Jazz Pharmaceuticals Announces Full Year And Fourth Quarter 2014 Financial Results Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the full year and the fourth quarter ended December 31, 2014 and...

DUBLIN , Feb. 24, 2015 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ ) today announced financial results for the full year and the fourth quarter ended December 31, 2014 and provided financial guidance for 2015.

"2014 was an outstanding year for Jazz Pharmaceuticals as we executed on our growth strategy, delivered strong sales of our key products and further diversified our product portfolio and expanded our development pipeline through completion of three transactions," said Bruce C. Cozadd , chairman and chief executive officer of Jazz Pharmaceuticals plc. "We also made significant progress in R&D, initiating multiple clinical trials and beginning the rolling submission of a new drug application for defibrotide, and in our operational capabilities, creating a scalable infrastructure that has enhanced our readiness to support future growth opportunities and continued creation of long-term shareholder value."

Adjusted net income attributable to Jazz Pharmaceuticals plc for 2014 was $527.6 million , or $8.43 per diluted share, compared to $388.3 million , or $6.31 per diluted share, for 2013. Adjusted net income attributable to Jazz Pharmaceuticals plc for the fourth quarter of 2014 was $153.1 million , or $2.44 per diluted share, compared to $106.1 million , or $1.72 per diluted share, for 2013.

GAAP net income attributable to Jazz Pharmaceuticals plc for 2014 was $58.4 million , or $0.93 per diluted share, compared to $216.3 million , or $3.51 per diluted share, for 2013. GAAP net income attributable to Jazz Pharmaceuticals plc for the fourth quarter of 2014 was $81.6 million , or $1.30 per diluted share, compared to $55.3 million , or $0.90 per diluted share, for the fourth quarter of 2013. GAAP net income attributable to Jazz Pharmaceuticals plc for 2014 included a total of $202.6 million in upfront and milestone payments primarily for the acquisition of rights to JZP-110 and to defibrotide in the Americas. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included in this press release.

2014 Revenues and Product Sales Total revenues for the year ended December 31, 2014 were $1,172.9 million , an increase of 34% over total revenues of $872.4 million for the year ended December 31, 2013 . Total revenues for the fourth quarter of 2014 were $328.1 million , an increase of 39% over total revenues of $235.8 million for the fourth quarter of 2013. The increases in total revenues were driven primarily by net product sales of Xyrem® (sodium oxybate) oral solution, Erwinaze®/Erwinase® (asparaginase Erwinia chrysanthemi ) and Defitelio® (defibrotide). Total revenues include net product sales, royalties and contract revenues.

Net product sales for 2014 and the fourth quarter of 2014 were as follows:

Tables showing actual and pro forma net product sales for the three months and year ended December 31, 2014 compared to actual and pro forma net product sales for the same periods in 2013 are included in this press release.

Operating Expenses and Other Operating expenses for 2014 were $977.3 million on a GAAP basis compared to $532.1 million for 2013. Operating expenses for the fourth quarter of 2014 were $198.2 million on a GAAP basis compared to $141.3 million for the fourth quarter of 2013. Operating expenses increased over the prior year periods primarily due to the following:

Net interest expense for 2014 was $52.7 million compared to $26.9 million for 2013. Net interest expense for the fourth quarter of 2014 was $16.7 million compared to $6.2 million for the fourth quarter of 2013. The increase was due to the company's increased debt levels following the Gentium acquisition in January 2014 and the sale in August 2014 of $575.0 million principal amount of 1.875% exchangeable senior notes due 2021. A portion of the net proceeds from the sale of the exchangeable senior notes was used to repay total outstanding borrowings of $300 million under the company's revolving credit facility.

Foreign currency gain was $8.7 million and $2.0 million for 2014 and the fourth quarter of 2014, respectively, primarily due to the strengthening of the U.S. dollar against the Euro.

As of December 31, 2014 , cash and cash equivalents were $684.0 million and the outstanding principal balance of the company's long-term debt was $1.5 billion . Cash and cash equivalents increased from December 31, 2013 primarily due to the net proceeds from the company's term loans and exchangeable senior notes and cash generated by the business, offset in part by cash used for the Gentium acquisition and to acquire the rights to JZP-110 and the rights to defibrotide in the Americas, to repay outstanding borrowings under the company's revolving credit facility, to make a contingent consideration payment to the former equity holders of EUSA Pharma, to repurchase ordinary shares under the company's share repurchase program and to fund capital expenditures.

In 2014, the company repurchased 0.3 million ordinary shares under its share repurchase program for $42.2 million at an average cost of $138.64 per ordinary share. As of December 31, 2014 , the amount remaining under the current share repurchase program was $21.3 million .

Management Transition Jeffrey Tobias , M.D., executive vice president of research and development and chief medical officer (CMO), will be retiring effective September 2015 after more than 35 years in medicine and the biopharmaceuticals industry. In the interim, Dr. Tobias will continue in his current role through the end of March, at which time he will transition to a new role as executive vice president of R&D strategy and CMO.

"I want to thank Jeff for his significant contributions to the growth and success of Jazz Pharmaceuticals over the past four years. Jeff has led the reshaping of R&D at Jazz, building strong capabilities and expanding from a U.S. to an international organization with a global leadership team and deep clinical expertise in our core therapeutic areas," said Bruce Cozadd , chairman and chief executive officer of Jazz Pharmaceuticals plc.

Recent Developments

2015 Financial Guidance Jazz Pharmaceuticals' full year 2015 financial guidance is as follows:

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, discuss its 2014 full year and fourth quarter results and provide 2015 financial guidance. The live webcast may be accessed from the Investors & Media 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 +1 800 237 9752 in the U.S., or +1 617 847 8706 outside the U.S., and entering passcode 21347754.

A replay of the conference call will be available through March 3, 2015 by dialing +1 888 286 8010 in the U.S., or +1 617 801 6888 outside the U.S., and entering passcode 39765339. An archived version of the webcast will be available for at least one week in the Investors & Media section of the Jazz Pharmaceuticals website at www.jazzpharmaceuticals.com .

About Jazz Pharmaceuticals plc Jazz Pharmaceuticals plc (Nasdaq: JAZZ ) is an international biopharmaceutical company focused on improving patients' lives by identifying, developing and commercializing meaningful products that address unmet medical needs. The company has a diverse portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology. In these areas, Jazz Pharmaceuticals markets Xyrem® (sodium oxybate) oral solution and Erwinaze® (asparaginase Erwinia chrysanthemi ) in the U.S., and markets Erwinase® and Defitelio® (defibrotide) in Europe and other countries outside the U.S. For more information, please visit www.jazzpharmaceuticals.com .

Investors should note that these non-GAAP financial measures are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts associated with the company's results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP financial measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. 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; likewise, 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. In this regard, the company has determined that, beginning with the 2015 financial guidance presented in this press release, it will no longer include an adjustment for depreciation expense in its non-GAAP adjusted financial measures. Accordingly, any historical non-GAAP adjusted financial measures presented by the company in the future, beginning with the company's earnings press release for the first quarter of 2015, will not include an adjustment for depreciation expense. Any comparative historical periods presented will also be updated to reflect this change beginning with the company's earnings press release for the first quarter of 2015. However, for purposes of comparability with the company's prior presentations of non-GAAP financial measures, the historical non-GAAP financial measures presented in this press release include an adjustment for depreciation expense. In addition, 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 may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by the company's competitors and other companies.

As used in this press release, (i) the historical adjusted net income measures attributable to Jazz Pharmaceuticals plc (and the related per share measures) exclude from GAAP reported net income attributable to Jazz Pharmaceuticals plc (and the related per share measures), as applicable, intangible asset amortization, share-based compensation expense, acquired in-process research and development expenses, impairment charges, transaction and integration costs, acquisition accounting inventory fair value step-up adjustments, depreciation expense, restructuring charges, change in fair value of contingent consideration, loss on extinguishment and modification of debt and non-cash interest expense; adjust the income tax provision to the estimated amount of taxes that are payable in cash; and adjust for the amount attributable to noncontrolling interests; (ii) the historical adjusted SG&A expense measures exclude from GAAP SG&A expenses, as applicable, share-based compensation expense, transaction and integration costs, depreciation expense, restructuring charges and change in fair value of contingent consideration; (iii) the historical adjusted R&D expense measures exclude from GAAP R&D expenses, as applicable, share-based compensation expense, transaction and integration costs and depreciation expense; (iv) the adjusted net income attributable to Jazz Pharmaceuticals plc (and the related per share measures) guidance exclude from estimated GAAP net income attributable to Jazz Pharmaceuticals plc (and the related per share measures) intangible asset amortization, share-based compensation expense, upfront and milestone payments and non-cash interest expense; and adjust the income tax provision to the estimated amount of taxes that are payable in cash; (v) the adjusted gross margin percentage guidance excludes from estimated GAAP gross margin percentage share-based compensation expense; (vi) the adjusted SG&A expenses guidance excludes from estimated GAAP SG&A expenses share-based compensation expense; (vii) the adjusted R&D expenses guidance excludes from estimated GAAP R&D expenses share-based compensation expense and potential milestone payments; and (viii) the adjusted interest expense guidance excludes from estimated GAAP interest expense non-cash interest expense.

"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 results, including 2015 financial guidance, the potential for future growth and creation of shareholder value, the company's plans to seek additional approvals for Erwinase in Europe , the potential acceptance for filing by the FDA of the first NDA for defibrotide for VOD and other statements that are not historical facts. These forward-looking statements are based on Jazz Pharmaceuticals' current expectations 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 and increasing sales of and revenue from Xyrem, such as the potential introduction of generic competition or other sodium oxybate products that compete with Xyrem and changed or increased regulatory restrictions on or requirements with respect to Xyrem, as well as similar risks related to effectively commercializing the company's other lead marketed products; protecting and enhancing the company's intellectual property rights; delays or problems in the supply or manufacture of the company's products which could impact the company's ability to meet commercial demand; obtaining and maintaining appropriate pricing and reimbursement for the company's products in an increasingly challenging environment; the challenges of compliance with the requirements of U.S. and non-U.S. regulatory agencies; the challenges of achieving and maintaining commercial success of the company's products; the risks and costs associated with business combination or product or product candidate acquisition transactions; the difficulty and uncertainty of pharmaceutical product development, including the timing thereof, and the uncertainty of clinical success, such as the risk that results from preclinical studies and/or early clinical trials may not be predictive of results obtained in later and larger clinical trials; the inherent uncertainty associated with the regulatory approval process, including the risk that the company may be unable to obtain regulatory approval for defibrotide in the United States in a timely manner or at all; the company's ability to identify and acquire, in-license or develop additional products or product candidates to grow its business; possible restrictions on the company's ability and flexibility to pursue certain future opportunities as a result of its substantial outstanding debt obligations, which increased significantly in 2014; risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results; and those other risks detailed 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, 2014 and future filings and reports by the company, including the Annual Report on Form 10-K for the year ended December 31, 2014 . Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events or changes in its expectations.

The following unaudited pro forma information represents net product sales for the three months and year ended December 31, 2014 and 2013, respectively, as if the acquisition of Gentium had been completed on January 1, 2013 :

JAZZ PHARMACEUTICALS PLC RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION CERTAIN LINE ITEMS AND OTHER INFORMATION (In thousands) (Unaudited)

Explanation of Adjustments and Certain Line Items:

SOURCE Jazz Pharmaceuticals plc