Jazz Pharmaceuticals Announces First Quarter 2016 Financial Results

DUBLIN, May 10, 2016 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the first quarter of 2016 and updated financial guidance for 2016.

"During the first quarter of 2016, we executed on our business model by delivering strong top- and bottom-line growth and commenced promotion of Defitelio in the U.S. immediately following FDA approval. Defitelio is the first and only approved treatment in the U.S. for patients who develop hepatic VOD with renal or pulmonary dysfunction following hematopoietic stem-cell transplantation," said Bruce C. Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals plc. "For 2016, we will continue to invest in the organic growth of our key products, including new indications, and the advancement of our development pipeline. Diversification of our product portfolio through internal and corporate development efforts remains a high priority as we seek to identify and acquire differentiated and long-lived therapeutic options for patients."

Adjusted net income for the first quarter of 2016 was $141.0 million, or $2.26 per diluted share, compared to $125.1 million, or $1.99 per diluted share, for the first quarter of 2015.

GAAP net income for the first quarter of 2016 was $74.1 million, or $1.19 per diluted share, compared to $70.7 million, or $1.12 per diluted share, for the first quarter of 2015. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included in this press release.

Net product sales increased by 9% in the first quarter of 2016 compared to the same period in 2015 primarily due to higher net product sales of Xyrem.

Erwinaze/Erwinase net product sales increased by 2% in the first quarter of 2016 compared to the same period in 2015. Although Erwinaze net product sales increased, as a consequence of constrained manufacturing capacity, the company has had a limited ability to build sufficient inventory levels that can be used to absorb supply disruptions. In the first quarter of 2016, the company experienced supply challenges that temporarily disrupted its ability to supply certain markets.

Defitelio/defibrotide product sales increased by 3% in the first quarter of 2016 compared to the same period in 2015. The increase in net product sales was partially offset by the impact of foreign exchange on sales made in euro.

Operating expenses changed over the prior year period primarily due to the following:

• Selling, general and administrative (SG&A) expenses increased in the first quarter of 2016 compared to the same period in 2015, on a GAAP and non-GAAP adjusted basis, primarily due to higher headcount and other expenses resulting from the expansion of the company's business.
• Research and development (R&D) expenses increased in the first quarter of 2016 compared to the same period in 2015, on a GAAP and non-GAAP adjusted basis, primarily due to higher costs for clinical studies and outside services for the development of JZP-110 and line extensions for the company's existing products.
• Acquired in-process research and development (IPR&D) expense in the first quarter of 2016 related to an upfront payment of $8.8 million the company made in connection with its acquisition of intellectual property and know-how related to recombinant crisantaspase.

Cash Flow and Balance Sheet

As of March 31, 2016, cash, cash equivalents and investments were $980.5 million, and the outstanding principal balance of the company's long-term debt was $1.3 billion. Cash, cash equivalents and investments decreased during the quarter primarily due to repurchases under the company's share repurchase program, partially offset by cash generated by the business. During the first quarter of 2016, the company repurchased 1.1 million ordinary shares for $134.4 million, at an average cost of $123.77 per ordinary share.

In March 2016, the company recorded a $150.0 million milestone owed to Sigma-Tau Pharmaceuticals, Inc., which was triggered by the U.S. Food and Drug Administration approval of Defitelio on March 30, 2016. The milestone was capitalized as an intangible asset and was paid by the company in April 2016.

2016 Financial Guidance

Jazz Pharmaceuticals is updating its full year 2016 financial guidance, which is as follows (in millions, except per share amounts and percentage):

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Conference Call Details

Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. EDT (9:30 p.m. IST) to provide a business and financial update and discuss its 2016 first quarter results. The live webcast may be accessed from the Investors & Media section of the company's website at www.jazzpharmaceuticals.com. Please connect to the website prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary. Investors may participate in the conference call by dialing +1 855 353 7924 in the U.S., or +1 503 343 6056 outside the U.S., and entering passcode 90587993.

A replay of the conference call will be available through May 17, 2016 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 90587993. An archived version of the webcast will be available for at least one week in the Investors & Media section of the Jazz Pharmaceuticals website at www.jazzpharmaceuticals.com.

About Jazz Pharmaceuticals plc

Jazz Pharmaceuticals plc (Nasdaq: JAZZ) is an international biopharmaceutical company focused on improving patients' lives by identifying, developing and commercializing meaningful products that address unmet medical needs. The company has a diverse portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology. In these areas, Jazz Pharmaceuticals markets Xyrem® (sodium oxybate) oral solution, Erwinaze® (asparaginase Erwinia chrysanthemi) and Defitelio® (defibrotide sodium) in the U.S. and markets Erwinase® and Defitelio® (defibrotide) in countries outside the U.S. For more information, please visit www.jazzpharmaceuticals.com.

Non-GAAP Financial Measures

To supplement Jazz Pharmaceuticals' financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the company uses certain non-GAAP (also referred to as adjusted or non-GAAP adjusted) financial measures in this press release and the accompanying tables. The company believes that each of these non-GAAP financial measures provides useful information to management, investors and analysts by excluding items that may not be indicative of the company's core operating results and business outlook, such as intangible asset amortization and share-based compensation expense, among other items, and by including, in the case of non-GAAP adjusted net income and the related per share measures, adjustments to convert the income tax provision to the estimated amount of taxes that are payable in cash. Jazz Pharmaceuticals' management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate the company's business and to make operating decisions, and compensation of executives is based in part on certain of these non-GAAP financial measures. In addition, Jazz Pharmaceuticals believes that these non-GAAP financial measures are useful to investors because they enhance investors' ability to compare the company's results from period to period; allow for greater transparency with respect to key financial metrics the company uses in making operating decisions; and are regularly used by investors and analysts to model and track the company's financial performance.

These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures; should be read in conjunction with the company's condensed consolidated financial statements prepared in accordance with GAAP; have no standardized meaning prescribed by GAAP; and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measures as used by Jazz Pharmaceuticals in this press release and the accompanying tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals' future financial and operating results, investment in the growth of the company's key products and advancement of the company's development pipeline, diversification of the company's product portfolio, and other statements that are not historical facts. These forward-looking statements are based on the company's current plans, objectives, estimates, expectations and intentions, and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with maintaining or increasing sales of and revenue from Xyrem, such as the potential introduction of generic competition or other competitive sodium oxybate products; regulatory restrictions and requirements applicable to Xyrem and ongoing patent litigation and related proceedings; effectively commercializing the company's other products and product candidates; protecting and enhancing the company's intellectual property rights; delays or problems in the supply or manufacture of the company's products and product candidates; complying with applicable U.S. and non-U.S. regulatory requirements; the difficulty and uncertainty of pharmaceutical product development and the uncertainty of clinical success; identifying and acquiring, in-licensing or developing additional products or product candidates and financing and integrating these transactions; and other risks and uncertainties affecting the company, including those described from time to time under the caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals plc's Securities and Exchange Commission filings and reports (Commission File No. 001-33500), including the company's Annual Report on Form 10-K for the year ended December 31, 2015 and future filings and reports by the company, including the company's Form 10-Q for the quarter ended March 31, 2016. Other risks and uncertainties of which the company is not currently aware may also affect the company's forward-looking statements and may cause actual results and timing of events to differ materially from those anticipated. The forward-looking statements herein are made only as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by the company on its website or otherwise. The company undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made.

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SOURCE Jazz Pharmaceuticals plc

Investors, Kathee Littrell, Vice President, Investor Relations, Jazz Pharmaceuticals plc, Ireland, + 353 1 634 7887, or U.S., + 1 650 496 2717; or Media, Laurie Hurley, Vice President, Corporate Affairs, Jazz Pharmaceuticals plc, Ireland, + 353 1 634 7894, U.S., + 1 650 496 2796