Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

July 28, 2011

Date of Report (Date of earliest event reported)

 

 

JAZZ PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   001-33500   05-0563787

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

3180 Porter Drive, Palo Alto, California 94304

(Address of principal executive offices, including zip code)

(650) 496-3777

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On July 28, 2011, Jazz Pharmaceuticals, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2011. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information in this Item 2.02 and in the press release furnished as Exhibit 99.1 to this current report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the press release furnished as Exhibit 99.1 to this current report shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by Jazz Pharmaceuticals, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

Number

  

Description

99.1    Press Release dated July 28, 2011


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

JAZZ PHARMACEUTICALS, INC.
By:  

 /s/ Bruce C. Cozadd

    Bruce C. Cozadd
    Chairman and Chief Executive Officer

Date: July 28, 2011


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Press Release dated July 28, 2011
Press Release

Exhibit 99.1

LOGO

Jazz Pharmaceuticals Announces Second Quarter 2011 Financial Results

— Net product sales grow to $63.5 million —

— Adjusted EPS of $0.82, GAAP EPS of $0.71 —

— 2011 sales and earnings guidance increased —

PALO ALTO, Calif., July 28, 2011 — Jazz Pharmaceuticals, Inc. (Nasdaq: JAZZ) today announced financial results for the second quarter of 2011.

Total revenues for the quarter ended June 30, 2011 were $64.6 million, compared to $40.5 million for the second quarter of 2010. Total revenues included net product sales, royalties and contract revenues.

GAAP net income for the second quarter of 2011 was $33.2 million, or $0.71 per diluted share, compared to a GAAP net loss of $6.4 million, or $0.18 per diluted share, for the second quarter of 2010. The company’s GAAP net loss in the second quarter of 2010 included a loss on extinguishment of debt of $12.3 million.

Adjusted net income for the second quarter of 2011 was $38.4 million, or $0.82 per diluted share, compared to $10.5 million, or $0.28 per diluted share, for the second quarter of 2010. A reconciliation of GAAP net income (loss) to adjusted net income and the related per diluted share amounts is included with this press release.

Net sales of Xyrem® (sodium oxybate) oral solution increased 67 percent to $56.2 million for the second quarter of 2011, compared to net sales of $33.7 million for the second quarter of 2010. Net sales of once-daily Luvox CR® (fluvoxamine maleate) were $7.3 million for the second quarter of 2011, compared to $5.8 million for the prior year period, an increase of 26 percent.

“Our strong quarterly performance demonstrates our ongoing commitment to growing Xyrem as the core of our company’s strategy,” said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. “We were also pleased to prepay the remaining $33 million of our long-term debt on July 1, further strengthening our balance sheet as our cash position continues to grow.”

Selling, general and administrative expenses and research and development expenses combined for the second quarter of 2011 were $25.5 million, compared to $25.1 million for the second quarter of 2010, reflecting higher headcount related expenses, including stock-based compensation, increased legal expenses, and lower product development spending.

Balance Sheet Update

As of June 30, 2011, cash and cash equivalents were $102.4 million. On July 1, 2011, the company paid in full the $33.3 million principal amount of its term loan and a prepayment penalty of $0.3 million.


LOGO

 

2011 Financial Guidance

Jazz Pharmaceuticals is providing updated full year 2011 financial guidance as follows:

 

  •     Total product sales    $ 247 - 260 million
              •        Xyrem    $ 215 - 225 million
              •        Luvox CR    $ 32 - 35 million
  •     SG&A and R&D combined expenses    $ 105 - 110 million
  •     GAAP net income per diluted share    $ 2.68 - 2.79
  •     Adjusted net income per diluted share*    $ 3.15 - 3.25

 

  * A reconciliation of GAAP net income (loss) to adjusted net income and the related per diluted share amounts is included with this press release.

Conference Call Details

Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 1:30 p.m. PT/4:30 p.m. ET to provide a business update and discuss 2011 second quarter results and updated 2011 financial guidance. 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 1-866-730-5762 in the U.S., or 1-857-350-1586 outside the U.S., and entering passcode 12078558.

An archived version of the webcast will be available for at least one week on the investors section of the Jazz Pharmaceuticals’ website at www.JazzPharmaceuticals.com.

About Jazz Pharmaceuticals, Inc.

Jazz Pharmaceuticals is a specialty pharmaceutical company focused on identifying, developing and commercializing innovative products to meet unmet medical needs in neurology and psychiatry. For further information see www.JazzPharmaceuticals.com.

Non-GAAP Financial Measures

To supplement our financial results and financial guidance presented on a GAAP basis, we use the non-GAAP measures adjusted net income and adjusted net income per diluted share. We believe these non-GAAP financial measures are helpful in understanding our past financial performance and our 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 our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. In addition, we believe that the use of these non-GAAP measures enhances the ability of investors to compare our results from period to period. Investors should note that 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 our competitors and other companies. Adjusted net income and adjusted net income per diluted share exclude from the comparable GAAP measures: revenue related to upfront and milestone payments, amortization of intangible assets, stock-based compensation, non-cash interest expense associated with a debt discount and debt issuance costs and a loss on extinguishment of debt.

 

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“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’ growth potential and future financial performance, including 2011 financial guidance. These forward-looking statements are based on the company’s current expectations and inherently involve significant risks and uncertainties. Jazz Pharmaceuticals’ 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 related to: Jazz Pharmaceuticals’ dependence on sales of Xyrem and its ability to increase sales of its Xyrem and Luvox CR products; competition, including potential generic competition; Jazz Pharmaceuticals’ dependence on single source suppliers and manufacturers; the ability of Jazz Pharmaceuticals to protect its intellectual property and defend its patents; regulatory obligations and oversight; Jazz Pharmaceuticals’ cash flow; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in Jazz Pharmaceuticals’ Securities and Exchange Commission filings and reports, including in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 filed with the Securities and Exchange Commission on May 9, 2011. 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.

# # #

Contact

Ami Knoefler

Executive Director

Investor Relations & Corporate Communications

Jazz Pharmaceuticals, Inc.

ami.knoefler@jazzpharma.com

650-496-2947

 

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JAZZ PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2011     2010     2011     2010  

Revenues:

        

Product sales, net

   $ 63,464      $ 39,528      $ 113,367      $ 73,811   

Royalties

     819        674        1,512        1,279   

Contract revenues

     284        284        569        569   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     64,567        40,486        115,448        75,659   

Operating expenses:

        

Cost of product sales

     3,370        2,802        6,179        5,684   

Selling, general and administrative

     22,094        17,096        42,005        33,886   

Research and development

     3,382        7,962        7,077        14,177   

Intangible asset amortization

     1,862        2,044        3,724        4,101   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     30,708        29,904        58,985        57,848   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     33,859        10,582        56,463        17,811   

Interest income and other, net

     2        4        2        6   

Interest expense

     (659     (4,687     (1,436     (10,454

Loss on extinguishment of debt

     —          (12,287     —          (12,287
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 33,202      $ (6,388   $ 55,029      $ (4,924
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

        

Basic

   $ 0.81      $ (0.18   $ 1.35      $ (0.15
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.71      $ (0.18   $ 1.19      $ (0.15
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares used in computing net income (loss) per share:

        

Basic

     41,209        35,423        40,788        33,428   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     46,601        35,423        46,238        33,428   
  

 

 

   

 

 

   

 

 

   

 

 

 

JAZZ PHARMACEUTICALS, INC.

SUMMARY OF PRODUCT SALES, NET

(In thousands)

(Unaudited)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2011      2010      2011      2010  

Xyrem

   $ 56,178       $ 33,723       $ 98,956       $ 62,468   

Luvox CR

     7,286         5,805         14,411         11,343   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 63,464       $ 39,528       $ 113,367       $ 73,811   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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JAZZ PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

     June 30,
2011
     December 31,
2010
 
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 102,396       $ 44,794   

Restricted cash

     —           400   

Accounts receivable, net of allowances

     24,999         22,081   

Inventories

     4,736         5,046   

Prepaid expenses

     3,575         1,858   

Other current assets

     382         279   
  

 

 

    

 

 

 

Total current assets

     136,088         74,458   

Property and equipment, net

     647         690   

Intangible assets, net

     18,309         22,033   

Goodwill

     38,213         38,213   

Other long-term assets

     152         335   
  

 

 

    

 

 

 

Total assets

   $ 193,409       $ 135,729   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY      

Current liabilities:

     

Revolving credit facility

   $ 4,000       $ 7,350   

Accounts payable

     4,665         3,049   

Accrued liabilities

     26,713         23,572   

Current portion of long-term debt

     32,693         16,064   

Purchased product rights liability

     4,750         4,500   

Liability under government settlement

     7,130         4,128   

Deferred revenue

     1,366         1,273   
  

 

 

    

 

 

 

Total current liabilities

     81,317         59,936   

Deferred rent

     12         82   

Deferred revenue, non-current

     8,484         9,053   

Purchased product rights liability, non-current

     2,000         4,500   

Liability under government settlement, non-current

     —           6,978   

Long-term debt, less current portion

     —           24,629   

Total stockholders’ equity

     101,596         30,551   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 193,409       $ 135,729   
  

 

 

    

 

 

 

 

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JAZZ PHARMACEUTICALS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2011     2010     2011     2010  

GAAP net income (loss)

   $ 33,202      $ (6,388   $ 55,029      $ (4,924

Add:

        

Intangible asset amortization

     1,862        2,044        3,724        4,101   

Stock-based compensation expense

     3,415        1,960        6,563        3,792   

Non-cash interest expense

     188        873        394        1,923   

Loss on extinguishment of debt

     —          12,287        —          12,287   

Deduct:

        

Contract revenues

     (284     (284     (569     (569
                                

Adjusted net income

   $ 38,383      $ 10,492      $ 65,141      $ 16,610   
                                

GAAP net income (loss) per diluted share

   $ 0.71      $ (0.18   $ 1.19      $ (0.15
                                

Adjusted net income per diluted share

   $ 0.82      $ 0.28      $ 1.41      $ 0.46   
                                

Shares used in computing GAAP net income (loss) per diluted share

     46,601        35,423        46,238        33,428   

Shares used in computing adjusted net income per diluted share

     46,601        38,142        46,238        36,447   

JAZZ PHARMACEUTICALS, INC.

RECONCILIATION OF GAAP TO NON-GAAP 2011 FINANCIAL GUIDANCE

(In millions, except per share amounts)

 

GAAP net income

   $123-131

Add:

  

Intangible asset amortization

   7

Stock-based compensation expense

   14

Non-cash interest expense and loss on extinguishment of debt

   2

Deduct:

  

Contract revenues

   (1)
    

Adjusted net income

   $145-153
    

GAAP net income per diluted share

   $2.68-2.79
    

Adjusted net income per diluted share

   $3.15-3.25
    

Shares used in computing GAAP and adjusted net income per diluted share amounts

   46-47

 

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