,000	4,000,000	4,000,000	4,000,000
Ordinary shares, nominal value (in dollars per share)	$ 0.0001		$ 0.0001
Ordinary shares, number of shares authorized	300,000,000	300,000,000	300,000,000	300,000,000
Ordinary shares, number of shares issued	60,643,000	60,643,000	57,854,000	57,854,000
Ordinary shares, number of shares outstanding	60,643,000	60,643,000	57,854,000	57,854,000

Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues:
Product sales, net	$ 1,162,716	$ 865,398	$ 580,527
Royalties and contract revenues	10,159	7,025	5,452
Total revenues	1,172,875	872,423	585,979
Operating expenses:
Cost of product sales (excluding amortization of acquired developed technologies and intangible asset impairment)	117,418	102,146	78,425
Selling, general and administrative	406,114	304,303	223,882
Research and development	85,181	41,632	20,477
Acquired in-process research and development	202,626	4,988	0
Intangible asset amortization	126,584	79,042	65,351
Asset impairment charges	39,365
Impairment charges	39,365	0	0
Total operating expenses	977,288	532,111	388,135
Income from operations	195,587	340,312	197,844
Interest expense, net	(52,713)	(26,916)	(16,869)
Foreign currency gain (loss)	8,683	(1,697)	(3,620)
Loss on extinguishment and modification of debt	0	(3,749)	0
Income from continuing operations before income tax provision (benefit)	151,557	307,950	177,355
Income tax provision (benefit)	94,231	91,638	(83,794)
Income from continuing operations	57,326	216,312	261,149
Income from discontinued operations, net of taxes	0	0	27,437
Net income	57,326	216,312	288,586
Net loss attributable to noncontrolling interests, net of tax	(1,061)	0	0
Net income attributable to Jazz Pharmaceuticals plc	$ 58,387	$ 216,312	$ 288,586
Basic:
Income from continuing operations (in dollars per share)	$ 0.98	$ 3.71	$ 4.61
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.48
Net income (in dollars per share)	$ 0.98	$ 3.71	$ 5.09
Diluted:
Income from continuing operations (in dollars per share)	$ 0.93	$ 3.51	$ 4.34
Income from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.45
Net income (in dollars per share)	$ 0.93	$ 3.51	$ 4.79
Weighted-average ordinary shares used in calculating net income per ordinary share attributable to Jazz Pharmaceuticals plc:
Basic (in shares)	59,746	58,298	56,643
Diluted (in shares)	62,614	61,569	60,195

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net income	$ 57,326	$ 216,312	$ 288,586
Other comprehensive income (loss):
Foreign currency translation adjustments	(178,264)	25,107	31,046
Available-for-sale securities:
Net unrealized gain on available-for-sale securities, net of income taxes	0	0	8
Reclassification adjustments for gains included in earnings, net of income taxes	0	0	23
Other comprehensive income (loss)	(178,264)	25,107	31,077
Total comprehensive income (loss)	(120,938)	241,419	319,663
Comprehensive loss attributable to noncontrolling interests, net of tax	(1,075)	0	0
Comprehensive income (loss) attributable to Jazz Pharmaceuticals plc	(119,863)	241,419	319,663
Continuing Operations [Member]
Available-for-sale securities:
Comprehensive income (loss) attributable to Jazz Pharmaceuticals plc	(119,863)	241,419	292,226
Discontinued Operations [Member]
Available-for-sale securities:
Comprehensive income (loss) attributable to Jazz Pharmaceuticals plc	$ 0	$ 0	$ 27,437

Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Ordinary Shares [Member]	Non-voting Euro Deferred [Member]	Capital Redemption Reserve [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings (Accumulated Deficit) [Member]	Total Jazz Pharmaceuticals plc Shareholders' Equity [Member]	Noncontrolling Interest [Member]
Balance, beginning of period at Dec. 31, 2011	$ 192,788	$ 4	$ 0	$ 0	$ 542,697	$ (31)	$ (349,882)	$ 192,788	$ 0
Balance, shares, beginning of period at Dec. 31, 2011		42,468,000	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Merger with Azur Pharma	576,464	2	55	471	575,936			576,464
Merger with Azur Pharma, shares		12,360,000	4,000,000
Issuance costs related to Azur Merger	(241)				(241)			(241)
Shares issued under directors deferred compensation plan	0				0			0
Shares issued under directors deferred compensation plan, shares		45,000
Issuance of ordinary shares in conjunction with exercise of share options	14,212				14,212			14,212
Issuance of ordinary shares in conjunction with exercise of share options, shares		1,951,000
Issuance of ordinary shares under employee stock purchase plan	3,707				3,707			3,707
Issuance of ordinary shares under employee stock purchase plan, shares		151,000
Shares withheld for payment of employee's withholding tax liability	(25,299)				(25,299)			(25,299)
Issuance of ordinary shares in conjunction with exercise of warrants	7,084				7,084			7,084
Issuance of ordinary shares in conjunction with exercise of warrants, shares		1,039,000
Share-based compensation	23,129				23,129			23,129
Excess tax benefits from employee share options	9,785				9,785			9,785
Other comprehensive income (loss)	31,077					31,077		31,077
Net income	288,586						288,586	288,586
Balance, end of period at Dec. 31, 2012	1,121,292	6	55	471	1,151,010	31,046	(61,296)	1,121,292	0
Balance, shares, end of period at Dec. 31, 2012		58,014,000	4,000,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of ordinary shares in conjunction with exercise of share options	20,895				20,895			20,895
Issuance of ordinary shares in conjunction with exercise of share options, shares		904,000
Issuance of ordinary shares under employee stock purchase plan	5,410				5,410			5,410
Issuance of ordinary shares under employee stock purchase plan, shares		147,000
Issuance of ordinary shares in conjunction with vesting of restricted stock units, shares		146,000
Shares withheld for payment of employee's withholding tax liability	(5,590)				(5,590)			(5,590)
Issuance of ordinary shares in conjunction with exercise of warrants	4,398				4,398			4,398
Issuance of ordinary shares in conjunction with exercise of warrants, shares		471,000
Share-based compensation	44,367				44,367			44,367
Excess tax benefits from employee share options	(173)				(173)			(173)
Shares repurchased	(136,484)						(136,484)	(136,484)
Stock repurchased, shares		(1,828,000)
Other comprehensive income (loss)	25,107					25,107		25,107
Net income	216,312						216,312	216,312
Balance, end of period at Dec. 31, 2013	1,295,534	6	55	471	1,220,317	56,153	18,532	1,295,534	0
Balance, shares, end of period at Dec. 31, 2013		57,854,000	4,000,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Noncontrolling interest on Gentium Acquisition	136,578								136,578
Acquisition of noncontrolling interest	(136,969)				(1,530)			(1,530)	(135,439)
Issuance of exchangeable senior notes	126,863				126,863			126,863
Shares issued under directors deferred compensation plan, shares		17,000
Issuance of ordinary shares in conjunction with exercise of share options	43,043				43,043			43,043
Issuance of ordinary shares in conjunction with exercise of share options, shares		1,185,000
Issuance of ordinary shares under employee stock purchase plan	7,197				7,197			7,197
Issuance of ordinary shares under employee stock purchase plan, shares		117,000
Issuance of ordinary shares in conjunction with vesting of restricted stock units, shares		222,000
Shares withheld for payment of employee's withholding tax liability	(18,030)				(18,030)			(18,030)
Issuance of ordinary shares in conjunction with exercise of warrants	8,247				8,247			8,247
Issuance of ordinary shares in conjunction with exercise of warrants, shares		1,552,000
Share-based compensation	70,057				70,057			70,057
Excess tax benefits from employee share options	1,841				1,841			1,841
Shares repurchased	(42,215)	0					(42,215)	(42,215)
Stock repurchased, shares		(304,000)
Other comprehensive income (loss)	(178,264)					(178,250)		(178,250)	(14)
Net income	57,326						58,387	58,387	(1,061)
Balance, end of period at Dec. 31, 2014	$ 1,371,208	$ 6	$ 55	$ 471	$ 1,458,005	$ (122,097)	$ 34,704	$ 1,371,144	$ 64
Balance, shares, end of period at Dec. 31, 2014		60,643,000	4,000,000

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Operating activities
Net income	$ 57,326	$ 216,312	$ 288,586
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	126,584	79,042	72,922
Share-based compensation	69,638	44,551	23,006
Impairment charges	39,365	0	0
Depreciation	7,097	3,048	1,307
Acquired in-process research and development	202,626	4,988	0
Loss on disposal of property and equipment	24	46	163
Excess tax benefit from share-based compensation	(1,841)	173	(9,785)
Acquisition accounting inventory fair value step-up adjustments	10,477	3,826	19,939
Change in fair value of contingent consideration	0	15,200	(300)
Deferred income taxes	(43,423)	(10,097)	(113,862)
Gain on sale of business	0	0	(35,244)
Provision for losses on accounts receivable and inventory	2,493	2,446	4,654
Loss on extinguishment and modification of debt	0	3,749	0
Other non-cash transactions	1,739	6,278	3,523
Changes in assets and liabilities:
Accounts receivable	(55,041)	(48,846)	(4,724)
Inventories	(7,630)	(8,516)	1,697
Prepaid expenses and other current assets	11,936	(13,871)	(13,091)
Other long-term assets	(8,891)	(4,306)	(3,491)
Accounts payable	(37,966)	5,089	(7,286)
Accrued liabilities	20,997	14,717	(11,428)
Income taxes payable	8,634	(38,984)	39,340
Deferred revenue	(1,203)	(1,061)	(1,205)
Contingent consideration	(14,900)	0	0
Other non-current liabilities	17,724	14,820	2,351
Liability under government settlement	0	0	(7,320)
Net cash provided by operating activities	405,765	288,604	249,752
Investing activities
Acquisitions, net of cash acquired	(828,676)	0	(542,531)
Acquisition of in-process research and development	(202,626)	(4,988)	0
Purchases of property and equipment	(36,347)	(9,976)	(5,976)
Purchases of marketable securities	0	0	(37,443)
Proceeds from Divestiture of Businesses	0	0	93,922
Proceeds from sale of marketable securities	0	0	81,246
Proceeds from maturities of marketable securities	0	0	31,988
Acquisition of intangible assets	0	(1,300)	0
Purchase of product rights	0	0	(16,500)
Net cash used in investing activities	(1,067,649)	(16,264)	(395,294)
Financing activities
Net proceeds from issuance of debt	1,194,385	553,425	450,916
Proceeds from employee equity incentive and purchase plans and exercise of warrants	58,487	30,703	25,003
Share repurchases	(42,215)	(136,484)	0
Acquisition of noncontrolling interests	(136,969)	0	0
Payment of contingent consideration	(35,100)	0	0
Payment of employee withholding taxes related to share-based awards	(18,030)	(5,590)	(25,299)
Excess tax benefit from share-based compensation	1,841	(173)	9,785
Repayments of long-term debt	(9,524)	(465,910)	(11,875)
Repayments under revolving credit facility	(300,000)	0	0
Net cash provided by (used in) financing activities	712,875	(24,029)	448,530
Effect of exchange rates on cash and cash equivalents	(3,453)	997	2,132
Net increase in cash and cash equivalents	47,538	249,308	305,120
Cash and cash equivalents, at beginning of period	636,504	387,196	82,076
Cash and cash equivalents, at end of period	684,042	636,504	387,196
Supplemental disclosure of cash flow information:
Cash paid for interest	31,978	18,278	14,192
Cash paid for income taxes	108,189	137,616	9,143
Non-cash investing activities:
Acquisition consideration for Azur Merger	$ 0	$ 0	$ 576,464

Organization and Description of Business

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

Jazz Pharmaceuticals plc, a public limited company formed under the laws of Ireland, is an international biopharmaceutical company focused on improving patients’ lives by identifying, developing and commercializing meaningful products that address unmet medical needs. We have a diverse portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology. In these areas, we market Xyrem^® (sodium oxybate) oral solution and Erwinaze^® (asparaginase Erwinia chrysanthemi) in the United States, and market Erwinase^® and Defitelio^® (defibrotide) in Europe and other countries outside the United States. Our strategy is to create shareholder value by:


•	Growing sales of the existing products in our portfolio, including by identifying new growth opportunities;


•	Acquiring additional differentiated products that are on the market or product candidates that are in late-stage development; and


•	Pursuing focused development of a pipeline of post-discovery differentiated product candidates.

On January 18, 2012, the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited Company, or Azur Pharma, were combined in a merger transaction, or the Azur Merger, accounted for as a reverse acquisition under the acquisition method of accounting for business combinations, with Jazz Pharmaceuticals, Inc. treated as the acquiring company for accounting purposes. As part of the Azur Merger, a wholly-owned subsidiary of Azur Pharma merged with and into Jazz Pharmaceuticals, Inc., with Jazz Pharmaceuticals, Inc. surviving the Azur Merger as a wholly-owned subsidiary of Jazz Pharmaceuticals plc. Prior to the Azur Merger, Azur Pharma changed its name to Jazz Pharmaceuticals plc.

On June 12, 2012, we completed the acquisition of EUSA Pharma Inc., or EUSA Pharma, which we refer to as the EUSA Acquisition.

On January 23, 2014, pursuant to a tender offer, we became the indirect majority shareholder of Gentium S.p.A., or Gentium, thereby acquiring control of Gentium on that date. In February 2014, we completed a subsequent offering period of the tender offer, resulting in total purchases pursuant to the tender offer of approximately 98% of the fully diluted voting securities of Gentium. As of December 31, 2014, we had acquired a further 1.8% interest in Gentium, resulting in an aggregate acquisition cost to us of $994.1 million, comprising cash payments of $1,011.2 million, offset by proceeds from the exercise of Gentium share options of $17.1 million. Please see Note 3 for additional information regarding our acquisition of Gentium, which we refer to as the Gentium Acquisition.

Unless otherwise indicated or the context otherwise requires, references to “Jazz Pharmaceuticals,” “the registrant,” “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries, including its predecessor, Jazz Pharmaceuticals, Inc., except that all such references prior to the effective time of the Azur Merger on January 18, 2012, are references to Jazz Pharmaceuticals, Inc. and its consolidated subsidiaries. All references to “ordinary shares” refer to Jazz Pharmaceuticals plc’s ordinary shares.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries and intercompany transactions and balances have been eliminated. We record noncontrolling interests in our consolidated financial statements which represent the ownership interest of minority shareholders in the equity of Gentium. The results of operations of the acquired Azur Pharma, EUSA Pharma and Gentium businesses, along with the estimated fair values of the assets acquired and liabilities assumed in each transaction, are included in our consolidated financial statements since the effective dates of the Azur Merger, the EUSA Acquisition and the Gentium Acquisition, respectively.

Reclassifications

Certain prior period amounts presented in these consolidated financial statements and the accompanying footnotes have been reclassified to conform to the current period presentation. Upfront license fees, previously classified as research and development expense in 2013, have been reclassified to acquired in-process research and development, or IPR&D, in the consolidated statements of income and reclassified from operating activities to investing activities in the consolidated statements of cash flows to conform to the current period presentation. Inventories of $1.4 million, previously classified as raw materials as of December 31, 2013, have been reclassified to work-in-process to conform to the current period presentation.

Significant Risks and Uncertainties

Our financial results are significantly influenced by sales of Xyrem. In 2014, net product sales of Xyrem were $778.6 million, which represented 67.0% of total net product sales. Our ability to maintain or increase sales of Xyrem in its approved indications is subject to a number of risks and uncertainties, including the potential introduction of generic competition, changed or increased regulatory restrictions and continued acceptance of Xyrem as safe and effective by physicians and patients. Five abbreviated new drug applications, or ANDAs, have been filed with the U.S. Food and Drug Administration, or FDA, by third parties seeking to market generic versions of Xyrem, including the most recent in the fourth quarter of 2014. We have initiated lawsuits against all five third parties, and the litigation proceedings are ongoing. We cannot predict the timing or outcome of these proceedings. Although no trial date has been set in any of the ANDA suits, we anticipate that trial on some of the patents in the case against the first ANDA filer, Roxane Laboratories, Inc., or Roxane, could occur as early as the third quarter of 2015. In addition, certain of the ANDA filers have sought to challenge the validity of our patents covering the distribution system for Xyrem by filing petitions for covered business method, or CBM, post-grant patent review and/or inter partes review, or IPR, by the Patent Trial and Appeal Board, or PTAB, of the U.S. Patent and Trademark Office, or USPTO. The PTAB has issued decisions denying institution of CBM review for all of the CBM petitions and has not yet determined whether to institute proceedings with respect to the petitions for IPR. We cannot predict whether PTAB will institute any of the petitioned IPR proceedings, whether additional post-grant patent review challenges will be filed, the outcome of any IPR or other proceeding if instituted, or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings. We expect that the approval of an ANDA that results in the launch of a generic version of Xyrem, or the approval and launch of other sodium oxybate products that compete with Xyrem, would have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In addition, we are continuing our efforts on various regulatory matters, including updating documents that we have submitted to the FDA on our risk management and controlled distribution system for Xyrem, which we refer to as the Xyrem Risk Management Program. We are engaged in ongoing communications with respect to our risk evaluation and mitigation strategies, or REMS, documents for Xyrem, but have not reached agreement with the FDA on certain significant terms. In late 2013, the FDA notified us that it would exercise its claimed authority to modify our REMS and that it would finalize the REMS as modified by the FDA unless we initiated dispute resolution procedures with respect to the modification of the Xyrem deemed REMS. Among other things, we disagree with the FDA’s position in the late 2013 notice that, as part of the current REMS process, the Xyrem deemed REMS should be modified to enable the distribution of Xyrem through more than one pharmacy, or potentially through retail pharmacies and wholesalers, as well as with certain modifications proposed by the FDA that would, in the FDA’s view, be sufficient to ensure that the REMS includes only those elements necessary to ensure that the benefits of Xyrem outweigh its risks, and that would, in the FDA’s view, reduce the burden on the healthcare system. Given these circumstances, we initiated dispute resolution procedures with the FDA at the end of February 2014. We received the FDA’s denial of our initial dispute resolution submission in the second quarter of 2014, and our dispute is currently subject to further supervisory review at the next administrative level of the FDA. We have received interim responses from the FDA, but the FDA has not yet communicated a decision on our further appeal to us. We expect to receive the FDA’s decision in the first quarter of 2015. We cannot predict whether, or on what terms, we will reach agreement with the FDA on final REMS documents for Xyrem, the outcome or timing of the current dispute resolution procedure, whether we will initiate additional dispute resolution proceedings with the FDA or other legal proceedings prior to finalizing the REMS documents, or the outcome or timing of any such proceedings. We expect that final REMS documents for Xyrem will include modifications to, and/or requirements that are not currently implemented in, the Xyrem Risk Management Program. Any such modifications or additional requirements could potentially make it more difficult or expensive for us to distribute Xyrem, make it easier for future generic competitors, and/or negatively affect sales of Xyrem.

We also expect to face pressure to license or share our Xyrem Risk Management Program, which is the subject of multiple issued patents, or elements of it, with generic competitors. In January 2014, the FDA held an initial meeting with us and the then-current Xyrem ANDA applicants to facilitate the development of a single shared system REMS for Xyrem (sodium oxybate). The parties have had numerous interactions with respect to a single shared system REMS since the initial meeting, and we expect the interactions to continue. In addition, if we do not develop a single shared system REMS or license or share our REMS with a generic competitor within a time frame or on terms that the FDA considers acceptable, the FDA may assert that its waiver authority permits it to allow the generic competitor to market a generic drug with a REMS that does not include the same elements that are in our deemed REMS or, when Xyrem REMS documents are approved, with a separate REMS that includes different, but comparable, elements to assure safe use. Similarly, it is possible that, consistent with the position that the FDA articulated in its December 2012 response denying a Citizen Petition we filed in July 2012, the FDA could approve an ANDA with a risk management plan that is separate from our Xyrem deemed REMS, rather than with a final REMS or a shared REMS for both the generic and Xyrem. We cannot predict the outcome or impact on our business of any future action that we may take with respect to the development of a single shared system REMS for Xyrem (sodium oxybate), licensing or sharing our REMS, or the FDA’s response to a certification that a third party had been unable to obtain a license.

Sales of our second largest product, Erwinaze, continue to grow. In 2014, net product sales of Erwinaze/Erwinase were $199.7 million, which represented 17.2% of net product sales in 2014. We seek to maintain and increase sales of Erwinaze, as well as to make Erwinaze more widely available, through ongoing research and development activities. However, our ability to successfully and sustainably maintain or grow sales of Erwinaze is subject to a number of risks and uncertainties, including the limited population of patients with acute lymphoblastic leukemia, or ALL, and the incidence of hypersensitivity reactions to E. coli-derived asparaginase within that population, our ability to obtain clinical data on the use of Erwinaze in young adults age 18 to 39 with ALL who are hypersensitive to E. coli-derived asparaginase, as well as our need to apply for and receive marketing authorizations, through the European Union’s, or EU’s, mutual recognition procedure or otherwise, in certain additional countries so we can launch promotional efforts in those countries. Another significant challenge to our ability to maintain current sales levels and to increase sales is our need to avoid supply interruptions of Erwinaze due to capacity constraints, production delays, quality challenges or other manufacturing difficulties. We have limited inventory of Erwinaze, which puts us at significant risk of not being able to meet product demand. The current manufacturing capacity for Erwinaze is nearly completely absorbed by demand for the product. As a consequence of constrained manufacturing capacity, we have had an extremely limited ability to build an excess level of product inventory that could be used to absorb disruptions to supply resulting from any quality or other issues. If we continue to be subject to capacity constraints or experience quality or other manufacturing challenges in the future, we may be unable to build a desired excess level of product inventory, and our ability to supply the market may be compromised. Although we are taking steps to improve the Erwinaze manufacturing process, if our ongoing efforts are not successful, we could experience additional Erwinaze supply interruptions in the future, which could have a material adverse effect on our sales of and revenues from Erwinaze and limit our potential future maintenance and growth of the market for this product. In addition, while we continue to work with the manufacturer of Erwinaze to evaluate potential steps to expand production capacity to increase the supply of Erwinaze over the longer term to address worldwide demand, our ability to maintain or increase sales of Erwinaze may be limited by our ability to obtain a sufficient supply of the product.

In furtherance of our growth strategy, we have made a significant investment in Defitelio. We added the product to our portfolio as a result of the Gentium Acquisition and secured worldwide rights to the product by acquiring rights to defibrotide in the Americas in August 2014. Our ability to realize the anticipated benefits from this investment is subject to a number of risks and uncertainties, including our ability to successfully maintain or grow sales of Defitelio in Europe, or obtain marketing approval in other countries, including the United States, so that we can launch promotional efforts in those countries. During 2014, Defitelio was launched in a number of European countries. We expect to continue to launch Defitelio in additional European countries on a rolling basis in 2015. A key challenge to our success in maintaining or growing sales of Defitelio in Europe is our ability to obtain appropriate pricing and reimbursement approvals in those European countries where Defitelio is not yet launched. If we experience delays or unforeseen difficulties in obtaining favorable pricing and reimbursement approvals, planned launches in the affected countries would be delayed, or, if we are unable to ultimately obtain favorable pricing and reimbursement approvals in countries that represent significant markets, especially where a country’s reimbursed price influences other countries, our growth prospects in Europe could be negatively affected.

We are also engaged in activities related to the potential approval of defibrotide in the United States. We initiated a rolling submission of a new drug application, or NDA, to the FDA for defibrotide for the treatment of severe hepatic veno-occlusive disease, or VOD, in December 2014 and expect to complete the submission in mid-2015. We do not expect to be required to complete any additional clinical trials prior to completion of the NDA submission. However, we may be unable to acquire and remediate key information to be included in the data package for the NDA in a timely manner or our analysis of such information may not support submission, which would delay or preclude the completion of our NDA submission, and we may be unable to otherwise obtain regulatory approval of defibrotide in the United States in a timely manner, if at all. We also face other challenges that could impact the anticipated value of Defitelio/defibrotide, including the limited size of the population of patients who undergo hematopoietic stem cell transplantation, or HSCT, therapy and develop severe VOD, the need to establish U.S. pricing and reimbursement support for the product in the event we are able to obtain U.S. marketing approval for defibrotide, the possibility that we may be required to conduct time-consuming and costly clinical trials as a condition of any U.S. marketing approval for the product, the lack of experience of U.S. physicians in diagnosing and treating VOD, and challenges to our ability to develop the product for indications in addition to the treatment of severe VOD. If sales of Defitelio/defibrotide do not reach the levels we expect, our anticipated revenue from the product would be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In addition to risks specifically related to Xyrem, Erwinaze and Defitelio/defibrotide, we are subject to other challenges and risks specific to our business, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including: the challenges of protecting and enhancing our intellectual property rights; delays or problems in the supply or manufacture of our products, particularly with respect to certain products as to which we maintain limited inventories, including products for which our supply demands are growing, and our dependence on single source suppliers to continue to meet our ongoing commercial demand or our requirements for clinical trial supplies; the need to obtain and maintain appropriate pricing and reimbursement for our products in an increasingly challenging environment due to, among other things, the attention being paid to healthcare cost containment and other austerity measures in the United States and worldwide, including the need to obtain and maintain reimbursement for Xyrem in the United States in an environment in which we are subject to increasingly restrictive conditions for reimbursement required by third party payors; and the challenges of compliance with the requirements of the FDA, the U.S. Drug Enforcement Administration, or DEA, and non-U.S. regulatory agencies, including with respect to product labeling, requirements for distribution, obtaining sufficient DEA quotas where needed, marketing and promotional activities, adverse event reporting and product recalls or withdrawals.

Other risks and uncertainties related to our ability to execute on our strategy include: the challenges of achieving and maintaining commercial success of our products, such as obtaining sustained acceptance of our products by patients, physicians and payors; the risks associated with business combination or product or product candidate acquisition transactions, such as the challenges inherent in the integration of acquired businesses with our historic business, the increase in geographic dispersion among our centers of operation, taking on the operation of a manufacturing plant as a result of the Gentium Acquisition, and the risks that we may acquire unanticipated liabilities along with acquired businesses or otherwise fail to realize the anticipated benefits (commercial or otherwise) from such transactions; the difficulty and uncertainty of pharmaceutical product development, including the timing thereof, and the uncertainty of clinical success, such as the risk that results from preclinical studies and/or early clinical trials may not be predictive of results obtained in later and larger clinical trials planned or anticipated to be conducted for our product candidates; the inherent uncertainty associated with the regulatory approval process, especially as we continue to undertake increased activities and make growing investment in our product pipeline development projects; our ability to identify and acquire, in-license or develop additional products or product candidates to grow our business; and possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt obligations, which increased significantly in 2014.

Business Acquisitions

Our consolidated financial statements include the results of operations of an acquired business from the date of acquisition. We account for acquired businesses using the acquisition method of accounting. The acquisition method of accounting for acquired businesses requires, among other things, that assets acquired, liabilities assumed and any noncontrolling interests in the acquired business be recognized at their estimated fair values as of the acquisition date, with limited exceptions, and that the fair value of acquired IPR&D be recorded on the balance sheet. Also, transaction costs are expensed as incurred. Any excess of the acquisition consideration over the assigned values of the net assets acquired is recorded as goodwill. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved and changes in fair value are recognized in earnings.

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents and marketable securities. Our investment policy permits investments in U.S. federal government and federal agency securities, corporate bonds or commercial paper issued by U.S. corporations, money market instruments, certain qualifying money market mutual funds, certain repurchase agreements, and tax-exempt obligations of U.S. states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities and issuers of investments to the extent recorded on the balance sheet.

We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in the United States, and to other international distributors and hospitals. Customer creditworthiness is monitored and collateral is not required. We monitor deteriorating economic conditions in certain European countries which may result in variability of the timing of cash receipts and an increase in the average length of time that it takes to collect accounts receivable outstanding. Historically, we have not experienced significant credit losses on our accounts receivable and we do not expect to have write-offs or adjustments to accounts receivable which would have a material adverse effect on our financial position, liquidity or results of operations. As of December 31, 2014, five customers accounted for 86% of gross accounts receivable including Express Scripts Specialty Distribution Services, Inc. and its affiliate CuraScript, Inc., or Express Scripts, which accounted for 66% of gross accounts receivable and IDIS Limited, which accounted for 11% of gross accounts receivable. As of December 31, 2013, five customers accounted for 85% of gross accounts receivable including Express Scripts which accounted for 69% of gross accounts receivable and Accredo Health Group, Inc. which accounted for 9% of gross accounts receivable.

We depend on single source suppliers and manufacturers for each of our products, product candidates and their active pharmaceutical ingredients.

Cash Equivalents and Marketable Securities

We consider all highly liquid investments, readily convertible to cash, that mature within three months or less from date of purchase to be cash equivalents.

Marketable securities are investments in debt securities with maturities of less than one year from the balance sheet date, or securities with maturities of greater than one year that are specifically identified to fund current operations. Collectively, cash equivalents and marketable securities are considered available-for-sale and are recorded at fair value. Unrealized gains and losses, net of tax, are recorded in accumulated other comprehensive income (loss) in shareholders’ equity. We use the specific-identification method for calculating realized gains and losses on securities sold. Realized gains and losses and declines in value judged to be other than temporary on marketable securities are included in interest expense, net in the consolidated statements of income. Realized gains and losses on sales of marketable securities have not been significant.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method for all inventories. Our policy is to write down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value and inventory in excess of expected requirements. The estimate of excess quantities is subjective and primarily dependent on our estimates of future demand for a particular product. If our estimate of future demand changes, we consider the impact on the reserve for excess inventory and adjust the reserve as required. Increases in the reserve are recorded as charges in cost of product sales. For product candidates that have not been approved by the FDA, inventory used in clinical trials is expensed at the time of production and recorded as research and development expense. For products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the clinical trial. Prior to receiving FDA approval, costs related to purchases of the active pharmaceutical ingredient and the manufacturing of the product candidate are recorded as research and development expense. All direct manufacturing costs incurred after approval are capitalized into inventory. The fair value of inventories acquired included no step-up in the value of inventories and $0.2 million step-up in the value of inventories as of December 31, 2014 and 2013, respectively.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from three to 10 years. Leasehold improvements are amortized over the shorter of the noncancelable term of our operating leases or their economic useful lives. Maintenance and repairs are expensed as incurred.

Goodwill

Goodwill represents the excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed. We have determined that we operate in a single segment and have a single reporting unit associated with the development and commercialization of pharmaceutical products. The annual test for goodwill impairment is a two-step process. The first step is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If this step indicates impairment, then, in the second step, the loss is measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of the fair value of the reporting unit over the fair value of all identified assets and liabilities. We test goodwill for impairment annually in October and when events or changes in circumstances indicate that the carrying value may not be recoverable.

Acquired In-Process Research and Development

The initial costs of rights to IPR&D projects acquired in an asset acquisition are expensed as IPR&D unless the project has an alternative future use. The fair value of IPR&D projects acquired in a business combination are capitalized and accounted for as indefinite-lived intangible assets until the underlying project receives regulatory approval, at which point the intangible asset will be accounted for as a finite-lived intangible asset, or discontinued, at which point the intangible asset will be written off. Development costs incurred after an acquisition are expensed as incurred.

Intangible Assets

Intangible assets with finite useful lives consist primarily of purchased developed technology and are amortized on a straight-line basis over their estimated useful lives, which range from two to 16 years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset.

Revenue Recognition

Revenues are recognized when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed and determinable and collection is reasonably assured.

Product Sales, Net

Product sales revenue is recognized when title has transferred to the customer and the customer has assumed the risks and rewards of ownership, which is typically on delivery to the customer or, in the case of products that are subject to consignment agreements, when the customer removes product from our consigned inventory location for shipment directly to a patient.

Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (i) the seller’s price to the buyer is substantially fixed or determinable at the date of sale, (ii) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product, (iii) the buyer’s obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product, (iv) the buyer acquiring the product for resale has economic substance apart from that provided by the seller, (v) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (vi) the amount of future returns can be reasonably estimated.

Revenues from sales of products are recorded net of estimated allowances for returns, specialty distributor fees, wholesaler fees, prompt payment discounts, government rebates, government chargebacks, coupon programs and rebates under managed care plans. Provisions for returns, specialty distributor fees, wholesaler fees, government rebates, coupon programs and rebates under managed care plans are included within current liabilities in our consolidated balance sheets. Provisions for government chargebacks and prompt payment discounts are generally shown as a reduction in accounts receivable. Calculating certain of these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, our expectations regarding future utilization rates for these programs and channel inventory data. Adjustments to estimates for these allowances have not been material.

Royalties and Contract Revenues

We receive royalties from third parties based on sales of our products under licensing and distribution arrangements. For those arrangements where royalties are reasonably estimable, we recognize revenues based on estimates of royalties earned during the applicable period, and adjust for differences between the estimated and actual royalties in the following quarter. Historically, these adjustments have not been significant.

Our contract revenues consist of fees and milestone payments. Non-refundable fees where we have no continuing performance obligations are recognized as revenues when there is persuasive evidence of an arrangement and collection is reasonably assured. In situations where we have continuing performance obligations, non-refundable fees are deferred and are recognized ratably over our projected performance period. We recognize at-risk milestone payments, which are typically related to regulatory, commercial or other achievements by us or our licensees and distributors, as revenues when the milestone is accomplished and collection is reasonably assured. Sales-based milestone payments are typically payments made to us that are triggered when aggregate net sales of a product by a collaborator for a specified period (for example, an annual period) reach an agreed upon threshold amount. We recognize sales-based milestone payments from a collaborator when the event which triggers the obligation of payment has occurred, there is no further obligation on our part in connection with the payment, and collection is reasonably assured. Refundable fees are deferred and recognized as revenues upon the later of when they become nonrefundable or when our performance obligations are completed.

Cost of Product Sales

Cost of product sales includes third party manufacturing and distribution costs, the cost of drug substance, royalties due to third parties on product sales, product liability and cargo insurance, FDA user fees, freight, shipping, handling and storage costs and salaries and related costs of employees involved with production. Cost of product sales in 2014 and 2013 included $10.5 million and $3.8 million, respectively, of inventory costs associated with the fair value step-up in acquired inventory. Excluded from cost of product sales, as shown on the consolidated statements of income, is amortization of acquired developed technology of $122.6 million, $78.8 million and $65.1 million in 2014, 2013 and 2012, respectively.

Research and Development

Research and development expenses consist primarily of personnel expenses, costs related to clinical studies and outside services, and other research and development costs. Personnel expenses relate primarily to salaries, benefits and share-based compensation. Clinical study and outside services costs relate primarily to services performed by clinical research organizations, clinical studies performed at clinical sites, materials and supplies, and other third-party fees. Other research and development expenses primarily include overhead allocations consisting of various support and facilities-related costs. Research and development costs are expensed as incurred. For product candidates that have not been approved by the FDA, inventory used in clinical trials is expensed at the time of production and recorded as research and development expense. For products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the trial.

Advertising Expenses

We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses for 2014, 2013 and 2012 were $1.0 million, $1.0 million and $0.7 million, respectively.

Income Taxes

We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amount and the tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized. We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are included in the income tax provision (benefit) and classified with the related liability on the consolidated balance sheets.

Foreign Currency

Our functional and reporting currency is the U.S. dollar. The assets and liabilities of our subsidiaries that have a functional currency other than the U.S. dollar are translated into U.S. dollars at the exchange rate prevailing at the balance sheet date with the results of operations of subsidiaries translated at the average exchange rate for the reporting period. The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity.

Transactions in foreign currencies are translated into the functional currency of the relevant subsidiary at the rate of exchange prevailing at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the relevant functional currency at exchange rates prevailing at the balance sheet date or on settlement. Resulting gains and losses are recorded in foreign currency gain (loss) in our consolidated statements of income.

Financing Costs

Deferred financing costs are reported at cost, less accumulated amortization and the related amortization expense is included in interest expense, net in our consolidated statements of income. The carrying amount of debt includes any related unamortized original issue discount.

Contingencies

From time to time, we may become involved in claims and other legal matters arising in the ordinary course of business. We record accruals for loss contingencies to the extent that we conclude that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. Legal fees and other expenses related to litigation are expensed as incurred and included in selling, general and administrative expenses.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Net Income per Ordinary Share

Basic net income per ordinary share attributable to Jazz Pharmaceuticals plc is based on the weighted-average number of ordinary shares outstanding. Diluted net income per ordinary share attributable to Jazz Pharmaceuticals plc is based on the weighted-average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding.

Basic and diluted net income per ordinary share attributable to Jazz Pharmaceuticals plc were computed as follows (in thousands, except per share amounts):



	Year Ended December 31,
	2014			2013		2012
Numerator:
Income from continuing operations	$	57,326		$	216,312	$	261,149
Loss from continuing operations attributable to noncontrolling interests, net of tax	(1,061		)	—		—
Income from continuing operations attributable to Jazz Pharmaceuticals plc	58,387			216,312		261,149
Income from discontinued operations	—			—		27,437
Net income attributable to Jazz Pharmaceuticals plc	$	58,387		$	216,312	$	288,586
Denominator:
Weighted-average ordinary shares used in calculating net income per ordinary share attributable to Jazz Pharmaceuticals plc - basic	59,746			58,298		56,643
Dilutive effect of employee equity incentive and purchase plans	2,402			1,772		1,536
Dilutive effect of warrants	466			1,499		2,016
Weighted-average ordinary shares used in calculating net income per ordinary share attributable to Jazz Pharmaceuticals plc - diluted	62,614			61,569		60,195

Net income per ordinary share attributable to Jazz Pharmaceuticals plc:
Basic:
Income from continuing operations	$	0.98		$	3.71	$	4.61
Income from discontinued operations	—			—		0.48
Net income attributable to Jazz Pharmaceuticals plc	$	0.98		$	3.71	$	5.09
Diluted:
Income from continuing operations	$	0.93		$	3.51	$	4.34
Income from discontinued operations	—			—		0.45
Net income attributable to Jazz Pharmaceuticals plc	$	0.93		$	3.51	$	4.79

Potentially dilutive ordinary shares from our employee equity incentive and purchase plans, warrants and exchangeable senior notes are determined by applying the treasury stock method to the assumed exercise of share options and warrants, the assumed vesting of outstanding restricted stock units, or RSUs, the assumed issuance of ordinary shares under our employee stock purchase plan, or ESPP, and the assumed issuance of ordinary shares upon exchange of our exchangeable senior notes. The approximately 2.9 million ordinary shares issuable upon exchange of our exchangeable senior notes had no effect on diluted net income per ordinary share attributable to Jazz Pharmaceuticals plc because the average price of our ordinary shares for the year ended December 31, 2014 did not exceed the effective exchange price of $199.77 per ordinary share. For additional information relating to our exchangeable senior notes, see Note 9.

The following table represents the weighted-average ordinary shares that were excluded from the computation of diluted net income per ordinary share attributable to Jazz Pharmaceuticals plc for the periods presented because including them would have an anti-dilutive effect (in thousands):



	Year Ended December 31,
	2014	2013	2012
Options to purchase ordinary shares and RSUs	819	1,584	1,506
1.875% exchangeable senior notes due 2021	1,112	—	—

Share-Based Compensation

We account for compensation cost for all share-based awards at fair value on the date of grant. The fair value is recognized as expense over the service period, net of estimated forfeitures, using the straight-line method. The estimation of share-based awards that will ultimately vest requires judgment, and, to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We primarily consider historical experience when estimating expected forfeitures.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update, or ASU, No. 2014-09, “Revenue from Contracts with Customers”, or ASU No. 2014-09, which states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this, an entity will need to identify the contract with a customer; identify the separate performance obligations in the contract; determine the transaction price; allocate the transaction price to the separate performance obligations in the contract; and recognize revenue when (or as) the entity satisfies each performance obligation. ASU No. 2014-09 will be effective for us beginning January 1, 2017 and can be adopted on a full retrospective basis or on a modified retrospective basis. We are currently assessing our approach to the adoption of this standard and the impact on our results of operations and financial position.

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”, or ASU 2014-08. Under ASU 2014-08, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Additionally, ASU 2014-08 requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. ASU 2014-08 is effective for fiscal and interim periods beginning on or after December 15, 2014, with early adoption permitted. We early adopted ASU 2014-08 in 2014. Please see Note 18 for additional information.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Business Combination and Asset Acquisitions

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Business Combination and Asset Acquisitions

Gentium Acquisition

On December 19, 2013, we entered into a definitive agreement with Gentium, or the Gentium tender offer agreement, pursuant to which we made a cash tender offer of $57.00 per share for all outstanding Gentium ordinary shares and American Depositary Shares, or ADSs. As of the expiration of the initial offering period on January 22, 2014, 12,244,156 Gentium ordinary shares and ADSs were properly tendered and not withdrawn in the tender offer. These ordinary shares and ADSs represented approximately 79% of Gentium’s issued and outstanding ordinary shares and ADSs and 69% of the fully diluted number of ordinary shares and ADSs (in each case without duplication for ordinary shares underlying ADSs). All properly tendered ordinary shares and ADSs as of such date were accepted for payment, which was made in accordance with the terms of the tender offer.

Upon payment for the properly tendered ordinary shares and ADSs on January 23, 2014, we became the indirect majority shareholder of Gentium and acquired control of Gentium. Following the expiration of the initial offering period, and in accordance with the terms of the Gentium tender offer agreement, we commenced a subsequent offering period to acquire all remaining untendered ordinary shares and ADSs. The subsequent offering period expired on February 20, 2014. In total, pursuant to the tender offer agreement, we purchased approximately 98% of Gentium’s fully diluted ordinary shares and ADSs. Later in 2014, we acquired additional Gentium ordinary shares, representing a further 1.8% interest in Gentium, for aggregate cash consideration of $17.8 million. As of December 31, 2014, the aggregate acquisition cost of the Gentium ordinary shares and ADSs was $994.1 million, comprising cash payments of $1,011.2 million, offset by proceeds from the exercise of Gentium share options of $17.1 million. $857.1 million of the acquisition consideration is attributable to the 12,244,156 Gentium ordinary shares and ADSs purchased on the closing date of the Gentium Acquisition, 1,345,023 ADSs committed to tender in accordance with the guaranteed delivery procedures contemplated by the tender offer and options to acquire 1,666,608 ordinary shares of Gentium subject to support agreements requiring that such options be exercised and the underlying ordinary shares be tendered in a subsequent offering period. These ADSs and ordinary shares represented in the aggregate approximately 86% of the fully diluted number of ordinary shares and ADSs of Gentium. The remaining $137.0 million of the acquisition cost is attributable to the acquisition of an additional 12% of the fully diluted Gentium ordinary shares and ADSs during the subsequent offering period of the tender offer and the acquisition of an additional 1.8% interest in Gentium later in 2014, which are accounted for as an acquisition of noncontrolling interests.

We believe the Gentium Acquisition provided us with an opportunity to diversify our development and commercial portfolio and complement our clinical experience in hematology/oncology and our expertise in reaching targeted physicians who treat serious medical conditions.

The Gentium Acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of Gentium were recorded at their respective estimated fair values as of the closing date of the Gentium Acquisition and added to the assets and liabilities of Jazz Pharmaceuticals plc, including an amount for goodwill representing the difference between the acquisition consideration and the estimated fair value of the identifiable net assets. The results of operations of Gentium and the estimated fair values of the assets acquired and liabilities assumed have been included in our consolidated financial statements since the closing of the Gentium Acquisition on January 23, 2014.

In 2014, we incurred $11.9 million in acquisition-related costs related to the Gentium Acquisition, which primarily consisted of banking, legal, accounting and valuation-related expenses. In addition, we incurred $5.4 million related to change in control obligations associated with the Gentium Acquisition. These expenses were recorded in selling, general and administrative expense in the accompanying consolidated statements of income. In 2014, our consolidated statements of income included revenues of $78.2 million from the acquired Gentium business, as measured from the closing date of the Gentium Acquisition. The portion of total expenses and net income associated with the acquired Gentium business was not separately identifiable due to the integration of Gentium operations with our historic operations.

The acquisition consideration (not including the acquisition cost of $119.2 million to acquire the 12% noncontrolling interests in the subsequent offering period of the tender offer and the acquisition cost of $17.8 million to acquire the 1.8% noncontrolling interests later in 2014) was comprised of (in thousands):



Cash consideration for shares acquired in initial tender offer period	$	697,917
Liability for shares committed under guaranteed delivery procedures	76,666
Liability for options committed for exercise	82,503
Total acquisition consideration	$	857,086

The fair values of assets acquired and liabilities assumed at the closing date of the Gentium Acquisition, and the fair value of the noncontrolling interests in Gentium at the dates they were acquired, are summarized below (in thousands):



Cash and cash equivalents	$	28,410
Short-term deposit	5,418
Accounts receivable (1)	13,855
Inventories	13,525
Prepaid and other current assets	1,383
Intangible assets	960,350
Goodwill	308,642
Deferred tax assets	22,999
Property, plant and equipment	10,201
Other long-term assets	431
Accounts payable	(11,778		)
Accrued expenses	(51,477		)
Income taxes payable	(502		)
Other long-term liabilities	(654		)
Debt (current and long-term)	(2,351		)
Deferred tax liabilities	(304,788		)
Noncontrolling interests	(136,578		)
Total acquisition consideration	$	857,086

___________________


(1)	The estimated fair value of trade receivables acquired was $13.9 million and the gross contractual amount was $14.9 million, of which we expect that $1.0 million will be uncollectible.

The intangible assets as of the closing date of the Gentium Acquisition included (in thousands):



Finite-lived intangible assets:
Currently marketed product:
Defibrotide VOD (Non Americas)	$	719,500
Manufacturing contracts	14,500
Tradename	350
Total finite-lived intangible assets	734,350
IPR&D:
Defibrotide VOD Prophylaxis	168,000
Defibrotide VOD (Americas)	58,000
Total IPR&D	226,000
Total intangible assets	$	960,350

The fair value of the currently marketed product was determined using the income approach. The income approach explicitly recognizes that the fair value of an asset is premised upon the expected receipt of future economic benefits such as earnings and cash inflows based on current sales projections and estimated costs for each product line. Indications of value were developed by discounting these benefits to their present worth at a discount rate that reflects the current return requirements of the market. The fair value of the currently marketed product was capitalized as of the closing date of the Gentium Acquisition and subsequently will be amortized over the estimated remaining life of the product of approximately 16 years.

Gentium produces active pharmaceutical ingredients, or APIs, including the defibrotide compound, urokinase, sodium heparin and sulglicotide. Other than defibrotide, these APIs are subsequently used to make the finished forms of various drugs and are distributed via supply contracts. The fair value of these supply contracts was determined using the income approach based on the expected cash flows from the projected net earnings of each API. The fair value of the API supply contracts was capitalized as of the closing date of the Gentium Acquisition and subsequently will be amortized over four years which approximates the remaining contractual term and reasonably expected renewal periods.

The fair value of IPR&D was determined using the income approach, including the application of probability factors related to the likelihood of success of the respective products reaching final development and commercialization. This approach also took into consideration information and certain program-related documents and forecasts prepared by management. The fair value of IPR&D was capitalized as of the closing date of the Gentium Acquisition and is subsequently accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the closing of the Gentium Acquisition, these assets will not be amortized into earnings; instead, these assets will be subject to periodic impairment testing. Upon successful completion of the development process for an acquired IPR&D project, determination as to the useful life of the asset will be made. The asset would then be considered a finite-lived intangible asset and amortization of the asset into earnings would begin over the remaining estimated useful life of the asset.

The excess of the total acquisition consideration over the fair value amounts assigned to the assets acquired and the liabilities assumed represents the goodwill amount resulting from the Gentium Acquisition. We believe that the factors that contributed to goodwill included the Gentium workforce, which will complement our clinical experience in hematology/oncology and our expertise in reaching targeted physicians who treat serious medical conditions, and the deferred tax consequences of intangible assets recorded for financial statement purposes. We do not expect any portion of this goodwill to be deductible for tax purposes.

The noncontrolling interests at the closing date of the Gentium Acquisition comprised 2,007,452 of Gentium’s issued and outstanding ordinary shares and ADSs and options to acquire 484,097 ordinary shares of Gentium that were not subject to support agreements. The fair value of the noncontrolling interests was estimated using Gentium’s closing market price quoted on The NASDAQ Global Market on January 22, 2014.

Pro Forma Financial Information (Unaudited)

The following unaudited supplemental pro forma information presents our combined historical results of operations with adjustments to reflect one-time charges and amortization of fair value adjustments in the appropriate pro forma periods as if the Gentium Acquisition had been completed on January 1, 2013. These adjustments include:


•	An increase in amortization expense related to the fair value of acquired identifiable intangible assets of $2.7 million in 2014 and $48.9 million in 2013.


•	The exclusion of acquisition-related expenses of $43.0 million in 2014 and $4.8 million in 2013.


•	An increase in interest expense of $1.3 million in 2014 and $22.5 million in 2013, incurred on additional borrowings made to fund the Gentium Acquisition as if the borrowings had occurred on January 1, 2013.


•	The exclusion of other non-recurring expenses of $40.7 million in 2014 and the inclusion of $18.6 million in 2013 primarily related to Gentium transaction bonus costs, the fair value step-up to acquired inventory, costs of change in control obligations and share-based compensation incurred from the acceleration of stock option vesting upon the closing date of the Gentium Acquisition.

The unaudited pro forma results do not assume any operating efficiencies as a result of the consolidation of operations and are as follows (in thousands, except per share data):



	Year Ended December 31,
	2014		2013
Revenues	$	1,176,178	$	925,185
Net income attributable to Jazz Pharmaceuticals plc	$	82,802	$	181,318
Net income per ordinary share attributable to Jazz Pharmaceuticals plc - basic	$	1.39	$	3.11
Net income per ordinary share attributable to Jazz Pharmaceuticals plc - diluted	$	1.32	$	2.94

Acquisition of Rights to Defibrotide in the Americas

As a result of the Gentium Acquisition, we acquired defibrotide, which is marketed under the name Defitelioin Europe. In 2013, the European Commission granted marketing authorization under exceptional circumstances for Defitelio for the treatment of severe VOD in adults and children undergoing HSCT therapy. In March 2014, we commenced the launch of Defitelio on a rolling basis in Europe. At the time of the Gentium Acquisition, Gentium had licensed to Sigma-Tau Pharmaceuticals, Inc., or Sigma-Tau, the rights to defibrotide for the treatment and prevention of VOD in North America, Central America and South America. In July 2014, we entered into a definitive agreement to acquire the rights to defibrotide in the Americas from Sigma-Tau. Pursuant to the agreement, upon the closing of the transaction in August 2014, we paid Sigma-Tau an upfront payment of $75.0 million. This transaction was accounted for as a purchase of IPR&D assets with no alternative future use. Accordingly, the $75.0 million upfront payment was charged to acquired IPR&D expense upon closing of the transaction. Sigma-Tau is also eligible to receive milestone payments of $25.0 million upon the acceptance for filing by the FDA of the first NDA for defibrotide for VOD and up to an additional $150.0 million based on the timing of potential FDA approval of defibrotide for VOD. We funded the upfront payment with cash on hand.

Acquisition of Rights to JZP-110 (formerly known as ADX-N05)

On January 13, 2014, we entered into a definitive agreement with Aerial BioPharma, LLC, or Aerial, under which we acquired certain assets related to JZP-110, a novel compound in clinical development for the treatment of excessive daytime sleepiness in patients with narcolepsy. Under the agreement, and in exchange for an upfront initial payment from us totaling $125.0 million, we acquired worldwide development, manufacturing and commercial rights to JZP-110, other than in certain jurisdictions in Asia where SK Biopharmaceuticals Co., Ltd, or SK, retains rights. Aerial and SK are eligible to receive milestone payments, in an aggregate amount of up $270.0 million, based on development, regulatory and sales milestones and tiered royalties from high single digits to mid-teens based on potential future sales. This acquisition was accounted for as a purchase of IPR&D assets with no alternative future use. Accordingly, the $125.0 million upfront payment was charged to acquired IPR&D expense in the year ended December 31, 2014. The assignment of the JZP-110 rights from Aerial to us triggered a milestone payment of $2.0 million to SK, which was also charged to acquired IPR&D expense in the year ended December 31, 2014.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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