Jazz Pharmaceuticals Announces First Quarter 2019 Financial Results

DUBLIN, May 7, 2019 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the first quarter of 2019 and reaffirmed 2019 financial guidance.

"In the first quarter of 2019, we delivered strong top- and bottom-line growth and continued our efforts to bring innovative and life-changing medicines to patients, with FDA approval of Sunosi for EDS associated with narcolepsy or OSA, launch of Xyrem in pediatric narcolepsy and announcement of positive top-line results from our Phase 3 study of JZP-258," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "As the year progresses, we are continuing to invest in our business to support the successful launch of Sunosi in the U.S. and pre-launch activities in the EU, to generate data for our existing products and to fuel further advancement and diversification of our pipeline."

GAAP net income for the first quarter of 2019 was $85.2 million, or $1.47 per diluted share, compared to $46.0 million, or $0.75 per diluted share, for the first quarter of 2018.

Adjusted net income for the first quarter of 2019 was $213.2 million, or $3.67 per diluted share, compared to $182.4 million, or $2.98 per diluted share, for the first quarter of 2018. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.

Key Regulatory/R&D Updates 

In March 2019, the company announced that the U.S. Food and Drug Administration (FDA) approved Sunosi™ (solriamfetol) to improve wakefulness in adult patients with EDS associated with narcolepsy or OSA. Sunosi is the first and only dual-acting dopamine and norepinephrine reuptake inhibitor approved by the FDA for this indication and was approved with strengths of 75 mg and 150 mg for patients with narcolepsy and 37.5 mg, 75 mg, and 150 mg for patients with OSA.

In March 2019, the company announced positive top-line results from the global, double-blind, placebo-controlled, randomized-withdrawal, multi-center Phase 3 study evaluating the efficacy and safety of JZP-258 for the treatment of cataplexy and EDS in adult patients with narcolepsy. JZP-258 is a novel oxybate product candidate with a 92% reduction in sodium content compared to Xyrem.

In March 2019, positive results from DEFIFrance, an observational, multi-center, post-marketing study in adult and pediatric patients treated with defibrotide at hematopoietic stem cell transplant centers in France, were presented at the European Society for Blood and Marrow Transplant (EBMT) meeting.

Other Developments

In March 2019, the company launched Xyrem to treat cataplexy and EDS in pediatric narcolepsy patients following receipt of FDA approval in October 2018 after completing implementation of the Risk Evaluation and Mitigation Strategy to include pediatric patients and their caregivers.

In April 2019, the company announced the finalization of the settlement agreement with the U.S. Department of Justice (DOJ) related to the company's support of charitable organizations that provide financial assistance to Medicare patients. In 2018, the company had announced an agreement in principle and recorded a total expense of $58.2 million related to this matter, including related interest. Under the settlement agreement, in April 2019, the company paid $57.0 million plus interest and entered into a five-year corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.

Total revenues increased 14% in the first quarter of 2019 compared to the same period in 2018.

Xyrem net product sales increased 16% in the first quarter of 2019 compared to the same period in 2018.

Erwinaze/Erwinase net product sales increased 20% in the first quarter of 2019 due to an increase in product availability compared to the same period in 2018. The company continues to expect supply disruptions throughout 2019 which will cause inter-quarter variability in Erwinaze net sales.

Defitelio/defibrotide net product sales increased 18% in the first quarter of 2019 compared to the same period in 2018 due to increased use by transplant centers that treat adult and pediatric patients. VOD is an ultra-rare disease and, as a result, the company continues to expect inter-quarter variability in Defitelio net sales.

Vyxeos net product sales increased 10% in the first quarter of 2019 compared to the same period in 2018 primarily due to the rolling launch in the EU initiated in September 2018. The company continues its education and outreach initiatives and its efforts to generate data to support Vyxeos' potential use across broader patient populations in AML and other hematological malignancies.

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

• Selling, general and administrative (SG&A) expenses on a GAAP basis decreased in the first quarter of 2019 compared to the same period in 2018 primarily due to a $57.0 million loss contingency recorded in 2018 related to the DOJ matter described above. SG&A expenses on a GAAP basis, excluding the impact of the loss contingency, and on a non-GAAP adjusted basis increased in the first quarter of 2019 compared to the same period in 2018 primarily due to higher expenses related to the planned launch of Sunosi in the U.S. and an increase in headcount and compensation-related expenses to support expansion of the business.
• Research and development (R&D) expenses on a GAAP basis decreased in the first quarter of 2019 compared to the same period in 2018 primarily due to milestone payments of $11.0 million related to FDA acceptance for filing of the company's solriamfetol NDA recorded in 2018. R&D expenses on a GAAP basis, excluding the impact of milestone payments, and on a non-GAAP adjusted basis increased in the first quarter of 2019 compared to the same period in 2018 primarily due to expenses related to the company's pre-clinical and clinical development programs, including partner programs, regulatory activities and related headcount increases to support these efforts.

Cash Flow and Balance Sheet

As of March 31, 2019, cash, cash equivalents and investments were $832.5 million and the outstanding principal balance of the company's long-term debt was $1.8 billion. During the first quarter of 2019, the company generated $202.3 million of cash from operations, made an upfront payment of $56.0 million to Codiak BioSciences, Inc. under a collaboration agreement and used $111.2 million to repurchase shares.

In the first quarter of 2019, the company repurchased approximately 858,000 ordinary shares under the company's share repurchase program at an average cost of $129.66 per ordinary share. As of March 31, 2019, the remaining amount authorized for share repurchases was $267.9 million.

2019 Financial Guidance

Jazz Pharmaceuticals is reaffirming its full year 2019 financial guidance as follows (in millions, except per share amounts and percentages):

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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 2019 first quarter results. The live webcast may be accessed from the Investors 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 6667859.

A replay of the conference call will be available through May 14, 2019 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 6667859. An archived version of the webcast will be available for at least one week in the Investors section of the company's website at www.jazzpharmaceuticals.com.

About Jazz Pharmaceuticals plc

Jazz Pharmaceuticals plc (Nasdaq: JAZZ), a global biopharmaceutical company, is dedicated to developing life-changing medicines for people with limited or no options. As a leader in sleep medicine and with a growing hematology/oncology portfolio, Jazz has a diverse portfolio of products and product candidates in development, and is focused on transforming biopharmaceutical discoveries into novel medicines. Jazz Pharmaceuticals markets Xyrem® (sodium oxybate) oral solution, Erwinaze® (asparaginase Erwinia chrysanthemi), Defitelio® (defibrotide sodium) and Vyxeos® (daunorubicin and cytarabine) liposome for injection in the U.S. and markets Erwinase®, Defitelio® (defibrotide) and Vyxeos® 44 mg/100 mg powder for concentrate for solution for infusion in countries outside the U.S. For country-specific product information, please visit https://www.jazzpharma.com/medicines. For more information, please visit www.jazzpharmaceuticals.com and follow us on Twitter at @JazzPharma.

Non-GAAP Financial Measures

To supplement Jazz Pharmaceuticals' financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the company uses certain non-GAAP (also referred to as adjusted or non-GAAP adjusted) financial measures in this press release and the accompanying tables. In particular, the company presents non-GAAP adjusted net income (and the related per share measure) and its line item components, as well as certain non-GAAP adjusted financial measures derived therefrom, including non-GAAP adjusted gross margin percentage and non-GAAP adjusted effective tax rate. Non-GAAP adjusted net income (and the related per share measure) and its line item components exclude from reported GAAP net income (and the related per share measure) and its line item components certain items, as detailed in the reconciliation tables that follow, and in the case of non-GAAP adjusted net income (and the related per share measure), adjust for the income tax effect of non-GAAP adjustments. In this regard, the components of non-GAAP adjusted net income, including non-GAAP cost of product sales, non-GAAP SG&A expenses and non-GAAP R&D expenses, are income statement line items prepared on the same basis as, and therefore components of, the overall non-GAAP adjusted net income measure.

The company believes that each of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors and analysts. 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. Jazz Pharmaceuticals' management also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate the company's business and to make operating decisions, and compensation of executives is based in part on certain of these non-GAAP financial measures. Because these non-GAAP financial measures are important internal measurements for Jazz Pharmaceuticals' management, the company also believes that these non-GAAP financial measures are useful to investors and analysts since these measures allow for greater transparency with respect to key financial metrics the company uses in assessing its own operating performance and making operating decisions.

These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures; should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP; have no standardized meaning prescribed by GAAP; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future there may be other items that the company may exclude for purposes of its non-GAAP financial measures; and the company has ceased, and may in the future cease, to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. Likewise, the company may determine to modify the nature of its adjustments to arrive at its non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measures as used by Jazz Pharmaceuticals in this press release and the accompanying tables 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, including its 2019 financial guidance, the company's planned or expected 2019 milestones and the timing thereof, the company's continuing investments to support a successful launch of Sunosi in the U.S. and EU pre-launch activities, to generate data for its existing products and to fuel further advancement and diversification of its pipeline, the company's expectations of further Erwinaze supply disruptions and inter-quarter variability in Erwinaze and Defitelio net sales, the company's plans to generate data to support existing products, including Vyxeos' potential use across broader patient populations in AML and other hematological malignancies, 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; effectively commercializing the company's other products and product candidates, including the risk of a potential delay in the commercial launch of Sunosi in the U.S. due to the DEA scheduling review or otherwise; the time-consuming and uncertain regulatory approval process, including the risk that the company's regulatory submissions, including the Sunosi marketing authorization application in the EU, may not be approved by applicable regulatory authorities in a timely manner or at all; costly and time-consuming pharmaceutical product development and the uncertainty of clinical success, including risks related to failure or delays in initiating or completing clinical trials; 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; government investigations and other actions; obtaining and maintaining adequate coverage and reimbursement for the company's products; identifying and acquiring, in-licensing or developing additional products or product candidates, financing these transactions and successfully integrating acquired businesses; the ability to achieve expected future financial performance and results and the uncertainty of future tax and other provisions and estimates; 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'sSecurities 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, 2018 and future filings and reports by the company, including the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019. Other risks and uncertainties of which the company is not currently aware may also affect the company's forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.

 

 

 

 

 

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SOURCE Jazz Pharmaceuticals plc

Investors: Kathee Littrell, Vice President, Investor Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 634 7887, U.S., +1 650 496 2717 or Media: Jacqueline Kirby, Vice President, Corporate Affairs & Government Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 697 2141, U.S., +1 215 867 4910