Full Press Release Details
DUBLIN , Nov. 9, 2021 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ ) today announced financial results for the third quarter of 2021 and updated financial guidance for 2021.
"Last year, we set the ambitious corporate objective of completing five key commercial launches through 2020 and 2021. With the launch of Xywav for idiopathic hypersomnia earlier this month, we have now accomplished this goal, demonstrating our significant execution capabilities and commitment to bring important new medicines forward for patients," said Bruce Cozadd , chairman and chief executive officer of Jazz Pharmaceuticals. "The successful integration of GW underscores our ability to deliver on transformative M&A to grow our business. While there's more work to be done, I'm confident we have the right strategy, teams and capabilities in place to realize the blockbuster potential of Epidiolex and to discover, develop and launch additional novel, innovative medicines leveraging cannabinoid science. Our commercial execution, productive R&D engine and culture of commitment to patients and their families provide a strong foundation for significant and sustained growth."
Renée Galá, executive vice president and chief financial officer, added, "This is an exciting time of transformation for Jazz, underpinned by operational execution, financial discipline and strategic capital allocation across our business. We continue to deliver on our business and financial targets which has enabled us to rapidly reduce our net leverage ratio to 4.4 1 times in just five months following the close of the GW transaction. We have also delivered on revenue growth and diversification. Recently launched or acquired products now make up over 50% of net product sales, and we remain on track to meet our goal of at least 65% in 2022. In addition, our prior investments in corporate development are translating into near-term catalysts as we advance JZP385, JZP150 and Zepzelca into important new clinical trials. We will continue to prioritize disciplined capital allocation to assets and activities that drive growth and value, while remaining focused on achieving our net leverage ratio target of less than 3.5 1 times by the end of next year."
| ____________________ | |
| 1. | On a pro forma, non-GAAP adjusted basis |
Business Updates
Oxybate (Xyrem ® and Xywav) :
Xywav for Narcolepsy (calcium, magnesium, potassium, and sodium oxybates) oral solution :
Xywav for Idiopathic Hypersomnia
Xyrem (sodium oxybate) oral solution :
Epidiolex / Epidyolex (cannabidiol) :
Sunosi ® (solriamfetol) :
Zepzelca (lurbinectedin) :
Rylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn):
Vyxeos ® (daunorubicin and cytarabine) liposome for injection :
Defitelio ® (defibrotide sodium) / defibrotide :
Financial Highlights
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (In thousands, except per share amounts) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Total revenues | $ | 838,115 | $ | 600,888 | $ | 2,197,507 | $ | 1,698,050 | |||||||
| GAAP net income (loss) | $ | (52,833) | $ | 148,234 | $ | (294,317) | $ | 105,202 | |||||||
| Adjusted net income 1 | $ | 261,418 | $ | 242,109 | $ | 730,812 | $ | 475,258 | |||||||
| GAAP EPS | $ | (0.86) | $ | 2.64 | $ | (4.98) | $ | 1.87 | |||||||
| Adjusted EPS 1 | $ | 4.20 | $ | 4.31 | $ | 12.02 | $ | 8.44 |
| ____________________ | |
| 1. | Commencing in 2020, following consultation with the staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission, 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. See "Non-GAAP Financial Measures" below. |
GAAP net income (loss) for 3Q21 was ( $52 .8 million), or ($0.86) per diluted share, compared to $148 .2 million, or $2.64 per diluted share, for 3Q20.
Non-GAAP adjusted net income for 3Q21 was $261 .4 million, or $4.20 per diluted share, compared to $242 .1 million, or $4.31 per diluted share, for 3Q20.
Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (In thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Xyrem | $ | 307,333 | $ | 447,809 | $ | 977,065 | $ | 1,302,492 | |||||||
| Xywav | 153,063 | — | 352,643 | — | |||||||||||
| Total Oxybate | 460,396 | 447,809 | 1,329,708 | 1,302,492 | |||||||||||
| Epidiolex/Epidyolex 1 | 160,378 | — | 269,859 | — | |||||||||||
| Sunosi | 19,251 | 9,116 | 42,981 | 19,618 | |||||||||||
| Sativex® (nabiximols) 1 | 6,097 | — | 8,058 | — | |||||||||||
| Total Neuroscience | 646,122 | 456,925 | 1,650,606 | 1,322,110 | |||||||||||
| Zepzelca | 71,714 | 36,941 | 181,972 | 36,941 | |||||||||||
| Vyxeos | 34,688 | 30,825 | 99,296 | 90,113 | |||||||||||
| Defitelio/defibrotide | 57,705 | 50,241 | 155,420 | 140,387 | |||||||||||
| Rylaze | 20,674 | — | 20,674 | — | |||||||||||
| Erwinaze/Erwinase | — | 20,145 | 69,382 | 90,560 | |||||||||||
| Total Oncology | 184,781 | 138,152 | 526,744 | 358,001 | |||||||||||
| Other | 3,344 | 1,872 | 8,768 | 5,246 | |||||||||||
| Product sales, net | 834,247 | 596,949 | 2,186,118 | 1,685,357 | |||||||||||
| Royalties and contract revenues | 3,868 | 3,939 | 11,389 | 12,693 | |||||||||||
| Total revenues | $ | 838,115 | $ | 600,888 | $ | 2,197,507 | $ | 1,698,050 |
| ____________________ | |
| 1. | Net product sales for Epidiolex and Sativex are included from the closing of the acquisition of GW Pharmaceuticals plc (GW Acquisition) on May 5, 2021. |
Total revenues increased 39% in 3Q21 compared to the same period in 2020.
Operating Expenses and Effective Tax Rate
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| (In thousands, except percentages) | 2021 | 2020 | 2021 | 2020 | |||||||
| GAAP: | |||||||||||
| Cost of product sales | $ | 145,224 | $ | 42,095 | $ | 304,607 | $ | 98,760 | |||
| Gross margin | 82.6% | 92.9% | 86.1% | 94.1% | |||||||
| Selling, general and administrative | $ | 363,682 | $ | 207,255 | $ | 1,053,221 | $ | 607,061 | |||
| % of total revenues | 43.4% | 34.5% | 47.9% | 35.8% | |||||||
| Research and development | $ | 141,036 | $ | 78,647 | $ | 350,305 | $ | 243,676 | |||
| % of total revenues | 16.8% | 13.1% | 15.9% | 14.4% | |||||||
| Acquired in-process research and development | $ | — | $ | 10,000 | $ | — | $ | 215,250 | |||
| Impairment charge | $ | — | $ | — | $ | — | $ | 136,139 | |||
| Income tax provision (benefit) | $ | (18,057) | $ | 19,283 | $ | 228,583 | $ | 22,750 | |||
| Effective tax rate | 26.7% | 11.5% | N/A (1) | 17.5% |
| ____________________ | |
| (1) | Our effective tax rate for the nine months ended September 30, 2021 on a GAAP basis is not a meaningful metric. |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| (In thousands, except percentages) | 2021 | 2020 | 2021 | 2020 | |||||||
| Non-GAAP adjusted: | |||||||||||
| Cost of product sales | $ | 58,872 | $ | 40,176 | $ | 147,291 | $ | 93,247 | |||
| Gross margin | 92.9% | 93.3% | 93.3% | 94.5% | |||||||
| Selling, general and administrative | $ | 278,552 | $ | 186,281 | $ | 776,392 | $ | 544,471 | |||
| % of total revenues | 33.2% | 31.0% | 35.3% | 32.1% | |||||||
| Research and development | $ | 124,470 | $ | 71,184 | $ | 310,925 | $ | 222,165 | |||
| % of total revenues | 14.9% | 11.8% | 14.1% | 13.1% | |||||||
| Acquired in-process research and development | $ | — | $ | 10,000 | $ | — | $ | 215,250 | |||
| Income tax provision | $ | 43,589 | $ | 38,268 | $ | 111,510 | $ | 116,040 | |||
| Effective tax rate | 14.1% | 13.6% | 13.3% | 19.5% |
Operating expenses changed over the prior year period primarily due to the following:
Cash Flow and Balance Sheet
As of September 30, 2021, cash and cash equivalents were $671 .8 million, and the outstanding principal balance of the Company's long-term debt was $6 .6 billion compared to $7.1 billion as of June 30, 2021 . In addition, the Company had undrawn borrowing capacity under a revolving credit facility of $500 .0 million.
For the nine months ended September 30, 2021, the Company generated $600 .8 million of cash from operations.
During the third quarter, and aligned to its stated deleveraging target, the Company made significant debt repayments of $477 .6 million which included the repayment on maturity of the remaining balance on its 1.875% exchangeable senior notes due 2021 and a voluntary payment on its term loan B.
2021 Financial Guidance 1
Jazz Pharmaceuticals is updating its full year 2021 financial guidance. This guidance reflects the Company's current and future expected operational performance, including COVID-19 related impacts, the strength of its underlying operations and the prioritization of new and ongoing value creating development projects.
The Company is raising its full-year earnings guidance, resulting in a reduced GAAP net loss and increased non-GAAP adjusted net income (ANI) on an absolute and per share basis. The updated non-GAAP ANI range exceeds the upper end of the prior range. The Company is reducing both SG&A and R&D expense guidance on a GAAP and non-GAAP adjusted basis, reflecting progress within its transformation initiatives, improved financial discipline and strategic capital allocation. The Company is narrowing its net sales guidance range for neuroscience and oncology, with a reduced mid-point for oncology net sales guidance which reflects the ongoing impacts of COVID-19 on our legacy products and the Rylaze competitive landscape at launch in 3Q21, resulting in a reduced mid-point for total revenues guidance.
| Guidance provided as of | |||
| (In millions) | August 3, 2021 | November 9, 2021 | |
| Revenues | $3,020 - $3,180 | $3,020 - $3,100 | |
| -Neuroscience | $2,260 - $2,360 | $2,275 - $2,345 | |
| -Oncology | $715 - $835 | $715 - $735 |
| Guidance provided as of | |||
| (In millions, except per share amounts and percentages) | August 3, 2021 | November 9, 2021 | |
| Gross margin % | 85% | 85% | |
| SG&A expenses | $1,468 - $1,560 | $1,400 - $1,451 | |
| SG&A expenses as % of total revenues | 46% - 52% | 45% - 48% | |
| R&D Expenses | $542 - $596 | $514 - $548 | |
| R&D expenses as % of total revenues | 17% - 20% | 17% - 18% | |
| Effective tax rate | (58%) - (102%) | (110%) - (183%) | |
| Net loss | ($560) - ($400) | ($420) - ($320) | |
| Net loss per diluted share | ($9.40) - ($6.70) | ($7.00) - ($5.40) 2 | |
| Weighted-average ordinary shares used in per share calculations | 60 | 60 |
| Guidance provided as of | |||
| (In millions, except per share amounts and percentages) | August 3, 2021 | November 9, 2021 | |
| Gross margin % | 93% | 93% 3,7 | |
| SG&A expenses | $1,120 - $1,180 | $1,060 - $1,100 4,7 | |
| SG&A expenses as % of total revenues | 35% - 39% | 34% - 36% | |
| R&D Expenses | $500 - $540 | $465 - $485 5,7 | |
| R&D expenses as % of total revenues | 16% - 18% | 15% - 16% | |
| Effective tax rate | 13% - 15% | 11% - 13% 6,7 | |
| Adjusted net income | $830 - $910 | $925 - $965 | |
| Net income per diluted share | $13.40 - $14.70 | $15.10 - $15.80 2,7 | |
| Weighted-average ordinary shares used in per share calculations | 62 | 61 |
| ____________________ | |
| 1. | The Company's 2021 financial guidance includes the anticipated results of the acquired GW business from the date of acquisition (May 5, 2021) and related acquisition accounting adjustments, which are subject to change if the Company obtains additional information during the measurement period (up to one year from the GW Acquisition date); any such change could be material. |
| 2. | The Company expects the GW Acquisition to be dilutive to both GAAP and non-GAAP adjusted net income per diluted share in 2021. On a GAAP basis, this is expected to be primarily due to an increase in the amortization of acquisition-related intangible assets and transaction and integration related expenses, the amortization of inventory fair value step-up, increased interest expense and an increase in number of outstanding shares relating to the GW Acquisition. On a non-GAAP adjusted basis, this is expected to be due to increased cash interest expense and an increase in the number of outstanding shares. |
| 3. | Excludes $205-$225 million of amortization of acquisition-related inventory fair value step-up, $10-$12 million of share-based compensation expense and $1-$4 million of transaction and integration related expenses relating to the GW Acquisition from estimated GAAP gross margin. |
| 4. | Excludes $222-$231 million of transaction and integration related expenses relating to the GW acquisition and $118-$120 million of share-based compensation expense from estimated GAAP SG&A expenses. |
| 5. | Excludes $42-$48 million of share-based compensation expense and $7-$15 million of transaction and integration related expenses relating to the GW Acquisition from estimated GAAP R&D expenses. |
| 6. | Excludes the income tax effect of adjustments between GAAP net loss and non-GAAP adjusted net income and an expense of approximately $251 million arising on the remeasurement of our U.K. net deferred tax liability, which arose primarily in relation to the GW Acquisition, due to a change in the statutory tax rate in the U.K. following enactment of the UK Finance Act 2021. |
| 7. | 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 2021 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 3Q21 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 5888822.
A replay of the conference call will be available through November 16, 2021 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 5888822. 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 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 and novel product candidates, from early- to late-stage development, in neuroscience and oncology. Within these therapeutic areas, we are identifying new options for patients by actively exploring small molecules and biologics, and through innovative delivery technologies and cannabinoid science. Jazz is headquartered in Dublin, Ireland and has employees around the globe, serving patients in nearly 75 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 (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 and impact of the change in the statutory tax rate in the U.K. 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.
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 net income per diluted share. 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.
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 updated 2021 financial guidance and the Company's expectations related thereto; the Company's commercial expectations, including its expectations for significant and sustained growth, its ability to realize the commercial potential of its products, including the blockbuster potential for Epidiolex and ability of Zepzelca to gain market share, and the value and growth potential of its products, including our ability to discover, develop and launch additional novel, innovative medicines leveraging cannabinoid science; the Company's net product sales, goals for net product sales from new and acquired products and net leverage goals; the Company's views and expectations relating to its patent portfolio, including with respect to expected patent protection and additional patents being issued, and the anticipated timing thereof; planned or anticipated clinical trial events, including with respect to initiations, enrollment and data read-outs, and the anticipated timing thereof; planned or anticipated regulatory submissions and filings, including for nabiximols, Epidiolex and Rylaze, and the anticipated timing thereof; the anticipated launch of Epidiolex in France 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 the Company's oxybate products, Zepzelca and other key marketed products; effectively launching and commercializing the Company's other products and 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, including the risk that the Company's sBLA seeking approval for a revised dosing label for Rylaze may not be approved by FDA 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 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; the Company's failure to realize the expected benefits of its acquisition of GW Pharmaceuticals, including the blockbuster potential of Epidiolex, our ability to discover, develop and launch additional novel, innovative medicines leveraging cannabinoid science, the risk that the legacy GW Pharmaceuticals business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; 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; 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 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 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, accounting and other provisions and estimates; the possibility that, if the Company does not achieve the perceived benefits of the acquisition of GW Pharmaceuticals as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company's ordinary shares could decline; 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 , and future filings and reports by the Company, including the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 . 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 September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Revenues: | |||||||||||||||
| Product sales, net | $ | 834,247 | $ | 596,949 | $ | 2,186,118 | $ | 1,685,357 | |||||||
| Royalties and contract revenues | 3,868 | 3,939 | 11,389 | 12,693 | |||||||||||
| Total revenues | 838,115 | 600,888 | 2,197,507 | 1,698,050 | |||||||||||
| Operating expenses: | |||||||||||||||
| Cost of product sales (excluding amortization of acquired developed technologies) | 145,224 | 42,095 | 304,607 | 98,760 | |||||||||||
| Selling, general and administrative | 363,682 | 207,255 | 1,053,221 | 607,061 | |||||||||||
| Research and development | 141,036 | 78,647 | 350,305 | 243,676 | |||||||||||
| Intangible asset amortization | 159,804 | 66,684 | 368,476 | 192,505 | |||||||||||
| Acquired in-process research and development | — | 10,000 | — | 215,250 | |||||||||||
| Impairment charge | — | — | — | 136,139 | |||||||||||
| Total operating expenses | 809,746 | 404,681 | 2,076,609 | 1,493,391 | |||||||||||
| Income from operations | 28,369 | 196,207 | 120,898 | 204,659 | |||||||||||
| Interest expense, net | (93,372) | (27,428) | (190,168) | (72,134) | |||||||||||
| Foreign exchange gain (loss) | (2,631) | (639) | 1,262 | (2,235) | |||||||||||
| Income (loss) before income tax provision (benefit) and equity in (gain) loss of investees | (67,634) | 168,140 | (68,008) | 130,290 | |||||||||||
| Income tax provision (benefit) | (18,057) | 19,283 | 228,583 | 22,750 | |||||||||||
| Equity in (gain) loss of investees | 3,256 | 623 | (2,274) | 2,338 | |||||||||||
| Net income (loss) | $ | (52,833) | $ | 148,234 | $ | (294,317) | $ | 105,202 | |||||||
| Net income (loss) per ordinary share: | |||||||||||||||
| Basic | $ | (0.86) | $ | 2.67 | $ | (4.98) | $ | 1.89 | |||||||
| Diluted | $ | (0.86) | $ | 2.64 | $ | (4.98) | $ | 1.87 | |||||||
| Weighted-average ordinary shares used in per share calculations - basic | 61,284 | 55,545 | 59,084 | 55,637 | |||||||||||
| Weighted-average ordinary shares used in per share calculations - diluted | 61,284 | 56,236 | 59,084 | 56,297 |
| JAZZ PHARMACEUTICALS PLC | |||||||||||||||
| PRO FORMA NET PRODUCT SALES | |||||||||||||||
| (In thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| The following unaudited pro forma information represents the net product sales for the three and nine months ended September 30, 2021, compared to the same periods in 2020, as if the GW Acquisition had been completed on January 1, 2020: | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Xyrem | $ | 307,333 | $ | 447,809 | $ | 977,065 | $ | 1,302,492 | |||||||
| Xywav | 153,063 | — | 352,643 | — | |||||||||||
| Total Oxybate | 460,396 | 447,809 | 1,329,708 | 1,302,492 | |||||||||||
| Epidiolex/Epidyolex | 160,378 | 132,538 | 464,508 | 366,421 | |||||||||||
| Sunosi | 19,251 | 9,116 | 42,981 | 19,618 | |||||||||||
| Sativex® (nabiximols) | 6,097 | 4,309 | 13,825 | 12,182 | |||||||||||
| Total Neuroscience | 646,122 | 593,772 | 1,851,022 | 1,700,713 | |||||||||||
| Zepzelca | 71,714 | 36,941 | 181,972 | 36,941 | |||||||||||
| Vyxeos | 34,688 | 30,825 | 99,296 | 90,113 | |||||||||||
| Defitelio/defibrotide | 57,705 | 50,241 | 155,420 | 140,387 | |||||||||||
| Rylaze | 20,674 | — | 20,674 | — | |||||||||||
| Erwinaze/Erwinase | — | 20,145 | 69,382 | 90,560 | |||||||||||
| Total Oncology | 184,781 | 138,152 | 526,744 | 358,001 | |||||||||||
| Other | 3,344 | 1,872 | 8,768 | 5,246 | |||||||||||
| Product sales, net | $ | 834,247 | $ | 733,796 | $ | 2,386,534 | $ | 2,063,960 |
| JAZZ PHARMACEUTICALS PLC | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (In thousands) | |||||||
| (Unaudited) | |||||||
| September 30, 2021 | December 31, 2020 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 671,780 | $ | 1,057,769 | |||
| Investments | — | 1,075,000 | |||||
| Accounts receivable, net of allowances | 499,023 | 396,490 | |||||
| Inventories | 1,137,851 | 95,396 | |||||
| Prepaid expenses | 94,474 | 62,422 | |||||
| Other current assets | 225,098 | 152,491 | |||||
| Total current assets | 2,628,226 | 2,839,568 | |||||
| Property, plant and equipment, net | 255,006 | 127,935 | |||||
| Operating lease assets | 89,628 | 129,169 | |||||
| Intangible assets, net | 7,282,579 | 2,195,051 | |||||
| Goodwill | 1,849,547 | 958,303 | |||||
| Deferred tax assets, net | 314,666 | 254,916 | |||||
| Deferred financing costs | 12,724 | 5,238 | |||||
| Other non-current assets | 45,776 | 25,721 | |||||
| Total assets | $ | 12,478,152 | $ | 6,535,901 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 63,815 | $ | 26,945 | |||
| Accrued liabilities | 603,715 | 352,732 | |||||
| Current portion of long-term debt | 31,000 | 246,322 | |||||
| Income taxes payable | 34,256 | 25,200 | |||||
| Deferred revenue | 2,267 | 2,546 | |||||
| Total current liabilities | 735,053 | 653,745 | |||||
| Deferred revenue, non-current | 986 | 2,315 | |||||
| Long-term debt, less current portion | 6,247,287 | 1,848,516 | |||||
| Operating lease liabilities, less current portion | 89,359 | 140,035 | |||||
| Deferred tax liabilities, net | 1,329,184 | 130,397 | |||||
| Other non-current liabilities | 137,806 | 101,148 | |||||
| Total shareholders' equity | 3,938,477 | 3,659,745 | |||||
| Total liabilities and shareholders' equity | $ | 12,478,152 | $ | 6,535,901 |
| JAZZ PHARMACEUTICALS PLC | |||||||
| SUMMARY OF CASH FLOWS | |||||||
| (In thousands) | |||||||
| (Unaudited) | |||||||
| Nine Months Ended September 30, | |||||||
| 2021 | 2020 | ||||||
| Net cash provided by operating activities | $ | 600,752 | $ | 713,377 | |||
| Net cash used in investing activities | (5,202,051) | (1,080,889) | |||||
| Net cash provided by financing activities | 4,217,131 | 472,195 | |||||
| Effect of exchange rates on cash and cash equivalents | (1,821) | (85) | |||||
| Net increase (decrease) in cash and cash equivalents | $ | (385,989) | $ | 104,598 |
| JAZZ PHARMACEUTICALS PLC | |||||||||||||||
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION | |||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| GAAP reported net income (loss) | $ | (52,833) | $ | 148,234 | $ | (294,317) | $ | 105,202 | |||||||
| Intangible asset amortization | 159,804 | 66,684 | 368,476 | 192,505 | |||||||||||
| Share-based compensation expense | 45,535 | 30,356 | 123,431 | 89,614 | |||||||||||
| Transaction and integration related expenses 1 | 59,867 | — | 201,457 | — | |||||||||||
| Non-cash interest expense 2 | 28,045 | 15,820 | 66,055 | 45,088 | |||||||||||
| Acquisition accounting inventory fair value step-up | 82,646 | — | 148,637 | — | |||||||||||
| Impairment charge 3 | — | — | — | 136,139 | |||||||||||
| Income tax effect of above adjustments | (61,646) | (18,985) | (134,307) | (93,290) | |||||||||||
| Impact of U.K. tax rate change 4 | — | — | 251,380 | — | |||||||||||
| Non-GAAP adjusted net income | $ | 261,418 | $ | 242,109 | $ | 730,812 | $ | 475,258 | |||||||
| GAAP reported net income (loss) per diluted share | $ | (0.86) | $ | 2.64 | $ | (4.98) | $ | 1.87 | |||||||
| Non-GAAP adjusted net income per diluted share | $ | 4.20 | $ | 4.31 | $ | 12.02 | $ | 8.44 | |||||||
| Weighted-average ordinary shares used in diluted per share calculations - GAAP | 61,284 | 56,236 | 59,084 | 56,297 | |||||||||||
| Weighted-average ordinary shares used in diluted per share calculations - non-GAAP | 62,285 | 56,236 | 60,805 | 56,297 |
| ____________________ | |
| Explanation of Adjustments and Certain Line Items: | |
| 1. | Transaction and integration expenses related to the GW Acquisition. |
| 2. | Non-cash interest expense associated with debt discount and debt issuance costs. |
| 3. | Impairment charge related to the Company's decision to stop enrollment in its Phase 3 clinical trial of defibrotide for the prevention of veno-occlusive disease. |
| 4. | Expense arising on the remeasurement of the Company's U.K. net deferred tax liability, which arose primarily in relation to the GW Acquisition, due to a change in the statutory tax rate in the U.K. following enactment of the UK Finance Act 2021. |
| JAZZ PHARMACEUTICALS PLC | |||||||||||||||||||||||||||
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION | |||||||||||||||||||||||||||
| CERTAIN LINE ITEMS - FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 and 2020 | |||||||||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Three months ended September 30, 2021 | |||||||||||||||||||||||||||
| Cost of product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Interest expense, net | Income tax provision (benefit) | Effective tax rate | ||||||||||||||||||||
| GAAP Reported | $ | 145,224 | 82.6 % | $ | 363,682 | $ | 141,036 | $ | 159,804 | $ | 93,372 | $ | (18,057) | 26.7 % | |||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||||||||||
| Intangible asset amortization | — | — | — | — | (159,804) | — | — | — | |||||||||||||||||||
| Share-based compensation expense | (2,763) | 0.3 | (31,752) | (11,020) | — | — | — | — | |||||||||||||||||||
| Transaction and integration related expenses | (943) | 0.1 | (53,378) | (5,546) | — | — | — | — | |||||||||||||||||||
| Non-cash interest expense | — | — | — | — | — | (28,045) | — | — | |||||||||||||||||||
| Acquisition accounting inventory fair value step-up | (82,646) | 9.9 | — | — | — | — | — | — | |||||||||||||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | 61,646 | (12.6) | |||||||||||||||||||
| Total of non-GAAP adjustments | (86,352) | 10.3 | (85,130) | (16,566) | (159,804) | (28,045) | 61,646 | (12.6) | |||||||||||||||||||
| Non-GAAP Adjusted | $ | 58,872 | 92.9 % | $ | 278,552 | $ | 124,470 | $ | — | $ | 65,327 | $ | 43,589 | 14.1 % |
| Three months ended September 30, 2020 | |||||||||||||||||||||||||||
| Cost of product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Interest expense, net | Income tax provision | Effective tax rate | ||||||||||||||||||||
| GAAP Reported | $ | 42,095 | 92.9 % | $ | 207,255 | $ | 78,647 | $ | 66,684 | $ | 27,428 | $ | 19,283 | 11.5 % | |||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||||||||||
| Intangible asset amortization | — | — | — | — | (66,684) | — | — | — | |||||||||||||||||||
| Share-based compensation expense | (1,919) | 0.4 | (20,974) | (7,463) | — | — | — | — | |||||||||||||||||||
| Non-cash interest expense | — | — | — | — | — | (15,820) | — | — | |||||||||||||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | 18,985 | 2.1 | |||||||||||||||||||
| Total of non-GAAP adjustments | (1,919) | 0.4 | (20,974) | (7,463) | (66,684) | (15,820) | 18,985 | 2.1 | |||||||||||||||||||
| Non-GAAP Adjusted | $ | 40,176 | 93.3 % | $ | 186,281 | $ | 71,184 | $ | — | $ | 11,608 | $ | 38,268 | 13.6 % |
| JAZZ PHARMACEUTICALS PLC | |||||||||||||||||||||||||||
| RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION | |||||||||||||||||||||||||||
| CERTAIN LINE ITEMS - FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020 | |||||||||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Nine months ended September 30, 2021 | |||||||||||||||||||||||||||
| Cost of product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Interest expense, net | Income tax provision | Effective tax rate | ||||||||||||||||||||
| GAAP Reported | $ | 304,607 | 86.1 % | $ | 1,053,221 | $ | 350,305 | $ | 368,476 | $ | 190,168 | $ | 228,583 | N/A (1) | |||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||||||||||
| Intangible asset amortization | — | — | — | — | (368,476) | — | — | — | |||||||||||||||||||
| Share-based compensation expense | (7,331) | 0.3 | (85,644) | (30,456) | — | — | — | — | |||||||||||||||||||
| Transaction and integration related expenses | (1,348) | 0.1 | (191,185) | (8,924) | — | — | — | — | |||||||||||||||||||
| Non-cash interest expense | — | — | — | — | — | (66,055) | — | — | |||||||||||||||||||
| Acquisition accounting inventory fair value step-up | (148,637) | 6.8 | — | — | — | — | — | — | |||||||||||||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | 134,307 | N/A (1) | |||||||||||||||||||
| Impact of U.K. tax rate change | — | — | — | — | — | — | (251,380) | N/A (1) | |||||||||||||||||||
| Total of non-GAAP adjustments | (157,316) | 7.2 | (276,829) | (39,380) | (368,476) | (66,055) | (117,073) | N/A (1) | |||||||||||||||||||
| Non-GAAP Adjusted | $ | 147,291 | 93.3 % | $ | 776,392 | $ | 310,925 | $ | — | $ | 124,113 | $ | 111,510 | 13.3 % |
| __________________________ | |
| (1) | Due to the impact of the U.K tax change, the GAAP effective tax rate is not a meaningful metric. |
| Nine months ended September 30, 2020 | |||||||||||||||||||||||||||||||
| Cost of product sales | Gross margin | Selling, general and administrative | Research and development | Intangible asset amortization | Impairment charge | Interest expense, net | Income tax provision | Effective tax rate | |||||||||||||||||||||||
| GAAP Reported | $ | 98,760 | 94.1 % | $ | 607,061 | $ | 243,676 | $ | 192,505 | $ | 136,139 | $ | 72,134 | $ | 22,750 | 17.5 % | |||||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||||||||||||||
| Intangible asset amortization | — | — | — | — | (192,505) | — | — | — | — | ||||||||||||||||||||||
| Share-based compensation expense | (5,513) | 0.4 | (62,590) | (21,511) | — | — | — | — | — | ||||||||||||||||||||||
| Impairment charge | — | — | — | — | — | (136,139) | — | — | — | ||||||||||||||||||||||
| Non-cash interest expense | — | — | — | — | — | — | (45,088) | — | — | ||||||||||||||||||||||
| Income tax effect of above adjustments | — | — | — | — | — | — | — | 93,290 | 2.0 | ||||||||||||||||||||||
| Total of non-GAAP adjustments | (5,513) | 0.4 | (62,590) | (21,511) | (192,505) | (136,139) | (45,088) | 93,290 | 2.0 | ||||||||||||||||||||||
| Non-GAAP Adjusted | $ | 93,247 | 94.5 % | $ | 544,471 | $ | 222,165 | $ | — | $ | — | $ | 27,046 | $ | 116,040 | 19.5 % |
| JAZZ PHARMACEUTICALS PLC | |||
| RECONCILIATION OF PRO FORMA GAAP NET LOSS TO PRO FORMA NON-GAAP ADJUSTED EBITDA AND CALCULATION OF PRO FORMA NON-GAAP NET LEVERAGE RATIO | |||
| (In thousands, except ratio) | |||
| (Unaudited) | |||
| The following table provides a reconciliation of the Company's pro forma GAAP net loss to pro forma non-GAAP Adjusted EBITDA for the last twelve months, or LTM, ended September 30, 2021 and the calculation of the Company's pro forma non-GAAP net leverage ratio: | |||
| LTM Ended September 30, 2021 | |||
| Pro forma GAAP net loss 1 | $ | (378,637) | |
| Interest expense, net | 218,149 | ||
| Income tax expense | 240,817 | ||
| Depreciation and amortization | 468,310 | ||
| Pro forma non-GAAP EBITDA | 548,639 | ||
| Transaction and integration related expenses | 378,631 | ||
| Share-based compensation expense | 192,420 | ||
| Acquisition accounting inventory fair value step-up | 148,637 | ||
| Expected cost synergies 2 | 45,000 | ||
| Upfront and milestone payments | 42,365 | ||
| Other | 6,597 | ||
| Pro forma non-GAAP Adjusted EBITDA 3 | $ | 1,362,289 | |
| At September 30, 2021 | |||
| Calculation of Net Debt: | |||
| Total debt 4 | $ | 6,669,271 | |
| Cash and cash equivalents | (671,780) | ||
| Net Debt | $ | 5,997,491 | |
| Calculation of Pro Forma Non-GAAP Net Leverage Ratio: | |||
| Pro forma non-GAAP Net Leverage Ratio | 4.4 |
| ____________________ | |
| 1. | Pro forma net loss is derived from the GAAP financial statements of the Company and GW Pharmaceuticals plc for the LTM ended September 30, 2021. |
| 2. | The Company expects to implement initiatives to achieve at least $45 million in annual run-rate cost synergies following the GW Acquisition. |
| 3. | Pro forma non-GAAP Adjusted EBITDA is calculated in accordance with the definition of Consolidated Adjusted EBITDA as set out in the Credit Agreement. |
| 4. | Debt principal balance, reflecting the impact of the Company's current hedging arrangements on the Euro term loan B, in accordance with the Credit Agreement. |
| JAZZ PHARMACEUTICALS PLC | |
| RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2021 NET INCOME GUIDANCE | |
| (In millions, except per share amounts) | |
| (Unaudited) | |
| GAAP net loss | ($420) - ($320) |
| Intangible asset amortization | 525 - 535 |
| Acquisition accounting inventory fair value step-up | 205 - 225 |
| Share-based compensation expense | 170 - 180 |
| Transaction and integration related expenses | 230 - 250 |
| Non-cash interest expense | 90 - 100 |
| Income tax effect of above adjustments | (185) - (195) |
| Impact of UK tax rate change | 251 |
| Non-GAAP adjusted net income | $925 - $965 |
| GAAP net loss per diluted share | ($7.00) - ($5.40) |
| Non-GAAP adjusted net income per diluted share | $15.10 - $15.80 |
| Weighted-average ordinary shares used in per share calculations - GAAP | 60 |
| Weighted-average ordinary shares used in per share calculations - non-GAAP | 61 |
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 1 697 2141 U.S. +1 215 867 4948
SOURCE Jazz Pharmaceuticals plc