Jazz Pharmaceuticals Announces First Quarter 2017 Financial Results
Total Revenues Increased 12% to
Settled Xyrem Patent Litigation with First ANDA Filer
Completed Rolling NDA Submission for Vyxeos (CPX-351)
Announced Positive Top-Line Data for JZP-110 in Obstructive Sleep Apnea and Narcolepsy and for Xyrem in Pediatric Narcolepsy
"The first part of 2017 has been an exceptionally productive period for us in R&D as we announced top-line data for our three JZP-110 Phase 3 studies and our Xyrem Phase 2/3 pediatric study, completed the Vyxeos NDA submission while preparing for potential
GAAP net income for the first quarter of 2017 was
Adjusted net income for the first quarter of 2017 was
Financial Highlights
Three Months Ended March 31, |
||||||||||
(In thousands, except per share amounts and percentages) |
2017 |
2016 |
Change |
|||||||
Total revenues |
$ |
376,053 |
$ |
336,010 |
11.9 |
% |
||||
GAAP net income |
$ |
86,511 |
$ |
75,812 |
14.1 |
% |
||||
Adjusted net income |
$ |
141,222 |
$ |
134,568 |
4.9 |
% |
||||
GAAP EPS |
$ |
1.41 |
$ |
1.21 |
16.5 |
% |
||||
Adjusted EPS |
$ |
2.31 |
$ |
2.15 |
7.4 |
% |
Total Revenues
Three Months Ended |
|||||||
(In thousands) |
2017 |
2016 |
|||||
Xyrem® (sodium oxybate) oral solution |
$ |
272,326 |
$ |
249,537 |
|||
Erwinaze® / Erwinase® (asparaginase Erwinia chrysanthemi) |
51,388 |
51,173 |
|||||
Defitelio® (defibrotide sodium) / defibrotide |
35,900 |
17,897 |
|||||
Prialt® (ziconotide) intrathecal infusion |
7,717 |
6,209 |
|||||
Other |
6,347 |
9,100 |
|||||
Product sales, net |
373,678 |
333,916 |
|||||
Royalties and contract revenues |
2,375 |
2,094 |
|||||
Total revenues |
$ |
376,053 |
$ |
336,010 |
Net product sales increased 12% in the first quarter of 2017 compared to the same period in 2016 primarily due to higher net product sales of Xyrem and Defitelio.
Xyrem net product sales increased 9% in the first quarter of 2017 compared to the same period in 2016.
Erwinaze/Erwinase net product sales in the first quarter of 2017 were consistent with net product sales in the same period in 2016. During the quarter, the company continued to experience supply challenges, which resulted in fluctuations in inventory levels and temporary disruptions to the company's ability to supply certain markets. The company expects that temporary supply disruptions will continue in 2017, including in the U.S.
Defitelio/defibrotide net product sales increased 101% in the first quarter of 2017 compared to the same period in 2016 primarily due to the launch of Defitelio in the U.S. in
Operating Expenses
Three Months Ended |
|||||||
(In thousands, except percentages) |
2017 |
2016 |
|||||
GAAP: |
|||||||
Cost of product sales |
$ |
25,065 |
$ |
23,439 |
|||
Gross margin |
93.3 |
% |
93.0 |
% |
|||
Selling, general and administrative |
$ |
144,255 |
$ |
128,765 |
|||
% of total revenues |
38.4 |
% |
38.3 |
% |
|||
Research and development |
$ |
44,928 |
$ |
31,252 |
|||
% of total revenues |
11.9 |
% |
9.3 |
% |
|||
Acquired in-process research and development |
$ |
— |
$ |
8,750 |
|||
Three Months Ended |
|||||||
(In thousands, except percentages) |
2017 |
2016 |
|||||
Non-GAAP adjusted: |
|||||||
Cost of product sales |
$ |
23,819 |
$ |
22,640 |
|||
Gross margin |
93.6 |
% |
93.2 |
% |
|||
Selling, general and administrative |
$ |
118,450 |
$ |
102,611 |
|||
% of total revenues |
31.5 |
% |
30.5 |
% |
|||
Research and development |
$ |
40,786 |
$ |
27,962 |
|||
% of total revenues |
10.8 |
% |
8.3 |
% |
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 2017 compared to the same period in 2016 on a GAAP and on a non-GAAP adjusted basis primarily due to higher headcount and other expenses resulting from the expansion of the company's business, including expenses related to the potential U.S. launch of Vyxeos™ (cytarabine and daunorubicin liposome injection).
- Research and development (R&D) expenses increased in the first quarter of 2017 compared to the same period in 2016 on a GAAP and on a non-GAAP adjusted basis and included costs related to the completion of the rolling new drug application (NDA) submission for Vyxeos; increased expenses for continued investments in oxybate-related R&D programs, including the initiation of a clinical study of JZP-258; and an increase in headcount required to support these activities.
Cash Flow and Balance Sheet
As of March 31, 2017, cash, cash equivalents and investments were
Recent Developments
In
In March and
In
On
In
In
2017 Financial Guidance
Revenues |
$1,625-$1,700 |
Total net product sales |
$1,617-$1,692 |
-Xyrem net sales* |
$1,200-$1,230 |
-Erwinaze/Erwinase net sales |
$205-$225 |
-Defitelio/defibrotide net sales |
$130-$150 |
-Vyxeos (CPX-351) net sales1 |
$10-$20 |
GAAP gross margin % |
93% |
Non-GAAP adjusted gross margin %2,5 |
93% |
GAAP SG&A expenses* |
$521-$556 |
Non-GAAP adjusted SG&A expenses3,5 |
$440-$460 |
GAAP R&D expenses* |
$185-$216 |
Non-GAAP adjusted R&D expenses4,5 |
$165-$180 |
GAAP net income per diluted share |
$6.55-$7.55 |
Non-GAAP adjusted net income per diluted share5 |
$10.70-$11.30 |
___________________________ |
|
* Updated May 9, 2017. |
|
1. |
Guidance assumes FDA approval and launch of Vyxeos (CPX-351) in the U.S. in 2017. |
2. |
Excludes $5 million of share-based compensation expense from estimated GAAP gross margin. |
3. |
Excludes $75-$90 million of share-based compensation expense and $6 million of expenses related to certain legal proceedings and restructuring from estimated GAAP SG&A expenses. |
4. |
Excludes $20-$25 million of share-based compensation expense and $0-$11 million of milestone payments from estimated GAAP R&D expenses. |
5. |
See "Non-GAAP Financial Measures" below. Reconciliations of non-GAAP adjusted guidance measures are included above and in the table titled "Reconciliation of GAAP to Non-GAAP Adjusted 2017 Net Income Guidance" at the end of this press release. |
Conference Call Details
A replay of the conference call will be available through
About
Non-GAAP Financial Measures
To supplement
The company believes that each of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors and analysts. In particular, the company believes that each of these non-GAAP financial measures, when considered together with the company's financial information prepared in accordance with GAAP, can enhance investors' and analysts' ability to meaningfully compare the company's results from period to period and to its forward-looking guidance, and to identify operating trends in the company's business. In addition, these non-GAAP financial measures are regularly used by investors and analysts to model and track the company's financial performance.
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. In addition, from time to time in the future there may be other items that the company may exclude for purposes of its non-GAAP financial measures; and the company has ceased, and may in the future cease, to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. Likewise, the company may determine to modify the nature of its adjustments to arrive at its non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measures as used by
"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 PLC |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||
(In thousands, except per share amounts) |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
2017 |
2016 |
||||||
Revenues: |
|||||||
Product sales, net |
$ |
373,678 |
$ |
333,916 |
|||
Royalties and contract revenues |
2,375 |
2,094 |
|||||
Total revenues |
376,053 |
336,010 |
|||||
Operating expenses: |
|||||||
Cost of product sales (excluding amortization of intangible assets) |
25,065 |
23,439 |
|||||
Selling, general and administrative |
144,255 |
128,765 |
|||||
Research and development |
44,928 |
31,252 |
|||||
Acquired in-process research and development |
— |
8,750 |
|||||
Intangible asset amortization |
25,665 |
22,642 |
|||||
Total operating expenses |
239,913 |
214,848 |
|||||
Income from operations |
136,140 |
121,162 |
|||||
Interest expense, net |
(18,844) |
(12,192) |
|||||
Foreign exchange loss |
(1,464) |
(819) |
|||||
Income before income tax provision and equity in loss of investee |
115,832 |
108,151 |
|||||
Income tax provision |
29,160 |
32,339 |
|||||
Equity in loss of investee |
161 |
— |
|||||
Net income |
$ |
86,511 |
$ |
75,812 |
|||
Net income per ordinary share: |
|||||||
Basic |
$ |
1.44 |
$ |
1.24 |
|||
Diluted |
$ |
1.41 |
$ |
1.21 |
|||
Weighted-average ordinary shares used in per share calculations - basic |
59,880 |
61,142 |
|||||
Weighted-average ordinary shares used in per share calculations - diluted |
61,178 |
62,616 |
JAZZ PHARMACEUTICALS PLC |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands) |
|||||||
(Unaudited) |
|||||||
March 31, |
December 31, |
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
346,995 |
$ |
365,963 |
|||
Investments |
60,000 |
60,000 |
|||||
Accounts receivable, net of allowances |
243,035 |
234,244 |
|||||
Inventories |
37,653 |
34,051 |
|||||
Prepaid expenses |
38,118 |
24,501 |
|||||
Other current assets |
27,052 |
29,310 |
|||||
Total current assets |
752,853 |
748,069 |
|||||
Property and equipment, net |
119,913 |
107,490 |
|||||
Intangible assets, net |
2,998,780 |
3,012,001 |
|||||
Goodwill |
899,290 |
893,810 |
|||||
Deferred tax assets, net, non-current |
18,038 |
15,060 |
|||||
Deferred financing costs |
9,325 |
9,737 |
|||||
Other non-current assets |
17,625 |
14,060 |
|||||
Total assets |
$ |
4,815,824 |
$ |
4,800,227 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
29,144 |
$ |
22,415 |
|||
Accrued liabilities |
183,645 |
193,268 |
|||||
Current portion of long-term debt |
136,094 |
36,094 |
|||||
Income taxes payable |
35,300 |
4,506 |
|||||
Deferred revenue |
8,590 |
1,123 |
|||||
Total current liabilities |
392,773 |
257,406 |
|||||
Deferred revenue, non-current |
22,624 |
2,601 |
|||||
Long-term debt, less current portion |
1,739,594 |
1,993,531 |
|||||
Deferred tax liability, net, non-current |
548,038 |
556,733 |
|||||
Other non-current liabilities |
128,809 |
112,617 |
|||||
Total shareholders' equity |
1,983,986 |
1,877,339 |
|||||
Total liabilities and shareholders' equity |
$ |
4,815,824 |
$ |
4,800,227 |
JAZZ PHARMACEUTICALS PLC |
|||||||
SUMMARY OF CASH FLOWS |
|||||||
(In thousands) |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
2017 |
2016 |
||||||
Net cash provided by operating activities |
$ |
164,540 |
$ |
151,654 |
|||
Net cash used in investing activities |
(3,574) |
(11,995) |
|||||
Net cash used in financing activities |
(181,674) |
(152,458) |
|||||
Effect of exchange rates on cash and cash equivalents |
1,740 |
3,794 |
|||||
Net decrease in cash and cash equivalents |
$ |
(18,968) |
$ |
(9,005) |
JAZZ PHARMACEUTICALS PLC |
|||||||
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION |
|||||||
(In thousands, except per share amounts) |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
2017 |
2016 |
||||||
GAAP reported net income |
$ |
86,511 |
$ |
75,812 |
|||
Intangible asset amortization |
25,665 |
22,642 |
|||||
Share-based compensation expense |
25,193 |
24,183 |
|||||
Upfront and milestone payments |
— |
8,750 |
|||||
Expenses related to certain legal proceedings and restructuring |
6,000 |
6,060 |
|||||
Non-cash interest expense |
5,615 |
5,362 |
|||||
Income tax effect of adjustments (1) |
(7,762) |
(8,241) |
|||||
Non-GAAP adjusted net income |
$ |
141,222 |
$ |
134,568 |
|||
GAAP reported net income per diluted share |
$ |
1.41 |
$ |
1.21 |
|||
Non-GAAP adjusted net income per diluted share |
$ |
2.31 |
$ |
2.15 |
|||
Weighted-average ordinary shares used in diluted per share calculations |
61,178 |
62,616 |
___________________________ |
|
(1) |
The income tax effect of the adjustments between GAAP reported and non-GAAP adjusted net income takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). |
JAZZ PHARMACEUTICALS PLC |
|||||||||||||||||||||||
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION |
|||||||||||||||||||||||
CERTAIN LINE ITEMS AND OTHER INFORMATION |
|||||||||||||||||||||||
(In thousands, except per share amounts and percentages) |
|||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||
March 31, 2017 |
March 31, 2016 |
||||||||||||||||||||||
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
||||||||||||||||||
Total revenues |
$ |
376,053 |
$ |
— |
$ |
376,053 |
$ |
336,010 |
$ |
— |
$ |
336,010 |
|||||||||||
Cost of product sales (excluding amortization of intangible assets) |
25,065 |
(1,246) |
(a) |
23,819 |
23,439 |
(799) |
(a) |
22,640 |
|||||||||||||||
Selling, general and administrative |
144,255 |
(25,805) |
(b) |
118,450 |
128,765 |
(26,154) |
(b) |
102,611 |
|||||||||||||||
Research and development |
44,928 |
(4,142) |
(c) |
40,786 |
31,252 |
(3,290) |
(c) |
27,962 |
|||||||||||||||
Acquired in-process research and development |
— |
— |
— |
8,750 |
(8,750) |
— |
|||||||||||||||||
Intangible asset amortization |
25,665 |
(25,665) |
— |
22,642 |
(22,642) |
— |
|||||||||||||||||
Interest expense, net |
18,844 |
(5,615) |
(d) |
13,229 |
12,192 |
(5,362) |
(d) |
6,830 |
|||||||||||||||
Foreign currency loss |
1,464 |
— |
1,464 |
819 |
— |
819 |
|||||||||||||||||
Income before income tax provision and equity in loss of investee |
115,832 |
62,473 |
(e) |
178,305 |
108,151 |
66,997 |
(e) |
175,148 |
|||||||||||||||
Income tax provision |
29,160 |
7,762 |
(f) |
36,922 |
32,339 |
8,241 |
(f) |
40,580 |
|||||||||||||||
Effective tax rate (g) |
25.2 |
% |
20.7 |
% |
29.9 |
% |
23.2 |
% |
|||||||||||||||
Equity in loss of investee |
161 |
— |
161 |
— |
— |
— |
|||||||||||||||||
Net income |
$ |
86,511 |
$ |
54,711 |
(h) |
$ |
141,222 |
$ |
75,812 |
$ |
58,756 |
(h) |
$ |
134,568 |
|||||||||
Net income per diluted share |
$ |
1.41 |
$ |
2.31 |
$ |
1.21 |
$ |
2.15 |
___________________________ |
|
Explanation of Adjustments and Certain Line Items (in thousands): |
|
(a) |
Share-based compensation expense of $1,246 and $689 and expenses related to certain legal proceedings and restructuring of $0 and $110 for the three months ended March 31, 2017 and 2016, respectively. |
(b) |
Share-based compensation expense of $19,805 and $20,204 and expenses related to certain legal proceedings and restructuring of $6,000 and $5,950 for the three months ended March 31, 2017 and 2016, respectively. |
(c) |
Share-based compensation expense of $4,142 and $3,290 for the three months ended March 31, 2017 and 2016, respectively. |
(d) |
Non-cash interest expense associated with debt discount and debt issuance costs for the respective three-month period. |
(e) |
Sum of adjustments (a) through (d) plus the adjustments for acquired in-process research and development and intangible asset amortization for the respective three-month period. |
(f) |
Income tax effect of the adjustments between GAAP reported and non-GAAP adjusted net income takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s) for the respective three-month period. |
(g) |
Income tax provision divided by income before income tax provision and equity in loss of investee for the respective three-month period. |
(h) |
Net of adjustments (e) and (f) for the respective three-month period. |
JAZZ PHARMACEUTICALS PLC |
|
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2017 NET INCOME GUIDANCE |
|
(In millions, except per share amounts) |
|
(Unaudited) |
|
GAAP net income |
$400 - $460 |
Intangible asset amortization |
130 - 165 |
Share-based compensation expense |
100 - 120 |
Milestone payments* |
0 - 11 |
Expenses related to certain legal proceedings and restructuring* |
6 |
Non-cash interest expense |
20 - 25 |
Income tax effect of adjustments |
(40) - (60) |
Non-GAAP adjusted net income |
$650 - $690 |
GAAP net income per diluted share |
$6.55-$7.55 |
Non-GAAP adjusted net income per diluted share |
$10.70-$11.30 |
Weighted-average ordinary shares used in per share calculations |
61 |
___________________________ |
* Updated May 9, 2017. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/jazz-pharmaceuticals-announces-first-quarter-2017-financial-results-300454503.html
SOURCE
Investors: Kathee Littrell, Vice President, Investor Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 634 7887, U.S., +1 650 496 2717; or Jacqueline Kirby, Vice President, Corporate Affairs & Government Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 697 2141, U.S., +1 215 867 4910