Full Press Release Details
– Total revenues of $3.8 billion in 2023 and $1 billion in 4Q23 – – 27% year-over-year revenue increase from combined key growth drivers: Xywav ® , Epidiolex ® and Rylaze ® – – Oncology revenue surpassed $1 billion in 2023 – – Multiple late-stage pipeline catalysts anticipated in 2024 – – 2024 total revenue guidance reflects continued top-line growth –
DUBLIN , Feb. 28, 2024 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ ) today announced financial results for the full year and fourth quarter of 2023 and provided guidance for 2024.
"2023 was a year of continued strong execution that delivered top- and bottom-line growth and over $3.8 billion in total revenue. Sleep 1 revenue exceeded $1.9 billion , Oncology revenue surpassed $1 billion and Epidiolex remains on track to deliver on its blockbuster potential, demonstrating our progress towards Vision 2025 targets. We also meaningfully advanced our late-stage pipeline and are pleased to note enrollment of the Phase 3 Zepzelca ® trial in first-line small cell lung cancer has been completed," said Bruce Cozadd , chairman and chief executive officer of Jazz Pharmaceuticals. "Looking to 2024, we expect double-digit percentage revenue growth across combined key growth drivers: Xywav , Epidiolex and Rylaze . We look forward to multiple near-term, late-stage pipeline catalysts and anticipate completing the rolling BLA submission for zanidatamab in second-line biliary tract cancer in the first half of 2024. We expect our disciplined capital allocation to enable investment in our key commercial growth drivers for near-term growth, in our pipeline for long-term growth and to provide flexibility for corporate development."
| _______________________ |
| 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 for Narcolepsy:
Xywav for Idiopathic Hypersomnia (IH):
Xyrem (sodium oxybate) oral solution:
High-Sodium Oxybate Authorized Generic (AG) Royalties:
Epidiolex / Epidyolex (cannabidiol):
Rylaze / Enrylaze ® (asparaginase erwinia chrysanthemi (recombinant)-rywn):
Zepzelca (lurbinectedin):
Key Pipeline Highlights
Suvecaltamide (JZP385):
Corporate Development
KRAS Inhibitor Program Agreement:
Ion Channel Targets Agreement:
Continued Repurchases under Previously Announced $1.5 Billion Share Repurchase Program
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 $161 million remained available and authorized for share repurchases, after the purchase of approximately $100 million of shares during the fourth quarter of 2023. The timing and amount of repurchases under the program will depend on a variety of factors, including the price of the Company's ordinary shares, alternative investment opportunities, restrictions under the Company's credit agreement, corporate and regulatory requirements and market conditions.
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 $414 .8 million, or $6.10 per diluted share, compared to a GAAP net loss of $(224.1) million, or $(3.58) per diluted share, for 2022. GAAP net income for 4Q23 was $94 .2 million, or $1.42 per diluted share, compared to a GAAP net loss of $(240.7) million, or $(3.82) per diluted share, for 4Q22.
Non-GAAP adjusted net income for 2023 was $1,295 .8 million, or $18.29 per diluted share, compared to $933 .6 million, or $13.20 per diluted share, for 2022. Non-GAAP adjusted net income for 4Q23 was $345 .3 million, or $5.02 per diluted share, compared to a Non-GAAP adjusted net loss of $(4.2) million, or $(0.07) per diluted share, for 4Q22.
Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
| 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 | |||
| Sunosi 1 | — | — | — | 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 U.S. was completed in May 2022. |
Total revenues increased 5% in 2023 and 4% in 4Q23 compared to the same periods in 2022.
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 rate 1 | 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:
Cash Flow and Balance Sheet
As of December 31, 2023, cash, cash equivalents and investments were $1 .6 billion, and the outstanding principal balance of the Company's long-term debt was $5 .8 billion. In addition, the Company had undrawn borrowing capacity under a revolving credit facility of $500.0 million . For the year ended December 31, 2023, the Company generated $1,092 .0 million of cash from operations reflecting strong business performance and continued financial discipline.
2024 Financial Guidance
Jazz Pharmaceutical's full year 2024 financial guidance is as follows:
| (In millions) | Guidance | ||
| Revenues | $4,000 - $4,200 | ||
| –Neuroscience (includes royalties from high-sodium oxybate AG) | $2,800 - $2,950 | ||
| –Oncology | $1,120 - $1,220 | ||
| (In millions, except per share amounts and percentages) | GAAP | Non-GAAP | |
| Gross margin % | 89 % | 93% 1,6 | |
| SG&A expenses | $1,346 - $1,426 | $1,170 - $1,230 2,6 | |
| SG&A expenses as % of total revenues | 32% - 36% | 28% - 31% | |
| R&D expenses | $877 - $935 | $800 - $850 3,6 | |
| R&D expenses as % of total revenues | 21% - 23% | 19% - 21% | |
| Effective tax rate | (22)% - (3)% | 10% - 13% 4,6 | |
| Net income | $385 - $530 | $1,275 - $1,350 6 | |
| Net income per diluted share 5 | $5.80 - $7.70 | $18.15 - $19.35 6 | |
| Weighted-average ordinary shares used in per share calculations 5 | 71 | 71 |
| ___________________________ | |
| 1. | Excludes $125-$145 million of amortization of acquisition-related inventory fair value step-up and $17-$19 million of share-based compensation expense. |
| 2. | Excludes $176-$196 million of share-based compensation expense. |
| 3. | Excludes $77-$85 million of share-based compensation expense. |
| 4. | Excludes 32%-16% from the GAAP effective tax rate of (22)%-(3)% relating to the income tax effect of adjustments between GAAP net income and non-GAAP adjusted net income, resulting in a non-GAAP adjusted effective tax rate of 10%-13%. |
| 5. | Diluted EPS calculations for 2024 include an estimated 6.4 million shares related to the assumed conversion of the 2.00% exchangeable senior notes due 2026, or the 2026 Notes, and the associated interest expense add-back to net income of $20 million and $18 million, on a GAAP and on a non-GAAP adjusted basis, respectively, under the "if converted" method. |
| 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: U.S. Dial-In Number: +1 888 350 4423 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 Dublin, Ireland with research and development laboratories, manufacturing facilities and employees in multiple countries committed to serving patients worldwide. Please visit www.jazzpharmaceuticals.com for more information.
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 (loss) (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 the non-GAAP adjustments. In this regard, the components of non-GAAP adjusted net income, including non-GAAP adjusted cost of product sales, SG&A expenses and 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.
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 Japan in the second half of 2024; the Company's expectations with respect to its products and product candidates and the potential of the Company's products and product candidates and the potential regulatory path related thereto; expectations that Xywav will remain the oxybate of choice; the Company's capital allocation and corporate development strategy; the potential successful future development, manufacturing, regulatory and commercialization activities; the Company's expectation of meaningful growth as part of its Vision 2025; growing and diversifying the Company's revenue, investing in its pipeline of novel therapies, and delivering innovative therapies for patients and the potential benefits of such therapies; the Company's ability to realize the commercial potential of its products; the Company's net product sales and goals for net product sales from new and acquired products; the Company's views and expectations relating to its patent portfolio, including with respect to expected patent protection, as well as expectations with respect to exclusivity; planned or anticipated clinical trial events, including with respect to initiations, enrollment and data read-outs, and the anticipated timing thereof; the Company's clinical trials confirming clinical benefit or enabling regulatory submissions; planned or anticipated regulatory submissions and filings, and the anticipated timing thereof; potential regulatory approvals; the timing and amount of repurchases of the Company's ordinary shares; 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: 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 Russia and Ukraine and related sanctions; macroeconomic conditions, including global financial markets, rising interest rates and inflation and recent and potential banking disruptions; regulatory initiatives and changes in tax laws; market volatility; protecting and enhancing the Company's intellectual property rights and the Company's commercial success being dependent upon the Company obtaining, maintaining and defending intellectual property protection and exclusivity for its products and product candidates; 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, including those governing the research, development, manufacturing and distribution of controlled substances; government investigations, legal proceedings and other actions; identifying and consummating corporate development transactions, financing these transactions and successfully integrating acquired product candidates, products and businesses; the Company's ability to realize the anticipated benefits of its corporate development transactions and its collaborations and license agreements with third parties; the sufficiency of the Company's cash flows and capital resources; the Company's ability to achieve targeted or expected future financial performance and results and the uncertainty of future tax, accounting and other provisions and estimates; the Company's ability to meet its projected long-term goals and objectives, including as part of Vision 2025, in the time periods that the Company anticipates, or at all, and the inherent uncertainty and significant judgments and assumptions underlying the Company's long-term goals and objectives; fluctuations in the market price and trading volume of the Company's ordinary shares; restrictions on repurchases of capital stock; the timing and availability of alternative investment opportunities; and other risks and uncertainties affecting the Company, including those described from time to time under the caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals' Securities and Exchange Commission filings and reports, including the Company's Annual Report on Form 10-K for the year ended December 31, 2022 as supplemented by its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 , and future filings and reports by the Company including the Company's Annual Report on Form 10-K for the year ended December 31, 2023 . 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.
| 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, 2023 | December 31, 2022 | ||
| 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 Income | Diluted EPS | Net Loss | Diluted EPS | Net Income | Diluted EPS | Net Income (Loss) | Diluted EPS | ||||||||
| GAAP reported 1 | $ 94,154 | $ 1.42 | $ (240,724) | $ (3.82) | $ 414,832 | $ 6.10 | $ (224,060) | $ (3.58) | |||||||
| Intangible asset amortization | 151,553 | 2.18 | 137,387 | 2.18 | 608,284 | 8.44 | 599,169 | 8.25 | |||||||
| Share-based compensation expense | 52,941 | 0.76 | 61,767 | 0.98 | 226,841 | 3.15 | 218,194 | 3.01 | |||||||
| Acquisition accounting inventory fair value step-up | 32,352 | 0.46 | 70,203 | 1.11 | 151,446 | 2.10 | 273,392 | 3.77 | |||||||
| Restructuring and other costs 2 | 61,727 | 0.89 | 19,681 | 0.31 | 85,215 | 1.18 | 77,306 | 1.06 | |||||||
| Non-cash interest expense 3 | 6,123 | 0.09 | 5,971 | 0.10 | 22,378 | 0.31 | 37,973 | 0.52 | |||||||
| Intangible asset impairment charge 4 | — | — | — | — | — | — | 133,648 | 1.84 | |||||||
| (Income) costs related to disposal of a business 5 | — | — | (1,783) | (0.03) | — | — | 47,756 | 0.66 | |||||||
| Transaction and integration related expenses 6 | — | — | — | — | — | — | 23,560 | 0.32 | |||||||
| Income tax effect of above adjustments | (53,564) | (0.77) | (56,741) | (0.90) | (213,172) | (2.95) | (253,340) | (3.49) | |||||||
| Effect of assumed conversion of Exchangeable Senior Notes | — | (0.01) | — | — | — | (0.04) | — | 0.84 | |||||||
| Non-GAAP adjusted 1 | $ 345,286 | $ 5.02 | $ (4,239) | $ (0.07) | $ 1,295,824 | $ 18.29 | $ 933,598 | $ 13.20 | |||||||
| Weighted-average ordinary shares used in diluted per share calculations - GAAP | 69,673 | 63,052 | 72,066 | 62,539 | |||||||||||
| Dilutive effect of Exchangeable Senior Notes 1 | — | — | — | 9,044 | |||||||||||
| Dilutive effect of employee equity incentive and purchase plans | — | — | — | 1,025 | |||||||||||
| Weighted-average ordinary shares used in diluted per share calculations - non-GAAP | 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 1.50% exchangeable senior notes due 2024, or the 2024 Notes and the 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes. In August 2023, we made an irrevocable election to fix the settlement method for exchanges of the 2024 Notes to a combination of cash and ordinary shares of the Company with a specified cash amount per $1,000 principal amount of the 2024 Notes of $1,000. As a result, the assumed issuance of ordinary shares upon exchange of the 2024 Notes has only been included in the calculation of diluted net income per ordinary share, on a GAAP and on a non-GAAP adjusted basis, in the year ended December 31, 2023 up to the date the irrevocable election was made. GAAP reported net income per diluted share for the three months and year ended December 31, 2023 included 6.4 million shares and 8.0 million shares, respectively, related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to GAAP net income of $4.9 million and $24.9 million, respectively. There was no impact on GAAP reported net loss per diluted share for the three months and year ended December 31, 2022, as the Exchangeable Senior Notes were anti-dilutive. Non-GAAP adjusted net income per diluted share for the three months and year ended December 31, 2023 included 6.4 million shares and 8.0 million shares, respectively, related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to non-GAAP adjusted net income of $4.4 million and $22.2 million, respectively. There was no impact on non-GAAP adjusted net loss per diluted share for the three months ended December 31, 2022, as the Exchangeable Senior Notes were anti-dilutive. Non-GAAP adjusted net income per diluted share for the year ended December 31, 2022 included 9.0 million shares related to the assumed conversion of the Exchangeable Senior Notes and the associated interest expense add-back to non-GAAP adjusted net income of $25.2 million. |
| 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 product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Interest expense, net | Income tax expense (benefit) | Effective tax rate (1) | |||||||||
| GAAP Reported | $ 107,243 | 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 expense | (3,653) | 0.4 | (33,787) | (15,501) | — | — | — | — | ||||||||
| Acquisition accounting inventory fair value step-up | (32,352) | 3.3 | — | — | — | — | — | — | ||||||||
| Restructuring and other costs | — | — | (61,727) | — | — | — | — | — | ||||||||
| Non-cash interest expense | — | — | — | — | — | (6,123) | — | — | ||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | 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 product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Acquired IPR&D | Interest expense, net | Income tax benefit | Effective tax rate (1) | |||||||||
| GAAP Reported | $ 167,364 | 82.7 % | $ 383,203 | $ 172,555 | $ 137,387 | $ 375,000 | $ 74,125 | $ (100,042) | 29.4 % | ||||||||
| Non-GAAP Adjustments: | |||||||||||||||||
| Intangible asset amortization | — | — | — | — | (137,387) | — | — | — | — | ||||||||
| Share-based compensation expense | (3,835) | 0.4 | (43,875) | (14,057) | — | — | — | — | — | ||||||||
| Income related to the disposal of a business | — | — | 1,783 | — | — | — | — | — | — | ||||||||
| Restructuring and other costs | 60 | — | (21,348) | 1,607 | — | — | — | — | — | ||||||||
| Non-cash interest expense | — | — | — | — | — | — | (5,971) | — | — | ||||||||
| Acquisition accounting inventory fair value step-up | (70,203) | 7.2 | — | — | — | — | — | — | — | ||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | — | 56,741 | 63.2 | ||||||||
| Total of non-GAAP adjustments | (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 | $ — | $ 375,000 | $ 68,154 | $ (43,301) | 92.6 % |
| 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 product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Acquired IPR&D | Interest expense, net | Income tax expense (benefit) | Effective tax rate (1) | |||||||||
| GAAP Reported | $ 435,577 | 88.3 % | $ 1,343,105 | $ 849,658 | $ 608,284 | $ 19,000 | $ 289,438 | $ (119,912) | (40.2) % | ||||||||
| Non-GAAP Adjustments: | |||||||||||||||||
| Intangible asset amortization | — | — | — | — | (608,284) | — | — | — | — | ||||||||
| Share-based compensation expense | (15,052) | 0.4 | (146,942) | (64,847) | — | — | — | — | — | ||||||||
| Restructuring and other costs | — | — | (85,215) | — | — | — | — | — | — | ||||||||
| Non-cash interest expense | — | — | — | — | — | — | (22,378) | — | — | ||||||||
| Acquisition accounting inventory fair value step-up | (151,446) | 4.1 | — | — | — | — | — | — | — | ||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | — | 213,172 | 46.9 | ||||||||
| Total of non-GAAP adjustments | (166,498) | 4.5 | (232,157) | (64,847) | (608,284) | — | (22,378) | 213,172 | 46.9 | ||||||||
| Non-GAAP Adjusted | $ 269,079 | 92.8 % | $ 1,110,948 | $ 784,811 | $ — | $ 19,000 | $ 267,060 | $ 93,260 | 6.7 % |
| Year ended December 31, 2022 | |||||||||||||||||||
| Cost of product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Acquired IPR&D | Intangible asset impairment charge | Interest expense, net | Income tax expense (benefit) | Effective tax rate (1) | ||||||||||
| GAAP Reported | $ 540,517 | 85.2 % | $ 1,416,967 | $ 590,453 | $ 599,169 | $ 444,148 | $ 133,648 | $ 288,242 | $ (158,645) | 42.6 % | |||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||
| Intangible asset amortization | — | — | — | — | (599,169) | — | — | — | — | — | |||||||||
| Share-based compensation expense | (12,416) | 0.3 | (148,726) | (57,052) | — | — | — | — | — | — | |||||||||
| Intangible asset impairment charge | — | — | — | — | — | — | (133,648) | — | — | — | |||||||||
| Costs related to the disposal of a business | — | — | (47,756) | — | — | — | — | — | — | — | |||||||||
| Restructuring and other costs | (2,299) | 0.1 | (64,723) | (10,284) | — | — | — | — | — | — | |||||||||
| Transaction and integration related costs | (469) | — | (21,059) | (2,032) | — | — | — | — | — | — | |||||||||
| Non-cash interest expense | — | — | — | — | — | — | — | (37,973) | — | — | |||||||||
| Acquisition accounting inventory fair value step-up | (273,392) | 7.5 | — | — | — | — | — | — | — | ||||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | — | — | 253,340 | (33.5) | |||||||||
| Total of non- GAAP adjustments | (288,576) | 7.9 | (282,264) | (69,368) | (599,169) | — | (133,648) | (37,973) | 253,340 | (33.5) | |||||||||
| Non-GAAP Adjusted | $ 251,941 | 93.1 % | $ 1,134,703 | $ 521,085 | $ — | $ 444,148 | $ — | $ 250,269 | $ 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 D ILUTED EPS GUIDANCE (In millions, except per share amounts) (Unaudited) | |||
| Net Income | Diluted EPS | ||
| GAAP guidance | $385 - $530 | $5.80 - $7.70 | |
| 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 | $1,275 - $1,350 | $18.15 - $19.35 | |
| Weighted-average ordinary shares used in per share calculations - GAAP and non-GAAP | 71 |
Investors: Andrea N. Flynn , Ph.D. Vice President, Head, Investor Relations Jazz Pharmaceuticals plc [email protected] Ireland +353 1 634 3211 U.S. +1 650 496 2717
Media: Kristin Bhavnani Head of Global Corporate Communications Jazz Pharmaceuticals plc [email protected] Ireland +353 1 637 2141 U.S. +1 215 867 4948
SOURCE Jazz Pharmaceuticals plc