DUBLIN, Feb. 25, 2020
/PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today
announced financial results for the full year and the fourth
quarter of 2019 and provided financial guidance for 2020.
"With more than $2 billion of
revenue and double-digit top- and bottom-line growth, we delivered
strong 2019 financial results while making significant investments
to support the continued robust evolution of our business," said
Bruce Cozadd, chairman and chief
executive officer of Jazz Pharmaceuticals. "Strong execution of our
long-term sustainable growth strategy has led to six major product
approvals in the past four years, and we look forward to further
diversification of our revenue base through corporate development
activities and by delivering on other key priorities, including
the European launch of Sunosi, the anticipated U.S. launches
of lurbinectedin and JZP-258, and pre-launch activities for
JZP-458."
"Backed by a growing commitment to R&D, we have made
significant progress strengthening and advancing our R&D
pipeline with the goal of providing important new therapeutic
options and improved patient outcomes in difficult-to-treat
diseases," said Robert Iannone,
M.D., M.S.C.E., executive vice president, research and development,
of Jazz Pharmaceuticals. "Our R&D organization remains focused
on optimizing and diversifying our portfolio through internal
efforts and external opportunities, including utilizing innovative
technologies, and working through partnerships and collaborations
designed to bring new life-changing therapeutics to patients."
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
|
Year Ended
December 31,
|
|
|
(In thousands, except
per share amounts and percentages)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
Total
revenues
|
$
|
581,740
|
|
|
$
|
476,457
|
|
|
22%
|
|
$
|
2,161,761
|
|
|
$
|
1,890,922
|
|
|
14%
|
GAAP net
income
|
$
|
73,992
|
|
|
$
|
159,470
|
|
|
(54)%
|
|
$
|
523,367
|
|
|
$
|
447,098
|
|
|
17%
|
Adjusted net
income
|
$
|
253,243
|
|
|
$
|
219,951
|
|
|
15%
|
|
$
|
934,231
|
|
|
$
|
838,613
|
|
|
11%
|
GAAP EPS
|
$
|
1.29
|
|
|
$
|
2.64
|
|
|
(51)%
|
|
$
|
9.09
|
|
|
$
|
7.30
|
|
|
25%
|
Adjusted
EPS
|
$
|
4.42
|
|
|
$
|
3.64
|
|
|
21%
|
|
$
|
16.23
|
|
|
$
|
13.70
|
|
|
18%
|
GAAP net income for 2019 was $523.4 million, or $9.09 per diluted share, compared to $447.1 million, or $7.30 per diluted share, for 2018. GAAP net
income for the fourth quarter of 2019 was $74.0 million, or $1.29 per diluted share, compared to $159.5 million, or $2.64 per diluted share, for the fourth quarter
of 2018. The decrease in GAAP net income and EPS in the fourth
quarter of 2019 compared to the fourth quarter of 2018 was
primarily due to the amortization of the $111.1 million cost of the priority review
voucher utilized in connection with the company's JZP-258 new drug
application (NDA) submission.
Non-GAAP adjusted net income for 2019 was $934.2 million, or $16.23 per diluted share, compared to
$838.6 million, or $13.70 per diluted share, for 2018. Non-GAAP
adjusted net income for the fourth quarter of 2019 was $253.2 million, or $4.42 per diluted share, compared to $220.0 million, or $3.64 per diluted share, for the fourth quarter
of 2018. Reconciliations of applicable GAAP reported to non-GAAP
adjusted information are included at the end of this press
release.
Key Corporate and R&D Updates
Corporate
- The company announced today the appointment of Renée D. Galá as
Executive Vice President and Chief Financial Officer (CFO)
effective March 16, 2020. At this
time, Ms. Galá will assume the duties and responsibilities of the
company's principal financial officer from Bruce Cozadd, Chairman and Chief Executive
Officer, who has been serving in this role on an interim
basis. Ms. Galá brings more than 25 years of extensive
experience across finance, strategy, leadership development and
corporate development and recently served at GRAIL, Inc. as
CFO. Prior to this, Ms. Galá served as Senior Vice President
and CFO of Theravance Biopharma, Inc. Ms. Galá serves on the
board of directors of Gossamer Bio, Inc., a clinical-stage
biopharmaceutical company, where she also chairs the audit
committee. Ms. Galá holds a B.S. in Mathematics from
Vanderbilt University and an M.B.A.
from Columbia Business School.
- The company announced today the appointment of Samantha Pearce as Senior Vice President,
Europe/Rest of World effective
March 2, 2020. From March 2010 to December
2019, Ms. Pearce held various global senior management
positions with Celgene Corporation, most recently as Vice President
and General Manager, International Markets. From August 2002 to March
2010, Ms. Pearce served in management positions at
AstraZeneca plc, culminating in her role as Director, Specialist
Care. Ms. Pearce received a B.Sc. from Birmingham University and an M.B.A. from Cranfield
University.
Sunosi® (solriamfetol)
- In January 2020, the European
Commission approved Sunosi to improve wakefulness and reduce
excessive daytime sleepiness (EDS) in adults with narcolepsy (with
or without cataplexy) or obstructive sleep apnea (OSA) whose
EDS has not been satisfactorily treated by primary OSA
therapy, such as continuous positive airway
pressure. Sunosi is the only licensed therapy in
the European Union (EU) for the treatment
of EDS in adults living with OSA.
JZP-258
- In January 2020, the company
submitted an NDA to the U.S. Food and Drug Administration (FDA) for
JZP-258 for the treatment of cataplexy and EDS in narcolepsy
patients 7 years of age and older. The company redeemed its
priority review voucher for the NDA submission.
Defitelio® (defibrotide sodium) / defibrotide
- In the fourth quarter of 2019, the company completed enrollment
in its prevention of acute graft-vs-host disease (aGvHD) Phase 2
study.
Vyxeos® (daunorubicin and cytarabine) liposome for
injection
- In the fourth quarter of 2019, the company activated sites for
its Phase 1b master trial of Vyxeos
in combination with various targeted agents in first-line, fit
acute myeloid leukemia.
JZP-458
- In the fourth quarter of 2019, FDA granted Fast Track
designation to JZP-458 for the treatment of acute lymphoblastic
leukemia (ALL)/lymphoblastic lymphoma (LBL) and the company
activated sites and began enrollment in its single-arm, pivotal
Phase 2/3 clinical study.
Lurbinectedin
- In December 2019, the company
announced that it had entered into an exclusive license agreement
with Pharma Mar S.A. (PharmaMar) for U.S. commercialization and
development rights to lurbinectedin. In January 2020, the transaction closed and the
company made an upfront payment of $200
million to PharmaMar.
- In February 2020, FDA accepted
the NDA and granted priority review for lurbinectedin for the
treatment of relapsed small cell lung cancer (SCLC) with a
Prescription Drug User Fee Act (PDUFA) action date of August 16, 2020.
Select 2020
Objectives
|
|
|
|
Sleep and
Neuroscience
|
|
Sunosi
|
|
●
|
Initiate European rolling launch in Germany
mid-2020
|
|
●
|
Initiate Phase 3
study for EDS in major depressive disorder mid-2020
|
|
JZP-258
|
|
✔
|
Submit NDA for
cataplexy and EDS in narcolepsy patients 7 years and older January
2020
|
|
●
|
Obtain U.S. approval
as early as 3Q20
|
|
●
|
Launch as early as
4Q20
|
|
●
|
Complete enrollment
in Phase 3 study in idiopathic hypersomnia 2H20
|
|
JZP-385
|
|
●
|
Initiate Phase 2b
study in essential tremor 4Q20
|
|
|
|
Hematology and
Oncology
|
|
Defitelio
|
|
●
|
Conduct interim
analysis in Phase 3 study for prevention of hepatic veno-occlusive
disease study to determine final enrollment 1H20
|
|
●
|
Report top-line
results from Phase 2 study for prevention of aGvHD 2H20
|
|
Lurbinectedin
|
|
●
|
Obtain U.S.
accelerated approval for relapsed SCLC and launch 3Q20
|
|
JZP-458
|
|
●
|
Conduct interim
analysis in pivotal Phase 2/3 clinical study in ALL/LBL
|
|
●
|
Submit Biologics
License Application (BLA) to FDA as early as 4Q20
|
|
Corporate
Development
|
|
●
|
Expand portfolio
through multiple acquisitions or partnerships
|
Total
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
(In
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Xyrem® (sodium
oxybate) oral solution
|
$
|
435,352
|
|
|
$
|
374,830
|
|
|
$
|
1,642,525
|
|
|
$
|
1,404,866
|
|
Erwinaze® / Erwinase®
(asparaginase Erwinia chrysanthemi)
|
54,920
|
|
|
24,265
|
|
|
177,465
|
|
|
174,739
|
|
Defitelio®
(defibrotide sodium) / defibrotide
|
47,779
|
|
|
37,712
|
|
|
172,938
|
|
|
149,448
|
|
Vyxeos® (daunorubicin
and cytarabine) liposome for injection
|
31,521
|
|
|
25,618
|
|
|
121,407
|
|
|
100,835
|
|
Sunosi®
(solriamfetol)
|
2,727
|
|
|
—
|
|
|
3,714
|
|
|
—
|
|
Other
|
4,227
|
|
|
4,909
|
|
|
17,552
|
|
|
39,585
|
|
Product sales,
net
|
576,526
|
|
|
467,334
|
|
|
2,135,601
|
|
|
1,869,473
|
|
Royalties and
contract revenues
|
5,214
|
|
|
9,123
|
|
|
26,160
|
|
|
21,449
|
|
Total
revenues
|
$
|
581,740
|
|
|
$
|
476,457
|
|
|
$
|
2,161,761
|
|
|
$
|
1,890,922
|
|
Total revenues increased 14% in 2019 and 22% in the fourth
quarter of 2019 compared to the same periods in 2018.
Xyrem net product sales increased 17% in 2019 and 16% in the
fourth quarter of 2019 compared to the same periods in 2018.
Erwinaze/Erwinase net product sales in 2019 were consistent with
net product sales in 2018 and higher in the fourth quarter of 2019
compared to the same period of 2018 due to the timing of supply
availability. The company experienced limited product availability
during 2019 and 2018 due to ongoing supply and manufacturing issues
at the sole manufacturer.
Defitelio/defibrotide net product sales increased 16% in 2019
and 27% in the fourth quarter of 2019 compared to the same periods
in 2018. The company continues to expect inter-quarter variability
in Defitelio net sales.
Vyxeos net product sales increased 20% in 2019 and 23% in the
fourth quarter of 2019 compared to the same periods in 2018
primarily due to the ongoing European launch.
Sunosi net product sales were $3.7 million in 2019 following the U.S.
launch in July 2019.
Operating Expenses
and Effective Tax Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
(In thousands, except
percentages)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP:
|
|
|
|
|
|
|
|
Cost of product
sales
|
$
|
35,348
|
|
$
|
26,337
|
|
$
|
127,930
|
|
$
|
121,544
|
Gross
margin
|
93.9%
|
|
94.4%
|
|
94.0%
|
|
93.5%
|
Selling, general and
administrative
|
$
|
214,275
|
|
$
|
161,865
|
|
$
|
736,942
|
|
$
|
683,530
|
% of total
revenues
|
36.8%
|
|
34.0%
|
|
34.1%
|
|
36.1%
|
Research and
development
|
$
|
97,382
|
|
$
|
56,657
|
|
$
|
299,726
|
|
$
|
226,616
|
% of total
revenues
|
16.7%
|
|
11.9%
|
|
13.9%
|
|
12.0%
|
Impairment
charges
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42,896
|
Acquired in-process
research and development
|
$
|
—
|
|
$
|
—
|
|
$
|
109,975
|
|
$
|
—
|
Income tax provision
(benefit)
|
$
|
(34,523)
|
|
$
|
5,144
|
|
$
|
(73,154)
|
|
$
|
80,162
|
Effective tax
rate
|
(84.7)%
|
|
3.1%
|
|
(16.1)%
|
|
15.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
|
Year Ended
December 31,
|
(In thousands, except
percentages)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Non-GAAP
adjusted:
|
|
|
|
|
|
|
|
Cost of product
sales
|
$
|
34,063
|
|
$
|
24,725
|
|
$
|
121,293
|
|
$
|
114,910
|
Gross
margin
|
94.1%
|
|
94.7%
|
|
94.3%
|
|
93.9%
|
Selling, general and
administrative
|
$
|
196,935
|
|
$
|
142,107
|
|
$
|
658,245
|
|
$
|
548,687
|
% of total
revenues
|
33.9%
|
|
29.8%
|
|
30.4%
|
|
29.0%
|
Research and
development
|
$
|
90,070
|
|
$
|
51,304
|
|
$
|
274,497
|
|
$
|
196,579
|
% of total
revenues
|
15.5%
|
|
10.8%
|
|
12.7%
|
|
10.4%
|
Acquired in-process
research and development
|
$
|
—
|
|
$
|
—
|
|
$
|
5,700
|
|
$
|
—
|
Income tax
provision
|
$
|
(2,366)
|
|
$
|
29,220
|
|
$
|
132,030
|
|
$
|
148,515
|
Effective tax
rate
|
(0.9)%
|
|
11.7%
|
|
12.3%
|
|
15.0%
|
Operating expenses increased over the prior year periods
primarily due to the following:
- Selling, general and administrative (SG&A) expenses
increased in 2019 and in the fourth quarter of 2019 compared to the
same periods in 2018 on a GAAP and on a non-GAAP adjusted basis
primarily due to expenses related to the expansion of the company's
business, including the U.S. launch of Sunosi.
- Research and development (R&D) expenses increased in 2019
and in the fourth quarter of 2019 compared to the same periods in
2018 on a GAAP and on a non-GAAP adjusted basis primarily due to
expenses related to the company's expanding pre-clinical and
clinical development programs and support of its partner programs,
including milestone payments of $26.0
million in 2019 to Pfenex, Inc. under a license and option
agreement to develop and commercialize multiple early stage
hematology product candidates.
The effective tax rate for the fourth quarter of 2019 on both a
GAAP and on a non-GAAP adjusted basis included a benefit of
$31.6 million for the years 2015 to
2019 resulting from the application of the Italian patent box
incentive. The effective tax rate for 2019 on a GAAP basis included
a one-time tax benefit of $112.3
million resulting from an intra-entity intellectual property
asset transfer.
Cash Flow and Balance Sheet
As of December 31, 2019, cash, cash equivalents and
investments were $1.1 billion, and
the outstanding principal balance of the company's long-term debt
was $1.8 billion. In 2019, the
company generated $776.4 million of
cash from operations, used $301.5
million to repurchase shares under the company's share
repurchase program, made milestone payments totaling $80.5 million related to Sunosi, and made upfront
payments of $52.5 million to acquire
Cavion, Inc. (Cavion) and $56.0
million to Codiak BioSciences, Inc. (Codiak) under a
collaboration agreement.
In 2019, the company repurchased approximately 2.3 million
ordinary shares under the company's share repurchase program at an
average cost of $133.97 per ordinary
share. As of December 31, 2019, the remaining amount
authorized for share repurchases under the company's share
repurchase program was $577.7
million.
2020 Financial Guidance
Jazz Pharmaceuticals' full year 2020 financial guidance as
follows (in millions, except per share amounts and
percentages):
|
GAAP and Non-GAAP
Adjusted
|
Revenues
|
$2,320 -
$2,400
|
Total net product
sales
|
$2,305 -
$2,375
|
-Oxybate
franchise net sales
|
$1,710 -
$1,760
|
-Sunosi net
sales
|
$30 - $50
|
-Erwinaze/Erwinase
net sales
|
$185 -
$215
|
-Defitelio/defibrotide net sales
|
$180 -
$200
|
-Vyxeos net
sales
|
$135 -
$165
|
|
|
GAAP
|
Non-GAAP
Adjusted
|
Gross margin
%
|
94%
|
94%1,6
|
SG&A
expenses
|
$855 -
$903
|
$770 -
$8102,6
|
SG&A expenses
as % of total revenues
|
36% -
39%
|
32% -
35%
|
R&D
Expenses
|
$312 -
$348
|
$285 -
$3153,6
|
R&D expenses
as % of total revenues
|
13% -
15%
|
12% -
14%
|
Acquired in-process
research and development expenses
|
$200
|
$2004
|
Effective tax
rate
|
15% - 23%
|
18% -
20%5,6
|
Net income per
diluted share
|
$5.90 -
$7.15
|
$12.50 -
$13.404,6
|
____________________________
1.
|
Excludes
$8-$9 million of share-based compensation expense from
estimated GAAP gross margin.
|
|
|
2.
|
Excludes $85-$93
million of share-based compensation expense from estimated GAAP
SG&A expenses.
|
|
|
3.
|
Excludes $27-$33
million of share-based compensation expense from estimated GAAP
R&D expenses.
|
|
|
4.
|
Beginning with the
presentation of the company's financial guidance for 2020,
following consultation with the staff of the Division of
Corporation Finance of the U.S. Securities and Exchange Commission,
the company will no longer exclude upfront and milestone payments
from the company's non-GAAP adjusted net income, its line item
components and non-GAAP adjusted EPS. The impact of this change to
the company's 2020 non-GAAP adjusted net income and non-GAAP
adjusted EPS guidance is approximately $175 million or $3.13 per
diluted share, respectively, related to the post-tax impact of the
$200 million upfront payment made to PharmaMar in January
2020.
|
|
|
5.
|
Excludes the income
tax effect of adjustments between GAAP reported and non-GAAP
adjusted net income.
|
|
|
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 2020 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.
EST (9:30 p.m. GMT) to provide
a business and financial update and discuss its 2019 full year and
fourth quarter results and provide 2020 financial guidance. The
live webcast may be accessed from the Investors section of the
company's website at www.jazzpharmaceuticals.com. Please connect to
the website prior to the start of the conference call to ensure
adequate time for any software downloads that may be necessary.
Investors may participate in the conference call by dialing
+1 855 353 7924 in the U.S., or +1 503 343 6056
outside the U.S., and entering passcode 9837779.
A replay of the conference call will be available through
March 3, 2020 by dialing +1 855 859
2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering
passcode 9837779. An archived version of the webcast will be
available for at least one week in the Investors section of the
company's website at www.jazzpharmaceuticals.com.
About Jazz Pharmaceuticals plc
Jazz Pharmaceuticals plc (Nasdaq: JAZZ) is a global
biopharmaceutical company dedicated to developing life-changing
medicines for people with serious diseases — often with limited or
no options. We have a diverse portfolio of marketed medicines and
novel product candidates, from early- to late-stage development, in
key therapeutic areas. Our focus is in neuroscience, including
sleep medicine and movement disorders, and in oncology, including
hematologic and solid tumors. We actively explore new options for
patients including novel compounds, small molecule
advancements, biologics and innovative delivery technologies.
Jazz is headquartered in Dublin,
Ireland and has employees around the globe, serving patients
in more than 90 countries. For more information, please
visit www.jazzpharmaceuticals.com and
follow @JazzPharma on Twitter.
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 reported GAAP net income (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 non-GAAP adjustments and, as applicable,
the income tax benefit related to an intra-entity intellectual
property asset transfer and the impact of the U.S. Tax Cuts and Job
Act (U.S. Tax Act). In this regard, the components of non-GAAP
adjusted net income, including non-GAAP cost of product sales,
non-GAAP SG&A expenses and non-GAAP 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. In
particular, the company believes 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 and 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
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. For example, commencing with the
presentation of the company's financial guidance for 2020, the
company will no longer exclude upfront and milestone payments from
the company's non-GAAP adjusted net income, its line item
components and non-GAAP adjusted EPS. Accordingly, while certain of
such payments are excluded from its non-GAAP financial measures for
the year ended December 31, 2019, as
detailed in the reconciliation tables that follow, such
presentation is made solely for comparability and transition
purposes and will not be continued going forward. 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.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements,
including, but not limited to, statements related to Jazz
Pharmaceuticals' future financial and operating results, including
the company's 2020 financial guidance and 2020 planned milestones
and the anticipated timing thereof, including the rolling launch of
Sunosi in Europe and the potential approval and launch of
lurbinectedin and JZP-258 in the U.S.; the company's clinical
development, planned BLA submission and pre-launch activities for
JZP-458; the company's expectation of continuing to diversity its
revenue base; the company's expectation of strengthening and
advancing its pipeline to provide new therapeutic options to
improve patient outcomes in difficult-to-treat diseases; the
company's expectation of diversifying its portfolio through
internal efforts and external opportunities; the company's
expectations of inter-quarter variability in Defitelio net sales;
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 Xyrem; effectively commercializing the
company's other products and product candidates, including with
respect to Sunosi and, if approved, lurbinectedin and JZP-258; the
time-consuming and uncertain regulatory approval process, including
the risk that the company's current and 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; protecting and enhancing the company's intellectual
property rights; delays or problems in the supply or manufacture of
the company's products and product candidates; the company's
ability to maintain rights to its products and product candidates,
including Erwinaze; complying with applicable U.S. and non-U.S.
regulatory requirements; government investigations and other
actions; obtaining and maintaining adequate coverage and
reimbursement for the company's products; identifying and
acquiring, in-licensing or developing additional products or
product candidates, financing these transactions and successfully
integrating acquired product candidates, products and businesses;
the company's ability to realize the anticipated benefits of its
collaborations with third parties for the development of product
candidates; the company's ability to achieve expected future
financial performance and results and the uncertainty of future tax
and other provisions and estimates; 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 plc's Securities and Exchange Commission filings
and reports (Commission File No. 001-33500), including the
company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019 and future filings
and reports by the company, including the company's Annual Report
on Form 10-K for the year ended December 31,
2019. 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
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Product sales,
net
|
$
|
576,526
|
|
|
$
|
467,334
|
|
|
$
|
2,135,601
|
|
|
$
|
1,869,473
|
|
Royalties and
contract revenues
|
5,214
|
|
|
9,123
|
|
|
26,160
|
|
|
21,449
|
|
Total
revenues
|
581,740
|
|
|
476,457
|
|
|
2,161,761
|
|
|
1,890,922
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of product sales
(excluding amortization of acquired developed
technologies)
|
35,348
|
|
|
26,337
|
|
|
127,930
|
|
|
121,544
|
|
Selling, general and
administrative
|
214,275
|
|
|
161,865
|
|
|
736,942
|
|
|
683,530
|
|
Research and
development
|
97,382
|
|
|
56,657
|
|
|
299,726
|
|
|
226,616
|
|
Intangible asset
amortization
|
173,490
|
|
|
46,543
|
|
|
354,814
|
|
|
201,498
|
|
Impairment
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
42,896
|
|
Acquired in-process
research and development
|
—
|
|
|
—
|
|
|
109,975
|
|
|
—
|
|
Total operating
expenses
|
520,495
|
|
|
291,402
|
|
|
1,629,387
|
|
|
1,276,084
|
|
Income from
operations
|
61,245
|
|
|
185,055
|
|
|
532,374
|
|
|
614,838
|
|
Interest expense,
net
|
(18,244)
|
|
|
(17,904)
|
|
|
(72,261)
|
|
|
(77,075)
|
|
Foreign exchange
loss
|
(2,234)
|
|
|
(1,694)
|
|
|
(5,811)
|
|
|
(6,875)
|
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,425)
|
|
Income before income
tax provision (benefit) and equity in loss of investees
|
40,767
|
|
|
165,457
|
|
|
454,302
|
|
|
529,463
|
|
Income tax provision
(benefit)
|
(34,523)
|
|
|
5,144
|
|
|
(73,154)
|
|
|
80,162
|
|
Equity in loss of
investees
|
1,298
|
|
|
843
|
|
|
4,089
|
|
|
2,203
|
|
Net income
|
$
|
73,992
|
|
|
$
|
159,470
|
|
|
$
|
523,367
|
|
|
$
|
447,098
|
|
|
|
|
|
|
|
|
|
Net income per
ordinary share:
|
|
|
|
|
|
|
|
Basic
|
$
|
1.31
|
|
|
$
|
2.69
|
|
|
$
|
9.22
|
|
|
$
|
7.45
|
|
Diluted
|
$
|
1.29
|
|
|
$
|
2.64
|
|
|
$
|
9.09
|
|
|
$
|
7.30
|
|
Weighted-average
ordinary shares used in per share calculations - basic
|
56,418
|
|
|
59,323
|
|
|
56,749
|
|
|
59,976
|
|
Weighted-average
ordinary shares used in per share calculations - diluted
|
57,262
|
|
|
60,413
|
|
|
57,550
|
|
|
61,221
|
|
JAZZ
PHARMACEUTICALS PLC
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
637,344
|
|
|
$
|
309,622
|
|
Investments
|
440,000
|
|
|
515,000
|
|
Accounts receivable,
net of allowances
|
355,987
|
|
|
263,838
|
|
Inventories
|
78,608
|
|
|
52,956
|
|
Prepaid
expenses
|
39,434
|
|
|
25,017
|
|
Other current
assets
|
78,895
|
|
|
67,572
|
|
Total current
assets
|
1,630,268
|
|
|
1,234,005
|
|
Property, plant and
equipment, net
|
131,506
|
|
|
200,358
|
|
Operating lease
assets
|
139,385
|
|
|
—
|
|
Intangible assets,
net
|
2,440,977
|
|
|
2,731,334
|
|
Goodwill
|
920,018
|
|
|
927,630
|
|
Deferred tax assets,
net
|
221,403
|
|
|
57,879
|
|
Deferred financing
costs
|
7,426
|
|
|
9,589
|
|
Other non-current
assets
|
47,914
|
|
|
42,696
|
|
Total
assets
|
$
|
5,538,897
|
|
|
$
|
5,203,491
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
47,545
|
|
|
$
|
40,602
|
|
Accrued
liabilities
|
267,873
|
|
|
264,887
|
|
Current portion of
long-term debt
|
33,387
|
|
|
33,387
|
|
Income taxes
payable
|
10,965
|
|
|
1,197
|
|
Deferred
revenue
|
4,720
|
|
|
5,414
|
|
Total current
liabilities
|
364,490
|
|
|
345,487
|
|
Deferred revenue,
non-current
|
4,861
|
|
|
9,581
|
|
Long-term debt, less
current portion
|
1,573,870
|
|
|
1,563,025
|
|
Operating lease
liabilities, less current portion
|
151,226
|
|
|
—
|
|
Deferred tax
liabilities, net
|
224,095
|
|
|
309,097
|
|
Other non-current
liabilities
|
109,374
|
|
|
218,879
|
|
Total shareholders'
equity
|
3,110,981
|
|
|
2,757,422
|
|
Total liabilities and
shareholders' equity
|
$
|
5,538,897
|
|
|
$
|
5,203,491
|
|
JAZZ
PHARMACEUTICALS PLC
SUMMARY OF CASH
FLOWS
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
Net cash provided by
operating activities
|
$
|
776,401
|
|
|
$
|
798,904
|
|
Net cash used in
investing activities
|
(155,300)
|
|
|
(394,487)
|
|
Net cash used in
financing activities
|
(293,745)
|
|
|
(479,130)
|
|
Effect of exchange
rates on cash and cash equivalents
|
366
|
|
|
(1,700)
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
|
327,722
|
|
|
$
|
(76,413)
|
|
JAZZ
PHARMACEUTICALS PLC
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
GAAP reported net
income
|
$
|
73,992
|
|
|
$
|
159,470
|
|
|
$
|
523,367
|
|
|
$
|
447,098
|
|
Intangible asset
amortization
|
173,490
|
|
|
46,543
|
|
|
354,814
|
|
|
201,498
|
|
Share-based
compensation expense
|
25,937
|
|
|
26,723
|
|
|
110,563
|
|
|
102,441
|
|
Loss contingency
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
57,000
|
|
Impairment charges
and disposal costs (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
43,969
|
|
Upfront and milestone
payments (c)
|
—
|
|
|
—
|
|
|
104,275
|
|
|
11,000
|
|
Non-cash interest
expense (d)
|
11,981
|
|
|
11,291
|
|
|
46,396
|
|
|
43,960
|
|
Income tax effect of
above adjustments
|
(32,157)
|
|
|
(13,751)
|
|
|
(92,910)
|
|
|
(60,896)
|
|
Income tax benefit
related to intra-entity intellectual property asset
transfer
|
—
|
|
|
—
|
|
|
(112,274)
|
|
|
—
|
|
U.S. Tax Act
impact
|
—
|
|
|
(10,325)
|
|
|
—
|
|
|
(7,457)
|
|
Non-GAAP adjusted net
income
|
$
|
253,243
|
|
|
$
|
219,951
|
|
|
$
|
934,231
|
|
|
$
|
838,613
|
|
|
|
|
|
|
|
|
|
GAAP reported net
income per diluted share
|
$
|
1.29
|
|
|
$
|
2.64
|
|
|
$
|
9.09
|
|
|
$
|
7.30
|
|
Non-GAAP adjusted net
income per diluted share
|
$
|
4.42
|
|
|
$
|
3.64
|
|
|
$
|
16.23
|
|
|
$
|
13.70
|
|
Weighted-average
ordinary shares used in diluted per share calculations
|
57,262
|
|
|
60,413
|
|
|
57,550
|
|
|
61,221
|
|
________________________________________________
Explanation of
Adjustments and Certain Line Items (in thousands):
|
|
|
(a)
|
Relates to a civil
settlement agreement with the U.S. Department of Justice and the
Office of the Inspector General.
|
(b)
|
Resulting from the
company's sale of its rights related to Prialt® (ziconotide)
intrathecal infusion.
|
(c)
|
For the year ended
December 31, 2019, the amount includes $48,275 attributed to
acquired in-process research and development expense related to the
acquisition of Cavion and a $56,000 upfront payment to Codiak under
a collaboration agreement.
|
(d)
|
Non-cash interest
expense associated with debt discount and debt issuance
costs.
|
JAZZ
PHARMACEUTICALS PLC
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
- FOR THE THREE MONTHS ENDED DECEMBER 31, 2019 and
2018
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2019
|
|
Cost of product
sales
|
|
Selling, general
and administrative
|
|
Research and
development
|
|
Intangible asset
amortization
|
|
Interest expense,
net
|
|
Income tax
provision (benefit)
|
GAAP
Reported
|
$
|
35,348
|
|
|
$
|
214,275
|
|
|
$
|
97,382
|
|
|
$
|
173,490
|
|
|
$
|
18,244
|
|
|
$
|
(34,523)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
(173,490)
|
|
|
—
|
|
|
—
|
|
Share-based
compensation expense
|
(1,285)
|
|
|
(17,340)
|
|
|
(7,312)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,981)
|
|
|
—
|
|
Income tax effect of
above adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,157
|
|
Total of Non-GAAP
adjustments
|
(1,285)
|
|
|
(17,340)
|
|
|
(7,312)
|
|
|
(173,490)
|
|
|
(11,981)
|
|
|
32,157
|
|
Non-GAAP
Adjusted
|
$
|
34,063
|
|
|
$
|
196,935
|
|
|
$
|
90,070
|
|
|
$
|
—
|
|
|
$
|
6,263
|
|
|
$
|
(2,366)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2018
|
|
Cost of product
sales
|
|
Selling, general
and administrative
|
|
Research and
development
|
|
Intangible asset
amortization
|
|
Interest expense,
net
|
|
Income tax
provision (benefit)
|
GAAP
Reported
|
$
|
26,337
|
|
|
$
|
161,865
|
|
|
$
|
56,657
|
|
|
$
|
46,543
|
|
|
$
|
17,904
|
|
|
$
|
5,144
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,543)
|
|
|
—
|
|
|
—
|
|
Share-based
compensation expense
|
(1,612)
|
|
|
(19,758)
|
|
|
(5,353)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,291)
|
|
|
—
|
|
Income tax effect of
above adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,751
|
|
U.S. Tax Act
impact
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,325
|
|
Total of Non-GAAP
adjustments
|
(1,612)
|
|
|
(19,758)
|
|
|
(5,353)
|
|
|
(46,543)
|
|
|
(11,291)
|
|
|
24,076
|
|
Non-GAAP
Adjusted
|
$
|
24,725
|
|
|
$
|
142,107
|
|
|
$
|
51,304
|
|
|
$
|
—
|
|
|
$
|
6,613
|
|
|
$
|
29,220
|
|
JAZZ
PHARMACEUTICALS PLC
RECONCILIATIONS OF
GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
- FOR THE YEARS ENDED DECEMBER 31, 2019 and 2018
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, 2019
|
|
Cost of product
sales
|
|
Selling, general
and administrative
|
|
Research and
development
|
|
Intangible asset
amortization
|
|
Acquired
IPR&D
|
|
Interest expense,
net
|
|
Income tax
provision (benefit)
|
GAAP
Reported
|
$
|
127,930
|
|
|
$
|
736,942
|
|
|
$
|
299,726
|
|
|
$
|
354,814
|
|
|
$
|
109,975
|
|
|
$
|
72,261
|
|
|
$
|
(73,154)
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
(354,814)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Share-based
compensation expense
|
(6,637)
|
|
|
(78,697)
|
|
|
(25,229)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Upfront &
milestone payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104,275)
|
|
|
—
|
|
|
—
|
|
Non-cash interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,396)
|
|
|
—
|
|
Income tax effect of
above adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,910
|
|
Income tax benefit
related to intra-entity intellectual property asset
transfer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,274
|
|
Total of Non-GAAP
adjustments
|
(6,637)
|
|
|
(78,697)
|
|
|
(25,229)
|
|
|
(354,814)
|
|
|
(104,275)
|
|
|
(46,396)
|
|
|
205,184
|
|
Non-GAAP
Adjusted
|
$
|
121,293
|
|
|
$
|
658,245
|
|
|
$
|
274,497
|
|
|
$
|
—
|
|
|
$
|
5,700
|
|
|
$
|
25,865
|
|
|
$
|
132,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31, 2018
|
|
Cost of product
sales
|
|
Selling, general
and administrative
|
|
Research and
development
|
|
Intangible asset
amortization
|
|
Impairment
charges
|
|
Interest expense,
net
|
|
Income tax
provision (benefit)
|
GAAP
Reported
|
$
|
121,544
|
|
|
$
|
683,530
|
|
|
$
|
226,616
|
|
|
$
|
201,498
|
|
|
$
|
42,896
|
|
|
$
|
77,075
|
|
|
$
|
80,162
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
(201,498)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Share-based
compensation expense
|
(6,634)
|
|
|
(76,770)
|
|
|
(19,037)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss
contingency
|
—
|
|
|
(57,000)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Impairment charges
and disposal costs
|
—
|
|
|
(1,073)
|
|
|
—
|
|
|
—
|
|
|
(42,896)
|
|
|
—
|
|
|
—
|
|
Upfront &
milestone payments
|
—
|
|
|
—
|
|
|
(11,000)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,960)
|
|
|
—
|
|
Income tax effect of
above adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,896
|
|
U.S. Tax Act
impact
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,457
|
|
Total of Non-GAAP
adjustments
|
(6,634)
|
|
|
(134,843)
|
|
|
(30,037)
|
|
|
(201,498)
|
|
|
(42,896)
|
|
|
(43,960)
|
|
|
68,353
|
|
Non-GAAP
Adjusted
|
$
|
114,910
|
|
|
$
|
548,687
|
|
|
$
|
196,579
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,115
|
|
|
$
|
148,515
|
|
JAZZ
PHARMACEUTICALS PLC
RECONCILIATION OF
GAAP TO NON-GAAP ADJUSTED 2020 NET INCOME GUIDANCE
(In millions,
except per share amounts)
(Unaudited)
|
|
|
GAAP net
income
|
$330 -
$400
|
Intangible asset
amortization
|
250 - 270
|
Share-based
compensation expense
|
120 -135
|
Non-cash interest
expense
|
45 - 55
|
Income tax effect of
adjustments
|
(65) -
(90)
|
Non-GAAP adjusted net
income
|
$700 -
$750
|
|
|
GAAP net income per
diluted share
|
$5.90 -
$7.15
|
Non-GAAP adjusted net
income per diluted share
|
$12.50 -
$13.40
|
|
|
Weighted-average
ordinary shares used in per share calculations
|
56
|
Contacts:
Investors:
Kathee
Littrell
Vice President, Investor Relations
Jazz Pharmaceuticals plc
Ireland, +353 1 634 7887
U.S., +1 650 496 2717
Media:
Jacqueline
Kirby
Vice President, Corporate Affairs & Government Relations
Jazz Pharmaceuticals plc
Ireland, +353 1 697 2141
U.S., +1 215 867 4910
View original content to download
multimedia:http://www.prnewswire.com/news-releases/jazz-pharmaceuticals-announces-full-year-and-fourth-quarter-2019-financial-results-301011078.html
SOURCE Jazz Pharmaceuticals plc