DUBLIN, Nov. 8, 2023 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the third quarter of 2023 and provided business updates.
"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-U.S. launches expected through 2024. Oncology net product sales grew 17% year-over-year and our Oncology therapeutic area remains on course to reach approximately $1 billion in annual revenue this year," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "We have raised our 2023 total revenue guidance yet again, as well as our Oncology revenue guidance, at the mid-points. We are increasing our investment in R&D based on our confidence in zanidatamab to raise the standard of care for patients and create long-term value for Jazz. Our disciplined capital deployment and strong execution has also enabled us to increase investment in our key commercial franchises, while delivering on our full year GAAP net income and non-GAAP adjusted net income guidance. We remain well-positioned to achieve Vision 2025."
"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 Japan is progressing well and we now anticipate top-line data in the second half of 2024. Nearer term catalysts include the anticipated readout of JZP150 Phase 2 top-line data in PTSD and initial proof-of-concept from JZP441 in healthy volunteers. The breadth and depth of our expanded R&D pipeline continues to add to the diversification and transformation of our company together with the ability to improve patients' lives," said Rob Iannone, M.D., M.S.C.E., executive vice president, global head of research and development of Jazz Pharmaceuticals.
Key Highlights
Business Updates
Key Commercial Products
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:
Xywav for Narcolepsy:
Xywav for Idiopathic Hypersomnia (IH):
Xyrem® (sodium oxybate) oral solution:
Oxybate (Xywav, Xyrem and AG Royalties):
Epidiolex/Epidyolex (cannabidiol):
Rylaze/Enrylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn):
Zepzelca® (lurbinectedin):
Key Pipeline Highlights
Zanidatamab:
JZP150:
Suvecaltamide (JZP385):
JZP441:
JZP815:
JZP898:
Continued Repurchases under Previously Announced $1.5 Billion Share Repurchase Program
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 September 30, 2023, approximately $261 million remained available and authorized for share repurchases, after the purchase of approximately $75 million shares during the third quarter of 2023. The timing and amount of repurchases under the program will depend on a variety of factors, including the price of the Company's ordinary shares, alternative investment opportunities, restrictions under the Company's credit agreement, corporate and regulatory requirements and market conditions.
Financial Highlights
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(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 $146.8 million, or $2.14 per diluted share, compared to $(19.6) million, or $(0.31) per diluted share, for 3Q22.
Non-GAAP adjusted net income for 3Q23 was $340.1 million, or $4.84 per diluted share, compared to $370.4 million, or $5.17 per diluted share, for 3Q22.
Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
Total Revenues
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(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 U.S. was completed in May 2022. |
Total revenues increased 3% in 3Q23 compared to the same period in 2022.
Operating Expenses and Effective Tax Rate
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(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 September 30, 2023 compared to the same periods in 2022, primarily due to the mix of pre-tax income and losses across tax jurisdictions and the impact of the nabiximols impairment, which was recognized in 3Q22. The nine months ended September 30, 2022 was also impacted by the Sunosi divestment. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(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:
Cash Flow and Balance Sheet
As of September 30, 2023, cash, cash equivalents and investments were $1.6 billion, and the outstanding principal balance of the Company's long-term debt was $5.8 billion. In addition, the Company had undrawn borrowing capacity under a revolving credit facility of $500 million. For the nine months ended September 30, 2023, the Company generated $924.7 million of cash from operations reflecting strong business performance and continued financial discipline.
2023 Financial Guidance
The Company is updating its full year 2023 financial guidance as follows:
(In millions) | November 8, 2023 | August 9, 2023 | |
Revenues | $3,750 - $3,875 | $3,725 - $3,875 | |
–Neuroscience (includes royalties from high-sodium oxybate AG) | $2,715 - $2,825 | $2,715 - $2,825 | |
–Oncology | $975 - $1,050 | $950 - $1,050 |
GAAP:
(In millions, except per share amounts and percentages) | November 8, 2023 | August 9, 2023 | |
Gross margin % | 89 % | 89 % | |
SG&A expenses | $1,240 - $1,295 | $1,220 - $1,295 | |
SG&A expenses as % of total revenues | 32% - 35% | 31% - 35% | |
R&D expenses | $844 - $888 | $739 - $793 | |
R&D expenses as % of total revenues | 22% - 24% | 19% - 21% | |
Effective tax rate | (59)% - (33)% | (35)% - (15)% | |
Net income | $450 - $565 | $450 - $565 | |
Net income per diluted share5 | $6.60 - $8.15 | $6.60 - $8.15 | |
Weighted-average ordinary shares used in per share calculations5 | 72 | 72 |
Non-GAAP:
(In millions, except per share amounts and percentages) | November 8, 2023 | August 9, 2023 | |
Gross margin % | 93%1,6 | 93 % | |
SG&A expenses | $1,065 - $1,1052,6 | $1,045 - $1,105 | |
SG&A expenses as % of total revenues | 27% - 29% | 27% - 30% | |
R&D expenses | $780 - $8203,6 | $675 - $725 | |
R&D expenses as % of total revenues | 20% - 22% | 17% - 19% | |
Effective tax rate | 4% - 6%4,6 | 8% - 10% | |
Net income | $1,290 - $1,3406 | $1,290 - $1,340 | |
Net income per diluted share5 | $18.15 - $19.006 | $18.15 - $19.00 | |
Weighted-average ordinary shares used in per share calculations5 | 72 | 72 |
1. | Excludes $135-$155 million of amortization of acquisition-related inventory fair value step-up and $14-$15 million of share-based compensation expense. | |||
2. | Excludes $152-$167 million of share-based compensation expense and $23 million of restructuring costs. | |||
3. | Excludes $64-$68 million of share-based compensation expense. | |||
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 $25 million and $22 million, on a GAAP and on a non-GAAP adjusted basis, respectively, under the "if converted" method. In August 2023, we made the irrevocable election to net share settle our 2024 Notes. This election is expected to impact our full-year net income per diluted share guidance by $0.05 to $0.10 per share, on a GAAP basis, and $0.25 to $0.40 per share, on a Non-GAAP adjusted basis, as a result of an estimated decrease in the weighted-average shares outstanding of 1 million shares. | |||
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
Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. ET (9:30 p.m. GMT) to provide a business and financial update and discuss its 2023 third quarter results.
Audio webcast/conference call:
U.S. Dial-In Number: +1 888 350 4423
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 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 and novel product candidates, from early- to late-stage development, in neuroscience and oncology. Within these therapeutic areas, we are identifying new options for patients by actively exploring small molecules and biologics, and through innovative delivery technologies and cannabinoid science. Jazz is headquartered in Dublin, Ireland and has employees around the globe, serving patients in nearly 75 countries. Please visit www.jazzpharmaceuticals.com for more information.
Non-GAAP Financial Measures
To supplement Jazz Pharmaceuticals' financial results and guidance presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP (also referred to as adjusted or non-GAAP adjusted) financial measures in this press release and the accompanying tables. In particular, the Company presents non-GAAP adjusted net income (and the related per share measure) and its line item components, as well as certain non-GAAP adjusted financial measures derived therefrom, including non-GAAP adjusted gross margin percentage and non-GAAP adjusted effective tax rate. Non-GAAP adjusted net income (and the related per share measure) and its line item components exclude from GAAP reported net income (loss) (and the related per share measure) and its line item components certain items, as detailed in the reconciliation tables that follow, and in the case of non-GAAP adjusted net income (and the related per share measure), adjust for the income tax effect of the non-GAAP adjustments. In this regard, the components of non-GAAP adjusted net income, including non-GAAP adjusted cost of product sales, SG&A expenses and R&D expenses, are income statement line items prepared on the same basis as, and therefore components of, the overall non-GAAP adjusted net income measure.
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 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-U.S. launches through 2024; expectations with respect to AGs; the Company's ability to achieve Vision 2025 and the Company's progress related thereto; the Company's development, regulatory and commercialization strategy; the Company's advancement of pipeline programs and the timing of development activities, regulatory activities and submissions related thereto, including the ability to deliver up to five late-stage data readouts by the end of 2024, expectations to initiate a Phase 1 clinical trial of JZP898 by the end of this year and proof of concept of JZP441 in 2023, expectations of top-line data from a Phase 2 trial of JZP150 for PTSD in the near term, a Phase 3 trial of zanidatamab for GEA in 2024 and a Phase 3 trial of Epidyolex for DS, LGS and TSC in Japan in the first half of 2024; the Company's expectations with respect to its products and product candidates and the potential of the Company's products and product candidates, including the potential of zanidatamab to transform the current standard of care in multiple HER2-expressing cancers and the potential regulatory path related thereto; expectations that Xywav will remain the oxybate of choice; the Company's capital allocation and corporate development strategy; the potential successful future development, manufacturing, regulatory and commercialization activities; the Company's expectation of meaningful growth as part of its Vision 2025; growing and diversifying the Company's revenue, investing in its pipeline of novel therapies, and delivering innovative therapies for patients and the potential benefits of such therapies; the Company's ability to realize the commercial potential of its products; the Company's net product sales and goals for net product sales from new and acquired products; the Company's views and expectations relating to its patent portfolio, including with respect to expected patent protection, as well as expectations with respect to exclusivity; planned or anticipated clinical trial events, including with respect to initiations, enrollment and data read-outs, and the anticipated timing thereof; the Company's clinical trials confirming clinical benefit or enabling regulatory submissions; planned or anticipated regulatory submissions and filings, and the anticipated timing thereof; potential regulatory approvals; the timing and amount of repurchases of the Company's ordinary shares; settlements of the Notes; and other statements that are not historical facts. These forward-looking statements are based on the Company's current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties.
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 GW Pharmaceuticals, including the failure to realize the blockbuster potential of Epidiolex; 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 Russia and Ukraine and related sanctions; macroeconomic conditions, including global financial markets, rising interest rates and inflation and recent and potential banking disruptions; regulatory initiatives and changes in tax laws; market volatility; protecting and enhancing the Company's intellectual property rights and the Company's commercial success being dependent upon the Company obtaining, maintaining and defending intellectual property protection for its products and product candidates; delays or problems in the supply or manufacture of the Company's products and product candidates; complying with applicable U.S. and non-U.S. regulatory requirements, including those governing the research, development, manufacturing and distribution of controlled substances; government investigations, legal proceedings and other actions; identifying and consummating corporate development transactions, financing these transactions and successfully integrating acquired product candidates, products and businesses; the Company's ability to realize the anticipated benefits of its corporate development transactions and its collaborations and license agreements with third parties; the sufficiency of the Company's cash flows and capital resources; the Company's ability to achieve targeted or expected future financial performance and results and the uncertainty of future tax, accounting and other provisions and estimates; the Company's ability to meet its projected long-term goals and objectives, including as part of Vision 2025, in the time periods that the Company anticipates, or at all, and the inherent uncertainty and significant judgments and assumptions underlying the Company's long-term goals and objectives; fluctuations in the market price and trading volume of the Company's ordinary shares; restrictions on repurchases of capital stock; the timing and availability of alternative investment opportunities; the Company's ability to pay cash amounts and issue ordinary shares due upon exchange of the Notes; and other risks and uncertainties affecting the Company, including those described from time to time under the caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals' Securities and Exchange Commission filings and reports, including the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, and future filings and reports by the Company. Other risks and uncertainties of which the Company is not currently aware may also affect the Company's forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.
JAZZ PHARMACEUTICALS PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (In thousands, except per share amounts) (Unaudited) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
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 |
JAZZ PHARMACEUTICALS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||
September 30, | December 31, | ||
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 | |
Goodwill | 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 |
JAZZ PHARMACEUTICALS PLC SUMMARY OF CASH FLOWS (In thousands) (Unaudited) | |||
Nine Months Ended September 30, | |||
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 |
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (In thousands, except per share amounts) (Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
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 August 2023, we made an irrevocable election to fix the settlement method for exchanges of the 2024 Notes to a combination of cash and ordinary shares of the Company with a specified cash amount per $1,000 principal amount of the 2024 Notes of $1,000. As a result, the assumed issuance of ordinary shares upon exchange of the 2024 Notes has only been included in the calculation of diluted net income per ordinary share, on a GAAP and on a non-GAAP adjusted basis, in the three and nine months ended September 30, 2023 up to the date the irrevocable election was made. GAAP reported net income per diluted share for the three and nine months ended September 30, 2023 included 7.6 million shares and 8.5 million shares, respectively, related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to GAAP net income of $5.9 million and $20.0 million, respectively. There was no impact on GAAP reported net income (loss) per diluted share for the three and nine months ended September 30, 2022, as the Exchangeable Senior Notes were anti-dilutive. Non-GAAP adjusted net income per diluted share for the three and nine months ended September 30, 2023 included 7.6 million shares and 8.5 million shares, respectively, related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to non-GAAP adjusted net income of $5.2 million and $17.8 million, respectively. Non-GAAP adjusted net income per diluted share for the three and nine months ended September 30, 2022 included 9.0 million shares related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to non-GAAP adjusted net income of $6.3 million and $18.9 million, respectively. | |||||
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. |
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 (In thousands, except percentages) (Unaudited) | |||||||||||||||
Three months ended September 30, 2023 | |||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Interest | Income tax | Effective | ||||||||
GAAP Reported | $ 102,153 | 89.1 % | $ 308,310 | $ 234,402 | $ 154,883 | $ 71,497 | $ (47,176) | (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 September 30, 2022 | |||||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Impairment | Interest | Income tax | Effective | |||||||||
GAAP Reported | $ 133,661 | 85.7 % | $ 358,478 | $ 148,870 | $ 141,232 | $ 133,648 | $ 80,244 | $ (43,027) | 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 | $ — | $ — | $ 65,982 | $ 44,386 | 10.6 % |
(1) | The GAAP effective tax rate decreased in the three months ended September 30, 2023 compared to the same period in 2022, primarily due to the mix of pre-tax income and losses across tax jurisdictions and the impact of the nabiximols impairment, which was recognized in 2022. |
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 and 2022 (In thousands, except percentages) (Unaudited) | |||||||||||||||||
Nine months ended September 30, 2023 | |||||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Acquired | Interest | Income tax | Effective | |||||||||
GAAP Reported | $ 328,334 | 88.1 % | $ 947,071 | $ 633,050 | $ 456,731 | $ 1,000 | $ 219,114 | $ (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 | $ 197,841 | 92.9 % | $ 810,428 | $ 583,704 | $ — | $ 1,000 | $ 202,859 | $ 72,785 | 7.1 % |
Nine months ended September 30, 2022 | |||||||||||||||||||
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 | $ 133,648 | $ 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 September 30, 2023 compared to the same period in 2022, primarily due to the mix of pre-tax income and losses across tax jurisdictions and the impact of both the Sunosi divestment in 2022 and the nabiximols impairment, which was recognized in 2022. |
JAZZ PHARMACEUTICALS PLC 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 | $450 - $565 | $6.60 - $8.15 | |
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 | $1,290 - $1,340 | $18.15 - $19.00 | |
Weighted-average ordinary shares used in per share calculations - GAAP and non- | 72 |
Contacts:
Investors:
Andrea N. Flynn, Ph.D.
Vice President, Head, Investor Relations
Jazz Pharmaceuticals plc
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Ireland +353 1 634 3211
U.S. +1 650 496 2717
Media:
Kristin Bhavnani
Head of Global Corporate Communications
Jazz Pharmaceuticals plc
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Ireland +353 1 637 2141
U.S. +1 215 867 4948
Last Trade: | US$124.20 |
Daily Change: | 0.47 0.38 |
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Market Cap: | US$7.510B |
December 17, 2024 December 04, 2024 |
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