Jazz Pharmaceuticals(JAZZ) - 2024 Q1 - Quarterly Results

Financial & Operational Highlights Jazz Pharmaceuticals reported strong Q1 2024 results, with key growth drivers and oncology portfolio showing double-digit revenue growth, affirming full-year guidance Q1 2024 Key Growth Driver Performance (YoY) | Product | Net Product Sales Growth (YoY) % | | :--- | :--- | | Xywav | 14 | | Epidiolex/Epidyolex | 5 | | Rylaze | 20 | - The company completed the Biologics License Application (BLA) submission for zanidatamab, seeking accelerated approval for second-line biliary tract cancer (BTC)[4] - Multiple near-term, late-stage pipeline catalysts are anticipated, including top-line data for suvecaltamide in essential tremor (late 1H24) and zanidatamab in 1L gastroesophageal adenocarcinoma (late 2024)[4] - Full-year 2024 total revenue guidance was affirmed at $4.0 to $4.2 billion[1][4] Business and Pipeline Updates Strong commercial performance, led by Xywav's 14% sales increase, complemented significant pipeline advancements including zanidatamab BLA submission and suvecaltamide trial enrollment completion Key Commercial Products Performance Q1 2024 saw Xywav sales grow 14% to $315.3 million, Rylaze 20% to $102.8 million, and Zepzelca 12% to $75.1 million, while Xyrem declined due to patient transition Xywav Performance (Q1 2024) | Metric | Value | | :--- | :--- | | Net Product Sales | $315.3 million (+14% YoY) | | Total Active Patients | ~12,950 | | Narcolepsy Patients | ~9,900 | | Idiopathic Hypersomnia (IH) Patients | ~3,050 | Other Key Product Sales (Q1 2024) | Product | Net Sales | Change (YoY) % | | :--- | :--- | :--- | | Rylaze/Enrylaze | $102.8 million | +20 | | Zepzelca | $75.1 million | +12 | | Epidiolex/Epidyolex | $198.7 million | +5 | | Xyrem | $64.2 million | -64 | - Royalties from high-sodium oxybate authorized generics (AGs) were $49.9 million in Q1 2024, and are expected to exceed $200 million for the full year[10] Key Pipeline Highlights Pipeline advanced with zanidatamab BLA submission for 2L BTC and completed enrollment for suvecaltamide Phase 2b essential tremor trial, with key data readouts anticipated - Zanidatamab: The BLA for 2L BTC was submitted to the FDA. A pivotal trial in 1L gastroesophageal adenocarcinoma (GEA) is ongoing, with top-line PFS data targeted for late 2024[12][14] - Suvecaltamide (JZP385): Enrollment for the Phase 2b trial in essential tremor (ET) was completed in Q1 2024, with top-line data anticipated in late 1H24[13][14] - Zepzelca: Enrollment in the Phase 3 trial for 1L small cell lung cancer (SCLC) was completed in Q1 2024, with top-line PFS data expected at the end of 2024 or early 2025[11] Financial Performance Q1 2024 total revenues grew 1% to $902.0 million, but GAAP net loss of $14.6 million resulted from increased R&D and SG&A expenses, while non-GAAP adjusted net income was $182.2 million Financial Highlights Summary Q1 2024 GAAP net loss was $14.6 million ($(0.23) per share), a decline from Q1 2023 net income, with non-GAAP adjusted net income at $182.2 million ($2.68 per diluted share) Q1 2024 vs. Q1 2023 Financial Results | Metric (in thousands, except per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $901,983 | $892,812 | | GAAP Net Income (Loss) | $(14,618) | $69,420 | | GAAP EPS (Loss) | $(0.23) | $1.04 | | Non-GAAP Adjusted Net Income | $182,215 | $285,261 | | Non-GAAP Adjusted EPS | $2.68 | $3.95 | Total Revenues Q1 2024 total revenues increased 1% YoY to $902.0 million, driven by oncology sales and AG royalty revenue, partially offset by declining Neuroscience revenue due to Xyrem sales Revenue Breakdown (in thousands) | Revenue Source | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Neuroscience | | | | Xywav | $315,300 | $277,761 | | Xyrem | $64,232 | $178,130 | | Epidiolex/Epidyolex | $198,716 | $188,909 | | Total Neuroscience | $580,983 | $651,898 | | Oncology | | | | Rylaze/Enrylaze | $102,750 | $85,927 | | Zepzelca | $75,100 | $67,181 | | Total Oncology | $257,549 | $228,887 | | High-sodium oxybate AG royalty revenue | $49,947 | $2,096 | | Total Revenues | $901,983 | $892,812 | Operating Expenses Q1 2024 GAAP SG&A and R&D expenses increased to 39.0% and 24.7% of revenues, driven by higher compensation, program investments, and litigation costs GAAP Operating Expenses as % of Total Revenues | Expense Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Gross Margin | 88.7% | 85.5% | | SG&A | 39.0% | 33.4% | | R&D | 24.7% | 21.2% | - Increases in SG&A and R&D expenses were primarily driven by higher compensation-related costs due to increased headcount, investment in priority programs like zanidatamab, and litigation costs[20] Cash Flow and Balance Sheet As of March 31, 2024, the company held $1.8 billion in cash and investments, with $5.8 billion in long-term debt, and generated $267.2 million in cash from operations Key Balance Sheet and Cash Flow Items (as of March 31, 2024) | Item | Value | | :--- | :--- | | Cash, cash equivalents and investments | $1.8 billion | | Principal balance of long-term debt | $5.8 billion | | Cash from operations (for Q1 2024) | $267.2 million | 2024 Financial Guidance Jazz Pharmaceuticals affirmed full-year 2024 guidance, projecting total revenues of $4.0-$4.2 billion and non-GAAP adjusted diluted EPS of $18.15-$19.35 Full Year 2024 Revenue Guidance (in millions) | Segment | Guidance | | :--- | :--- | | Total Revenues | $4,000 - $4,200 | | Neuroscience | $2,800 - $2,950 | | Oncology | $1,120 - $1,220 | Full Year 2024 Profitability Guidance | Metric | GAAP | Non-GAAP Adjusted | | :--- | :--- | :--- | | Net Income (in millions) | $385 - $530 | $1,275 - $1,350 | | Net Income per Diluted Share | $5.80 - $7.70 | $18.15 - $19.35 | Consolidated Financial Statements This section presents unaudited condensed consolidated financial statements for Q1 2024, including income statement with $14.6 million net loss, balance sheet with $11.3 billion total assets, and cash flow statement with $267.2 million cash from operations Condensed Consolidated Statements of Income (Loss) For Q1 2024, total revenues were $902.0 million, resulting in a net loss of $14.6 million, or $(0.23) per diluted share, after $835.8 million in operating expenses Q1 2024 Income Statement Summary (in thousands) | Line Item | Three Months Ended March 31, 2024 | | :--- | :--- | | Total revenues | $901,983 | | Total operating expenses | $835,776 | | Income from operations | $66,207 | | Net income (loss) | $(14,618) | | Diluted net income (loss) per share | $(0.23) | Condensed Consolidated Balance Sheets As of March 31, 2024, total assets were $11.33 billion, total liabilities $7.63 billion, and total shareholders' equity $3.70 billion, with cash and cash equivalents at $1.44 billion Balance Sheet Summary (in thousands) | Line Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,443,385 | $1,506,310 | | Total current assets | $3,539,898 | $3,435,428 | | Total assets | $11,327,075 | $11,393,359 | | Total current liabilities | $1,562,206 | $1,536,692 | | Total liabilities | $7,630,614 | $7,656,362 | | Total shareholders' equity | $3,696,461 | $3,736,997 | Summary of Cash Flows For Q1 2024, net cash from operations was $267.2 million, while investing activities used $271.9 million and financing activities used $56.6 million, leading to a $62.9 million net decrease in cash Cash Flow Summary (in thousands) | Line Item | Three Months Ended March 31, 2024 | | :--- | :--- | | Net cash provided by operating activities | $267,229 | | Net cash used in investing activities | $(271,904) | | Net cash used in financing activities | $(56,552) | | Net decrease in cash and cash equivalents | $(62,925) | Reconciliation of GAAP to Non-GAAP Measures This section details GAAP to non-GAAP reconciliations, showing Q1 2024 GAAP net loss of $14.6 million adjusted to $182.2 million non-GAAP net income, with similar adjustments for full-year guidance Reconciliation of Q1 2024 GAAP Net Loss to Non-GAAP Adjusted Net Income (in thousands) | Description | Amount | | :--- | :--- | | GAAP reported net loss | $(14,618) | | Intangible asset amortization | $155,730 | | Share-based compensation expense | $61,441 | | Acquisition accounting inventory fair value step-up | $28,943 | | Non-cash interest expense | $4,846 | | Income tax effect of above adjustments | $(54,127) | | Non-GAAP adjusted net income | $182,215 | Reconciliation of 2024 GAAP to Non-GAAP Diluted EPS Guidance | Description | Diluted EPS Range | | :--- | :--- | | GAAP guidance | $5.80 - $7.70 | | Intangible asset amortization | $8.55 - $9.15 | | Acquisition accounting inventory fair value step-up | $1.75 - $2.05 | | Share-based compensation expense | $3.80 - $4.25 | | Non-cash interest expense | $0.30 - $0.40 | | Income tax effect of above adjustments | $(2.90) - $(3.20) | | Non-GAAP guidance | $18.15 - $19.35 |