Jazz Pharmaceuticals Announces Second Quarter 2024 Financial Results and Updates 2024 Financial Guidance
Rhea-AI Summary
Jazz Pharmaceuticals (Nasdaq: JAZZ) announced their Q2 2024 financial results and updated 2024 guidance. Key growth drivers such as Xywav, Epidiolex, and Rylaze contributed to a 15% YoY revenue increase. Oncology revenues grew by 10% YoY. The company narrowed its 2024 revenue guidance to $4.0-$4.1 billion and affirmed GAAP and non-GAAP adjusted net income guidance. Key highlights include:
- Xywav sales grew by 13% YoY.
- Epidiolex/Epidyolex sales increased by 22% YoY.
- Rylaze sales rose by 6% YoY.
Other updates include the FDA's Priority Review for zanidatamab with a PDUFA date of Nov. 29, 2024, and significant pipeline catalysts expected through 2025. Financial highlights for Q2 2024 include a GAAP net income of $168.6 million ($2.49 per diluted share) and non-GAAP adjusted net income of $364.7 million ($5.30 per diluted share). The company also authorized a new $500 million share repurchase program and completed a repricing of $2.7 billion in term loans, anticipating $23 million in annual interest savings.
Positive
- 15% YoY revenue increase
- 10% YoY growth in Oncology revenues
- FDA Priority Review for zanidatamab
- Revenue guidance of $4.0-$4.1 billion
- GAAP net income of $168.6 million, up from $104.4 million YoY
- New $500 million share repurchase program
- Repricing of $2.7 billion term loans, saving $23 million annually
Negative
- Lowering Oncology guidance to $1.10-$1.15 billion
- Non-GAAP adjusted net income decreased from $610.4 million to $546.9 million YoY
- Xyrem sales decreased by 61% YoY
- Higher SG&A and R&D expenses
Insights
Jazz Pharmaceuticals' Q2 2024 results demonstrate solid performance, with total revenues increasing 7% year-over-year to
Some notable financial highlights:
- GAAP net income of
$168.6 million ($2.49 per diluted share), up 61% YoY - Non-GAAP adjusted net income of
$364.7 million ($5.30 per diluted share), up 12% YoY - Cash flow from operations of
$598.6 million for H1 2024 $2.0 billion in cash and investments as of June 30, 2024
The company narrowed its 2024 total revenue guidance to
The $500 million share repurchase authorization and term loan repricing should benefit shareholders and reduce interest expenses. Overall, Jazz appears well-positioned financially to advance its pipeline and commercial portfolio.
Jazz's oncology portfolio continues to show strong growth, with Q2 revenues up 10% year-over-year to
The most exciting pipeline development is zanidatamab, which received FDA Priority Review for second-line biliary tract cancer (BTC) with a PDUFA date of November 29, 2024. If approved, it would be the first HER2-targeted treatment specifically for BTC in the U.S. Updated data presented at ASCO 2024 showed a
Other important zanidatamab milestones include:
- EMA validation of the marketing authorization application for 2L BTC
- Initiation of the Phase 3 EmpowHER trial in late-line HER2+ breast cancer
- Ongoing pivotal HERIZON-GEA-01 trial in 1L gastroesophageal adenocarcinoma, with PFS data expected in Q2 2025
The Zepzelca Phase 3 trial in 1L small cell lung cancer is also progressing, with top-line data expected by end of 2024. These late-stage assets could significantly expand Jazz's oncology footprint if successful.
Jazz's neuroscience franchise remains robust, with total revenue of
Epidiolex/Epidyolex also showed strong growth, with net product sales up 22% to
Some setbacks in the neuroscience pipeline include:
- Suvecaltamide's Phase 2b trial in essential tremor did not achieve statistical significance
- The company is awaiting results from a Phase 2 trial in Parkinson's disease tremor before determining next steps
On a positive note, Jazz plans to initiate a Phase 1b trial of JZP441 in type 1 narcolepsy patients in H2 2024, which could provide valuable insights into orexin agonism.
While the pipeline faced some challenges, the commercial portfolio's performance remains strong. The company's focus on rare neurological disorders and its expanding global footprint should continue to drive growth in this segment.
–
– Oncology revenues grew
– Zanidatamab granted Priority Review by
– Near-term, late-stage pipeline catalysts anticipated through 2025 –
– Narrowing 2024 total revenue guidance to
– Affirming GAAP and non-GAAP adjusted net income guidance –
"Jazz's record revenues of over
Key Highlights
- Key growth drivers:
- Xywav net product sales grew
13% year-over-year. - Epidiolex/Epidyolex® net product sales grew
22% year-over-year. - Rylaze/Enrylaze® net product sales grew
6% year-over-year.
- Xywav net product sales grew
- Zanidatamab:
- Granted Priority Review by
U.S. FDA for 2L BTC; MAA validated by EMA. - Initiated Phase 3 EmpowHER trial in late-line HER2+ breast cancer.
- Granted Priority Review by
- Near-term, late-stage pipeline catalysts anticipated:
- Top-line data from Epidyolex Phase 3 trial in
Japan in 2H24. - Top-line data from Zepzelca® 1L SCLC Phase 3 trial by the end of 2024.
- Top-line PFS data from zanidatamab in Phase 3 1L GEA estimated to be 2Q25.
- Top-line data from Epidyolex Phase 3 trial in
- 2024 Financial Guidance:
- Narrowing 2024 total revenue guidance range to
$4.0 $4.1 billion - Narrowing Neuroscience guidance to
$2.82 5$2.92 5 billion - Lowering Oncology guidance to
$1.10 $1.15 billion - Affirming GAAP net income guidance of
$385 $530 million $1.27 5$1.35 0 billion - Raising GAAP EPS guidance range by approximately
$1.00 $6.00 $8.00 $19.20 $20.30
- Narrowing 2024 total revenue guidance range to
- Vision 2025: The Company is no longer providing the Vision 2025 metrics; however, the priorities highlighted in Vision 2025 remain the same:
- Achieving commercial excellence to drive a growing and diversified revenue base;
- Reaching more patients and creating value for shareholders by investing in our business and pipeline, including through corporate development; and
- Maintaining disciplined capital allocation to generate long-term sustainable growth and value.
____________________________ | ||||||||
1 See "Non-GAAP Financial Measures." |
Business Updates
Key Commercial Products
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:
- Xywav net product sales were
$368.5 million 13% compared to the same period in 2023. - There were approximately 13,225 active Xywav patients exiting 2Q24 comprised of:
- Approximately 9,925 narcolepsy patients.
- Approximately 3,300 idiopathic hypersomnia (IH) patients, with 250 net patient adds.
- As the only low-sodium oxybate and the only therapy approved to treat IH, expect Xywav to remain the oxybate of choice.
- Expert recommendations for optimizing flexible and individualized dosing regimens of low-sodium Xywav in narcolepsy and IH were published in Neurology and Therapy. Nearly
90% of HCPs surveyed felt the ability to adjust Xywav dosing to accommodate routine changes was important or very important and had a positive impact on their ability to provide care. - Data presented at SLEEP 2024 included two late-breaking posters assessing the burden experienced by patients with IH. One poster demonstrated substantial comorbidity and health-related quality-of-life burdens for IH patients. Another poster reported greater economic burden, including work productivity impairment, compared to people living without IH.
Xyrem® (sodium oxybate) oral solution and high-sodium oxybate authorized generic (AG) royalties:
- Xyrem net product sales were
$62.2 million 61% compared to the same period in 2023. - Royalties from high-sodium oxybate AGs were
$54.2 million $48.7 million - The Company expects high-sodium oxybate AG royalty revenue to exceed
$200 million
Epidiolex/Epidyolex (cannabidiol):
- Epidiolex/Epidyolex net product sales were
$247.1 million 22% compared to the same period in 2023. - Outside of the
U.S. , Epidyolex is approved in more than 35 countries with additional launches and reimbursements anticipated through the end of 2024. - A plain language summary of the BECOME survey results was published in Future Neurology. In addition to reporting an
85% reduction in the frequency of seizures, caregivers also reported improvements in non-seizure benefits such as cognitive, emotional and social functioning. - Retrospective review of the validated REST-LGS questionnaire was evaluated in a real-world setting and the majority of patients who had not been previously diagnosed with Lennox-Gastaut syndrome (LGS) were identified, highlighting the potential of the screening tool to identify patients with LGS who may benefit from further diagnostic evaluation.
Rylaze/Enrylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn):
- Rylaze/Enrylaze net product sales were
$107.8 million 6% compared to the same period in 2023.
Zepzelca (lurbinectedin):
- Zepzelca net product sales were
$81.0 million 15% compared to the same period in 2023. - Enrollment in the Phase 3 trial evaluating first-line (1L) use of Zepzelca in combination with Tecentriq® (atezolizumab) in small cell lung cancer (SCLC), in partnership with Roche, was completed in 1Q24.
- The Company expects top-line progression-free survival (PFS) data readout by the end of 2024.
Key Pipeline Highlights
Zanidatamab:
- In 2Q24, the
U.S. FDA accepted and granted Priority Review of the Biologics License Application for zanidatamab with a target action date of November 29, 2024. If approved, zanidatamab would be the first HER2-targeted treatment specifically approved for biliary tract cancer (BTC) in theU.S. A confirmatory trial in 1L metastatic BTC is ongoing. - The European Medicines Agency (EMA) validated the marketing authorization application (MAA) for zanidatamab in second-line (2L) BTC.
- Updated zanidatamab data from the HERIZON-BTC-01 trial were presented at the ASCO Annual Meeting 2024, demonstrating a confirmed objective response rate was maintained at
41.3% , median duration of response increased by approximately two months to 14.9 months compared to findings reported in 2023, and a median overall survival of 15.5 months in all patients with HER2+ BTC and 18.1 months in patients with immunohistochemistry (IHC) 3+ tumors. - The pivotal HERIZON-GEA-01 trial, evaluating zanidatamab in 1L gastroesophageal adenocarcinoma (GEA), is ongoing and enrollment remains on track. Based on an updated blinded assessment of progression events, the Company estimates top-line PFS data will be available in 2Q25. The Company continues to track events in the trial relative to the initial protocol assumptions.
- The Company initiated the Phase 3 EmpowHER-BC-303 trial to evaluate zanidatamab plus chemotherapy or trastuzumab plus chemotherapy in patients with HER2-positive breast cancer whose disease has progressed on previous trastuzumab deruxtecan (T-DXd) treatment.
Suvecaltamide (JZP385):
- Announced top-line results from the Phase 2b trial of suvecaltamide in essential tremor did not achieve statistical significance. The improvement in placebo from baseline to week 12 exceeded the Company's expectations and was higher than what was observed for placebo in the prior T-CALM trial of suvecaltamide.
- A Phase 2 trial in patients with Parkinson's disease tremor (PDT) is ongoing, with results expected 1Q25. The Company awaits results from the PDT trial to determine next steps, if any, for the program.
JZP441:
- Pending input from FDA, the Company is planning to initiate a Phase 1b trial of JZP441 in type 1 narcolepsy patients in 2H24.
- Expect this trial will further the Company's understanding of JZP441 and more broadly orexin agonism, providing key learnings that could inform future development efforts.
Share Repurchases of Approximately
The Company resumed repurchases of its ordinary shares on the open market in the second quarter of 2024 as part of the Company's previously authorized and announced share repurchase program. Under this share repurchase program, the Company was authorized to repurchase its ordinary shares for up to an aggregate purchase price of
On July 25, 2024, the Board of Directors authorized a new share repurchase program with no expiration date pursuant to which the Company may repurchase its ordinary shares for up to an aggregate purchase price of
Term Loan B Repricing
The Company completed a repricing of the approximately
Irrevocable Election of Settlement Method for the
Jazz Investments I Limited (the "Issuer"), a subsidiary of Jazz Pharmaceuticals, announced that it provided written notice to the exchange agent, the trustee and the holders of its
Financial Highlights
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(In thousands, except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||
Total revenues | $ 1,023,825 | $ 957,317 | $ 1,925,808 | $ 1,850,129 | |||
GAAP net income | $ 168,568 | $ 104,438 | $ 153,950 | $ 173,858 | |||
Non-GAAP adjusted net income | $ 364,727 | $ 325,129 | $ 546,942 | $ 610,390 | |||
GAAP earnings per share | $ 2.49 | $ 1.52 | $ 2.35 | $ 2.55 | |||
Non-GAAP adjusted EPS | $ 5.30 | $ 4.51 | $ 7.98 | $ 8.46 | |||
GAAP net income for 2Q24 was
Non-GAAP adjusted net income for 2Q24 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 June 30, | Six Months Ended June 30, | ||||||
(In thousands) | 2024 | 2023 | 2024 | 2023 | |||
Xywav | $ 368,472 | $ 326,564 | $ 683,772 | $ 604,325 | |||
Xyrem | 62,180 | 159,769 | 126,412 | 337,899 | |||
Epidiolex/Epidyolex | 247,102 | 202,226 | 445,818 | 391,135 | |||
Sativex | 6,383 | 2,806 | 9,118 | 9,904 | |||
Total Neuroscience | 684,137 | 691,365 | 1,265,120 | 1,343,263 | |||
Rylaze/Enrylaze | 107,829 | 101,693 | 210,579 | 187,620 | |||
Zepzelca | 81,047 | 70,348 | 156,147 | 137,529 | |||
Defitelio/defibrotide | 45,421 | 46,108 | 93,097 | 85,187 | |||
Vyxeos | 43,012 | 34,056 | 75,035 | 70,756 | |||
Total Oncology | 277,309 | 252,205 | 534,858 | 481,092 | |||
Other | 2,698 | 3,417 | 6,268 | 6,851 | |||
Product sales, net | 964,144 | 946,987 | 1,806,246 | 1,831,206 | |||
High-sodium oxybate AG royalty revenue | 54,164 | 5,514 | 104,111 | 7,610 | |||
Other royalty and contract revenues | 5,517 | 4,816 | 15,451 | 11,313 | |||
Total revenues | $ 1,023,825 | $ 957,317 | $ 1,925,808 | $ 1,850,129 | |||
Total revenues increased
Total neuroscience revenue, including high-sodium oxybate AG royalty revenue, was
Oncology net product sales were
Operating Expenses and Effective Tax Rate
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(In thousands, except percentages) | 2024 | 2023 | 2024 | 2023 | |||
GAAP: | |||||||
Cost of product sales | $ 109,902 | $ 97,537 | $ 205,389 | $ 226,181 | |||
Gross margin | 88.6 % | 89.7 % | 88.6 % | 87.6 % | |||
Selling, general and administrative | $ 338,523 | $ 340,844 | $ 690,235 | $ 638,761 | |||
% of total revenues | 33.1 % | 35.6 % | 35.8 % | 34.5 % | |||
Research and development | $ 220,734 | $ 209,238 | $ 443,581 | $ 398,648 | |||
% of total revenues | 21.6 % | 21.9 % | 23.0 % | 21.5 % | |||
Acquired in-process research and development | $ — | $ — | $ 10,000 | $ 1,000 | |||
Income tax benefit1 | $ (30,653) | $ (24,323) | $ (18,984) | $ (39,647) | |||
Effective tax rate 1 | (22.2) % | (29.7) % | (13.9) % | (29.0) % | |||
_________________________ | |
1. | The GAAP income tax benefit decreased in the six months ended June 30, 2024, compared to the same period in 2023, due to the change in income mix across our jurisdictions and the impact of tax shortfalls from share-based compensation. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(In thousands, except percentages) | 2024 | 2023 | 2024 | 2023 | |||
Non-GAAP adjusted: | |||||||
Cost of product sales | $ 72,413 | $ 65,994 | $ 136,561 | $ 130,722 | |||
Gross margin | 92.5 % | 93.0 % | 92.4 % | 92.9 % | |||
Selling, general and administrative | $ 303,386 | $ 276,871 | $ 614,885 | $ 537,386 | |||
% of total revenues | 29.6 % | 28.9 % | 31.9 % | 29.0 % | |||
Research and development | $ 203,463 | $ 192,019 | $ 407,478 | $ 365,937 | |||
% of total revenues | 19.9 % | 20.1 % | 21.2 % | 19.8 % | |||
Acquired in-process research and development | $ — | $ — | $ 10,000 | $ 1,000 | |||
Income tax expense1 | $ 23,520 | $ 25,210 | $ 89,316 | $ 65,407 | |||
Effective tax rate1 | 6.1 % | 7.2 % | 14.0 % | 9.6 % | |||
_________________________ | |
1. | The non-GAAP income tax expense increased in the six months ended June 30, 2024, compared to the same period in 2023, due to the change in income mix across our jurisdictions and the impact of tax shortfalls from share-based compensation. |
Changes in operating expenses in 2Q24 over the prior year period are primarily due to the following:
- Cost of product sales on a GAAP basis increased in 2Q24 compared to the same period in 2023 due to higher acquisition accounting inventory fair value step-up expense and changes in product mix. Cost of product sales on a non-GAAP adjusted basis increased in 2Q24 compared to the same period in 2023, due to changes in product mix.
- Selling, general and administrative (SG&A) expenses on a GAAP basis decreased in 2Q24 compared to the same period in 2023 primarily due to costs related to program terminations incurred in 2Q23. SG&A expenses on a GAAP and on a non-GAAP adjusted basis included increased investment in our priority programs in 2Q24 as compared to the same period in 2023.
- Research and development (R&D) expenses on a GAAP and on a non-GAAP adjusted basis increased in 2Q24 compared to the same period in 2023 primarily due to higher costs related to zanidatamab, as well as our other key pipeline programs.
Cash Flow and Balance Sheet
As of June 30, 2024, cash, cash equivalents and investments were
2024 Financial Guidance
The Company is updating its full year 2024 financial guidance as follows:
(In millions) | July 31, 2024 | May 1, 2024 | |
Revenues | |||
–Neuroscience (includes royalties from high-sodium oxybate AG) | |||
–Oncology | |||
GAAP: | |||
(In millions, except per share amounts and percentages) | July 31, 2024 | May 1, 2024 | |
Gross margin % | 89 % | 89 % | |
SG&A expenses | |||
SG&A expenses as % of total revenues | |||
R&D expenses | |||
R&D expenses as % of total revenues | |||
Effective tax rate | (22)% - (3)% | (22)% - (3)% | |
Net income | |||
Net income per diluted share5 | |||
Weighted-average ordinary shares used in per share calculations | 67 | 71 | |
Non-GAAP: | |||
(In millions, except per share amounts and percentages) | July 31, 2024 | May 1, 2024 | |
Gross margin % | 93 % | ||
SG&A expenses | |||
SG&A expenses as % of total revenues | |||
R&D expenses | |||
R&D expenses as % of total revenues | |||
Effective tax rate | |||
Net income | |||
Net income per diluted share5 | |||
Weighted-average ordinary shares used in per share calculations | 67 | 71 | |
___________________________ | |
1. | Excludes |
2. | Excludes |
3. | Excludes |
4. | Excludes |
5. | Diluted EPS calculations for 2024 include an estimated 3.5 million shares related to the assumed conversion of the 2026 Notes, and the associated interest expense, net of tax, 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 2024 Net Income Guidance" at the end of this press release. |
Conference Call Details
Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. ET (9:30 p.m. IST) to provide a business and financial update and discuss its 2024 second quarter results.
Audio webcast/conference call:
Ireland Dial-In Number: +353 1800 943 926
Additional global dial-in numbers are available here.
Passcode: 9124647
Interested parties may access the live audio webcast via the Investors section of the Jazz Pharmaceuticals website at www.jazzpharmaceuticals.com. To ensure a timely connection, it is recommended that participants register at least 15 minutes prior to the scheduled webcast.
A replay of the webcast will be available via the Investors section of the Jazz Pharmaceuticals website at www.jazzpharmaceuticals.com.
About Jazz Pharmaceuticals
Jazz Pharmaceuticals plc (NASDAQ: JAZZ) is a global biopharmaceutical company whose purpose is to innovate to transform the lives of patients and their families. We are dedicated to developing life-changing medicines for people with serious diseases — often with limited or no therapeutic options. We have a diverse portfolio of marketed medicines, including leading therapies for sleep disorders and epilepsy, and a growing portfolio of cancer treatments. Our patient-focused and science-driven approach powers pioneering research and development advancements across our robust pipeline of innovative therapeutics in oncology and neuroscience. Jazz is headquartered in
Non-GAAP Financial Measures
To supplement Jazz Pharmaceuticals' financial results and guidance presented in accordance with
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. 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 the reconciliation tables that follow. 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.
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 2024 financial guidance and the Company's expectations related thereto and anticipated catalysts; expectations that Xywav will remain the oxybate of choice; expectations of high-sodium oxybate AG royalty revenue in 2024; the ability to generate long-term sustainable growth and value; the Company's advancement of pipeline programs and the timing of development activities, regulatory activities and submissions related thereto; planned or anticipated clinical trial events, including with respect to initiations, enrollment and data read-outs, and the anticipated timing thereof, including: expectations of near-term, late-stage pipeline catalysts through 2025, top-line data from a Phase 2 trial of suvecaltamide in PDT, top-line PFS data from a Phase 3 trial of zanidatamab in 1L GEA, top-line data from a Phase 3 trial of Epidyolex in DS, LGS and TSC in
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, Xywav, Rylaze and Epidiolex/Epidyolex and other marketed products; the introduction of new products into the U.S. market that compete with, or otherwise disrupt the market for the Company's 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; global economic, financial, and healthcare system disruptions and the current and potential future negative impacts to the Company's business operations and financial results; geopolitical events, including the conflict between
JAZZ PHARMACEUTICALS PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenues: | |||||||
Product sales, net | $ 964,144 | $ 946,987 | $ 1,806,246 | $ 1,831,206 | |||
Royalties and contract revenues | 59,681 | 10,330 | 119,562 | 18,923 | |||
Total revenues | 1,023,825 | 957,317 | 1,925,808 | 1,850,129 | |||
Operating expenses: | |||||||
Cost of product sales (excluding amortization of acquired developed technologies) | 109,902 | 97,537 | 205,389 | 226,181 | |||
Selling, general and administrative | 338,523 | 340,844 | 690,235 | 638,761 | |||
Research and development | 220,734 | 209,238 | 443,581 | 398,648 | |||
Intangible asset amortization | 155,223 | 152,062 | 310,953 | 301,848 | |||
Acquired in-process research and development | — | — | 10,000 | 1,000 | |||
Total operating expenses | 824,382 | 799,681 | 1,660,158 | 1,566,438 | |||
Income from operations | 199,443 | 157,636 | 265,650 | 283,691 | |||
Interest expense, net | (62,023) | (73,470) | (128,139) | (147,617) | |||
Foreign exchange gain (loss) | 507 | (2,382) | (1,186) | 811 | |||
Income before income tax benefit and equity in loss of investees | 137,927 | 81,784 | 136,325 | 136,885 | |||
Income tax benefit | (30,653) | (24,323) | (18,984) | (39,647) | |||
Equity in loss of investees | 12 | 1,669 | 1,359 | 2,674 | |||
Net income | $ 168,568 | $ 104,438 | $ 153,950 | $ 173,858 | |||
Net income per ordinary share: | |||||||
Basic | $ 2.68 | $ 1.63 | $ 2.45 | $ 2.73 | |||
Diluted | $ 2.49 | $ 1.52 | $ 2.35 | $ 2.55 | |||
Weighted-average ordinary shares used in per share calculations - basic | 62,882 | 63,991 | 62,710 | 63,744 | |||
Weighted-average ordinary shares used in per share calculations - diluted | 69,625 | 73,540 | 69,684 | 73,657 | |||
JAZZ PHARMACEUTICALS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||
June 30, | December 31, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 1,355,802 | $ 1,506,310 | |
Investments | 625,000 | 120,000 | |
Accounts receivable, net of allowances | 698,037 | 705,794 | |
Inventories | 542,555 | 597,039 | |
Prepaid expenses | 134,421 | 185,476 | |
Other current assets | 325,851 | 320,809 | |
Total current assets | 3,681,666 | 3,435,428 | |
Property, plant and equipment, net | 169,281 | 169,646 | |
Operating lease assets | 73,145 | 65,340 | |
Intangible assets, net | 5,079,462 | 5,418,039 | |
Goodwill | 1,735,931 | 1,753,130 | |
Deferred tax assets, net | 545,222 | 477,834 | |
Deferred financing costs | 5,736 | 6,478 | |
Other non-current assets | 71,425 | 67,464 | |
Total assets | $ 11,361,868 | $ 11,393,359 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 97,096 | $ 102,750 | |
Accrued liabilities | 800,993 | 793,914 | |
Current portion of long-term debt | 605,798 | 604,954 | |
Income taxes payable | 52,138 | 35,074 | |
Total current liabilities | 1,556,025 | 1,536,692 | |
Long-term debt, less current portion | 5,100,983 | 5,107,988 | |
Operating lease liabilities, less current portion | 67,617 | 59,225 | |
Deferred tax liabilities, net | 775,228 | 847,706 | |
Other non-current liabilities | 99,416 | 104,751 | |
Total shareholders' equity | 3,762,599 | 3,736,997 | |
Total liabilities and shareholders' equity | $ 11,361,868 | $ 11,393,359 | |
JAZZ PHARMACEUTICALS PLC SUMMARY OF CASH FLOWS (In thousands) (Unaudited) | |||
Six Months Ended June 30, | |||
2024 | 2023 | ||
Net cash provided by operating activities | $ 598,581 | $ 617,473 | |
Net cash used in investing activities | (528,995) | (90,561) | |
Net cash used in financing activities | (217,637) | (126,455) | |
Effect of exchange rates on cash and cash equivalents | (2,457) | 365 | |
Net increase (decrease) in cash and cash equivalents | $ (150,508) | $ 400,822 | |
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (In thousands, except per share amounts) (Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net | Diluted | Net | Diluted | Net | Diluted | Net | Diluted | ||||||||
GAAP reported | $ 168,568 | $ 2.49 | $ 104,438 | $ 1.52 | $ 153,950 | $ 2.35 | $ 173,858 | $ 2.55 | |||||||
Intangible asset amortization | 155,223 | 2.23 | 152,062 | 2.07 | 310,953 | 4.46 | 301,848 | 4.10 | |||||||
Share-based compensation expense | 56,654 | 0.81 | 61,433 | 0.84 | 118,095 | 1.69 | 117,785 | 1.60 | |||||||
Acquisition accounting inventory fair value step-up | 33,243 | 0.48 | 27,814 | 0.38 | 62,186 | 0.89 | 88,272 | 1.20 | |||||||
Other costs2 | — | — | 23,488 | 0.32 | — | — | 23,488 | 0.32 | |||||||
Non-cash interest expense3 | 5,212 | 0.07 | 5,427 | 0.07 | 10,058 | 0.14 | 10,193 | 0.14 | |||||||
Income tax effect of above adjustments | (54,173) | (0.77) | (49,533) | (0.67) | (108,300) | (1.54) | (105,054) | (1.43) | |||||||
Effect of assumed conversion of Exchangeable Senior Notes1 | — | (0.01) | — | (0.02) | — | (0.01) | — | (0.02) | |||||||
Non-GAAP adjusted | $ 364,727 | $ 5.30 | $ 325,129 | $ 4.51 | $ 546,942 | $ 7.98 | $ 610,390 | $ 8.46 | |||||||
Weighted-average ordinary shares used in diluted per share calculations - GAAP and non-GAAP1 | 69,625 | 73,540 | 69,684 | 73,657 | |||||||||||
________________________________________________ | |
Explanation of Adjustments and Certain Line Items: | |
1. | Diluted EPS was calculated using the "if-converted" method in relation to the |
2. | Costs related to program terminations. |
3. | Non-cash interest expense associated with debt issuance costs. |
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE THREE MONTHS ENDED JUNE 30, 2024 and 2023 (In thousands, except percentages) (Unaudited) | |||||||||||||
Three months ended June 30, 2024 | |||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Interest | Income tax | |||||||
GAAP Reported | 88.6 % | $ 338,523 | $ 220,734 | $ 62,023 | $ (30,653) | ||||||||
Non-GAAP Adjustments: | |||||||||||||
Intangible asset amortization | — | — | — | — | (155,223) | — | — | ||||||
Share-based compensation expense | (4,246) | 0.4 | (35,137) | (17,271) | — | — | — | ||||||
Acquisition accounting inventory fair value step-up | (33,243) | 3.5 | — | — | — | — | — | ||||||
Non-cash interest expense | — | — | — | — | — | (5,212) | — | ||||||
Income tax effect of above adjustments | — | — | — | — | — | — | 54,173 | ||||||
Total of non-GAAP adjustments | (37,489) | 3.9 | (35,137) | (17,271) | (155,223) | (5,212) | 54,173 | ||||||
Non-GAAP Adjusted | $ 72,413 | 92.5 % | $ 303,386 | $ 203,463 | $ — | $ 56,811 | $ 23,520 | ||||||
Three months ended June 30, 2023 | |||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Interest | Income tax | |||||||
GAAP Reported | $ 97,537 | 89.7 % | $ 340,844 | $ 209,238 | $ 73,470 | $ (24,323) | |||||||
Non-GAAP Adjustments: | |||||||||||||
Intangible asset amortization | — | — | — | — | (152,062) | — | — | ||||||
Share-based compensation expense | (3,729) | 0.3 | (40,485) | (17,219) | — | — | — | ||||||
Other costs | — | — | (23,488) | — | — | — | — | ||||||
Non-cash interest expense | — | — | — | — | — | (5,427) | — | ||||||
Acquisition accounting inventory fair value step-up | (27,814) | 3.0 | — | — | — | — | — | ||||||
Income tax effect of above adjustments | — | — | — | — | — | — | 49,533 | ||||||
Total of non-GAAP adjustments | (31,543) | 3.3 | (63,973) | (17,219) | (152,062) | (5,427) | 49,533 | ||||||
Non-GAAP Adjusted | $ 65,994 | 93.0 % | $ 276,871 | $ 192,019 | $ — | $ 68,043 | $ 25,210 | ||||||
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE SIX MONTHS ENDED JUNE 30, 2024 and 2023 (In thousands, except percentages) (Unaudited) | |||||||||||||||
Six months ended June 30, 2024 | |||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Acquired | Interest | Income tax | ||||||||
GAAP Reported | $ 205,389 | 88.6 % | $ 690,235 | $ 443,581 | $ 310,953 | $ 10,000 | $ (18,984) | ||||||||
Non-GAAP Adjustments: | |||||||||||||||
Intangible asset amortization | — | — | — | — | (310,953) | — | — | — | |||||||
Share-based compensation expense | (6,642) | 0.4 | (75,350) | (36,103) | — | — | — | — | |||||||
Non-cash interest expense | — | — | — | — | — | — | (10,058) | — | |||||||
Acquisition accounting inventory fair value step-up | (62,186) | 3.4 | — | — | — | — | — | — | |||||||
Income tax effect of above adjustments | — | — | — | — | — | — | — | 108,300 | |||||||
Total of non-GAAP adjustments | (68,828) | 3.8 | (75,350) | (36,103) | (310,953) | — | (10,058) | 108,300 | |||||||
Non-GAAP Adjusted | $ 136,561 | 92.4 % | $ 614,885 | $ 407,478 | $ — | $ 10,000 | $ 89,316 | ||||||||
Six months ended June 30, 2023 | |||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Acquired | Interest | Income tax | ||||||||
GAAP Reported | 87.6 % | $ 638,761 | $ 398,648 | $ 301,848 | $ 1,000 | $ 147,617 | $ (39,647) | ||||||||
Non-GAAP Adjustments: | |||||||||||||||
Intangible asset amortization | — | — | — | — | (301,848) | — | — | — | |||||||
Share-based compensation expense | (7,187) | 0.4 | (77,887) | (32,711) | — | — | — | — | |||||||
Other costs | — | — | (23,488) | — | — | — | — | — | |||||||
Non-cash interest expense | — | — | — | — | — | — | (10,193) | — | |||||||
Acquisition accounting inventory fair value step-up | (88,272) | 4.9 | — | — | — | — | — | — | |||||||
Income tax effect of above adjustments | — | — | — | — | — | — | — | 105,054 | |||||||
Total of non-GAAP adjustments | (95,459) | 5.3 | (101,375) | (32,711) | (301,848) | — | (10,193) | 105,054 | |||||||
Non-GAAP Adjusted | 92.9 % | $ 537,386 | $ 365,937 | $ — | $ 1,000 | $ 137,424 | $ 65,407 | ||||||||
JAZZ PHARMACEUTICALS PLC RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2024 NET INCOME AND DILUTED EPS GUIDANCE (In millions, except per share amounts) (Unaudited) | |||
Net Income | Diluted EPS | ||
GAAP guidance | |||
Intangible asset amortization | 605 - 645 | 8.95 - 9.70 | |
Acquisition accounting inventory fair value step-up | 125 - 145 | 1.85 - 2.20 | |
Share-based compensation expense | 270 - 300 | 4.00 - 4.50 | |
Non-cash interest expense | 20 - 30 | 0.30 - 0.45 | |
Income tax effect of above adjustments | (205) - (225) | (3.05) - (3.40) | |
Non-GAAP guidance | |||
Weighted-average ordinary shares used in per share calculations - GAAP and non-GAAP | 67 | ||
Contacts:
Investors:
Andrea N. Flynn, Ph.D.
Vice President, Head, Investor Relations
Jazz Pharmaceuticals plc
InvestorInfo@jazzpharma.com
Media:
Kristin Bhavnani
Head of Global Corporate Communications
Jazz Pharmaceuticals plc
CorporateAffairsMediaInfo@jazzpharma.com
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SOURCE Jazz Pharmaceuticals plc
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