Jazz Pharmaceuticals Announces Full Year and Fourth Quarter 2023 Financial Results and Provides 2024 Financial Guidance
- Total revenues of $3.8 billion in 2023 with a 27% year-over-year increase.
- Xywav, Epidiolex, and Rylaze drove the revenue growth, surpassing $1 billion in Oncology revenue.
- Anticipated double-digit percentage revenue growth in 2024 with multiple late-stage pipeline catalysts.
- 2024 revenue guidance of $4.0 to $4.2 billion, reflecting continued top-line growth.
- None.
Insights
The reported total revenues for Jazz Pharmaceuticals of $3.8 billion in 2023, with a 27% year-over-year increase, indicate a robust financial performance, particularly driven by key products Xywav®, Epidiolex® and Rylaze®. The oncology segment surpassing $1 billion in revenue is a testament to the company's growing presence in this therapeutic area. The guidance for 2024 suggests sustained growth, which is a positive signal for investors looking for companies with strong revenue trajectories.
It's worth noting the strategic shifts within the company's product portfolio, such as the decline in Xyrem sales and the corresponding increase in Xywav sales, which suggests a successful transition to the lower-sodium alternative. This transition is likely to be well-received by both patients and healthcare providers due to the associated long-term health benefits. The company's focus on late-stage pipeline catalysts, such as the anticipated completion of the rolling BLA submission for zanidatamab, indicates a proactive approach to expanding its oncology portfolio and addressing unmet medical needs.
The operational efficiencies can be inferred from the decrease in selling, general and administrative (SG&A) expenses as a percentage of total revenues and the reduction in cost of product sales, which have contributed to an improved gross margin year over year. However, investors should monitor the company's R&D spending, which has increased both in absolute terms and as a percentage of total revenues, as this could impact future earnings if not balanced by successful product launches and market penetration.
The pharmaceutical industry is highly competitive and Jazz Pharmaceuticals' performance must be viewed in the context of market dynamics, including regulatory changes, patent expiries and competitive pressures. The company's revenue growth is impressive, particularly in the neuroscience and oncology segments, which are areas with high unmet medical needs and strong market demand. The strategic acquisition of Redx Pharma's KRAS inhibitor program and the collaboration with Autifony on ion channel targets are forward-thinking moves that could open up new revenue streams and diversify the company's pipeline.
However, the decline in Xyrem sales due to increased competition from high-sodium oxybate generics is a concern that the company appears to be mitigating with the growth of Xywav sales. The increased royalty revenue from these generics in 2024 also presents an opportunity to offset losses from Xyrem's decline. The company's revenue guidance for 2024 indicates confidence in its current strategy and the potential for continued growth in key therapeutic areas.
Investors should be aware of the potential risks associated with the company's late-stage pipeline. Delays or failures in clinical trials can significantly impact future revenues and the company's valuation. The emphasis on late-stage pipeline catalysts, such as zanidatamab for biliary tract cancer, underscores the company's commitment to expanding its oncology portfolio, which could lead to significant market opportunities if successful.
From a medical research perspective, the progression of Jazz Pharmaceuticals' late-stage pipeline is of particular interest. The completion of Phase 3 Zepzelca® trial enrollment for small cell lung cancer and the anticipated BLA submission for zanidatamab represent significant milestones in the company's oncology research efforts. These developments are critical as they have the potential to bring new treatment options to market for conditions with high unmet needs.
The 40% year-over-year growth in Rylaze net product sales demonstrates the market's acceptance of Jazz Pharmaceuticals' offerings in the oncology space, which is encouraging for their other pipeline products. The quality of life improvements reported by patients responding to zanidatamab in the Phase 2b trial also indicate the potential for this drug to make a meaningful impact on patient care.
Furthermore, the company's investment in the KRAS inhibitor program and ion channel targets for neurological disorders highlights a strategic approach to broadening its research focus. The diversification of the pipeline into areas such as essential tremor and Parkinson's disease tremor with Suvecaltamide could position the company well within the neurology market, provided the clinical data continues to be favorable.
– Total revenues of
–
– Oncology revenue surpassed
– Multiple late-stage pipeline catalysts anticipated in 2024 –
– 2024 total revenue guidance reflects continued top-line growth –
"2023 was a year of continued strong execution that delivered top- and bottom-line growth and over
Key Highlights
- Achieved first
$1 billion - Key growth drivers:
- Xywav net product sales grew
33% year-over-year; annualizing2 at$1.35 billion - Epidiolex/Epidyolex® net product sales grew
15% year-over-year; annualizing2 at over$900 million - Rylaze net product sales grew
40% year-over-year; annualizing2 at over$400 million
- Xywav net product sales grew
- Initiated zanidatamab 1L BTC confirmatory trial in 1Q24.
- Multiple near-term, late-stage pipeline catalysts anticipated:
- Completion of rolling BLA submission for accelerated approval in 2L BTC in 1H24.
- Top-line PFS data from zanidatamab in Phase 3 1L GEA targeted for late 2024.
- Suvecaltamide top-line data from Phase 2b trial in ET in late 1H24.
- Top-line data from Epidyolex Phase 3 trial in
Japan in 2H24. - Top-line data from Zepzelca 1L SCLC Phase 3 trial at the end of 2024 or early 2025.
- The Company will host a virtual zanidatamab R&D Day on Tuesday, March 19, 2024.
- 2024 total revenue guidance of
$4.0 $4.2 billion 7% top-line growth at the mid-point. - Total revenue guidance is underpinned by expectations of continued growth in net sales of Xywav in IH, Epidiolex/Epidyolex, our Oncology therapeutic area, and royalties on net sales of authorized generics of Xyrem® offset by a continued decline in net sales of Xyrem.
_______________________ |
1 Total Sleep revenue includes: Xywav, branded Xyrem and high-sodium authorized generic royalty revenues. |
2 Based on 4Q23 net product sales. |
Business Updates
Key Commercial Products
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:
- Xywav net product sales increased
33% to$1,273.0 million 20% to$337.0 million - As the only low-sodium oxybate and the only therapy approved to treat IH, expect Xywav to remain the oxybate of choice.
- There were approximately 12,300 active Xywav patients exiting 4Q23.
- Results from the real-world TENOR study were published in Sleep Medicine. The most common reason cited for switching to Xywav was long-term health benefits due to lower sodium content of Xywav.
- A review of scientific evidence was published in Neurology and Therapy showing oxybate regimens impart substantial and highly similar medical benefit on subjective and objective measures of sleep and daytime function regardless of dosing.
Xywav for Narcolepsy:
- There were approximately 9,525 narcolepsy patients taking Xywav exiting 4Q23.
Xywav for Idiopathic Hypersomnia (IH):
- There were approximately 2,775 IH patients taking Xywav exiting 4Q23.
Xyrem (sodium oxybate) oral solution:
- Xyrem net product sales decreased
44% to$569 57% to$106.7 million
High-Sodium Oxybate Authorized Generic (AG) Royalties:
- Royalties from high-sodium oxybate AGs were
$75.9 million $39.4 million - The Company expects high-sodium oxybate AG royalty revenue to exceed
$200 million
Epidiolex/Epidyolex (cannabidiol):
- Epidiolex/Epidyolex net product sales increased
15% to$845.5 million 16% to$240.6 million - Outside of the
U.S. , Epidyolex is approved in more than 35 countries with additional launches and reimbursement anticipated through the end of 2024. - Long-term and real-world data of treatment-resistant epilepsy were presented at AES 2023:
- Data from long-term Expanded Access Program study demonstrated Epidiolex was associated with a sustained reduction in treatment-resistant, focal-onset seizures through 144 weeks.
- Interim results from the BECOME-TSC survey of caregivers of patients with tuberous sclerosis complex (TSC) demonstrated improved day-to-day function, cognition, language and communication and emotional and social function in patients.
Rylaze/Enrylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn):
- Rylaze net product sales increased
40% to$394.2 million 26% to$101.7 million - Initiated European rolling launch of Enrylaze (JZP458; a recombinant Erwinia asparaginase or crisantaspase), marketed as Rylaze in the
U.S. andCanada , in 4Q23.
Zepzelca (lurbinectedin):
- Zepzelca net product sales increased
7% to$289.5 million 3% to$74.0 million - Enrollment in the Phase 3 trial evaluating first-line (1L) use of Zepzelca in combination with Tecentriq® (atezolizumab) in small cell lung cancer, in partnership with Roche, is complete; expect top-line progression-free survival (PFS) data readout at the end of 2024 or early 2025.
Key Pipeline Highlights
Zanidatamab:
- Initiated the zanidatamab rolling biologics license application (BLA) submission in 4Q23 for accelerated approval in second-line (2L) biliary tract cancer (BTC) and expect to complete the rolling submission 1H24.
- Initiated confirmatory trial in 1L metastatic BTC, where there remains unmet patient need, in 1Q24.
- The pivotal HERIZON-GEA-01 trial, evaluating zanidatamab in 1L gastroesophageal adenocarcinoma (GEA), is ongoing and the Company is targeting top-line PFS data in late 2024. The Company increased enrollment in the trial from 714 to 918 to improve statistical power for overall survival analysis, while maintaining PFS top-line readout.
- Data presented at SABCS in heavily pretreated patients with HER2+/HR+ metastatic breast cancer demonstrated
67% PFS at six months with a median PFS of 12 months. - In addition to achieving clinically meaningful improvements, data presented at the ASCO Gastrointestinal Cancers Symposium in January 2024 demonstrated that patients who responded to zanidatamab also reported improved quality of life with less pain interference in the Phase 2b HERIZON-BTC-01 trial.
Suvecaltamide (JZP385):
- Patient enrollment is ongoing in the Phase 2b essential tremor (ET) trial; top-line data readout is anticipated late 1H24.
- A Phase 2 trial in patients with Parkinson's disease tremor is ongoing.
JZP898:
- Initiated a Phase 1 first-in-human clinical trial in solid tumors in 4Q23.
Corporate Development
KRAS Inhibitor Program Agreement:
- In February 2024, the Company acquired Redx Pharma's KRAS inhibitor program, which includes G12D selective and pan-KRAS molecules, further expanding Jazz's early-stage oncology pipeline.
Ion Channel Targets Agreement:
- In November 2023, the Company and Autifony announced an exclusive global license and collaboration agreement to discover and develop drug candidates for two different ion channel targets associated with neurological disorders.
Continued Repurchases under Previously Announced
The Company continued repurchases of its ordinary shares on the open market in the fourth quarter of 2023 as part of its previously authorized and announced share repurchase program. As of December 31, 2023, approximately
Financial Highlights
Three Months Ended December 31, | Year Ended December 31, | ||||||
(In thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||
Total revenues | $ 1,011,935 | $ 972,123 | $ 3,834,204 | $ 3,659,374 | |||
GAAP net income (loss) | $ 94,154 | $ (240,724) | $ 414,832 | $ (224,060) | |||
Non-GAAP adjusted net income (loss) | $ 345,286 | $ (4,239) | $ 1,295,824 | $ 933,598 | |||
GAAP earnings (loss) per share | $ 1.42 | $ (3.82) | $ 6.10 | $ (3.58) | |||
Non-GAAP adjusted EPS | $ 5.02 | $ (0.07) | $ 18.29 | $ 13.20 | |||
GAAP net income for 2023 was
Non-GAAP adjusted net income for 2023 was
Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
Total Revenues
Three Months Ended December 31, | Year Ended December 31, | ||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||
Xywav | $ 337,019 | $ 281,384 | $ 1,272,977 | $ 958,425 | |||
Xyrem | 106,721 | 247,496 | 569,730 | 1,020,453 | |||
Epidiolex/Epidyolex | 240,622 | 206,998 | 845,468 | 736,398 | |||
Sativex | 5,137 | 4,721 | 19,668 | 16,825 | |||
Sunosi1 | — | — | — | 28,844 | |||
Total Neuroscience | 689,499 | 740,599 | 2,707,843 | 2,760,945 | |||
Rylaze | 101,747 | 80,972 | 394,226 | 281,659 | |||
Zepzelca | 74,010 | 71,969 | 289,533 | 269,912 | |||
Defitelio/defibrotide | 51,083 | 40,653 | 184,000 | 194,290 | |||
Vyxeos | 46,912 | 30,266 | 147,495 | 127,980 | |||
Total Oncology | 273,752 | 223,860 | 1,015,254 | 873,841 | |||
Other | 4,088 | 3,067 | 13,846 | 6,643 | |||
Product sales, net | 967,339 | 967,526 | 3,736,943 | 3,641,429 | |||
High-sodium oxybate AG royalty revenue | 39,387 | — | 75,918 | — | |||
Other royalty and contract revenues | 5,209 | 4,597 | 21,343 | 17,945 | |||
Total revenues | $ 1,011,935 | $ 972,123 | $ 3,834,204 | $ 3,659,374 | |||
___________________________ |
1. Divestiture of Sunosi |
Total revenues increased
- Total neuroscience revenue, including high-sodium oxybate AG royalty revenue, of
$2,783.8 million $728.9 million - Oncology net product sales increased
16% in 2023 and22% in 4Q23 compared to the same periods in 2022, primarily driven by the continued growth in Rylaze product sales, which increased40% to$394.2 million 26% to$101.7 million
Operating Expenses and Effective Tax Rate
Three Months Ended December 31, | Year Ended December 31, | ||||||
(In thousands, except percentages) | 2023 | 2022 | 2023 | 2022 | |||
GAAP: | |||||||
Cost of product sales | $ 107,243 | $ 167,364 | $ 435,577 | $ 540,517 | |||
Gross margin | 88.9 % | 82.7 % | 88.3 % | 85.2 % | |||
Selling, general and administrative | $ 396,034 | $ 383,203 | $ 1,343,105 | $ 1,416,967 | |||
% of total revenues | 39.1 % | 39.4 % | 35.0 % | 38.7 % | |||
Research and development | $ 216,608 | $ 172,555 | $ 849,658 | $ 590,453 | |||
% of total revenues | 21.4 % | 17.8 % | 22.2 % | 16.1 % | |||
Acquired in-process research and development | $ 18,000 | $ 375,000 | $ 19,000 | $ 444,148 | |||
Intangible asset impairment charge | $ — | $ — | $ — | $ 133,648 | |||
Income tax benefit | $ (33,089) | $ (100,042) | $ (119,912) | $ (158,645) | |||
Effective tax rate 1 | (53.8) % | 29.4 % | (40.2) % | 42.6 % | |||
_________________________ | |
1. | The GAAP effective tax rate decreased for the three months and the year ended December 31, 2023 compared to the same periods in 2022, primarily due to the impact of payments made for acquired in-process research and development (IPR&D) in 2022. The year ended December 31, 2022 was also impacted by the recognition of the nabiximols impairment charge, partially offset by the change in income mix across jurisdictions. |
Three Months Ended December 31, | Year Ended December 31, | ||||||
(In thousands, except percentages) | 2023 | 2022 | 2023 | 2022 | |||
Non-GAAP adjusted: | |||||||
Cost of product sales | $ 71,238 | $ 93,386 | $ 269,079 | $ 251,941 | |||
Gross margin | 92.6 % | 90.3 % | 92.8 % | 93.1 % | |||
Selling, general and administrative | $ 300,520 | $ 319,763 | $ 1,110,948 | $ 1,134,703 | |||
% of total revenues | 29.7 % | 32.9 % | 29.0 % | 31.0 % | |||
Research and development | $ 201,107 | $ 160,105 | $ 784,811 | $ 521,085 | |||
% of total revenues | 19.9 % | 16.5 % | 20.5 % | 14.2 % | |||
Acquired in-process research and development | $ 18,000 | $ 375,000 | $ 19,000 | $ 444,148 | |||
Income tax expense (benefit) | $ 20,475 | $ (43,301) | $ 93,260 | $ 94,695 | |||
Effective tax rate1 | 5.6 % | 92.6 % | 6.7 % | 9.1 % | |||
_________________________ | |
1. | The non-GAAP effective tax rate decreased for the three months ended December 31, 2023 compared to the same period in 2022, primarily due to the impact of payments made for acquired IPR&D in 2022. |
Changes in operating expenses in 2023 and 4Q23 over the prior year periods are primarily due to the following:
- Cost of product sales decreased in 2023 and 4Q23 compared to the same periods in 2022, on a GAAP basis, primarily due to lower acquisition accounting inventory fair value step-up expense and the impact of an expense in 2022 for past royalties payable under a settlement agreement with Otsuka Pharmaceutical Co., Ltd, or the Otsuka past royalty expense, partially offset by changes in product mix. Cost of product sales, on a non-GAAP adjusted basis, increased in 2023 compared to the same period in 2022 primarily due to changes in product mix, partially offset by the Otsuka past royalty expense and decreased in 4Q23 compared to the same period in 2022 primarily due to the Otsuka past royalty expense, partially offset by changes in product mix.
- Selling, general and administrative (SG&A) expenses, on a GAAP basis, decreased in 2023 compared to the same period in 2022, primarily due to the loss on disposal of Sunosi, restructuring costs and GW related integration costs incurred in 2022, together with a reduction in costs related to program terminations, partially offset by an impairment of facility assets in 2023. SG&A expenses, on a GAAP and on a non-GAAP adjusted basis, in 2023 included lower compensation-related expenses compared to 2022. SG&A expenses, on a GAAP basis, increased in 4Q23 compared to the same period in 2022, primarily due to an impairment of facility assets in 4Q23, offset by costs related to program terminations incurred in 2022. SG&A expenses, on a GAAP and on a non-GAAP adjusted basis, in 4Q23 included lower compensation-related and litigation expenses compared to 4Q22.
- Research and development (R&D) expenses increased in 2023 and 4Q23 compared to the same periods in 2022, on a GAAP and on a non-GAAP adjusted basis, primarily due to the inclusion of costs related to zanidatamab, as well as our other key pipeline programs.
- Acquired IPR&D expense in 4Q23 and 2023, on a GAAP and on a non-GAAP adjusted basis, primarily related to an upfront payment made in connection with our licensing and collaboration agreement with Autifony Therapeutics Limited. Acquired IPR&D expense in 4Q22, on a GAAP and on a non-GAAP adjusted basis, related to payments of
$375.0 million $50.0 million $15.0 million - The intangible asset impairment charge in 2022, on a GAAP basis, related to the discontinuation of our nabiximols program.
Cash Flow and Balance Sheet
As of December 31, 2023, cash, cash equivalents and investments were
2024 Financial Guidance
Jazz Pharmaceutical's full year 2024 financial guidance is as follows:
(In millions) | Guidance | ||
Revenues | |||
–Neuroscience (includes royalties from high-sodium oxybate AG) | |||
–Oncology | |||
(In millions, except per share amounts and percentages) | GAAP | Non-GAAP | |
Gross margin % | 89 % | ||
SG&A expenses | |||
SG&A expenses as % of total revenues | |||
R&D expenses | |||
R&D expenses as % of total revenues | |||
Effective tax rate | (22)% - (3)% | ||
Net income | |||
Net income per diluted share5 | |||
Weighted-average ordinary shares used in per share calculations5 | 71 | 71 | |
___________________________ | |
1. | Excludes |
2. | Excludes |
3. | Excludes |
4. | Excludes |
5. | Diluted EPS calculations for 2024 include an estimated 6.4 million shares related to the assumed conversion of the |
6. | See "Non-GAAP Financial Measures" below. Reconciliations of non-GAAP adjusted guidance measures are included above and in the table titled "Reconciliation of GAAP to non-GAAP Adjusted 2024 Net Income Guidance" at the end of this press release. |
Conference Call Details
Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. ET (9:30 p.m. GMT) to provide a business and financial update and discuss its 2023 full year and 4Q23 results and 2024 guidance.
Audio webcast/conference call:
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, including leading therapies for sleep disorders and epilepsy, and a growing portfolio of cancer treatments. Our patient-focused and science-driven approach powers pioneering research and development advancements across our robust pipeline of innovative therapeutics in oncology and neuroscience. Jazz is headquartered in
Non-GAAP Financial Measures
To supplement Jazz Pharmaceuticals' financial results and guidance presented in accordance with
The Company believes that each of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors and analysts and that each of these non-GAAP financial measures, when considered together with the Company's financial information prepared in accordance with GAAP, can enhance investors' and analysts' ability to meaningfully compare the Company's results from period to period, to its forward-looking guidance, and to identify operating trends in the Company's business. In addition, these non-GAAP financial measures are regularly used by investors and analysts to model and track the Company's financial performance. Jazz Pharmaceuticals' management also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate the Company's business and to make operating decisions, and compensation of executives is based in part on certain of these non-GAAP financial measures. Because these non-GAAP financial measures are important internal measurements for Jazz Pharmaceuticals' management, the Company also believes that these non-GAAP financial measures are useful to investors and analysts since these measures allow for greater transparency with respect to key financial metrics the Company uses in assessing its own operating performance and making operating decisions. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures; should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP; have no standardized meaning prescribed by GAAP; and are not prepared under any comprehensive set of accounting rules or principles in the reconciliation tables that follow. In addition, from time to time in the future there may be other items that the Company may exclude for purposes of its non-GAAP financial measures; and the Company has ceased, and may in the future cease, to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. Likewise, the Company may determine to modify the nature of its adjustments to arrive at its non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measures as used by Jazz Pharmaceuticals in this press release and the accompanying tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to: the Company's growth prospects and future financial and operating results, including the Company's 2024 financial guidance and the Company's expectations related thereto and anticipated catalysts; the Company's expectations for total revenue and Oncology revenue growth in 2024 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 launches through 2024; expectations with respect to royalties from 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 multiple late-stage data readouts by the end of 2025, expectations to complete a rolling BLA submission for zanidatamab for BTC in the first half of 2024 and top line data from a Phase 3 trial of Epidyolex for Dravet syndrome, Lennox-Gastaut syndrome and TSC in
Actual results and the timing of events could differ materially from those anticipated in such forward- looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with: maintaining or increasing sales of and revenue from Xywav, Rylaze and Epidiolex/Epidyolex and other marketed products; Epidiolex realizing its blockbuster potential; the introduction of new products into the U.S. market that compete with, or otherwise disrupt the market for the Company's products and product candidates; effectively launching and commercializing the Company's other products and product candidates; the successful completion of development and regulatory activities with respect to the Company's product candidates, obtaining and maintaining adequate coverage and reimbursement for the Company's products; the time-consuming and uncertain regulatory approval process, including the risk that the Company's current and/or planned regulatory submissions may not be submitted, accepted or approved by applicable regulatory authorities in a timely manner or at all; the costly and time-consuming pharmaceutical product development and the uncertainty of clinical success, including risks related to failure or delays in successfully initiating or completing clinical trials and assessing patients; global economic, financial, and healthcare system disruptions and the current and potential future negative impacts to the Company's business operations and financial results; geopolitical events, including the conflict between
JAZZ PHARMACEUTICALS PLC CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (In thousands, except per share amounts) (Unaudited) | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenues: | |||||||
Product sales, net | $ 967,339 | $ 967,526 | $ 3,736,943 | $ 3,641,429 | |||
Royalties and contract revenues | 44,596 | 4,597 | 97,261 | 17,945 | |||
Total revenues | 1,011,935 | 972,123 | 3,834,204 | 3,659,374 | |||
Operating expenses: | |||||||
Cost of product sales (excluding amortization of acquired developed technologies) | 107,243 | 167,364 | 435,577 | 540,517 | |||
Selling, general and administrative | 396,034 | 383,203 | 1,343,105 | 1,416,967 | |||
Research and development | 216,608 | 172,555 | 849,658 | 590,453 | |||
Intangible asset amortization | 151,553 | 137,387 | 608,284 | 599,169 | |||
Acquired in-process research and development | 18,000 | 375,000 | 19,000 | 444,148 | |||
Intangible asset impairment charge | — | — | — | 133,648 | |||
Total operating expenses | 889,438 | 1,235,509 | 3,255,624 | 3,724,902 | |||
Income (loss) from operations | 122,497 | (263,386) | 578,580 | (65,528) | |||
Interest expense, net | (70,324) | (74,125) | (289,438) | (288,242) | |||
Foreign exchange gain (loss) | 9,353 | (2,482) | 8,787 | (19,014) | |||
Income (loss) before income tax benefit and equity in loss of investees | 61,526 | (339,993) | 297,929 | (372,784) | |||
Income tax benefit | (33,089) | (100,042) | (119,912) | (158,645) | |||
Equity in loss of investees | 461 | 773 | 3,009 | 9,921 | |||
Net income (loss) | $ 94,154 | $ (240,724) | $ 414,832 | $ (224,060) | |||
Net income (loss) per ordinary share: | |||||||
Basic | $ 1.50 | $ (3.82) | $ 6.55 | $ (3.58) | |||
Diluted | $ 1.42 | $ (3.82) | $ 6.10 | $ (3.58) | |||
Weighted-average ordinary shares used in per share calculations - basic | 62,578 | 63,052 | 63,291 | 62,539 | |||
Weighted-average ordinary shares used in per share calculations - diluted | 69,673 | 63,052 | 72,066 | 62,539 | |||
JAZZ PHARMACEUTICALS PLC CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||
December 31, | December 31, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 1,506,310 | $ 881,482 | |
Investments | 120,000 | — | |
Accounts receivable, net of allowances | 705,794 | 651,493 | |
Inventories | 597,039 | 714,061 | |
Prepaid expenses | 185,476 | 91,912 | |
Other current assets | 320,809 | 267,192 | |
Total current assets | 3,435,428 | 2,606,140 | |
Property, plant and equipment, net | 169,646 | 228,050 | |
Operating lease assets | 65,340 | 73,326 | |
Intangible assets, net | 5,418,039 | 5,794,437 | |
Goodwill | 1,753,130 | 1,692,662 | |
Deferred tax assets, net | 477,834 | 376,247 | |
Deferred financing costs | 6,478 | 9,254 | |
Other non-current assets | 67,464 | 55,139 | |
Total assets | $ 11,393,359 | $ 10,835,255 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 102,750 | $ 90,758 | |
Accrued liabilities | 793,914 | 803,255 | |
Current portion of long-term debt | 604,954 | 31,000 | |
Income taxes payable | 35,074 | 7,717 | |
Deferred revenue | — | 463 | |
Total current liabilities | 1,536,692 | 933,193 | |
Long-term debt, less current portion | 5,107,988 | 5,693,341 | |
Operating lease liabilities, less current portion | 59,225 | 71,838 | |
Deferred tax liabilities, net | 847,706 | 944,337 | |
Other non-current liabilities | 104,751 | 106,812 | |
Total shareholders' equity | 3,736,997 | 3,085,734 | |
Total liabilities and shareholders' equity | $ 11,393,359 | $ 10,835,255 | |
JAZZ PHARMACEUTICALS PLC SUMMARY OF CASH FLOWS (In thousands) (Unaudited) | |||
Year Ended December 31, | |||
2023 | 2022 | ||
Net cash provided by operating activities | $ 1,092,007 | $ 1,271,977 | |
Net cash used in investing activities | (163,062) | (446,230) | |
Net cash used in financing activities | (305,254) | (529,491) | |
Effect of exchange rates on cash and cash equivalents | 1,137 | (6,222) | |
Net increase in cash and cash equivalents | $ 624,828 | $ 290,034 | |
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, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net | Diluted | Net Loss | Diluted | Net | Diluted | Net | Diluted | ||||||||
GAAP reported1 | $ 94,154 | $ 1.42 | $ (3.82) | $ 414,832 | $ 6.10 | $ (3.58) | |||||||||
Intangible asset amortization | 151,553 | 2.18 | 137,387 | 2.18 | 608,284 | 8.44 | 599,169 | 8.25 | |||||||
Share-based compensation | 52,941 | 0.76 | 61,767 | 0.98 | 226,841 | 3.15 | 218,194 | 3.01 | |||||||
Acquisition accounting | 32,352 | 0.46 | 70,203 | 1.11 | 151,446 | 2.10 | 273,392 | 3.77 | |||||||
Restructuring and other costs2 | 61,727 | 0.89 | 19,681 | 0.31 | 85,215 | 1.18 | 77,306 | 1.06 | |||||||
Non-cash interest expense3 | 6,123 | 0.09 | 5,971 | 0.10 | 22,378 | 0.31 | 37,973 | 0.52 | |||||||
Intangible asset impairment | — | — | — | — | — | — | 133,648 | 1.84 | |||||||
(Income) costs related to | — | — | (1,783) | (0.03) | — | — | 47,756 | 0.66 | |||||||
Transaction and integration | — | — | — | — | — | — | 23,560 | 0.32 | |||||||
Income tax effect of above | (53,564) | (0.77) | (56,741) | (0.90) | (213,172) | (2.95) | (253,340) | (3.49) | |||||||
Effect of assumed conversion | — | (0.01) | — | — | — | (0.04) | — | 0.84 | |||||||
Non-GAAP adjusted1 | $ 345,286 | $ 5.02 | $ (4,239) | $ (0.07) | $ 18.29 | $ 933,598 | $ 13.20 | ||||||||
Weighted-average ordinary | 69,673 | 63,052 | 72,066 | 62,539 | |||||||||||
Dilutive effect of | — | — | — | 9,044 | |||||||||||
Dilutive effect of employee | — | — | — | 1,025 | |||||||||||
Weighted-average ordinary | 69,673 | 63,052 | 72,066 | 72,608 | |||||||||||
________________________________________________ | |
Explanation of Adjustments and Certain Line Items: | |
1. | Diluted EPS was calculated using the "if-converted" method in relation to the |
2. | Includes costs related to the impairment of facility assets, program terminations and restructuring. |
3. | Non-cash interest expense associated with debt issuance costs. |
4. | Intangible asset 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 DECEMBER 31, 2023 and 2022 (In thousands, except percentages) (Unaudited) | ||||||||||||||||||
Three months ended December 31, 2023 | ||||||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Interest | Income tax | Effective | |||||||||||
GAAP Reported | 88.9 % | $ 396,034 | $ 216,608 | $ 151,553 | $ 70,324 | $ (33,089) | (53.8) % | |||||||||||
Non-GAAP Adjustments: | ||||||||||||||||||
Intangible asset amortization | — | — | — | — | (151,553) | — | — | — | ||||||||||
Share-based compensation | (3,653) | 0.4 | (33,787) | (15,501) | — | — | — | — | ||||||||||
Acquisition accounting inventory | (32,352) | 3.3 | — | — | — | — | — | — | ||||||||||
Restructuring and other costs | — | — | (61,727) | — | — | — | — | — | ||||||||||
Non-cash interest expense | — | — | — | — | — | (6,123) | — | — | ||||||||||
Income tax effect of above | — | — | — | — | — | — | 53,564 | 59.4 | ||||||||||
Total of non-GAAP adjustments | (36,005) | 3.7 | (95,514) | (15,501) | (151,553) | (6,123) | 53,564 | 59.4 | ||||||||||
Non-GAAP Adjusted | $ 71,238 | 92.6 % | $ 300,520 | $ 201,107 | $ — | $ 64,201 | $ 20,475 | 5.6 % | ||||||||||
Three months ended December 31, 2022 | |||||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Acquired | Interest | Income tax | Effective | |||||||||
GAAP Reported | 82.7 % | $ 383,203 | $ 172,555 | $ 74,125 | $ (100,042) | 29.4 % | |||||||||||
Non-GAAP Adjustments: | |||||||||||||||||
Intangible asset | — | — | — | — | (137,387) | — | — | — | — | ||||||||
Share-based | (3,835) | 0.4 | (43,875) | (14,057) | — | — | — | — | — | ||||||||
Income related to the | — | — | 1,783 | — | — | — | — | — | — | ||||||||
Restructuring and other | 60 | — | (21,348) | 1,607 | — | — | — | — | — | ||||||||
Non-cash interest expense | — | — | — | — | — | — | (5,971) | — | — | ||||||||
Acquisition accounting | (70,203) | 7.2 | — | — | — | — | — | — | — | ||||||||
Income tax effect of above | — | — | — | — | — | — | — | 56,741 | 63.2 | ||||||||
Total of non-GAAP | (73,978) | 7.6 | (63,440) | (12,450) | (137,387) | — | (5,971) | 56,741 | 63.2 | ||||||||
Non-GAAP Adjusted | $ 93,386 | 90.3 % | $ 319,763 | $ 160,105 | $ — | $ 68,154 | 92.6 % | ||||||||||
1. | The GAAP and non-GAAP effective tax rate decreased in the three months ended December 31, 2023 compared to the same period in 2022, primarily due to the impact of payments made for acquired IPR&D in 2022. | |||||||||
JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS - FOR THE YEAR ENDED DECEMBER 31, 2023 and 2022 (In thousands, except percentages) (Unaudited) | |||||||||||||||||
Year ended December 31, 2023 | |||||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Acquired | Interest | Income tax | Effective | |||||||||
GAAP Reported | $ 435,577 | 88.3 % | $ 849,658 | $ 608,284 | $ 19,000 | $ (119,912) | (40.2) % | ||||||||||
Non-GAAP Adjustments: | |||||||||||||||||
Intangible asset | — | — | — | — | (608,284) | — | — | — | — | ||||||||
Share-based | (15,052) | 0.4 | (146,942) | (64,847) | — | — | — | — | — | ||||||||
Restructuring and other | — | — | (85,215) | — | — | — | — | — | — | ||||||||
Non-cash interest expense | — | — | — | — | — | — | (22,378) | — | — | ||||||||
Acquisition accounting | (151,446) | 4.1 | — | — | — | — | — | — | — | ||||||||
Income tax effect of above | — | — | — | — | — | — | — | 213,172 | 46.9 | ||||||||
Total of non-GAAP | (166,498) | 4.5 | (232,157) | (64,847) | (608,284) | — | (22,378) | 213,172 | 46.9 | ||||||||
Non-GAAP Adjusted | $ 269,079 | 92.8 % | $ 784,811 | $ — | $ 19,000 | $ 93,260 | 6.7 % | ||||||||||
Year ended December 31, 2022 | |||||||||||||||||||
Cost of | Gross | Selling, | Research | Intangible | Acquired | Intangible | Interest | Income tax | Effective | ||||||||||
GAAP Reported | 85.2 % | $ 1,416,967 | $ 590,453 | $ 599,169 | $ 444,148 | $ (158,645) | 42.6 % | ||||||||||||
Non-GAAP | |||||||||||||||||||
Intangible asset | — | — | — | — | (599,169) | — | — | — | — | — | |||||||||
Share-based | (12,416) | 0.3 | (148,726) | (57,052) | — | — | — | — | — | — | |||||||||
Intangible asset | — | — | — | — | — | — | (133,648) | — | — | — | |||||||||
Costs related to | — | — | (47,756) | — | — | — | — | — | — | — | |||||||||
Restructuring and | (2,299) | 0.1 | (64,723) | (10,284) | — | — | — | — | — | — | |||||||||
Transaction and | (469) | — | (21,059) | (2,032) | — | — | — | — | — | — | |||||||||
Non-cash interest | — | — | — | — | — | — | — | (37,973) | — | — | |||||||||
Acquisition | (273,392) | 7.5 | — | — | — | — | — | — | — | ||||||||||
Income tax effect | — | — | — | — | — | — | — | — | 253,340 | (33.5) | |||||||||
Total of non- | (288,576) | 7.9 | (282,264) | (69,368) | (599,169) | — | (133,648) | (37,973) | 253,340 | (33.5) | |||||||||
Non-GAAP | 93.1 % | $ 1,134,703 | $ 521,085 | $ — | $ 444,148 | $ — | $ 94,695 | 9.1 % | |||||||||||
__________________________ | |
(1) | The GAAP effective tax rate decreased in the year ended December 31, 2023 compared to the same period in 2022, primarily due to the impact of payments made for acquired IPR&D in 2022 and the nabiximols impairment charge, which was recognized in 2022, partially offset mix of pre-tax income and losses across tax jurisdictions. |
JAZZ PHARMACEUTICALS PLC RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2024 NET INCOME AND DILUTED EPS GUIDANCE (In millions, except per share amounts) (Unaudited) | |||
Net Income | Diluted EPS | ||
GAAP guidance | |||
Intangible asset amortization | 605 - 645 | 8.55 - 9.15 | |
Acquisition accounting inventory fair value step-up | 125 - 145 | 1.75 - 2.05 | |
Share-based compensation expense | 270 - 300 | 3.80 - 4.25 | |
Non-cash interest expense | 20 - 30 | 0.30 - 0.40 | |
Income tax effect of above adjustments | (205) - (225) | (2.90) - (3.20) | |
Effect of assumed conversion of 2026 Notes | - | (0.05) | |
Non-GAAP guidance | |||
Weighted-average ordinary shares used in per share calculations - GAAP and | 71 | ||
Contacts:
Investors:
Andrea N. Flynn, Ph.D.
Vice President, Head, Investor Relations
Jazz Pharmaceuticals plc
InvestorInfo@jazzpharma.com
Media:
Kristin Bhavnani
Head of Global Corporate Communications
Jazz Pharmaceuticals plc
CorporateAffairsMediaInfo@jazzpharma.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/jazz-pharmaceuticals-announces-full-year-and-fourth-quarter-2023-financial-results-and-provides-2024-financial-guidance-302074577.html
SOURCE Jazz Pharmaceuticals plc
FAQ
What were Jazz Pharmaceuticals' total revenues in 2023?
What was the year-over-year revenue increase in 2023?
Which products drove the revenue growth for Jazz Pharmaceuticals?
What is Jazz Pharmaceuticals' revenue guidance for 2024?
What percentage revenue growth is expected in 2024?
