Jazz Pharmaceuticals Announces Second Quarter 2012 Results

DUBLIN, Aug. 7, 2012 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the second quarter ended June 30, 2012.  These results include the first complete quarter of financial results following the Azur Pharma plc merger, as well as a partial month of results following completion of the acquisition of EUSA Pharma Inc. on June 12, 2012. Results for 2011 reflect only the financial results reported by Jazz Pharmaceuticals, Inc. 

"The first six months of 2012 have been a time of tremendous progress for Jazz Pharmaceuticals as we've delivered strong organic sales growth led by Xyrem^® and completed two important transactions. The Azur and EUSA acquisitions added attractive new products to our portfolio, brought increased depth to our team and expanded our geographic footprint," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals.  "We are particularly pleased by our year-over-year and sequential growth in adjusted net income, and we remain committed to our strategy of increasing sales of our current products, growing our product portfolio through corporate development and investing in focused development programs."

Adjusted net income for the second quarter of 2012 was $66.2 million, or $1.09 per diluted share, reflecting both strong organic growth and the positive impact of the Azur Pharma and EUSA Pharma acquisitions.  GAAP net income for the second quarter of 2012 was impacted by various non-recurring acquisition-related expenses and non-cash amortization expenses.  For the quarter, GAAP net income was $27.1 million, or $0.45 per diluted share.  A reconciliation of GAAP net income to adjusted net income and the related per diluted share amounts is included with this press release.

Revenues and Product Sales

Total revenues for the quarter ended June 30, 2012 were $129.5 million, including net sales, royalties and contract revenues.

Total net sales for the second quarter of 2012 increased to $128.3 million, driven by significant growth in Xyrem (sodium oxybate) oral solution net sales, as well as the addition of net sales from the expanded product portfolio resulting from the merger with Azur Pharma and a partial month of sales of Erwinaze^® (asparaginase Erwinia chrysanthemi) and other products from the EUSA Pharma acquisition.

Net sales for the second quarter of 2012 included:

• Xyrem:  Net sales of Xyrem increased by 59% to $89.1 million for the second quarter of 2012, compared to net sales of $56.2 million in the second quarter of 2011. During the second quarter of 2012, approximately 9,850 patients were on active therapy with Xyrem.
• Erwinaze/Erwinase: Worldwide net sales of Erwinaze/Erwinase were $6.0 million, reflecting results for the partial month following the completion of the EUSA Pharma acquisition.  For the full quarter, pro forma net sales were $32.9 million.
• Psychiatry Products:  Net sales of the company's psychiatry products, including once-daily Luvox CR^® (fluvoxamine maleate), FazaClo^® (clozapine, USP) HD and FazaClo LD, were $19.8 million for the second quarter of 2012.  Net sales of Luvox CR increased 44% compared to the second quarter of 2011.  On a pro forma basis, total net sales of the FazaClo products were down 1% while the proportion of FazaClo HD sales increased from 20% to 36% compared to the prior year quarter.
• Prialt:  Second quarter 2012 net sales of Prialt^® (ziconotide) intrathecal infusion were $5.6 million, an increase of 12% from the prior year quarter on a pro forma basis.
• Other:  Net sales of other products for the second quarter of 2012 were $7.9 million.

Other Financial Highlights

Additional financial information for the second quarter of 2012 includes:

• Cost of product sales increased by $12.0 million compared to the second quarter of 2011 due to higher sales and $4.0 million of purchase accounting inventory fair value step-up.
• Selling, general and administrative expenses increased by $38.5 million compared to the prior year quarter, primarily due to the inclusion of Azur Pharma and EUSA Pharma operations, and transaction and integration expenses of $10.6 million related to these acquisitions. Jazz Pharmaceuticals currently has approximately 650 employees worldwide.
• Intangible asset amortization for the second quarter of 2012 was $15.8 million, related primarily to the company's expanded product portfolio. 
• Jazz Pharmaceuticals financed the majority of the EUSA Pharma acquisition with a $475 million term loan. The company's cash and cash equivalents totaled $154.5 million at June 30, 2012.   

2012 Financial Guidance

Jazz Pharmaceuticals is also providing the following updated financial guidance for 2012, which reflects the EUSA Pharma acquisition and expected results from and after June 12, 2012:

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 2012 second quarter results and 2012 guidance.  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 +1 866-804-6921 in the U.S., or +1 857-350-1667 outside the U.S., and entering passcode 13817577.

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

Jazz Pharmaceuticals plc is a specialty biopharmaceutical company focused on improving patients' lives by identifying, developing and commercializing products that address unmet medical needs. The company has a diverse portfolio of products in the areas of narcolepsy, oncology, pain, psychiatry and women's health. The company's U.S. marketed products in these areas include: Xyrem^® (sodium oxybate), Erwinaze^® (asparaginase Erwinia chrysanthemi), Prialt^® (ziconotide) intrathecal infusion, FazaClo^® (clozapine, USP) HD and FazaClo LD, Luvox CR^® (fluvoxamine maleate) and Elestrin^® (estradiol gel). Outside of the U.S., Jazz Pharmaceuticals also has a number of products marketed by its international division, EUSA Pharma.

Non-GAAP Financial Measures

To supplement Jazz Pharmaceuticals' financial results presented on a GAAP basis, the company uses the non-GAAP measures adjusted net income and adjusted net income per diluted share as shown in the tables below.  The company believes that these non-GAAP financial measures are helpful in understanding its past financial performance and potential future results.  They are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP.  Jazz Pharmaceuticals' management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions.  Compensation of executives is based in part on the performance of the company's business based on these non-GAAP measures.  In addition, Jazz Pharmaceuticals believes that the use of these non-GAAP measures enhances the ability of investors to compare its results from period to period.  Adjusted net income and adjusted net income per diluted share, as used by Jazz Pharmaceuticals, may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the company's competitors and other companies.  The non-GAAP historical financial measures and 2012 financial guidance exclude amortization of intangible assets, share-based compensation, purchase accounting inventory fair value step-up adjustments, transaction and integration costs, change in fair value of contingent consideration, other non-cash items and income tax adjustments. 

"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 results, strategy and growth potential, including 2012 financial guidance, and other statements that are not historical facts.  These forward-looking statements are based on Jazz Pharmaceuticals' current expectations 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 and increasing sales of and revenue from Xyrem, such as the potential introduction of generic competition and changed or increased regulatory restrictions on Xyrem, as well as similar risks related to effectively commercializing the company's other marketed products, including Erwinaze and Prialt; successfully integrating and growing Jazz Pharmaceuticals' combined business operations after the Azur Pharma merger and EUSA Pharma acquisition, which may be more difficult, time-consuming or costly than expected, particularly in light of the company's expanded international footprint; obtaining appropriate pricing and reimbursement for the company's products in an increasingly challenging environment; ongoing regulation and oversight by U.S. and foreign regulatory agencies; dependence on key customers and sole source suppliers; the company's ability to protect intellectual property rights with respect to its products; the difficulty and uncertainty of pharmaceutical product development and the uncertainty of clinical success and regulatory approval; and potential restrictions on the company's ability and flexibility to pursue future opportunities as a result of its substantial outstanding debt obligations; as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results; and those risks detailed 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 in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, as updated by the Current Reports on Form 8-K filed on June 4, 2012 and July 9, 2012, respectively, and future filings and reports by the company, including the Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.  

SOURCE Jazz Pharmaceuticals plc

Investors and Media, Ami Knoefler, Executive Director, Investor Relations & Corporate Communications, Ireland, + 353 1 638 1032, U.S., + 1-650-496-2947, or Investors, William Craumer, Director, Investor Relations, U.S., +1-650-496-2750