Jazz Pharmaceuticals Announces First Quarter 2021 Financial Results
DUBLIN, May 4, 2021 /PRNewswire/ -- Jazz Pharmaceuticals, Inc. (Nasdaq: JAZZ) today announced financial results for the first quarter of 2021 and affirmed financial guidance for 2021. "Demand for Xywav is strong, as both patients and physicians embrace the health benefits associated with reducing daily sodium intake. We also continue to see robust uptake of Zepzelca among both platinum-resistant and platinum-sensitive small cell lung cancer patients, consistent with the positive feedback we've received on its profile," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "We are on track to deliver significant revenue growth and diversification in 2022, are poised for two additional product launches this year and look forward to completing the acquisition of GW Pharmaceuticals this month, all key milestones in our transformation to an innovative biopharmaceutical company and neuroscience leader." Robert Iannone, M.D., M.S.C.E., executive vice president, research and development and chief medical officer, added, "Across our R&D organization, we've continued our track record of strong execution. We presented positive Xywav data in idiopathic hypersomnia (IH) at the American Academy of Neurology Annual Meeting. We are also pleased to have announced that FDA granted priority review of Xywav in IH with a PDUFA goal date set for August 12, 2021, bringing us another step closer to delivering this important treatment to patients with IH, for whom there is currently no FDA-approved therapy. Further, our JZP458 program remains on track with a potential approval in mid-2021. I'm proud that our continued execution enables us to bring life-changing medicines to often overlooked patient groups with significant unmet need." Business Updates Corporate Development On February 3, 2021, the Company announced that it had entered into a definitive agreement to acquire GW Pharmaceuticals plc (GW) for $220.00 per American Depositary Share, in the form of $200 in cash and $20 in Jazz ordinary shares, based on the volume weighted average price of Jazz ordinary shares on Nasdaq for the 15 consecutive trading day period beginning on the 18th trading day immediately preceding the closing date of the transaction, for a total value of approximately $7.2 billion, or $6.7 billion net of GW cash. The Company has secured $5.35 billion of financing to support the GW transaction; $1.5 billion as senior secured notes and a $3.85 billion term loan. This financing structure supports the Company's rapid deleveraging to its stated targets. All shareholder and regulatory approvals required for the acquisition have now been obtained. Completion of the acquisition remains subject to the sanction by the High Court of Justice of England and Wales (Court) and other customary closing conditions. The Court hearing to sanction the acquisition is currently scheduled for May 5, 2021, and the completion of the acquisition is expected to occur shortly thereafter. Upon close of the transaction, the combined company will be a leader in neuroscience with a global commercial and operational footprint, well positioned to maximize the value of its diversified portfolio. Neuroscience Oxybate (Xyrem® and XywavTM):
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:
Xyrem (sodium oxybate) oral solution:
Xywav in Idiopathic Hypersomnia
Sunosi® (solriamfetol):
JZP385:
JZP150:
Oncology Zepzelca™ (lurbinectedin):
JZP458 (recombinant Erwinia asparaginase):
Vyxeos® (daunorubicin and cytarabine) liposome for injection:
Defitelio® (defibrotide sodium) / defibrotide:
Erwinaze® / Erwinase® (asparaginase Erwinia chrysanthemi):
Financial Highlights
GAAP net income for the first quarter of 2021 was $121.8 million, or $2.09 per diluted share, compared to a GAAP net loss of $157.8 million, or $2.82 per diluted share, for the first quarter of 2020. Non-GAAP adjusted net income for the first quarter of 2021 was $228.8 million, or $3.92 per diluted share, compared to $25.8 million, or $0.45 per diluted share, for the first quarter of 2020. The GAAP net loss and non-GAAP adjusted net income for the first quarter of 2020 included the post-tax impact of a $200.0 million upfront payment made to PharmaMar for the exclusive U.S. commercialization and development rights to Zepzelca. The GAAP net loss for the first quarter of 2020 also included the post-tax impact of an impairment charge of $136.1 million following the Company's decision to stop enrollment in its Phase 3 clinical trial of defibrotide for the prevention of veno-occlusive disease (VOD). Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release. Total Revenues
Total revenues increased 14% in the first quarter of 2021 compared to the same period in 2020.
Operating Expenses and Effective Tax Rate
Operating expenses changed over the prior year periods primarily due to the following:
Cash Flow and Balance Sheet As of March 31, 2021, cash, cash equivalents and investments were $2.4 billion, and the outstanding principal balance of the Company's long-term debt was $2.4 billion. In the first quarter of 2021, the Company generated $285.0 million of cash from operations. 2021 Financial Guidance1 The Company is affirming its full year 2021 financial guidance as follows:
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. IST) to provide a business and financial update and discuss its 2021 first quarter results. 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 8765706. A replay of the conference call will be available through May 11, 2021 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 8765706. 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 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) is a global biopharmaceutical company dedicated to developing and commercializing life-changing medicines that transform the lives of patients 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 and movement disorders, and in oncology, including hematologic malignancies and solid tumors. We actively explore new options for patients including novel compounds, small molecules, 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 GAAP reported 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. 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 in 2020, the Company no longer excludes upfront and milestone payments from the Company's non-GAAP adjusted net income, its line item components and non-GAAP adjusted EPS. 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' growth prospects and future financial and operating results, including the company's 2021 financial guidance and the company's expectations related thereto; the company delivering significant revenue diversification in 2022; statements about the company's 2021 commercial and R&D objectives, including statements regarding potential regulatory approvals, initiation of clinical development trials, and expansion and diversification of the company's pipeline and business; the potential of Xywav in IH; statements related to the proposed acquisition of GW Pharmaceuticals and the anticipated timing, results and benefits thereof; the company working to further expand commercial payer coverage for Xywav; the company's objective of ensuring that ALL/LBL patients have access to a reliably produced, high-quality recombinant asparaginase; the company's expected clinical development, regulatory submissions and product launches, and the timing thereof; expected initiations of JZP385, JZP150 and Zepzelca trials and the timing thereof; the company's expectations regarding the distribution of Erwinaze; the company's financing structure supporting the company's rapid deleveraging and positioning the company to meet its stated leverage targets; 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: Jazz Pharmaceuticals' and GW Pharmaceuticals' ability to complete the acquisition on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the sanction of the High Court of Justice of England and Wales and satisfaction of other closing conditions to consummate the acquisition; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction; risks related to diverting the attention of GW Pharmaceuticals and Jazz Pharmaceuticals management from ongoing business operations; failure to realize the expected benefits of the acquisition; significant transaction costs and/or unknown or inestimable liabilities; the risk that GW Pharmaceuticals' business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; Jazz Pharmaceuticals' ability to obtain the expected financing to consummate the acquisition; risks related to future opportunities and plans for the combined company, including the uncertainty of expected future regulatory filings, financial performance and results of the combined company following completion of the acquisition; GW Pharmaceuticals' dependence on the successful commercialization of Epidiolex/Epidyolex and the uncertain market potential of Epidiolex; pharmaceutical product development and the uncertainty of clinical success; the regulatory approval process, including the risks that GW Pharmaceuticals may be unable to submit anticipated regulatory filings on the timeframe anticipated, or at all, or that GW Pharmaceuticals may be unable to obtain regulatory approvals of any of its product candidates, including nabiximols and Epidiolex for additional indications, in a timely manner or at all; disruption from the proposed acquisition of GW Pharmaceuticals, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; the possibility that, if Jazz Pharmaceuticals does not achieve the perceived benefits of the acquisition as rapidly or to the extent anticipated by financial analysts or investors, the market price of Jazz Pharmaceuticals' ordinary shares could decline; regulatory initiatives and changes in tax laws; market volatility; the ultimate duration and severity of the COVID-19 pandemic and resulting global economic, financial, and healthcare system disruptions and the current and potential future negative impacts to the company's business operations and financial results; maintaining or increasing sales of and revenue from the company's oxybate products and other key marketed products; effectively launching and commercializing the company's other products and product candidates; the time-consuming and uncertain regulatory approval process, including the risk that the company's 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 process and the uncertainty of clinical success, including risks related to failure or delays in successfully initiating or completing clinical trials and assessing patients such as those being experienced, and expected to continue to be experienced, by the company as a result of the effects of the COVID-19 pandemic; 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; complying with applicable U.S. and non-U.S. regulatory requirements; government investigations, legal proceedings 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 and license agreements with third parties; the sufficiency of the company's cash flows and capital resources to fund its debt service obligations, de-lever and meet its stated leverage targets; 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 and GW Pharmaceuticals, including those described from time to time under the caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals' and GW Pharmaceuticals' Securities and Exchange Commission filings and reports, including the company's Annual Report on Form 10-K for the year ended December 31, 2020, GW Pharmaceuticals' Annual Report on Form 10-K for the year ended December 31, 2020, GW Pharmaceuticals' definitive proxy statement filed with the SEC on March 15, 2021, GW Pharmaceuticals' Form 10-Q for the quarter ended March 31, 2021, and future filings and reports by either company. In addition, while the company expects the COVID-19 pandemic to continue to adversely affect its business operations and financial results, the extent of the impact on the company's ability to generate sales of and revenues from its approved products, execute on new product launches, its clinical development and regulatory efforts, its corporate development objectives and the value of and market for its ordinary shares, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration and severity of the pandemic, governmental "stay-at-home" orders and travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Ireland and other countries, and the effectiveness of actions taken globally to contain and treat the disease. Moreover, 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.
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Company Codes: NASDAQ-NMS:JAZZ |