Jazz Pharmaceuticals Announces First Quarter 2022 Financial Results and Raises 2022 Financial Guidance
DUBLIN, May 4, 2022 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the first quarter of 2022, raised 2022 financial guidance and provided business updates.
"We're pleased to raise our top- and bottom-line guidance, driven by our continued execution and significant progress across commercial and R&D in the first quarter, which positions us well for the rest of the year and to achieve Vision 2025," said Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals. "Our recent launches of Xywav®, in both narcolepsy and idiopathic hypersomnia (IH), and Rylaze® in acute lymphoblastic leukemia (ALL), continue to generate increased prescriber and patient adoption, and demonstrate our ability to deliver innovative new medicines to improve the lives of patients and their families. On the corporate development front, our three recent transactions are aligned with our broader strategy, allowing us to focus on our highest priorities, enhance our pipeline in areas of key interest in neuroscience and oncology and drive long-term shareholder value."
"We've had a highly productive start to 2022 with the submission of two Rylaze Supplemental Biologics License Applications, the first patient enrolled in our Phase 2 basket trial for Zepzelca® and the first presentation of preclinical data for JZP815, an investigational, next-generation pan-RAF kinase inhibitor," said Rob Iannone, M.D., M.S.C.E., executive vice president, global head of research and development of Jazz Pharmaceuticals. "I'm also excited about the addition of DSP-0187, a potent and highly selective oral orexin-2 receptor agonist, now called JZP441, further strengthening our leadership in sleep medicine, and WTX-613, a differentiated, conditionally activated interferon alpha (IFN?) INDUKINE™ molecule, now called JZP898, which has demonstrated anti-tumor activity in preclinical models. These recent transactions reinforce our commitment to enhancing our pipeline and leveraging our productive R&D engine to develop novel medicines for people with serious diseases."
- Robust early launch momentum in first full quarter of Xywav for IH
- Submitted a Rylaze Supplemental Biologics License Application (sBLA) for Monday/Wednesday/Friday (M/W/F) intramuscular (IM) dosing and an sBLA for intravenous (IV) administration; both are being reviewed under the Real-Time Oncology Review (RTOR) program
- First patient enrolled in Zepzelca EMERGE-201 Phase 2 basket trial
- Strengthened leadership in sleep medicine with addition of a potent, highly selective oral orexin-2 receptor agonist, JZP441 (DSP-0187)
- Expanded oncology pipeline with JZP898 (WTX-613), a differentiated, conditionally activated IFN? INDUKINE™ molecule
- Strategic divestiture of Sunosi® allows increased investment and sharpens focus on highest strategic priorities
- Growing and durable commercial franchises drove 1Q22 total revenues of $813.7 million; 34% increase compared to the same period in 2021
- Raising top- and bottom-line guidance; 2022 total revenue guidance increased to $3.5 to $3.7 billion
- Net leverage ratio of 3.9x1 as of March 31, 2022, demonstrating rapid deleveraging following the close of the GW Pharmaceuticals (GW) acquisition; on-track for target of less than 3.5x by the end of 2022
- Substantial revenue diversification continues as newer products continue to grow and the Company optimizes its commercial portfolio
1 | On a non-GAAP adjusted basis. Non-GAAP net leverage ratio is a non-GAAP financial measure. For further information, see "Non-GAAP Financial Measures." |
- Net product sales for the combined oxybate business increased 6% to $433.6 million in 1Q22 compared to the same period in 2021.
- Average active oxybate patients on therapy was approximately 16,650 in 1Q22, an increase of approximately 6% compared to the same period in 2021.
- Xywav net product sales increased 147% to $186.1 million in 1Q22 compared to the same period in 2021.
- There were approximately 7,800 active Xywav patients exiting 1Q22.
- Xywav has broad patent protection to 2033.
- There were approximately 7,050 narcolepsy patients taking Xywav exiting 1Q22.
- The benefits of lowering sodium intake continues to resonate with patients and prescribers. In June 2021, U.S. Food and Drug Administration (FDA) recognized seven years of Orphan Drug Exclusivity (ODE), through July 2027, for Xywav and published its summary of clinical superiority findings stating that "Xywav is clinically superior to Xyrem by means of greater safety because Xywav provides a greatly reduced chronic sodium burden compared to Xyrem." Further, FDA stated that "the differences in the sodium content of the two products at the recommended doses will be clinically meaningful in reducing cardiovascular morbidity in a substantial proportion of patients for whom the drug is indicated."
- Positive early launch momentum with approximately 750 IH patients taking Xywav exiting 1Q22.
- The Company launched Xywav for IH in November 2021, with initial launch efforts focused on the approximately 37,000 currently diagnosed patients in the U.S. who are actively seeking healthcare. Healthcare providers are excited to have a treatment option with positive and compelling clinical trial results that address IH and not just its symptoms.
- FDA recognized ODE for IH in January 2022, extending regulatory exclusivity to August 2028.
- Xyrem net product sales decreased 26% to $247.5 million in 1Q22 compared to the same period in 2021, reflecting the continued adoption of Xywav by patients with narcolepsy.
- Epidiolex/Epidyolex net product sales increased 6% to $157.9 million in 1Q22 compared to the same period in 2021, on a proforma basis.
- Epidiolex/Epidyolex net product sales in 4Q21 were favorably impacted by approximately $18 million, due to a temporary increase in specialty pharmacy inventory levels at the end of 2021. The majority of this increase reversed in 1Q22, reducing 1Q22 revenues.
- Excluding this impact, we saw double-digit percentage revenue growth in 1Q22 compared to 1Q21, and sequential growth in underlying demand, despite challenges posed by the Omicron variant.
- Epidyolex is now commercially available and fully reimbursed in four of the five key European markets: United Kingdom, Germany, Italy and Spain, with an anticipated launch in France in 2022. The Company has made significant progress on its European rollout with launches in Spain, Italy and Switzerland in 3Q21 and Ireland and Norway in 1Q22.
- The Company expects to initiate a Phase 3 pivotal trial of Epidiolex for Epilepsy with Myoclonic-Atonic Seizures (EMAS), the fourth target indication for Epidiolex, in 1H22.
- The Company continues to strengthen the durability of Epidiolex. Patent US 11,207,292 is Orange Book listed and extends through 2039. This patent covers the composition of the botanically derived cannabidiol (CBD) preparation used in Epidiolex and the treatment of indicated disorders using that CBD preparation.
- Zepzelca net product sales increased 9% to $59.3 million in 1Q22 compared to the same period in 2021.
- The Company is pleased to have established Zepzelca as the treatment of choice in the second-line small cell lung cancer (SCLC) setting after only eighteen months on the market.
- Zepzelca development program updates:
- In March 2022, the first patient was enrolled in the EMERGE-201 Phase 2 basket trial evaluating Zepzelca as monotherapy in select relapsed/refractory solid tumors.
- Jazz and collaborator F. Hoffmann-La Roche Ltd (Roche) have initiated a Phase 3 trial to evaluate first-line use of Zepzelca in combination with Tecentriq® (atezolizumab), compared to Tecentriq alone, as maintenance therapy in patients with extensive-stage SCLC after induction chemotherapy. The first patient was enrolled in the trial in November 2021.
- The Company's partner, PharmaMar, initiated a confirmatory trial, LAGOON, in second-line SCLC in December 2021. If positive, this trial could confirm the benefit of Zepzelca in the treatment of SCLC when patients progress following first-line treatment with a platinum-based regimen.
- Rylaze net product sales were $54.2 million in 1Q22.
- The continued strong launch of Rylaze reflects the significant unmet patient need for a high-quality, reliable supply of Erwinia asparaginase for patients with ALL.
- In January 2022, the Company completed the submission of an sBLA to FDA seeking approval for a M/W/F IM dosing schedule for Rylaze. In April 2022, the Company also completed the submission of an sBLA to FDA seeking approval for IV administration of Rylaze. Both submissions are being reviewed under the RTOR program.
- The Company anticipates that data from the current development program will support regulatory filings in Europe in mid-2022, including IV administration, with potential for approval in 2023. The Company is also working with a partner to advance the program for potential submission, approval and launch in Japan.
- On May 4, 2022, the Company and Sumitomo Pharma Co., Ltd. announced an exclusive license agreement for DSP-0187, now called JZP441, a potent, highly selective oral orexin-2 receptor agonist designed to activate orexin signaling.
- Sumitomo Pharma initiated a Phase 1 clinical trial in Japan in November 2021 to evaluate safety, tolerability, and pharmacokinetics in healthy volunteers.
- The collaboration will leverage the Company's substantial experience and leadership in sleep disorders to advance this therapy with the potential to improve patient care.
- Financial terms included a $50 million upfront payment to Sumitomo Pharma, and Sumitomo Pharma is eligible to receive development, regulatory and commercial milestone payments of up to $1.09 billion. Pending approval, Sumitomo Pharma is eligible to receive a tiered, low double-digit royalty on the Company's future net sales of JZP441.
- On April 7, 2022, the Company and Werewolf Therapeutics entered into a licensing agreement under which the Company acquired exclusive global development and commercialization rights to Werewolf's investigational molecule, WTX-613, now called JZP898, a differentiated, conditionally activated IFN? INDUKINE™ molecule.
- JZP898 is an engineered IFN? cytokine pro-drug that is activated specifically within the tumor microenvironment where it can stimulate IFN? receptors on cancer-fighting immune effector cells. The aim of JZP898 is to minimize the severe toxicities that have been observed with systemically active recombinant IFN? therapy and maximize clinical benefit when administered as monotherapy or in combination with other agents.
- Jazz expects to file an Investigational New Drug (IND) application in the U.S. in 2023.
- Financial terms included a $15 million upfront payment to Werewolf, and Werewolf is eligible to receive development, regulatory and commercial milestone payments of up to $1.26 billion. Pending approval, Werewolf is eligible to receive a tiered, mid-single-digit percentage royalty on the net sales.
- On March 28, 2022, Jazz entered into a definitive agreement to divest Sunosi to Axsome Therapeutics.
- The Company will receive an upfront payment of $53 million, a high single-digit royalty on Axsome's U.S. net sales of Sunosi in current indications and a mid-single-digit royalty on Axsome's U.S. net sales of Sunosi in future indications.
- The Company and Axsome are committed to ensuring that patients receive uninterrupted access to Sunosi throughout the transition.
- The companies expect the U.S. transaction to close in the second quarter of 2022 and the ex-U.S. transaction close to occur within 60 days following the close of the U.S. transaction.
- There are currently three ongoing Phase 3 trials in multiple sclerosis (MS)-related spasticity. The Company anticipates data from its first Phase 3 trial, NCT04657666, in 2Q22; supportive findings may enable a New Drug Application submission to FDA in 2022.
- Suvecaltamide, a highly selective modulator of T-type calcium channels, is in clinical development for the treatment of essential tremor.
- The Company initiated a Phase 2b trial in 4Q21 and announced that the first patient was enrolled in December 2021. Top-line data read-out is anticipated in 1H24.
- JZP150, a selective fatty acid amide hydrolase, or FAAH, inhibitor, is in clinical development for the potential treatment of post-traumatic stress disorder (PTSD).
- The Company initiated a Phase 2 trial in 4Q21 and announced that the first patient was enrolled in December 2021. Top-line data read-out is anticipated in late 2023.
- The Company received Fast Track Designation for JZP150 development in PTSD from FDA in 4Q21, underscoring the significant unmet medical needs of patients.
- JZP815 is an investigational, preclinical stage pan-RAF kinase inhibitor that targets specific components of the mitogen-activated protein kinase (MAPK) pathway, which when activated by oncogenic mutations, can be a frequent driver of human cancer.
- The pan-RAF inhibitor program is part of a novel class of next-generation precision oncology therapies that has the potential to benefit cancer patients with high unmet needs in multiple different solid tumors.
- The Company, together with our preclinical collaboration partner, Redx Pharma, presented its first preclinical data in a poster at the American Association for Cancer Research Annual Meeting in April 2022.
- JZP815 inhibited tumor growth in several RAS- and BRAF-mutated solid tumor models, and demonstrated enhanced activity when combined with other MAPK pathway inhibitors.
- The Company plans to submit an IND for JZP815 this year.
Sunosi® (solriamfetol):
- Sunosi net product sales increased by 37% to $15.9 million in 1Q22 compared to the same period in 2021.
Vyxeos® (daunorubicin and cytarabine) liposome for injection:
- Vyxeos net product sales increased 2% to $33.8 million in 1Q22 compared to the same period in 2021.
Defitelio® (defibrotide sodium) / defibrotide:
- Defitelio/defibrotide net product sales of $49.5 million in 1Q22 were consistent with the same period in 2021.
Financial Highlights | |||
Three Months Ended March 31, | |||
(In thousands, except per share amounts) | 2022 | 2021 | |
Total revenues | $ 813,721 | $ 607,581 | |
GAAP net income | $ 1,647 | $ 121,832 | |
Adjusted net income | $ 261,934 | $ 228,819 | |
GAAP EPS | $ 0.03 | $ 2.09 | |
Adjusted EPS1,2 | $ 3.73 | $ 3.92 |
1. | Adjusted EPS in 1Q22 was impacted by $0.44 per share following the adoption of ASU 2020-06. | ||
2. | The Company adopted ASU No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity", (ASU 2020-06) on January 1, 2022. Following adoption, diluted EPS must be calculated using the if-converted method which assumes full conversion of our Exchangeable Senior Notes. |
GAAP net income in 1Q22 was $1.6 million, or $0.03 per diluted share, compared to $121.8 million, or $2.09 per diluted share, for 1Q22. Non-GAAP adjusted net income in 1Q22 was $261.9 million, or $3.73 per diluted share, compared to $228.8 million, or $3.92 per diluted share, for 1Q22. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
Total Revenues | |||
Three Months Ended March 31, | |||
(In thousands) | 2022 | 2021 | |
Xyrem | $ 247,497 | $ 335,550 | |
Xywav | 186,080 | 75,416 | |
Total Oxybate | 433,577 | 410,966 | |
Epidiolex/Epidyolex1 | 157,893 | — | |
Sunosi | 15,878 | 11,606 | |
Sativex® (nabiximols)1 | 4,742 | — | |
Total Neuroscience | 612,090 | 422,572 | |
Zepzelca | 59,338 | 54,334 | |
Rylaze | 54,220 | — | |
Vyxeos | 33,757 | 33,155 | |
Defitelio/defibrotide | 49,489 | 49,619 | |
Erwinaze/Erwinase | — | 41,068 | |
Total Oncology | 196,804 | 178,176 | |
Other | 943 | 2,783 | |
Product sales, net | 809,837 | 603,531 | |
Royalties and contract revenues | 3,884 | 4,050 | |
Total revenues | $ 813,721 | $ 607,581 |
1. | Net product sales for Epidiolex/Epidyolex and Sativex are included from the acquisition of GW on May 5, 2021. |
Total revenues increased 34% in 1Q22 compared to the same period in 2021.
- Neuroscience net product sales in 1Q22 increased 45% to $612.1 million compared to the same period in 2021 primarily driven by Epidiolex/Epidyolex net product sales in the first quarter of 2022 of $157.9 million following the acquisition of GW. In 1Q22, oxybate net product sales increased 6% to $433.6 million.
- Oncology net product sales in 1Q22 increased 10% to $196.8 million compared to the same period in 2021 primarily driven by Rylaze net product sales in 1Q22 of $54.2 million following product launch in July 2021, partially offset by Erwinaze/Erwinase net product sales in 1Q21 of $41.1 million.
Operating Expenses and Effective Tax Rate | |||
Three Months Ended March 31, | |||
(In thousands, except percentages) | 2022 | 2021 | |
GAAP: | |||
Cost of product sales | $ 115,284 | $ 40,189 | |
Gross margin | 85.8% | 93.3% | |
Selling, general and administrative | $ 308,813 | $ 260,508 | |
% of total revenues | 38.0% | 42.9% | |
Research and development | $ 129,981 | $ 76,573 | |
% of total revenues | 16.0% | 12.6% | |
Income tax expense | $ 536 | $ 18,019 | |
Effective tax rate | 8.5% | 13.3% | |
Three Months Ended March 31, | |||
(In thousands, except percentages) | 2022 | 2021 | |
Non-GAAP adjusted: | |||
Cost of product sales | $ 48,206 | $ 38,193 | |
Gross margin | 94.0% | 93.7% | |
Selling, general and administrative | $ 258,701 | $ 228,400 | |
% of total revenues | 31.8% | 37.6% | |
Research and development | $ 116,459 | $ 67,930 | |
% of total revenues | 14.3% | 11.2% | |
Income tax expense | $ 55,223 | $ 37,659 | |
Effective tax rate | 17.2% | 14.4% |
Operating expenses increased over the prior year period primarily due to the following:
- Cost of product sales increased in 1Q22 compared to the same period in 2021, on a GAAP and on a non-GAAP adjusted basis, due to increased net product sales as a result of the acquisition of GW. In addition, acquisition accounting inventory fair value step-up expense of $63.9 million in 1Q22 impacted GAAP cost of product sales.
- Selling, general and administrative (SG&A) expenses increased in 1Q22 compared to the same period in 2021, on a GAAP and on a non-GAAP adjusted basis, primarily due to an increase in compensation-related expenses driven by higher headcount as a result of the acquisition of GW.
- Research and development (R&D) expenses increased in 1Q22 compared to the same period in 2021, on a GAAP and on a non-GAAP adjusted basis, primarily due to the addition of costs related to clinical programs for Epidiolex, nabiximols and cannabinoids, an increase in costs related to JZP150 and suvecaltamide (JZP385) and an increase in compensation-related expenses due to higher headcount primarily driven by the acquisition of GW.
As of March 31, 2022, cash and cash equivalents were $490.8 million, and the outstanding principal balance of the Company's long-term debt was $6.2 billion compared to $6.4 billion as of December 31, 2021. In addition, the Company had undrawn borrowing capacity under a revolving credit facility of $500.0 million. For the three months ended March 31, 2022, the Company generated $209.0 million of cash from operations. In 1Q22 the Company repaid in full the $251.0 million remaining aggregate principal amount of the Euro Term Loan B.
The Company is raising its full year 2022 financial guidance as follows:
(In millions) | May 4, 2022 | March 1, 2022 | |
Revenues | $3,500 - $3,700 | $3,460 - $3,660 | |
–Neuroscience (includes potential Xyrem authorized generic royalties) | $2,600 - $2,800 | $2,560 - $2,760 | |
–Oncology | $840 - $920 | $840 - $920 |
GAAP: | |||
(In millions, except per share amounts and percentages) | May 4, 2022 | March 1, 2022 | |
Gross margin % | 84% | 83% | |
SG&A expenses | $1,299 - $1,389 | $1,298 - $1,397 | |
SG&A expenses as % of total revenues | 35% - 40% | 35% - 40% | |
R&D expenses | $621 - $669 | $621 - $670 | |
R&D expenses as % of total revenues | 17% - 19% | 17% - 19% | |
Acquired in-process research and development expenses | $65 | - | |
Effective tax rate | (117)% - (30)% | (116)% - (32)% | |
Net income | $15 - $200 | $10 - $185 | |
Net income per diluted share5 | $0.25 - $3.20 | $0.50 - $3.00 | |
Weighted-average ordinary shares used in per share calculations | 63 - 72 | 72 |
Non-GAAP: | |||
(In millions, except per share amounts and percentages) | May 4, 2022 | March 1, 2022 | |
Gross margin % | 93%1,6 | 92% | |
SG&A expenses | $1,080 - $1,1302,6 | $1,120 - $1,190 | |
SG&A expenses as % of total revenues | 29% - 32% | 31% - 34% | |
R&D expenses | $560 - $6003,6 | $560 - $600 | |
R&D expenses as % of total revenues | 15% - 17% | 15% - 17% | |
Acquired in-process research and development expenses | $65 | - | |
Effective tax rate | 10% - 12%4,6 | 10% - 12% | |
Net income | $1,180 - $1,2506 | $1,130 - $1,200 | |
Net income per diluted share5 | $16.70 - $17.706 | $16.00 - $17.00 | |
Weighted-average ordinary shares used in per share calculations | 72 | 72 |
1. | Excludes $305-$340 million of amortization of acquisition-related inventory fair value step-up, $13-$15 million of share-based compensation expense and $2 million of transaction and integration related expenses relating to the acquisition of GW from estimated GAAP gross margin. |
2. | Excludes $148-$168 million of share-based compensation expense and $31-$41 million of transaction and integration related expenses relating to the acquisition of GW and $40-$50 million of costs related to the disposal of a business from estimated GAAP SG&A expenses. |
3. | Excludes $59-$67 million of share-based compensation expense and $2 million of transaction and integration related expenses relating to the acquisition of GW from estimated GAAP R&D expenses. |
By: PR Newswire Association LLC.
- 04 May 2022
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