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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
(Mark One)
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2023
or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from              to             
Commission File Number: 001-33500
JAZZ PHARMACEUTICALS PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter) 
Ireland98-1032470
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Fifth Floor, Waterloo Exchange,
Waterloo Road, Dublin 4, Ireland D04 E5W7
011-353-1-634-7800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary shares, nominal value $0.0001 per shareJAZZThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
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.





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  No 
As of May 3, 2023, 64,004,791 ordinary shares of the registrant, nominal value $0.0001 per share, were outstanding.


Table of Contents
JAZZ PHARMACEUTICALS PLC
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023

INDEX
 
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.

We own or have rights to various copyrights, trademarks, and trade names used in our business in the U.S. and/or other countries, including the following: Jazz Pharmaceuticals®, Xyrem® (sodium oxybate) oral solution, Xywav® (calcium, magnesium, potassium, and sodium oxybates) oral solution, Epidiolex® (cannabidiol) oral solution, Epidyolex® (the trade name in Europe and other countries outside the U.S. for Epidiolex), Defitelio® (defibrotide sodium), Defitelio® (defibrotide), CombiPlex®, Vyxeos® (daunorubicin and cytarabine) liposome for injection, Vyxeos® liposomal 44 mg/100 mg powder for concentrate for solution for infusion, Zepzelca® (lurbinectedin), Rylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn) and Sativex® (nabiximols) oral solution. This Quarterly Report on Form 10-Q also includes trademarks, service marks and trade names of other companies. Trademarks, service marks and trade names appearing in this Quarterly Report on Form 10‑Q are the property of their respective owners.





2

Table of Contents
PART I – FINANCIAL INFORMATION
 
Item 1.Financial Statements

JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$1,167,911 $881,482 
Accounts receivable, net of allowances623,938 651,493 
Inventories674,778 714,061 
Prepaid expenses72,779 91,912 
Other current assets245,244 267,192 
Total current assets2,784,650 2,606,140 
Property, plant and equipment, net227,552 228,050 
Operating lease assets75,538 73,326 
Intangible assets, net5,764,209 5,794,437 
Goodwill1,723,444 1,692,662 
Deferred tax assets, net399,097 376,247 
Deferred financing costs8,559 9,254 
Other non-current assets64,076 55,139 
Total assets$11,047,125 $10,835,255 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$125,454 $90,758 
Accrued liabilities712,349 803,255 
Current portion of long-term debt31,000 31,000 
Income taxes payable40,095 7,717 
Deferred revenue4 463 
Total current liabilities908,902 933,193 
Long-term debt, less current portion5,689,662 5,693,341 
Operating lease liabilities, less current portion72,095 71,838 
Deferred tax liabilities, net932,247 944,337 
Other non-current liabilities109,178 106,812 
Commitments and contingencies (Note 9)
Shareholders’ equity:
Ordinary shares6 6 
Non-voting euro deferred shares55 55 
Capital redemption reserve472 472 
Additional paid-in capital3,511,732 3,477,124 
Accumulated other comprehensive loss(980,230)(1,125,509)
Retained earnings803,006 733,586 
Total shareholders’ equity3,335,041 3,085,734 
Total liabilities and shareholders’ equity$11,047,125 $10,835,255 




The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Table of Contents
JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended
March 31,
 20232022
Revenues:
Product sales, net$884,219 $809,837 
Royalties and contract revenues8,593 3,884 
Total revenues892,812 813,721 
Operating expenses:
Cost of product sales (excluding amortization of acquired developed technologies)128,644 115,284 
Selling, general and administrative297,917 308,813 
Research and development189,410 129,981 
Intangible asset amortization149,786 172,094 
Acquired in-process research and development1,000  
Total operating expenses766,757 726,172 
Income from operations126,055 87,549 
Interest expense, net(74,147)(70,684)
Foreign exchange gain (loss)3,193 (10,540)
Income before income tax expense (benefit) and equity in loss of investees55,101 6,325 
Income tax expense (benefit)(15,324)536 
Equity in loss of investees1,005 4,142 
Net income$69,420 $1,647 
Net income per ordinary share:
Basic$1.09 $0.03 
Diluted$1.04 $0.03 
Weighted-average ordinary shares used in per share calculations - basic63,494 61,865 
Weighted-average ordinary shares used in per share calculations - diluted73,771 62,907 

















The accompanying notes are an integral part of these condensed consolidated financial statements.
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JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 
 Three Months Ended
March 31,
 20232022
Net income$69,420 $1,647 
Other comprehensive income (loss):
Foreign currency translation adjustments145,279 (190,488)
Loss on fair value hedging activities reclassified from accumulated other comprehensive income (loss) to foreign exchange gain (loss), net of income tax benefit of $ and $43, respectively
 128 
Other comprehensive income (loss)145,279 (190,360)
Total comprehensive income (loss)$214,699 $(188,713)
























The accompanying notes are an integral part of these condensed consolidated financial statements.
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JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 Ordinary SharesNon-voting Euro DeferredCapital
Redemption
Reserve
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Equity
SharesAmountSharesAmount
Balance at December 31, 202263,214 $6 4,000 $55 $472 $3,477,124 $(1,125,509)$733,586 $3,085,734 
Issuance of ordinary shares in conjunction with exercise of share options188 — — — — 21,228 — — 21,228 
Issuance of ordinary shares in conjunction with vesting of restricted stock units585 — — — — — — — — 
Shares withheld for payment of employee's withholding tax liability— — — — — (43,266)— — (43,266)
Share-based compensation— — — — — 56,646 — — 56,646 
Other comprehensive income— — — — — — 145,279 — 145,279 
Net income— — — — — — — 69,420 69,420 
Balance at March 31, 202363,987 $6 4,000 $55 $472 $3,511,732 $(980,230)$803,006 $3,335,041 


 Ordinary SharesNon-voting Euro DeferredCapital
Redemption
Reserve
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Equity
SharesAmountSharesAmount
Balance at December 31, 202161,633 $6 4,000 $55 $472 $3,534,792 $(400,360)$830,226 $3,965,191 
Cumulative effect adjustment from adoption of ASU 2020-06— — — — — (333,524)— 127,474 (206,050)
Issuance of ordinary shares in conjunction with exercise of share options207 — — — — 21,729 — — 21,729 
Issuance of ordinary shares in conjunction with vesting of restricted stock units404 — — — — — — — — 
Shares withheld for payment of employee's withholding tax liability— — — — — (33,776)— — (33,776)
Share-based compensation— — — — — 50,106 — — 50,106 
Other comprehensive loss— — — — — — (190,360)— (190,360)
Net income— — — — — — — 1,647 1,647 
Balance at March 31, 202262,244 $6 4,000 $55 $472 $3,239,327 $(590,720)$959,347 $3,608,487 







The accompanying notes are an integral part of these condensed consolidated financial statements.
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JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) 
 Three Months Ended
March 31,
 20232022
Operating activities
Net income$69,420 $1,647 
Adjustments to reconcile net income to net cash provided by operating activities:
Intangible asset amortization149,786 172,094 
Acquisition accounting inventory fair value step-up adjustment60,458 63,943 
Share-based compensation 56,352 50,070 
Other non-cash transactions16,773 (14,701)
Depreciation7,574 7,617 
Non-cash interest expense4,766 12,168 
Provision for losses on accounts receivable and inventory2,316 2,170 
Acquired in-process research and development1,000  
Deferred tax benefit(66,061)(45,339)
Changes in assets and liabilities:
Accounts receivable28,460 (9,723)
Inventories(6,266)(24,812)
Prepaid expenses and other current assets42,032 23,170 
Operating lease assets4,508 3,095 
Other non-current assets(9,541)979 
Accounts payable34,286 (27,617)
Accrued liabilities(96,985)(23,241)
Income taxes payable25,413 16,767 
Deferred revenue(459)(523)
Operating lease liabilities, less current portion(4,959)(3,915)
Other non-current liabilities1,835 5,130 
Net cash provided by operating activities320,708 208,979 
Investing activities
Acquired in-process research and development(1,000) 
Purchases of property, plant and equipment(3,822)(12,292)
Acquisition of intangible assets (25,000)
Net cash used in investing activities(4,822)(37,292)
Financing activities
Proceeds from employee equity incentive and purchase plans21,228 21,729 
Repayments of long-term debt(7,750)(258,764)
Payment of employee withholding taxes related to share-based awards(43,266)(33,776)
Net cash used in financing activities(29,788)(270,811)
Effect of exchange rates on cash and cash equivalents331 (1,489)
Net increase (decrease) in cash and cash equivalents286,429 (100,613)
Cash and cash equivalents, at beginning of period881,482 591,448 
Cash and cash equivalents, at end of period$1,167,911 $490,835 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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JAZZ PHARMACEUTICALS PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. The Company and Summary of Significant Accounting Policies
Jazz Pharmaceuticals plc 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 and novel product candidates, from early- to late-stage development, in neuroscience and oncology. Within these therapeutic areas, we strive to identify new options for patients by actively exploring small molecules and biologics, and through innovative delivery technologies and cannabinoid science.
Our lead marketed products are:
Neuroscience
Xywav® (calcium, magnesium, potassium, and sodium oxybates) oral solution, a product approved by the U.S. Food and Drug Administration, or FDA, in July 2020 and launched in the U.S. in November 2020 for the treatment of cataplexy or excessive daytime sleepiness, or EDS, in patients with narcolepsy seven years of age and older, and also approved by FDA in August 2021 for the treatment of idiopathic hypersomnia, or IH, in adults and launched in the U.S. in November 2021. Xywav contains 92% less sodium than Xyrem®;
Xyrem (sodium oxybate) oral solution, a product approved by FDA and distributed in the U.S. for the treatment of cataplexy or EDS in patients with narcolepsy seven years of age and older; Jazz also markets Xyrem in Canada for the treatment of cataplexy in patients with narcolepsy. Xyrem is also approved and distributed in the European Union, or EU (EU market authorizations include Northern Ireland), Great Britain and other markets through a licensing agreement; and
Epidiolex® (cannabidiol) oral solution, a product approved by FDA and launched in the U.S. in 2018 by GW Pharmaceuticals plc, or GW, and currently indicated for the treatment of seizures associated with Lennox-Gastaut syndrome, or LGS, Dravet syndrome, or DS, or tuberous sclerosis complex, or TSC, in patients one year of age or older; in the EU and Great Britain (where it is marketed as Epidyolex®) and other markets, it is approved for adjunctive treatment of seizures associated with LGS or DS, in conjunction with clobazam (EU and Great Britain only), in patients 2 years of age and older and for adjunctive treatment of seizures associated with TSC in patients 2 years of age and older (select markets).
Oncology
Rylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn), a product approved by FDA in June 2021 and launched in the U.S. in July 2021 for use as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia or lymphoblastic lymphoma in adults and pediatric patients aged one month or older who have developed hypersensitivity to E. coli-derived asparaginase;
Zepzelca® (lurbinectedin), a product approved by FDA in June 2020 under FDA's accelerated approval pathway and launched in the U.S. in July 2020 for the treatment of adult patients with metastatic small cell lung cancer, or SCLC, with disease progression on or after platinum-based chemotherapy; in Canada, Zepzelca received conditional approval in September 2021 for the treatment of adults with Stage III or metastatic SCLC, who have progressed on or after platinum-containing therapy;
Defitelio® (defibrotide sodium), a product approved in the U.S. and Brazil for the treatment of hepatic veno-occlusive disease, or VOD, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Japan for the treatment of hepatic sinusoidal obstruction syndrome (hepatic VOD). It is currently approved in the EU, Great Britain and other markets for the treatment of severe hepatic VOD, also known as sinusoidal obstructive syndrome in HSCT therapy. It is indicated in adults and pediatric patients over 1 month of age; and
Vyxeos® (daunorubicin and cytarabine) liposome for injection, a product approved in the U.S., Canada, EU, Great Britain and other markets (marketed as Vyxeos® liposomal in the EU, Great Britain and other markets) for the treatment of adults with newly diagnosed therapy-related acute myeloid leukemia, or t-AML, or AML with myelodysplasia-related changes, or AML-MRC. An expanded indication was granted in the U.S. for the treatment of newly diagnosed t-AML or AML-MRC in pediatric patients aged 1 year and older.
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Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated or the context otherwise requires, all references to “Jazz Pharmaceuticals,” “the registrant,” "the Company", “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries. Throughout this Quarterly Report on Form 10-Q, all references to “ordinary shares” refer to Jazz Pharmaceuticals plc’s ordinary shares.
Basis of Presentation
These unaudited condensed consolidated financial statements have been prepared following the requirements of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. GAAP, can be condensed or omitted. The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with our annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10‑K for the year ended December 31, 2022.
In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of our financial position and operating results. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, for any other interim period or for any future period.
Our significant accounting policies have not changed substantially from those previously described in our Annual Report on Form 10‑K for the year ended December 31, 2022, other than as described below.
These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated.
Our operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker, or CODM. Our CODM has been identified as our chief executive officer. We have determined that we operate in one business segment, which is the identification, development and commercialization of meaningful pharmaceutical products that address unmet medical needs.
Use of Estimates
The preparation of financial statements in conformity with U.S. 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.
Adoption of New Accounting Standards
In October 2021, the Financial Accounting Standards Board issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, or ASU 2021-08, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. ASU 2021-08 was effective for the Company from January 1, 2023 and we will apply to future business combinations, if any.
Significant Risks and Uncertainties
Historically, our business has been substantially dependent on Xyrem and while we expect that our business will continue to be substantially dependent on oxybate product sales from both Xywav and Xyrem, there is no guarantee that we can maintain oxybate sales at or near historical levels, or that oxybate sales will continue to grow. In this regard, our ability to maintain or increase oxybate product sales and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties including, without limitation, those related to the launch of Xywav for the treatment of IH in adults and adoption in that indication; competition from the recent introduction of an authorized generic, or AG, version of Xyrem and in the future from additional AG versions of high-sodium oxybate and generic versions of high-sodium oxybate and new products, such as Avadel’s recently approved Lumryz, for treatment of cataplexy and/or EDS in narcolepsy in the U.S. market and from other competitors; increased pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third party payors, including our ability to maintain adequate coverage and reimbursement for Xywav and Xyrem; increased rebates required to maintain access to our products; challenges to our intellectual property around Xywav and/or Xyrem, including
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from pending antitrust and intellectual property litigation; and continued acceptance of Xywav and Xyrem by physicians and patients. A significant decline in oxybate product sales could cause us to reduce our operating expenses or seek to raise additional funds, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects, including on our ability to acquire, in-license or develop new products to grow our business.
In addition to risks related specifically to Xywav and Xyrem, we are subject to other challenges and risks related to successfully commercializing a portfolio of oncology products and other neuroscience products, and other risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: ongoing clinical research activity and related outcomes, obtaining regulatory approval of our late-stage product candidates; effectively commercializing our approved or acquired products such as Epidiolex, Rylaze and Zepzelca; obtaining and maintaining adequate coverage and reimbursement for our products; contracting and rebates to pharmacy benefit managers and similar organizations that reduce our net revenue; increasing scrutiny of pharmaceutical product pricing and resulting changes in healthcare laws and policy; market acceptance; regulatory concerns with controlled substances generally and the potential for abuse; future legislation, action by the U.S. Drug Enforcement Agency or FDA action authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved cannabinoid products; delays or problems in the supply of our products, loss of single source suppliers or failure to comply with manufacturing regulations; delays or problems with third parties that are part of our manufacturing and supply chain; identifying, acquiring or in-licensing additional products or product candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; complying with applicable regulatory requirements; and possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt obligations. In addition, the success of the acquisition of GW will depend, in part, on our ability to realize the anticipated benefits from our and GW's historical businesses. The anticipated benefits to us of the GW Acquisition may not be realized at the expected levels, within the expected timeframe or at all or may take longer to realize or cost more than expected, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.
Concentrations of Risk
Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, investments and derivative contracts. 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 investments to the extent recorded on the balance sheet.
We manage our foreign currency transaction risk and interest rate risk within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. As of March 31, 2023, we had foreign exchange forward contracts with notional amounts totaling $183.2 million. As of March 31, 2023, the outstanding foreign exchange forward contracts had a net asset fair value of $4.3 million. The counterparties to these contracts are large multinational commercial banks, and we believe the risk of nonperformance is not significant.
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 U.S., and to other international distributors and hospitals. Customer creditworthiness is monitored and collateral is not required. We monitor 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 as of March 31, 2023 and December 31, 2022, allowances on receivables were not material. As of March 31, 2023, three customers accounted for 73% of gross accounts receivable, Express Scripts Specialty Distribution Services, Inc. and its affiliates, or ESSDS, which accounted for 51% of gross accounts receivable, McKesson Corporation and affiliates, or McKesson, which accounted for 12% of gross accounts receivable and Cardinal Health, Inc., or Cardinal, which accounted for 10% of gross accounts receivable. As of December 31, 2022, three customers accounted for 74% of gross accounts receivable, ESSDS, which accounted for 55% of gross accounts receivable, Cardinal, which accounted for 10% of gross accounts receivable and McKesson, which accounted for 9% of gross accounts receivable.
We depend on single source suppliers for most of our products, product candidates and their active pharmaceutical ingredients, or APIs. With respect to our oxybate products, the API is manufactured for us by a single source supplier and the finished products are manufactured both by us in our facility in Athlone, Ireland and by our U.S.-based supplier.
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2. Cash and Available-for-Sale Securities
Cash and cash equivalents consisted of the following (in thousands): 
March 31, 2023
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash and
Cash
Equivalents
Cash$424,139 $ $ $424,139 $424,139 
Time deposits180,000   180,000 180,000 
Money market funds563,772   563,772 563,772 
Totals$1,167,911 $ $ $1,167,911 $1,167,911 
December 31, 2022
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Cash and
Cash
Equivalents
Cash$334,018 $ $ $334,018 $334,018 
Time deposits30,000   30,000 30,000 
Money market funds517,464   517,464 517,464 
Totals$881,482 $ $ $881,482 $881,482 
Cash equivalents are considered available-for-sale securities. We use the specific-identification method for calculating realized gains and losses on securities sold and include them in interest expense, net in the condensed consolidated statements of income. Interest income from available-for-sale securities was $10.6 million and $0.2 million in the three months ended March 31, 2023 and 2022, respectively.

3. Fair Value Measurement
The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of March 31, 2023 and December 31, 2022 that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands): 
March 31, 2023December 31, 2022
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Total
Estimated
Fair Value
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Total
Estimated
Fair Value  
Assets:
Available-for-sale securities:
Money market funds$563,772 $ $563,772 $517,464 $ $517,464 
Time deposits 180,000 180,000  30,000 30,000 
Foreign exchange forward contracts 4,906 4,906  17,356 17,356 
Totals$563,772 $184,906 $748,678 $517,464 $47,356 $564,820 
Liabilities:
Foreign exchange forward contracts 570 570    
Totals$ $570 $570 $ $ $ 
As of March 31, 2023, our available-for-sale securities included money market funds and time deposits and their carrying values were approximately equal to their fair values. Money market funds were measured using quoted prices in active markets, which represent Level 1 inputs and time deposits were measured at fair value using Level 2 inputs. Level 2 inputs are obtained from various third party data providers and represent quoted prices for similar assets in active markets, or these inputs were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data.
Our derivative assets and liabilities include foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates and based on these inputs, the derivative assets and liabilities are classified within Level 2 of the fair value hierarchy.
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There were no transfers between the different levels of the fair value hierarchy in 2023 or 2022.
As of March 31, 2023 and December 31, 2022, the carrying amount of investments measured using the measurement alternative for equity investments without a readily determinable fair value was $5.5 million. The carrying amount, which is recorded within other non-current assets, is based on the latest observable transaction price.
As of March 31, 2023, the estimated fair values of the 1.50% exchangeable senior notes due 2024, or 2024 Notes, the 2.00% exchangeable senior notes due 2026, or 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes, the 4.375% senior secured notes, due 2029, or the Secured Notes, and the seven-year $3.1 billion term loan B facility, or the Dollar Term Loan, were approximately $556 million, $1.1 billion, $1.4 billion and $2.7 billion respectively. The fair values of each of these debt facilities was estimated using quoted market prices obtained from brokers (Level 2).

4. Derivative Instruments and Hedging Activities
We are exposed to certain risks arising from operating internationally, including fluctuations in foreign exchange rates primarily related to the translation of sterling and euro-denominated net monetary liabilities, including intercompany balances, held by subsidiaries with a U.S. dollar functional currency. We manage these exposures within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.
We enter into foreign exchange forward contracts, with durations of up to 12 months, designed to limit the exposure to fluctuations in foreign exchange rates related to the translation of certain non-U.S. dollar denominated liabilities, including intercompany balances. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of March 31, 2023 and December 31, 2022, the notional amount of foreign exchange contracts where hedge accounting is not applied was $183.2 million and $505.0 million, respectively.
The foreign exchange gain (losses) in our condensed consolidated statements of income included the following gains (losses) associated with foreign exchange contracts not designated as hedging instruments (in thousands):
Three Months Ended
March 31,
Foreign Exchange Forward Contracts:20232022
Gain (loss) recognized in foreign exchange gain (loss)$4,275 $(21,025)
In order to hedge our exposure to foreign currency exchange risk associated with our seven-year625.0 million term loan B facility, or the Euro Term Loan, we entered into a cross-currency interest rate swap contract in May 2021, which matured on March 31, 2022, and was de-designated as a fair value hedge. The terms of this contract converted the principal repayments and interest payments on the Euro Term Loan into U.S. dollars. The carrying amount of the Euro Term Loan and the fair value of the cross-currency interest rate swap contract were remeasured on a monthly basis, with changes in the euro to U.S. dollar foreign exchange rates recognized within foreign exchange gain (loss) in the condensed consolidated statements of income.
The impact on accumulated other comprehensive income (loss) and earnings from the cross-currency interest rate swap contract was as follows (in thousands):
Cross-Currency Interest Rate Contract:Three Months Ended
March 31, 2022
Loss reclassified from accumulated other comprehensive income (loss) to foreign exchange loss, net of tax$128 
Loss recognized in foreign exchange loss2,646 
The cash flow effects of our derivative contracts for the three months ended March 31, 2023 and 2022 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows, except for the settlement of notional amounts of the cross-currency swap, which were included in net cash used in financing activities.
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The following tables summarize the fair value of outstanding derivatives (in thousands):
ClassificationMarch 31,
2023
December 31,
2022
Assets
Derivatives not designated as hedging instruments:
Foreign exchange forward contractsOther current assets$4,906 $17,356 
Liabilities
Derivatives not designated as hedging instruments:
Foreign exchange forward contractsAccrued liabilities$570 $ 
Although we do not offset derivative assets and liabilities within our consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. These provisions were not applicable as of December 31, 2022 since all derivatives were in an asset position. The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our foreign exchange forward contracts subject to such provisions as of March 31, 2023 (in thousands):
March 31, 2023
Gross Amounts of Recognized Assets/ LiabilitiesGross Amounts Offset in the Consolidated Balance SheetNet Amounts of Assets/ Liabilities Presented in the Consolidated Balance SheetGross Amounts Not Offset in the Consolidated Balance Sheet
DescriptionDerivative Financial InstrumentsCash Collateral Received (Pledged)Net Amount
Derivative assets$4,906 $ $4,906 $(570)$ $4,336 
Derivative liabilities(570) (570)570   

5. Inventories
Inventories consisted of the following (in thousands): 
March 31,
2023
December 31,
2022
Raw materials$25,797 $20,786 
Work in process510,634 517,670 
Finished goods138,347 175,605 
Total inventories$674,778 $714,061 
As of March 31, 2023 and December 31, 2022 inventories included $409.1 million and $457.6 million, respectively, related to the purchase accounting inventory fair value step-up on inventory acquired in the GW Acquisition.

6. Goodwill and Intangible Assets
The gross carrying amount of goodwill was as follows (in thousands):
Balance at December 31, 2022$1,692,662 
Foreign exchange30,782 
Balance at March 31, 2023$1,723,444 


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The gross carrying amounts and net book values of our intangible assets were as follows (in thousands): 
 March 31, 2023December 31, 2022
 Remaining
Weighted-
Average Useful
Life
(In years)
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Acquired developed technologies10.2$7,639,267 $(1,875,058)$5,764,209 $7,491,994 $(1,697,557)$5,794,437 
Manufacturing contracts11,641 (11,641) 11,417 (11,417) 
Trademarks2,881 (2,881) 2,876 (2,876) 
Total finite-lived intangible assets$7,653,789 $(1,889,580)$5,764,209 $7,506,287 $(1,711,850)$5,794,437 
The increase in the gross carrying amount of intangible assets as of March 31, 2023 compared to December 31, 2022 primarily reflects the positive impact of foreign currency translation adjustments due to the strengthening of sterling and euro against the U.S. dollar.
The assumptions and estimates used to determine future cash flows and remaining useful lives of our intangible and other long-lived assets are complex and subjective. They can be affected by various factors, including external factors, such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.
Based on finite-lived intangible assets recorded as of March 31, 2023, and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands): 
Year Ending December 31,Estimated Amortization Expense
2023 (remainder)$455,456 
2024607,275 
2025607,275 
2026607,275 
2027607,275 
Thereafter2,879,653 
Total$5,764,209 

7. Certain Balance Sheet Items
Property, plant and equipment consisted of the following (in thousands):
March 31,
2023
December 31,
2022
Manufacturing equipment and machinery$75,541 $73,580 
Land and buildings69,513 68,935 
Construction-in-progress69,196 67,385 
Leasehold improvements66,228 64,776 
Computer software35,561 34,116 
Computer equipment17,127 16,424 
Furniture and fixtures10,526 10,481 
Subtotal343,692 335,697 
Less accumulated depreciation and amortization(116,140)(107,647)
Property, plant and equipment, net$227,552 $228,050 
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Other current assets consisted of the following (in thousands):
March 31,
2023
December 31,
2022
Deferred charge for income taxes on intercompany profit$188,028 $176,057 
Other57,216 91,135 
Total other current assets$245,244 $267,192 
Accrued liabilities consisted of the following (in thousands):
March 31,
2023
December 31,
2022
Rebates and other sales deductions$318,048 $313,176 
Employee compensation and benefits104,914 143,243 
Accrued collaboration expenses39,806 33,205 
Accrued facilities expenses30,158 25,864 
Sales return reserve28,868 26,164 
Consulting and professional services23,406 22,278 
Clinical trial accruals22,182 31,338 
Accrued interest21,481 35,614 
Accrued royalties19,439 57,347 
Current portion of lease liabilities17,232 15,938 
Selling and marketing accruals12,635 18,553 
Inventory-related accruals12,631 8,565 
Accrued construction-in-progress3,327 3,298 
Derivative instrument liabilities570  
Other57,652 68,672 
Total accrued liabilities$712,349 $803,255 

8. Debt
The following table summarizes the carrying amount of our indebtedness (in thousands):
March 31,
2023
December 31,
2022
2024 Notes$575,000 $575,000 
Unamortized - debt issuance costs(2,353)(2,738)
2024 Notes, net572,647 572,262 
2026 Notes 1,000,000 1,000,000 
Unamortized - debt issuance costs(8,391)(8,932)
2026 Notes, net991,609 991,068 
Secured Notes 1,477,509 1,476,938 
Term Loan 2,678,897 2,684,073 
Total debt5,720,662 5,724,341 
Less current portion31,000 31,000 
Total long-term debt$5,689,662 $5,693,341 
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Exchangeable Senior Notes
The Exchangeable Senior Notes were issued by Jazz Investments I Limited, or the Issuer, a 100%-owned finance subsidiary of Jazz Pharmaceuticals plc. The Exchangeable Senior Notes are senior unsecured obligations of the Issuer and are fully and unconditionally guaranteed on a senior unsecured basis by Jazz Pharmaceuticals plc. No subsidiary of Jazz Pharmaceuticals plc guaranteed the Exchangeable Senior Notes. Subject to certain local law restrictions on payment of dividends, among other things, and potential negative tax consequences, we are not aware of any significant restrictions on the ability of Jazz Pharmaceuticals plc to obtain funds from the Issuer or Jazz Pharmaceuticals plc’s other subsidiaries by dividend or loan, or any legal or economic restrictions on the ability of the Issuer or Jazz Pharmaceuticals plc’s other subsidiaries to transfer funds to Jazz Pharmaceuticals plc in the form of cash dividends, loans or advances. There is no assurance that in the future such restrictions will not be adopted.
The total liability of the 2026 Notes is reflected net of issuance costs of $15.3 million which will be amortized over the term of the 2026 Notes. The effective interest rate of the 2026 Notes is 2.26%. During the three months ended March 31, 2023 and 2022, we recognized interest expense of $5.5 million, of which $5.0 million related to the contractual coupon rate and $0.5 million related to the amortization of debt issuance costs.
The total liability of the 2024 Notes is reflected net of issuance costs of $11.4 million which will be amortized over the term of the 2024 Notes. The effective interest rate of the 2024 Notes is 1.79%. During the three months ended March 31, 2023 and 2022, we recognized interest expense of $2.5 million, of which $2.1 million related to the contractual coupon rate and $0.4 million related to the amortization of debt issuance costs.
Maturities
Scheduled maturities with respect to our long-term debt principal balances outstanding as of March 31, 2023 were as follows (in thousands):
Year Ending December 31,Scheduled Long-Term Debt Maturities
2023 (remainder)$23,250 
2024606,000 
202531,000 
20261,031,000 
202731,000 
Thereafter4,098,500 
Total$5,820,750 

9. Commitments and Contingencies
Indemnification
In the normal course of business, we enter into agreements that contain