Jazz Pharmaceuticals Announces Third Quarter 2023 Financial Results and Updates Financial Guidance
– 3Q23 total revenues of
– Combined revenues from key growth drivers, Xywav®, Epidiolex® and Rylaze®, increased 24% year-over-year –
– Raising total and Oncology revenue guidance at the mid-points –
– Plan to initiate zanidatamab rolling biologics license application (BLA) submission this year for accelerated approval in second-line (2L) biliary tract cancers (BTC) –
"We have once again delivered strong financial results from increasingly diversified revenue streams and remain well-positioned for long-term growth. Low-sodium Xywav grew 30% year-over-year despite additional competition, with continued compelling adoption across both narcolepsy and idiopathic hypersomnia (IH). Epidiolex is well-positioned to deliver on its blockbuster potential as a differentiated treatment option with multiple ex-
"We now expect as many as five late-stage readouts from our robust R&D pipeline by the end of 2024 and continue to progress multiple early-stage programs in both neuroscience and oncology. We plan to initiate the zanidatamab rolling BLA submission this year for accelerated approval in 2L BTC and expect to complete it in the first half of 2024. Our pivotal, Phase 3 trial of Epidyolex® in
Key Highlights
- Xywav net product sales grew 30% year-over-year; annualizing at
$1.3 billion . - Total oxybate revenue, including royalties from authorized generics (AGs), is annualizing at
$1.9 billion ; 68% of 3Q23 total oxybate revenues were driven by Xywav. - Epidiolex/Epidyolex net product sales grew 9% year-over-year with continued global launch momentum; top-line data from pivotal, Phase 3 trial in
Japan expected in 2H24. - Rylaze net product sales grew 43% year-over-year supported by multiple demand drivers.
- Plan to initiate zanidatamab rolling BLA submission this year for accelerated approval in 2L BTC; expect to complete BLA in 1H24.
- Robust pipeline with as many as five late-stage data readouts expected by the end of 2024.
- Increased R&D investment driven by confidence in robust pipeline; reaffirmed full year GAAP net income and non-GAAP adjusted net income (ANI) guidance.
Business Updates
Key Commercial Products
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:
- Xywav net product sales increased 30% to
$331.6 million in 3Q23 compared to the same period in 2022; expect Xywav to remain the oxybate of choice. - There were approximately 12,050 active Xywav patients exiting 3Q23.
- The Company continued to present data supporting its scientific leadership in sleep disorders and highlighting the impact of low-sodium Xywav for patients with narcolepsy and IH.
- At
Psych Congress 2023, a review of multiple clinical trials demonstrated oxybate improves sleep quality, sleep architecture and measures of disrupted nighttime sleep in narcolepsy, independent of once- or twice-nightly dosing. - At World Sleep 2023, results from the TENOR study of adults with narcolepsy showed the most common patient-reported reasons for utilizing Xywav individualized dosing regimens were to avoid morning grogginess, help fall asleep and improve sleep quality. Results from another study, CV-RHYTHM, found patients with IH experienced a greater burden of cardiovascular comorbidities, including stroke, heart attacks and heart failure than those without IH, emphasizing the importance of holistic management to treat under-recognized sleep disorders.
- At
Xywav for Narcolepsy:
- Continued growth of Xywav in narcolepsy, despite additional competition, with approximately 9,500 narcolepsy patients taking Xywav exiting 3Q23.
- The benefits of reducing sodium intake continue to resonate with patients and prescribers.
Xywav for Idiopathic Hypersomnia (IH):
- There were approximately 2,550 IH patients taking Xywav exiting 3Q23.
- Jazz survey of sleep specialists indicates 70% anticipate increasing their prescribing of Xywav for IH over the next six months, and new prescribers continued to grow in 3Q23.
- Xywav remains the first and only FDA-approved treatment demonstrating improvement across multiple symptoms, including sleep inertia, which has a significant impact on patients' quality of life and daily function.
Xyrem® (sodium oxybate) oral solution:
- Xyrem net product sales decreased 51% to
$125.1 million in 3Q23 compared to the same period in 2022, reflecting the continued adoption of Xywav by patients with narcolepsy and the launch of high-sodium oxybate AGs in 2023.
Oxybate (Xywav, Xyrem and AG Royalties):
- Total oxybate revenue, including royalties from AGs, is annualizing at
$1.9 billion . - Royalties from high-sodium oxybate AGs were
$28.9 million in 3Q23, which reflect a significant increase over 1H23 and the fixed-rate royalty structures of the AG agreements in 2H23.
Epidiolex/Epidyolex (cannabidiol):
- Epidiolex/Epidyolex net product sales increased 9% to
$213.7 million in 3Q23 compared to the same period in 2022. - Epidiolex/Epidyolex global prescriber base increasing with multiple launches ongoing and anticipated outside of the
U.S. through 2024, further positioning Epidiolex/Epidyolex to achieve blockbuster status. - Demand driven by compelling efficacy data from Epidiolex in combination with clobazam, increased penetration in adults and long-term care settings, and beyond seizure benefits from the BECOME caregiver survey in in Dravet syndrome (DS) and Lennox-Gastaut syndrome (LGS).
- Additional opportunity for growth coming from continued data generation, including potential beyond seizure benefits from the EpiCom study in tuberous sclerosis complex (TSC) and multiple publications at AES 2023.
- A pivotal, Phase 3 trial of Epidyolex in DS, LGS and TSC in
Japan is enrolling patients and top-line data from the trial are expected in 2H24.
Rylaze/Enrylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn):
- Rylaze net product sales increased 43% to
$104.9 million compared to the same period in 2022. - Continued strong Rylaze demand driven by multiple factors, including increased use in adolescents and young adults with acute lymphoblastic leukemia (ALL) and additional switching of patients from E. coli-based asparaginase to Rylaze due to non-hypersensitivity treatment-related issues.
- The
European Commission granted marketing authorization for Enrylaze® (JZP458; a recombinant Erwinia asparaginase or crisantaspase), marketed as Rylaze in theU.S. andCanada , for use as a component of a multi-agent chemotherapeutic regimen for the treatment of ALL and lymphoblastic lymphoma in adult and pediatric patients (1 month and older) who developed hypersensitivity or silent inactivation to E. coli-derived asparaginase. The Company is planning to begin a rolling launch later this year.
Zepzelca® (lurbinectedin):
- Zepzelca net product sales increased 11% to
$78.0 million in 3Q23 compared to the same period in 2022. - The Company expects top-line data from the Phase 3 trial evaluating first-line (1L) use of Zepzelca to readout at the end of 2024 or early 2025. The trial is assessing the combination with Tecentriq® (atezolizumab), compared to Tecentriq alone, as maintenance therapy in patients with extensive-stage small cell lung cancer after induction chemotherapy, in partnership with
F. Hoffmann-La Roche Ltd (Roche).
Key Pipeline Highlights
Zanidatamab:
- Zanidatamab is a novel bispecific antibody that simultaneously binds two non-overlapping epitopes of HER2, resulting in multiple mechanisms of action, potent immune activation and encouraging antitumor activity in patients.
- The Company plans to initiate the zanidatamab rolling BLA submission this year for accelerated approval in 2L BTC and expects to complete the rolling submission 1H24.
- The Company has alignment with FDA on a confirmatory trial in 1L metastatic BTC, where there remains unmet patient need.
- The pivotal HERIZON-GEA-01 trial, evaluating zanidatamab in 1L gastroesophageal adenocarcinoma, is ongoing and top-line data are expected in 2024.
- The Company, along with partners, presented zanidatamab data at
ESMO Congress 2023. Results from a Phase 1b/2 study of zanidatamab plus chemotherapy in combination with tislelizumab for the 1L treatment of HER2-positive gastric/gastroesophageal junction adenocarcinoma demonstrated antitumor activity with a confirmed ORR of 75.8%, median duration of response of 22.8 months and median PFS of 16.7 months and safety was consistent with previous findings.
JZP150:
- JZP150, a selective fatty acid amide hydrolase, or FAAH, inhibitor, is in clinical development for the potential treatment of post-traumatic stress disorder (PTSD).
- Patient enrollment is now complete in the Phase 2 PTSD trial and top-line data are expected in
January 2024 . - The Company received Fast Track Designation for JZP150 development in PTSD from FDA, underscoring the significant unmet medical needs of patients.
Suvecaltamide (JZP385):
- Suvecaltamide, a highly selective and state dependent modulator of T-type calcium channels, is in clinical development for the treatment of essential tremor (ET) and Parkinson's disease tremor.
- Patient enrollment is ongoing in the Phase 2b ET trial and top-line data readout is anticipated in 1H24. A Phase 2 trial in patients with Parkinson's disease tremor is ongoing.
JZP441:
- JZP441 is a potent, highly selective oral orexin-2 receptor agonist designed to activate orexin signaling with the potential to be applicable in the treatment of narcolepsy, IH and other sleep disorders.
- A Phase 1 development program to evaluate safety, tolerability, pharmacokinetics and pharmacodynamics of JZP441 in sleep-deprived healthy volunteers is ongoing.
- The Company expects initial proof of concept in healthy volunteers in 2023.
JZP815:
- JZP815 potently inhibits both monomer- and dimer-driven RAF signaling and prevents paradoxical pathway activation induced by BRAF selective inhibition.
- A Phase 1 trial evaluating JZP815 in patients with advanced or metastatic solid tumors with MAPK pathway alterations is ongoing and a trial in progress poster of the Phase 1 study was presented at
ESMO Congress 2023.
JZP898:
- JZP898 is an engineered IFNα cytokine pro-drug that is activated specifically within the tumor microenvironment where it can stimulate IFNα receptors on cancer-fighting immune effector cells.
- JZP898 received Investigational New Drug application clearance and the Company expects to initiate a Phase 1 clinical trial by the end of the year.
Continued Repurchases under Previously Announced
The Company continued repurchases of its ordinary shares on the open market in the third quarter of 2023 as part of its previously authorized and announced share repurchase program. As of
Financial Highlights
Three Months Ended |
Nine Months Ended |
||||||
(In thousands, except per share amounts) |
2023 |
2022 |
2023 |
2022 |
|||
Total revenues |
$ 972,140 |
$ 940,652 |
$ 2,822,269 |
$ 2,687,251 |
|||
GAAP net income (loss) |
$ 146,820 |
$ (19,648) |
$ 320,678 |
$ 16,664 |
|||
Non-GAAP adjusted net income |
$ 340,148 |
$ 370,438 |
$ 950,538 |
$ 937,837 |
|||
GAAP earnings (loss) per share |
$ 2.14 |
$ (0.31) |
$ 4.67 |
$ 0.26 |
|||
Non-GAAP adjusted EPS |
$ 4.84 |
$ 5.17 |
$ 13.29 |
$ 13.21 |
GAAP net income (loss) for 3Q23 was
Non-GAAP adjusted net income for 3Q23 was
Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
Total Revenues
Three Months Ended |
Nine Months Ended |
||||||
(In thousands) |
2023 |
2022 |
2023 |
2022 |
|||
Xywav |
$ 331,633 |
$ 255,936 |
$ 935,958 |
$ 677,041 |
|||
Xyrem |
125,110 |
256,039 |
463,009 |
772,957 |
|||
Epidiolex/Epidyolex |
213,711 |
196,218 |
604,846 |
529,400 |
|||
Sativex |
4,627 |
3,220 |
14,531 |
12,104 |
|||
Sunosi1 |
— |
— |
— |
28,844 |
|||
Total Neuroscience |
675,081 |
711,413 |
2,018,344 |
2,020,346 |
|||
Rylaze |
104,859 |
73,513 |
292,479 |
200,687 |
|||
Zepzelca |
77,994 |
70,320 |
215,523 |
197,943 |
|||
Defitelio/defibrotide |
47,730 |
49,452 |
132,917 |
153,637 |
|||
Vyxeos |
29,827 |
30,067 |
100,583 |
97,714 |
|||
Total Oncology |
260,410 |
223,352 |
741,502 |
649,981 |
|||
Other |
2,907 |
1,001 |
9,758 |
3,576 |
|||
Product sales, net |
938,398 |
935,766 |
2,769,604 |
2,673,903 |
|||
High-sodium oxybate AG royalty revenue |
28,921 |
— |
36,531 |
— |
|||
Other royalty and contract revenues |
4,821 |
4,886 |
16,134 |
13,348 |
|||
Total revenues |
$ 972,140 |
$ 940,652 |
$ 2,822,269 |
$ 2,687,251 |
(1) Divestiture of Sunosi |
Total revenues increased 3% in 3Q23 compared to the same period in 2022.
- Total neuroscience revenue, including high-sodium oxybate AG royalty revenue, was
$704.0 million in 3Q23 compared to$711.4 million in 3Q22. Neuroscience net product sales in 3Q23 decreased 5% to$675.1 million compared to the same period in 2022 driven by decreased Xyrem revenues, reflecting the continued strong adoption of Xywav by patients with narcolepsy and availability of high-sodium oxybate AGs, offset by increased Xywav and Epidiolex/Epidyolex net product sales. High-sodium oxybate AG royalty revenue relates primarily to royalty revenue received from Hikma Pharmaceuticals plc on net sales of a high-sodium oxybate AG product. - Oncology net product sales in 3Q23 increased 17% to
$260.4 million compared to the same period in 2022 primarily driven by the continued growth in Rylaze product sales, which increased 43% to$104.9 million .
Operating Expenses and Effective Tax Rate
Three Months Ended |
Nine Months Ended |
||||||
(In thousands, except percentages) |
2023 |
2022 |
2023 |
2022 |
|||
GAAP: |
|||||||
Cost of product sales |
$ 102,153 |
$ 133,661 |
$ 328,334 |
$ 373,153 |
|||
Gross margin |
89.1 % |
85.7 % |
88.1 % |
86.0 % |
|||
Selling, general and administrative |
$ 308,310 |
$ 358,478 |
$ 947,071 |
$ 1,033,764 |
|||
% of total revenues |
31.7 % |
38.1 % |
33.6 % |
38.5 % |
|||
Research and development |
$ 234,402 |
$ 148,870 |
$ 633,050 |
$ 417,898 |
|||
% of total revenues |
24.1 % |
15.8 % |
22.4 % |
15.6 % |
|||
Acquired in-process research and development |
$ — |
$ — |
$ 1,000 |
$ 69,148 |
|||
Impairment charge |
$ — |
$ 133,648 |
$ — |
$ 133,648 |
|||
Income tax benefit |
$ (47,176) |
$ (43,027) |
$ (86,823) |
$ (58,603) |
|||
Effective tax rate 1 |
(47.4) % |
71.6 % |
(36.7) % |
178.7 % |
(1) |
The GAAP effective tax rate decreased for the three and nine months ended |
Three Months Ended |
Nine Months Ended |
||||||
(In thousands, except percentages) |
2023 |
2022 |
2023 |
2022 |
|||
Non-GAAP adjusted: |
|||||||
Cost of product sales |
$ 67,119 |
$ 57,103 |
$ 197,841 |
$ 158,554 |
|||
Gross margin |
92.8 % |
93.9 % |
92.9 % |
94.1 % |
|||
Selling, general and administrative |
$ 273,042 |
$ 274,747 |
$ 810,428 |
$ 814,941 |
|||
% of total revenues |
28.1 % |
29.2 % |
28.7 % |
30.3 % |
|||
Research and development |
$ 217,767 |
$ 120,802 |
$ 583,704 |
$ 360,980 |
|||
% of total revenues |
22.4 % |
12.8 % |
20.7 % |
13.4 % |
|||
Acquired in-process research and development |
$ — |
$ — |
$ 1,000 |
$ 69,148 |
|||
Income tax expense |
$ 7,378 |
$ 44,386 |
$ 72,785 |
$ 137,996 |
|||
Effective tax rate |
2.1 % |
10.6 % |
7.1 % |
12.7 % |
Changes in operating expenses in 3Q23 over the prior year period are primarily due to the following:
- Cost of product sales decreased in 3Q23 compared to the same period in 2022, on a GAAP basis, primarily due to lower acquisition accounting inventory fair value step-up expense, partially offset by changes in product mix. Cost of product sales increased in 3Q23 compared to the same period in 2022, on a non-GAAP adjusted basis, primarily due to changes in product mix.
- Selling, general and administrative (SG&A) expenses decreased in 3Q23 compared to the same period in 2022, on a GAAP basis, primarily due to restructuring and program termination costs incurred in 3Q22. SG&A expenses, on a GAAP and on a non-GAAP adjusted basis, included decreased compensation-related expenses and increased investment in our priority programs.
- Research and development (R&D) expenses increased in 3Q23 compared to the same period in 2022, on a GAAP and on a non-GAAP adjusted basis, primarily due to the inclusion of costs related to zanidatamab, as well as our other key pipeline programs.
- The impairment charge in 3Q22, on a GAAP basis, related to an acquired IPR&D asset impairment relating to the discontinuation of our nabiximols program.
Cash Flow and Balance Sheet
As of
2023 Financial Guidance
The Company is updating its full year 2023 financial guidance as follows:
(In millions) |
|
|
|
Revenues |
|
|
|
–Neuroscience (includes royalties from high-sodium oxybate AG) |
|
|
|
–Oncology |
|
|
GAAP:
(In millions, except per share amounts and percentages) |
|
|
|
Gross margin % |
89 % |
89 % |
|
SG&A expenses |
|
|
|
SG&A expenses as % of total revenues |
32% - 35% |
31% - 35% |
|
R&D expenses |
|
|
|
R&D expenses as % of total revenues |
22% - 24% |
19% - 21% |
|
Effective tax rate |
(59)% - (33)% |
(35)% - (15)% |
|
Net income |
|
|
|
Net income per diluted share5 |
|
|
|
Weighted-average ordinary shares used in per share calculations5 |
72 |
72 |
Non-GAAP:
(In millions, except per share amounts and percentages) |
|
|
|
Gross margin % |
93%1,6 |
93 % |
|
SG&A expenses |
|
|
|
SG&A expenses as % of total revenues |
27% - 29% |
27% - 30% |
|
R&D expenses |
|
|
|
R&D expenses as % of total revenues |
20% - 22% |
17% - 19% |
|
Effective tax rate |
4% - 6%4,6 |
8% - 10% |
|
Net income |
|
|
|
Net income per diluted share5 |
|
|
|
Weighted-average ordinary shares used in per share calculations5 |
72 |
72 |
1. |
Excludes |
|||
2. |
Excludes |
|||
3. |
Excludes |
|||
4. |
Excludes 63%-39% from the GAAP effective tax rate of (59)%-(33)% relating to the income tax effect of adjustments between GAAP net income and non-GAAP adjusted net income, resulting in a non-GAAP adjusted effective tax rate of 4%-6%. |
|||
5. |
Diluted EPS calculations for 2023 include an estimated 8 million shares related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to net income of |
|||
6. |
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 2023 Net Income Guidance" at the end of this press release. |
Conference Call Details
Audio webcast/conference call:
Ireland Dial-In Number: +353 1800 943 926
Additional global dial-in numbers are available here.
Passcode: 6907242
Interested parties may access the live audio webcast via the Investors section of the
A replay of the webcast will be available via the Investors section of the
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 and 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, 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.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to: the Company's growth prospects and future financial and operating results, including the Company's 2023 financial guidance and the Company's expectations related thereto and anticipated catalysts; the Company's expectations for total revenue and Oncology revenue growth in 2023 and anticipated product sales; expectations of continued growth in net sales of Xywav, Epidiolex/Epidyolex and the oncology portfolio; the blockbuster potential of Epidiolex/Epidyolex and its significant additional growth opportunities; the Company's expectations to executing multiple Epidyolex ex-
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 the Company's oxybate products, Zepzelca, Rylaze and Epidiolex/Epidyolex and other key marketed products; the introduction of new products into the U.S. market that compete with, or otherwise disrupt the market for the Company's oxybate products and product candidates; effectively launching and commercializing the Company's other products and product candidates; the successful completion of development and regulatory activities with respect to the Company's product candidates, obtaining and maintaining adequate coverage and reimbursement for the Company's products; the time-consuming and uncertain regulatory approval process, including the risk that the Company's current and/or planned regulatory submissions may not be submitted, accepted or approved by applicable regulatory authorities in a timely manner or at all; the costly and time-consuming pharmaceutical product development and the uncertainty of clinical success, including risks related to failure or delays in successfully initiating or completing clinical trials and assessing patients; the Company's failure to realize the expected benefits of its acquisition of
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (In thousands, except per share amounts) (Unaudited) |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Revenues: |
|||||||
Product sales, net |
$ 938,398 |
$ 935,766 |
$ 2,769,604 |
$ 2,673,903 |
|||
Royalties and contract revenues |
33,742 |
4,886 |
52,665 |
13,348 |
|||
Total revenues |
972,140 |
940,652 |
2,822,269 |
2,687,251 |
|||
Operating expenses: |
|||||||
Cost of product sales (excluding amortization of |
102,153 |
133,661 |
328,334 |
373,153 |
|||
Selling, general and administrative |
308,310 |
358,478 |
947,071 |
1,033,764 |
|||
Research and development |
234,402 |
148,870 |
633,050 |
417,898 |
|||
Intangible asset amortization |
154,883 |
141,232 |
456,731 |
461,782 |
|||
Acquired in-process research and development |
— |
— |
1,000 |
69,148 |
|||
Impairment charge |
— |
133,648 |
— |
133,648 |
|||
Total operating expenses |
799,748 |
915,889 |
2,366,186 |
2,489,393 |
|||
Income from operations |
172,392 |
24,763 |
456,083 |
197,858 |
|||
Interest expense, net |
(71,497) |
(80,244) |
(219,114) |
(214,117) |
|||
Foreign exchange loss |
(1,377) |
(4,649) |
(566) |
(16,532) |
|||
Income (loss) before income tax benefit and equity in loss |
99,518 |
(60,130) |
236,403 |
(32,791) |
|||
Income tax benefit |
(47,176) |
(43,027) |
(86,823) |
(58,603) |
|||
Equity in loss (gain) of investees |
(126) |
2,545 |
2,548 |
9,148 |
|||
Net income (loss) |
$ 146,820 |
$ (19,648) |
$ 320,678 |
$ 16,664 |
|||
Net income (loss) per ordinary share: |
|||||||
Basic |
$ 2.33 |
$ (0.31) |
$ 5.05 |
$ 0.27 |
|||
Diluted |
$ 2.14 |
$ (0.31) |
$ 4.67 |
$ 0.26 |
|||
Weighted-average ordinary shares used in per share |
63,114 |
62,785 |
63,532 |
62,365 |
|||
Weighted-average ordinary shares used in per share |
71,293 |
62,785 |
72,866 |
63,388 |
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
|||
|
|
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 1,335,690 |
$ 881,482 |
|
Investments |
250,000 |
— |
|
Accounts receivable, net of allowances |
627,841 |
651,493 |
|
Inventories |
611,827 |
714,061 |
|
Prepaid expenses |
109,990 |
91,912 |
|
Other current assets |
310,404 |
267,192 |
|
Total current assets |
3,245,752 |
2,606,140 |
|
Property, plant and equipment, net |
222,476 |
228,050 |
|
Operating lease assets |
65,038 |
73,326 |
|
Intangible assets, net |
5,417,860 |
5,794,437 |
|
|
1,705,320 |
1,692,662 |
|
Deferred tax assets, net |
464,367 |
376,247 |
|
Deferred financing costs |
7,172 |
9,254 |
|
Other non-current assets |
76,080 |
55,139 |
|
Total assets |
$ 11,204,065 |
$ 10,835,255 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 109,850 |
$ 90,758 |
|
Accrued liabilities |
769,942 |
803,255 |
|
Current portion of long-term debt |
604,507 |
31,000 |
|
Income taxes payable |
89,026 |
7,717 |
|
Deferred revenue |
4 |
463 |
|
Total current liabilities |
1,573,329 |
933,193 |
|
Long-term debt, less current portion |
5,110,757 |
5,693,341 |
|
Operating lease liabilities, less current portion |
61,892 |
71,838 |
|
Deferred tax liabilities, net |
841,234 |
944,337 |
|
Other non-current liabilities |
127,480 |
106,812 |
|
Total shareholders' equity |
3,489,373 |
3,085,734 |
|
Total liabilities and shareholders' equity |
$ 11,204,065 |
$ 10,835,255 |
SUMMARY OF CASH FLOWS (In thousands) (Unaudited) |
|||
Nine Months Ended |
|||
2023 |
2022 |
||
Net cash provided by operating activities |
$ 924,668 |
$ 930,006 |
|
Net cash used in investing activities |
(264,860) |
(121,852) |
|
Net cash used in financing activities |
(204,948) |
(549,087) |
|
Effect of exchange rates on cash and cash equivalents |
(652) |
(11,157) |
|
Net increase in cash and cash equivalents |
$ 454,208 |
$ 247,910 |
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2023 |
2022 |
2023 |
2022 |
||||||||||||
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
||||||||
GAAP reported1 |
$ 146,820 |
$ 2.14 |
$ (19,648) |
$ (0.31) |
$ 320,678 |
$ 4.67 |
$ 16,664 |
$ 0.26 |
|||||||
Intangible asset amortization |
154,883 |
2.17 |
141,232 |
1.94 |
456,731 |
6.27 |
461,782 |
6.38 |
|||||||
Share-based compensation |
56,115 |
0.79 |
54,948 |
0.75 |
173,900 |
2.39 |
156,427 |
2.16 |
|||||||
Acquisition accounting |
30,822 |
0.43 |
70,964 |
0.97 |
119,094 |
1.63 |
203,189 |
2.81 |
|||||||
Restructuring and other |
— |
— |
57,625 |
0.79 |
23,488 |
0.32 |
57,625 |
0.80 |
|||||||
Non-cash interest expense3 |
6,062 |
0.09 |
14,262 |
0.20 |
16,255 |
0.23 |
32,002 |
0.44 |
|||||||
Impairment charge4 |
— |
— |
133,648 |
1.83 |
— |
— |
133,648 |
1.85 |
|||||||
(Income) costs related to |
— |
— |
(671) |
(0.01) |
— |
— |
49,539 |
0.68 |
|||||||
Transaction and integration |
— |
— |
5,491 |
0.08 |
— |
— |
23,560 |
0.33 |
|||||||
Income tax effect of above |
(54,554) |
(0.77) |
(87,413) |
(1.20) |
(159,608) |
(2.19) |
(196,599) |
(2.71) |
|||||||
Effect of assumed conversion |
— |
(0.01) |
— |
0.13 |
— |
(0.03) |
— |
0.21 |
|||||||
Non-GAAP adjusted1 |
$ 340,148 |
$ 4.84 |
$ 370,438 |
$ 5.17 |
$ 950,538 |
$ 13.29 |
$ 937,837 |
$ 13.21 |
|||||||
Weighted-average ordinary |
71,293 |
62,785 |
72,866 |
63,388 |
|||||||||||
Dilutive effect of |
— |
9,044 |
— |
9,044 |
|||||||||||
Dilutive effect of employee |
— |
1,031 |
— |
— |
|||||||||||
Weighted-average ordinary |
71,293 |
72,860 |
72,866 |
72,432 |
Explanation of Adjustments and Certain Line Items: |
||||||
1. |
Diluted EPS was calculated using the "if-converted" method in relation to the 1.50% exchangeable senior notes due 2024, or 2024 Notes and the 2.00% exchangeable senior notes due 2026, or 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes. In |
|||||
2. |
Includes restructuring and costs related to program terminations. |
|||||
3. |
Non-cash interest expense associated with debt issuance costs. |
|||||
4. |
Impairment charge related to the IPR&D asset impairment following the discontinuation of our nabiximols program. |
|||||
5. |
Loss on disposal of Sunosi to Axsome Therapeutics Inc. and associated costs. |
|||||
6. |
Transaction and integration expenses related to the acquisition of GW Pharmaceuticals plc. |
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE THREE MONTHS ENDED (In thousands, except percentages) (Unaudited) |
|||||||||||||||
Three months ended |
|||||||||||||||
Cost of |
Gross |
Selling, |
Research |
Intangible |
Interest |
Income tax |
Effective |
||||||||
GAAP Reported |
$ 102,153 |
89.1 % |
$ 308,310 |
$ 234,402 |
$ 154,883 |
$ 71,497 |
|
(47.4) % |
|||||||
Non-GAAP Adjustments: |
|||||||||||||||
Intangible asset amortization |
— |
— |
— |
— |
(154,883) |
— |
— |
— |
|||||||
Share-based compensation expense |
(4,212) |
0.5 |
(35,268) |
(16,635) |
— |
— |
— |
— |
|||||||
Acquisition accounting inventory |
(30,822) |
3.2 |
— |
— |
— |
— |
— |
— |
|||||||
Non-cash interest expense |
— |
— |
— |
— |
— |
(6,062) |
— |
— |
|||||||
Income tax effect of above |
— |
— |
— |
— |
— |
— |
54,554 |
49.5 |
|||||||
Total of non-GAAP adjustments |
(35,034) |
3.7 |
(35,268) |
(16,635) |
(154,883) |
(6,062) |
54,554 |
49.5 |
|||||||
Non-GAAP Adjusted |
$ 67,119 |
92.8 % |
$ 273,042 |
$ 217,767 |
$ — |
$ 65,435 |
$ 7,378 |
2.1 % |
Three months ended |
|||||||||||||||||
Cost of |
Gross |
Selling, |
Research |
Intangible |
Impairment |
Interest |
Income tax |
Effective |
|||||||||
GAAP Reported |
|
85.7 % |
$ 358,478 |
$ 148,870 |
$ 141,232 |
|
|
|
71.6 % |
||||||||
Non-GAAP Adjustments: |
|||||||||||||||||
Intangible asset |
— |
— |
— |
— |
(141,232) |
— |
— |
— |
— |
||||||||
Share-based |
(3,160) |
0.3 |
(35,890) |
(15,898) |
— |
— |
— |
— |
— |
||||||||
Impairment charge |
— |
— |
— |
— |
— |
(133,648) |
— |
— |
— |
||||||||
Income related to the |
— |
— |
671 |
— |
— |
— |
— |
— |
— |
||||||||
Restructuring and other |
(2,359) |
0.3 |
(43,375) |
(11,891) |
— |
— |
— |
— |
— |
||||||||
Transaction and |
(75) |
— |
(5,137) |
(279) |
— |
— |
— |
— |
— |
||||||||
Non-cash interest |
— |
— |
— |
— |
— |
— |
(14,262) |
— |
— |
||||||||
Acquisition accounting |
(70,964) |
7.6 |
— |
— |
— |
— |
— |
— |
|||||||||
Income tax effect of |
— |
— |
— |
— |
— |
— |
— |
87,413 |
(61.0) |
||||||||
Total of non-GAAP |
(76,558) |
8.2 |
(83,731) |
(28,068) |
(141,232) |
(133,648) |
(14,262) |
87,413 |
(61.0) |
||||||||
Non-GAAP Adjusted |
$ 57,103 |
93.9 % |
$ 274,747 |
$ 120,802 |
$ — |
$ — |
|
$ 44,386 |
10.6 % |
(1) |
The GAAP effective tax rate decreased in the three months ended |
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE NINE MONTHS ENDED (In thousands, except percentages) (Unaudited) |
|||||||||||||||||
Nine months ended |
|||||||||||||||||
Cost of |
Gross |
Selling, |
Research |
Intangible |
Acquired |
Interest |
Income tax |
Effective |
|||||||||
GAAP Reported |
|
88.1 % |
$ 947,071 |
$ 633,050 |
$ 456,731 |
$ 1,000 |
|
$ (86,823) |
(36.7) % |
||||||||
Non-GAAP Adjustments: |
|||||||||||||||||
Intangible asset |
— |
— |
— |
— |
(456,731) |
— |
— |
— |
— |
||||||||
Share-based compensation |
(11,399) |
0.4 |
(113,155) |
(49,346) |
— |
— |
— |
— |
— |
||||||||
Restructuring and other |
— |
— |
(23,488) |
— |
— |
— |
— |
— |
— |
||||||||
Non-cash interest |
— |
— |
— |
— |
— |
— |
(16,255) |
— |
— |
||||||||
Acquisition accounting |
(119,094) |
4.4 |
— |
— |
— |
— |
— |
— |
— |
||||||||
Income tax effect of above |
— |
— |
— |
— |
— |
— |
— |
159,608 |
43.8 |
||||||||
Total of non-GAAP |
(130,493) |
4.8 |
(136,643) |
(49,346) |
(456,731) |
— |
(16,255) |
159,608 |
43.8 |
||||||||
Non-GAAP Adjusted |
|
92.9 % |
$ 810,428 |
$ 583,704 |
$ — |
$ 1,000 |
|
$ 72,785 |
7.1 % |
Nine months ended |
|||||||||||||||||||
Cost of |
Gross |
Selling, |
Research |
Intangible |
Acquired |
Impairment |
Interest |
Income tax |
Effective |
||||||||||
GAAP Reported |
$ 373,153 |
86.0 % |
$ 1,033,764 |
$ 417,898 |
$ 461,782 |
$ 69,148 |
|
$ 214,117 |
$ (58,603) |
178.7 % |
|||||||||
Non-GAAP |
|||||||||||||||||||
Intangible asset |
— |
— |
— |
— |
(461,782) |
— |
— |
— |
— |
— |
|||||||||
Share-based |
(8,581) |
0.3 |
(104,851) |
(42,995) |
— |
— |
— |
— |
— |
— |
|||||||||
Impairment |
— |
— |
— |
— |
— |
— |
(133,648) |
— |
— |
— |
|||||||||
Costs related to |
— |
— |
(49,539) |
— |
— |
— |
— |
— |
— |
— |
|||||||||
Restructuring |
(2,359) |
0.1 |
(43,375) |
(11,891) |
— |
— |
— |
— |
— |
— |
|||||||||
Transaction and |
(470) |
— |
(21,058) |
(2,032) |
— |
— |
— |
— |
— |
— |
|||||||||
Non-cash |
— |
— |
— |
— |
— |
— |
— |
(32,002) |
— |
— |
|||||||||
Acquisition |
(203,189) |
7.7 |
— |
— |
— |
— |
— |
— |
— |
||||||||||
Income tax effect |
— |
— |
— |
— |
— |
— |
— |
— |
196,599 |
(166.0) |
|||||||||
Total of non- |
(214,599) |
8.1 |
(218,823) |
(56,918) |
(461,782) |
— |
(133,648) |
(32,002) |
196,599 |
(166.0) |
|||||||||
Non-GAAP |
$ 158,554 |
94.1 % |
$ 814,941 |
$ 360,980 |
$ — |
$ 69,148 |
$ — |
$ 182,115 |
$ 137,996 |
12.7 % |
(1) |
The GAAP effective tax rate decreased in the nine months ended |
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2023 NET INCOME AND DILUTED EPS GUIDANCE (In millions, except per share amounts) (Unaudited) |
|||
Net Income |
Diluted EPS |
||
GAAP guidance |
|
|
|
Intangible asset amortization |
580 - 615 |
8.00 - 8.50 |
|
Acquisition accounting inventory fair value step-up |
135 - 155 |
1.85 - 2.15 |
|
Share-based compensation expense |
230 - 250 |
3.20 - 3.45 |
|
Restructuring and other costs |
23 |
0.30 |
|
Non-cash interest expense |
20 - 30 |
0.30 - 0.40 |
|
Income tax effect of above adjustments |
(215) - (230) |
(2.95) - (3.20) |
|
Effect of assumed conversion of Exchangeable Senior Notes |
- |
(0.05) |
|
Non-GAAP guidance |
|
|
|
Weighted-average ordinary shares used in per share calculations - GAAP and non- |
72 |
Contacts:
Investors:
Vice President, Head, Investor Relations
InvestorInfo@jazzpharma.com
Media:
Head of
CorporateAffairsMediaInfo@jazzpharma.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/jazz-pharmaceuticals-announces-third-quarter-2023-financial-results-and-updates-financial-guidance-301982090.html
SOURCE