Jazz Pharmaceuticals Announces Second Quarter 2018 Financial Results

DUBLIN, Aug. 7, 2018 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the second quarter of 2018 and updated financial guidance for 2018.

"We had another highly productive quarter, including strong commercial performance, achievement of significant regulatory and R&D milestones, and further strengthening of our balance sheet," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals.  "We head into the second half of 2018 focused on supporting our sales momentum, progressing our pre-clinical and clinical pipeline, deploying our resources to expand the business through R&D and corporate development activities, and preparing for multiple near-term regulatory milestones, including three potential marketing approvals."

GAAP net income for the second quarter of 2018 was $92.3 million, or $1.50 per diluted share, compared to $105.6 million, or $1.72 per diluted share, for the second quarter of 2017. GAAP net income for the second quarter of 2018 included an impairment charge of $42.9 million resulting from the company's decision to sell its rights related to Prialt.

Adjusted net income for the second quarter of 2018 was $214.6 million, or $3.49 per diluted share, compared to $157.4 million, or $2.56 per diluted share, for the second quarter of 2017. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.

 

Total revenues increased 27% in the second quarter of 2018 compared to the same period in 2017 due to the contribution of strong sales from Xyrem, Erwinaze/Erwinase, Defitelio and the addition of Vyxeos following the launch in August 2017.

Xyrem net product sales increased 19% in the second quarter of 2018 compared to the same period in 2017.

Erwinaze/Erwinase net product sales increased 20% in the second quarter of 2018 compared to the same period in 2017. The company experienced supply disruptions during both periods and fluctuations in quarterly results reflect, in part, the timing of supply availability. The company expects continued supply challenges from time to time for the remainder of 2018.

Defitelio/defibrotide net product sales increased 34% in the second quarter of 2018 compared to the same period in 2017. The company continues to expect inter-quarter variability in Defitelio net sales given that veno-occlusive disease is an ultra-rare disease.

Vyxeos net product sales were $28.0 million in the second quarter of 2018.

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

• Selling, general and administrative (SG&A) expenses increased in the second quarter of 2018 compared to the same period in 2017 on a GAAP and on a non-GAAP adjusted basis due to higher expenses resulting from the expansion of the company's business, including pre-launch activities for the potential approvals of Vyxeos in the EU and solriamfetol in the U.S.
• Research and development (R&D) expenses increased in the second quarter of 2018 compared to the same period in 2017 on a GAAP and on a non-GAAP adjusted basis due to an increase in expenses related to the company's pre-clinical and clinical development programs, regulatory activities and support of partner programs.

Cash Flow and Balance Sheet

As of June 30, 2018, cash, cash equivalents and investments were $815.1 million and the outstanding principal balance of the company's long-term debt was $1.8 billion. During the six months ended June 30, 2018, the company generated $354.0 million of cash from operations, purchased a priority review voucher for $110.0 million and used $55.6 million to repurchase approximately 373,000 ordinary shares under the company's share repurchase program at an average cost of $149.16 per ordinary share.

In June 2018, the company refinanced its senior credit facilities to increase the borrowing capacity available under the revolving credit facility to $1.60 billion from $1.25 billion and to extend the maturity profile of the facilities to June 2023 from July 2021.

Recent Developments

At the Associated Professional Sleep Societies meeting in June 2018, the company presented long-term safety and efficacy results from its global multi-center studies evaluating Xyrem for the treatment of cataplexy in pediatric patients with narcolepsy and solriamfetol in adult patients with excessive sleepiness associated with obstructive sleep apnea and with narcolepsy.

In June 2018, the U.S. Food and Drug Administration (FDA) accepted for priority review the company's supplemental new drug application (sNDA) seeking revised labeling for Xyrem to include an indication to treat cataplexy and excessive daytime sleepiness in pediatric narcolepsy patients. The Prescription Drug User Fee Act goal date for an FDA decision is October 27, 2018.

In June 2018, the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending marketing authorization of Vyxeos for the treatment of adults with newly diagnosed t-AML or AML-MRC.

In July 2018, the company announced that data from the pivotal Phase 3 study of Vyxeos compared to standard of care cytarabine and daunorubicin (7+3) was published online in the Journal of Clinical Oncology.

In August 2018, the company announced that the United States Centers for Medicare and Medicaid Services granted approval for a New Technology Add-on Payment for Vyxeos for the treatment of adults with newly diagnosed, therapy-related acute myeloid leukemia (t-AML) or AML with myelodysplasia-related changes (AML-MRC).

In August 2018, the company and The University of Texas MD Anderson Cancer Center announced a five-year collaboration to evaluate potential treatment options for hematologic malignancies, with a near-term focus on Vyxeos.

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 2018 second 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 4989706.

A replay of the conference call will be available through August 14, 2018 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 4989706. 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) 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), Defitelio® (defibrotide sodium) and Vyxeos® (daunorubicin and cytarabine) liposome for injection in the U.S. and markets Erwinase® and Defitelio® (defibrotide) in countries outside the U.S. For country-specific product information, please visit www.jazzpharmaceuticals.com/products.  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 selling, general and administrative expenses and non-GAAP research and development 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 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 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 2018 financial guidance, the company's expectations for supporting its sales momentum, progressing its pre-clinical and clinical pipeline, deploying resources to expand its business through R&D and corporate development activities, and preparing for multiple near-term regulatory milestones, the company's expectations for future Erwinaze supply challenges and inter-quarter variability in Defitelio net sales, 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; the time-consuming and uncertain regulatory approval process, including the risk that the company's regulatory submissions, including the solriamfetol new drug application, the Xyrem sNDA and the marketing authorization application for Vyxeos in the European Union, may not be approved by applicable regulatory authorities in a timely manner or at all; 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, including the risk that the company may not ultimately reach a final settlement with the U.S. Department of Justice to resolve an investigation relating to the company's support of 501(c)(3) organizations that provide financial assistance to Medicare patients; obtaining and maintaining appropriate pricing and reimbursement for the company's products; pharmaceutical product development and the uncertainty of clinical success, including risks related to failure or delays in initiating or completing clinical trials; 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's Securities and Exchange Commission filings and reports (Commission File No. 001-33500), including the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 and future filings and reports by the company, including the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.  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.  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, U.S., +1 650 496 2717; Media: Jacqueline Kirby, Vice President, Corporate Affairs & Government Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 697 2141, U.S., +1 215 867 4910