Jazz Pharmaceuticals, Inc. Q3 Beats Wall Street, Raises FY EPS View

PALO ALTO, Calif., Nov. 4, 2010 /PRNewswire-FirstCall/ -- Jazz Pharmaceuticals, Inc. (Nasdaq: JAZZ) today announced financial results for the third quarter ended September 30, 2010, and updated financial guidance for 2010. The company’s updated 2010 financial guidance reflects higher expected sales of XYREM® (sodium oxybate) oral solution and lower expected expenses.

Total revenues for the quarter ended September 30, 2010 were $44.8 million, up 45 percent compared to $30.8 million for the quarter ended September 30, 2009. Total net product sales of Xyrem and LUVOX CR® (fluvoxamine maleate) extended-release capsules were $43.8 million, an increase of 46 percent from the third quarter of 2009.

For the third quarter of 2010, Xyrem net sales were $37.2 million, compared to $25.0 million for the third quarter of 2009, representing a 49 percent increase. The increase in Xyrem net sales in the third quarter of 2010 was primarily due to the impact of price increases, as well as to a lesser extent, an increase in prescription volume. Net sales of once-daily Luvox CR were $6.6 million for the quarter, up 33 percent compared to $5.0 million for the third quarter of 2009.

“These positive financial results and our increased guidance for 2010 highlight the success of our ongoing commercial operations, particularly the strength of our Xyrem business,” said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. “We look forward to gaining clarity from the FDA regarding next steps for JZP-6 in fibromyalgia, and as we look towards 2011, we remain committed to delivering attractive earnings growth driven by strong sales of our currently marketed products.”

Research and development expenses were $7.3 million for the quarter ended September 30, 2010, compared to $7.6 million for the quarter ended September 30, 2009. Selling, general and administrative expenses for the quarter ended September 30, 2010 were $18.0 million, compared to $15.1 million for the quarter ended September 30, 2009. The increase in selling, general and administrative expenses was due to higher personnel costs, including stock-based compensation, and activities related to the company’s JZP-6 product candidate.

Interest expense for the third quarter of 2010 was $1.2 million, compared to $5.4 million for the prior year period. The significant decline in interest expense reflects a substantially lower principal amount of outstanding debt at a lower interest rate than in 2009.

For the third quarter of 2010, the company reported GAAP net income of $13.2 million, or $0.32 per diluted share, compared to a GAAP net loss of $1.7 million, or $0.05 per diluted share, for the quarter ended September 30, 2009.

Adjusted net income for the third quarter of 2010 was $17.2 million, or $0.41 per diluted share, compared to $2.1 million, or $0.06 per diluted share, for the same period of 2009. Adjusted net income (loss) and adjusted net income (loss) per diluted share are non-GAAP financial measures that exclude from GAAP net income (loss) and GAAP net income (loss) per diluted share revenue related to upfront and milestone payments, and certain expenses comprised of loss on extinguishment of debt, amortization of intangible assets, stock-based compensation and non-cash interest expense associated with debt discount and debt issuance costs. A reconciliation of adjusted net income (loss) and adjusted net income (loss) per diluted share to GAAP net income (loss) and GAAP net income (loss) per diluted share is available in a table included at the end of this press release.

Updated 2010 Guidance

Jazz Pharmaceuticals is revising its full year 2010 guidance to increase the company’s adjusted net income per share guidance and provide updated estimates of full year product sales and operating expenses. The new financial guidance for 2010 is as follows:

Investor Conference Call

Jazz Pharmaceuticals will host an investor conference call and live audio webcast today (November 4, 2010) at 4:30 PM Eastern Time/1:30 PM Pacific Time to discuss its third quarter financial results and guidance for 2010, and provide a company update. The live webcast may be accessed from the Investors section of the Jazz Pharmaceuticals 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 866-770-7125 in the U.S., or 617-213-8066 outside the U.S., and entering passcode 61488979.

An archived version of the webcast will be available for at least one week on the Investors section of the Jazz Pharmaceuticals’ website at www.jazzpharmaceuticals.com.

About Jazz Pharmaceuticals, Inc.

Jazz Pharmaceuticals is a specialty pharmaceutical company focused on identifying, developing and commercializing innovative products to meet unmet medical needs in neurology and psychiatry. For further information see www.jazzpharmaceuticals.com.

“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 performance, financial position and earnings growth potential, including 2010 financial guidance, future sales of its currently-marketed products and expenses. These forward-looking statements are based on the company’s current expectations and inherently involve significant risks and uncertainties. Jazz Pharmaceuticals’ 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 related to: Jazz Pharmaceuticals’ ability to increase sales of its Xyrem and Luvox CR products; Jazz Pharmaceuticals’ dependence on single source suppliers and manufacturers as well as Jazz Pharmaceuticals’ ability to obtain adequate clinical and commercial supplies of its product candidates, products and materials from current and potential new suppliers; Jazz Pharmaceuticals’ dependence one central pharmacy distributor for Xyrem sales in the United States; Jazz Pharmaceuticals’ cash flow estimates and the sufficiency of its cash resources; competition, including from potential generic competitors; Jazz Pharmaceuticals’ ability to obtain and maintain intellectual property protection for its products and product candidates; and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in Jazz Pharmaceuticals’ Securities and Exchange Commission filings and reports, including in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 filed by Jazz Pharmaceuticals with the Securities and Exchange Commission on August 11, 2010. Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.