Jazz Pharmaceuticals(JAZZ) - 2025 Q1 - Quarterly Results

Executive Summary Jazz Pharmaceuticals reported strong Q1 2025 revenues, affirmed full-year guidance, and advanced its pipeline with key acquisitions and regulatory submissions First Quarter 2025 Performance Overview Jazz Pharmaceuticals reported total revenues of $898 million in Q1 2025, driven by strong performance from Xywav and Epidiolex, while affirming 2025 total revenue guidance and updating financial guidance to reflect recent acquisitions and litigation settlements - Total revenues reached $898 million in 1Q25, with Xywav and Epidiolex showing strong performance[1][2] - Affirmed 2025 total revenue guidance range of $4.15 - $4.40 billion, reflecting confidence in commercial portfolio growth[2][4] - Completed the acquisition of Chimerix, adding dordaviprone to the late-stage pipeline, and submitted an sNDA for Zepzelca in 1L ES-SCLC[1][2] Business Updates The company experienced varied commercial performance across key products, completed a strategic acquisition, and advanced its late-stage pipeline with significant regulatory and clinical milestones Commercial Updates Commercial performance in Q1 2025 saw varied results across key products, with Xywav and Epidiolex/Epidyolex demonstrating strong growth, while other products experienced declines due to market competition or protocol updates Key Product Net Sales (1Q25 vs 1Q24) | Product | 1Q25 Net Sales ($M) | 1Q24 Net Sales ($M) | YoY Change | Key Driver/Impact | |---|---|---|---|---| | Xywav | 344.8 | 315.3 | +9% | Meaningful patient adds | | Xyrem | 37.2 | 64.2 | -42% | | | Epidiolex/Epidyolex | 217.7 | 198.7 | +10% | Confident in blockbuster status for 2025 | | Rylaze/Enrylaze | 94.2 | 102.7 | -8% | Headwinds from COG pediatric treatment protocol updates | | Zepzelca | 63.0 | 75.1 | -16% | Increased competition in 2L SCLC, treatment protocol updates | | Ziihera | 2.0 | — | N/A | Product launch in December 2024 | - Xywav added approximately 450 net patients in 1Q25, reaching about 14,600 active patients, and remains the 1 branded treatment for narcolepsy and the only FDA-approved therapy for IH[4][6] - A supplemental New Drug Application (sNDA) for Zepzelca in combination with atezolizumab for maintenance therapy in 1L ES-SCLC was submitted, with potentially practice-changing data to be presented at ASCO 2025[4][6] Corporate Development Jazz Pharmaceuticals completed the acquisition of Chimerix in April 2025, integrating dordaviprone, a novel treatment for H3 K27M-mutant diffuse glioma, into its late-stage pipeline, addressing a significant unmet medical need - Acquisition of Chimerix completed in April 2025, adding dordaviprone to the late-stage pipeline[2][4][7] - Dordaviprone is a novel first-in-class small molecule treatment for H3 K27M-mutant diffuse glioma, a rare, high-grade brain tumor[7] Key Pipeline Highlights The company made significant progress across its pipeline, with key updates for zanidatamab and dordaviprone, including pivotal trial readouts, FDA Priority Review, and ongoing Phase 3 evaluations - Top-line PFS data from the pivotal HERIZON-GEA-01 trial for zanidatamab in 1L gastroesophageal adenocarcinoma (GEA) is expected in 2H25[2][4][12] - A New Drug Application (NDA) for accelerated approval of dordaviprone in recurrent H3 K27M-mutant diffuse glioma was accepted by FDA and granted Priority Review, with a PDUFA action date of August 18, 2025[4][12] - The Phase 3 ACTION trial is evaluating dordaviprone in newly diagnosed, non-recurrent H3 K27M-mutant diffuse glioma patients, potentially extending its use into the first-line setting[12] Financial Results (Q1 2025) Q1 2025 financial results show a GAAP net loss primarily due to Xyrem litigation settlements, stable total revenues, and increased operating expenses, while non-GAAP net income decreased Financial Highlights In Q1 2025, Jazz Pharmaceuticals reported a GAAP net loss of $(92.5) million, a significant increase from Q1 2024, primarily due to a $172.0 million expense related to Xyrem antitrust litigation settlements, while non-GAAP adjusted net income also decreased Q1 2025 Financial Highlights (GAAP & Non-GAAP) | Metric | 1Q25 (GAAP) | 1Q24 (GAAP) | 1Q25 (Non-GAAP) | 1Q24 (Non-GAAP) | |---|---|---|---|---| | Total revenues (in thousands) | $897,841 | $901,983 | N/A | N/A | | Net income (loss) (in thousands) | $(92,541) | $(14,618) | $105,233 | $178,430 | | EPS (LPS) | $(1.52) | $(0.23) | $1.68 | $2.63 | - GAAP net loss for 1Q25 was $(92.5) million, compared to $(14.6) million for 1Q24, primarily impacted by a $172.0 million expense from Xyrem antitrust litigation settlements[11][13] - Non-GAAP adjusted net income for 1Q25 decreased to $105.2 million from $178.4 million in 1Q24[11] Total Revenues Breakdown Total revenues for Q1 2025 were $897.8 million, largely in line with Q1 2024, with Neuroscience revenue increasing due to Xywav and Epidiolex/Epidyolex sales, while Oncology net product sales decreased Total Revenues by Segment (1Q25 vs 1Q24) | Segment | 1Q25 ($M) | 1Q24 ($M) | YoY Change | |---|---|---|---| | Total Neuroscience (incl. royalties) | 654.1 | 630.9 | +4% | | Total Oncology | 229.4 | 257.5 | -11% | | Other | 4.8 | 3.6 | +33.3% | | Total Revenues | 897.8 | 902.0 | -0.5% | - Neuroscience revenue increase was driven by higher Xywav and Epidiolex/Epidyolex net product sales, partially offset by decreased Xyrem net product sales[15] - Oncology net product sales decrease was primarily due to lower sales of Zepzelca, Rylaze/Enrylaze, and Defitelio/defibrotide, with Rylaze impacted by COG pediatric treatment protocol updates[16] Operating Expenses and Effective Tax Rate Operating expenses in Q1 2025 increased due to product mix changes, higher inventory provisions, and Xyrem antitrust litigation settlements, while R&D expenses decreased, and the GAAP effective tax rate was significantly influenced by the Xyrem settlements Operating Expenses (GAAP) (1Q25 vs 1Q24) | Expense Category | 1Q25 ($M) | 1Q24 ($M) | YoY Change | |---|---|---|---| | Cost of product sales | 104.6 | 95.5 | +9.5% | | Selling, general and administrative | 514.0 | 351.7 | +46.1% | | Research and development | 180.7 | 222.8 | -18.9% | | Acquired in-process R&D | — | 10.0 | -100% | | Income tax (benefit) expense | (17.8) | 11.7 | N/A | | Effective tax rate | 16.2% | (728.4)% | N/A | - SG&A expenses increased significantly due to $172.0 million in Xyrem antitrust litigation settlements[19] - R&D expenses decreased primarily due to lower clinical study costs for zanidatamab and the discontinuation of JZP385 and JZP150 programs[19] Cash Flow and Balance Sheet Jazz Pharmaceuticals maintained strong liquidity with $2.6 billion in cash, generated $429.8 million from operations, and reduced long-term debt through a $750 million prepayment Key Financial Position & Cash Flow (as of March 31, 2025) | Metric | Amount ($B) | |---|---| | Cash, cash equivalents and investments | 2.6 | | Outstanding principal balance of long-term debt | 5.4 | | Undrawn revolving credit facility | 0.885 | | Cash from operations (1Q25) | 0.430 | - Generated $429.8 million of cash from operations in 1Q25, reflecting strong business performance[20] - Made a voluntary prepayment of $750.0 million principal amount on the Term Loan B in January 2025[20] 2025 Financial Guidance Jazz Pharmaceuticals updated its 2025 financial guidance to reflect the Chimerix acquisition and Xyrem litigation settlements, affirming revenue but significantly revising net income and EPS projections downwards Overall Guidance Update Jazz Pharmaceuticals updated its full-year 2025 financial guidance primarily to incorporate the impact of the Chimerix acquisition and certain Xyrem antitrust litigation settlements, resulting in affirmed total revenue guidance but significantly revised GAAP and Non-GAAP net income and EPS projections - Updated 2025 financial guidance to reflect the Chimerix acquisition and Xyrem antitrust litigation settlements[21] - Total revenue guidance for 2025 remains affirmed at $4.15 - $4.40 billion[22] - The acquired IPR&D expense from the Chimerix acquisition ($885.0 million at midpoint) and Xyrem antitrust litigation settlements ($172.0 million) are expected to impact GAAP and non-GAAP projected results by $1.0 billion[25][27] GAAP Guidance The updated GAAP guidance for 2025 projects a net loss of $(615) - $(450) million, a significant change from previous net income projections, primarily driven by acquired IPR&D expense from the Chimerix acquisition and Xyrem antitrust litigation settlements 2025 GAAP Financial Guidance Comparison | Metric | May 6, 2025 Guidance | February 25, 2025 Guidance | |---|---|---| | SG&A expenses ($M) | $1,640 - $1,723 | $1,404 - $1,483 | | R&D expenses ($M) | $835 - $895 | $792 - $851 | | Acquired in-process R&D ($M) | $870 - $900 | - | | Net income (loss) ($M) | $(615) - $(450) | $560 - $720 | | Net income (loss) per diluted share | $(10.00) - $(7.50) | $9.15 - $11.50 | - The projected GAAP net loss includes an acquired IPR&D expense of $885.0 million (midpoint) relating to the Chimerix acquisition and $172.0 million for Xyrem antitrust litigation settlements[25] Non-GAAP Guidance The updated Non-GAAP guidance for 2025 shows a substantial reduction in projected net income to $250 - $350 million, primarily due to the inclusion of acquired IPR&D expense and Xyrem antitrust litigation settlements, which also significantly impacted the non-GAAP effective tax rate 2025 Non-GAAP Financial Guidance Comparison | Metric | May 6, 2025 Guidance | February 25, 2025 Guidance | |---|---|---| | SG&A expenses ($M) | $1,470 - $1,530 | $1,250 - $1,310 | | R&D expenses ($M) | $760 - $810 | $720 - $770 | | Acquired in-process R&D ($M) | $870 - $900 | - | | Effective tax rate | 35% - 45% | 13% - 15% | | Net income ($M) | $250 - $350 | $1,400 - $1,500 | | Net income per diluted share | $4.00 - $5.60 | $22.50 - $24.00 | - The non-GAAP adjusted net income guidance includes the acquired IPR&D expense from the Chimerix acquisition and Xyrem antitrust litigation settlements, leading to a significant downward revision[25][27] - The non-GAAP effective tax rate is projected to be 35% - 45%, a substantial increase from the previous guidance of 13% - 15%[24][31] Additional Information This section provides details on the Q1 2025 conference call, an overview of Jazz Pharmaceuticals, explanations of non-GAAP financial measures, and cautions regarding forward-looking statements Conference Call Details Jazz Pharmaceuticals hosted an investor conference call and live audio webcast on May 6, 2025, at 4:30 p.m. ET to discuss Q1 2025 results and provide a business and financial update, with a replay available online - Conference call and live audio webcast held on May 6, 2025, at 4:30 p.m. ET to discuss Q1 2025 results[28] - A replay of the webcast is available via the Investors section of the Jazz Pharmaceuticals website[30] About Jazz Pharmaceuticals Jazz Pharmaceuticals plc is a global biopharmaceutical company focused on developing life-changing medicines for serious diseases, particularly in sleep disorders, epilepsy, and oncology, with a patient-focused, science-driven approach to R&D - Jazz Pharmaceuticals is a global biopharmaceutical company dedicated to developing life-changing medicines for serious diseases[32] - The company has a diverse portfolio of marketed medicines, including leading therapies for sleep disorders, epilepsy, and a growing portfolio of cancer treatments[32] - Headquartered in Dublin, Ireland, with R&D labs, manufacturing facilities, and employees worldwide[32] Non-GAAP Financial Measures Jazz Pharmaceuticals uses non-GAAP adjusted financial measures to supplement GAAP results, excluding items like intangible asset amortization and share-based compensation, to provide useful supplementary information for investors and analysts, with an updated adjustment policy for Q1 2025 - Non-GAAP measures are used to supplement GAAP results, providing useful supplementary information for investors and analysts[33][34] - Non-GAAP adjustments exclude items such as intangible asset amortization, share-based compensation expense, and acquisition accounting inventory fair value step-up[33][48][50] - Commencing with Q1 2025, the company no longer includes an adjustment for non-cash interest expense in its non-GAAP adjusted financial measures[34] Caution Concerning Forward-Looking Statements This section highlights that the press release contains forward-looking statements regarding future financial results, pipeline advancements, regulatory activities, and commercialization strategies, which are subject to significant risks and uncertainties that could cause actual results to differ materially - The press release contains forward-looking statements related to 2025 financial guidance, pipeline advancements, regulatory activities, and commercialization strategies[36] - These statements are subject to significant risks and uncertainties, including maintaining sales, new product competition, regulatory approval processes, clinical trial success, and macroeconomic conditions[36][37] - Actual results and timing of events could differ materially from those anticipated due to these risks, as detailed in SEC filings[37][38] Condensed Consolidated Financial Statements The condensed financial statements detail Q1 2025 performance, showing a net loss, changes in assets and liabilities, and cash flow activities, with reconciliations to non-GAAP measures Condensed Consolidated Statements of Loss The condensed consolidated statements of loss show a net loss of $(92.5) million for Q1 2025, compared to $(14.6) million for Q1 2024, with stable total revenues but significantly increased operating expenses Condensed Consolidated Statements of Loss (1Q25 vs 1Q24) | Metric (in thousands) | 1Q25 | 1Q24 | |---|---|---| | Total revenues | $897,841 | $901,983 | | Total operating expenses | $953,733 | $835,776 | | Income (loss) from operations | $(55,892) | $66,207 | | Net loss | $(92,541) | $(14,618) | | Net loss per ordinary share (basic and diluted) | $(1.52) | $(0.23) | - Selling, general and administrative expenses increased from $351.7 million in 1Q24 to $514.0 million in 1Q25[41] - Research and development expenses decreased from $222.8 million in 1Q24 to $180.7 million in 1Q25[41] Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $11.5 billion from $12.0 billion at December 31, 2024, primarily due to a decrease in cash and cash equivalents, while total liabilities also decreased, driven by a reduction in long-term debt Condensed Consolidated Balance Sheets (March 31, 2025 vs December 31, 2024) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | |---|---|---| | Cash and cash equivalents | $1,861,946 | $2,412,864 | | Total current assets | $4,127,817 | $4,629,028 | | Total assets | $11,534,682 | $12,012,257 | | Total current liabilities | $1,222,610 | $1,038,573 | | Long-term debt, less current portion | $5,336,481 | $6,077,640 | | Total shareholders' equity | $4,174,891 | $4,093,756 | - Cash and cash equivalents decreased by over $550 million from December 31, 2024, to March 31, 2025[44] - Long-term debt, less current portion, decreased by approximately $741 million[44] Summary of Cash Flows For Q1 2025, net cash provided by operating activities significantly increased to $429.8 million, but net cash used in financing activities also increased substantially due to debt prepayments, resulting in a net decrease in cash and cash equivalents Summary of Cash Flows (1Q25 vs 1Q24) | Cash Flow Activity (in thousands) | 1Q25 | 1Q24 | |---|---|---| | Net cash provided by operating activities | $429,784 | $267,229 | | Net cash used in investing activities | $(168,931) | $(271,904) | | Net cash used in financing activities | $(813,466) | $(56,552) | | Net decrease in cash and cash equivalents | $(550,918) | $(62,925) | - Net cash provided by operating activities increased by over 60% year-over-year[46] - Net cash used in financing activities increased significantly, indicating substantial outflows, likely for debt reduction[46] Reconciliations of GAAP Reported to Non-GAAP Adjusted Information This section provides detailed reconciliations between GAAP reported figures and non-GAAP adjusted figures for Q1 2025 and Q1 2024, as well as for the 2025 full-year guidance, highlighting how key adjustments significantly impact net income and EPS GAAP to Non-GAAP Reconciliation (1Q25) | Metric (in thousands) | GAAP Reported | Adjustments | Non-GAAP Adjusted | |---|---|---|---| | Net Income (Loss) | $(92,541) | $197,774 | $105,233 | | Diluted EPS/(LPS) | $(1.52) | $3.20 | $1.68 | | Cost of product sales | $104,620 | $(34,929) | $69,691 | | SG&A | $514,013 | $(41,674) | $472,339 | | R&D | $180,652 | $(20,930) | $159,722 | - Key non-GAAP adjustments for Q1 2025 include $154.4 million for intangible asset amortization, $67.7 million for share-based compensation expense, and $29.9 million for acquisition accounting inventory fair value step-up[48] - The reconciliation for 2025 guidance shows a significant impact from intangible asset amortization ($610-$660 million) and acquired IPR&D ($870-$900 million) on the shift from GAAP net loss to non-GAAP adjusted net income[53]