On February 25, 2025 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the full year and fourth quarter of 2024 and provided guidance for 2025 (Press release, Jazz Pharmaceuticals, FEB 25, 2025, View Source [SID1234650530]).

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"2024 was another strong year as our proven team delivered significant top- and bottom-line growth along with record total revenues of over $4 billion. Our diversified portfolio spanning sleep1, epilepsy and oncology, with each annualizing at over $1 billion, continued to drive growth," said Bruce Cozadd, chairman and chief executive officer, Jazz Pharmaceuticals. "We are pleased with the continued progress of our late-stage pipeline assets, including the recent launch of Ziihera in 2L HER2+ (IHC3+) BTC, upcoming top-line data readout from the HERIZON-GEA-01 trial in 1L GEA, which we now expect in the second half of 2025, and highly encouraging results from the Phase 3 IMforte trial, which we expect to submit as part of an sNDA for Zepzelca in 1L ES-SCLC in the first half of 2025."

Mr. Cozadd continued, "The strength of our 2024 results reinforces our confidence that Jazz is well-positioned to deliver top- and bottom-line growth in 2025 and drive long-term shareholder value. Our focus remains on disciplined capital allocation, which we expect to drive growth of our diversified commercial portfolio, continue advancement of our pipeline and provide flexibility to remain active in corporate development."

Key Highlights

•Total revenues in 2024 grew 6% year-over-year; generated over $1.4 billion in cash from operations.
•Zanidatamab:
◦Received U.S. FDA approval of and launched Ziihera in 2L HER2+ (IHC3+) BTC.
◦Top-line PFS data from zanidatamab in Phase 3 1L GEA expected in 2H25.
•On track to submit an sNDA in 1H25 for Zepzelca in combination with Tecentriq (atezolizumab) as maintenance therapy in 1L ES-SCLC based on the potentially practice-changing results from the Phase 3 IMforte trial.
•Top- and bottom-line growth expected in 2025; 2025 total revenue guidance of $4.15 – $4.40 billion, representing 5% growth at the midpoint.
◦Total revenue guidance is underpinned by expected continued growth in diversified commercial portfolio spanning sleep1, epilepsy and oncology.

Business Updates

Commercial Updates
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:
•Xywav net product sales increased 16% to $1,473.2 million in 2024 and increased 19% to $401.0 million in 4Q24 compared to the same periods in 2023.
•Meaningful Xywav net patient adds in 4Q24 (approximately 525 patients) with approximately 14,150 active Xywav patients exiting 4Q24, comprised of:
◦Approximately 10,250 narcolepsy patients.
◦Approximately 3,900 idiopathic hypersomnia (IH) patients, with 350 net patient adds.
•Xywav is the only low-sodium oxybate, the #1 branded treatment for narcolepsy2 and the only FDA-approved therapy to treat IH.

Xyrem (sodium oxybate) oral solution and high-sodium oxybate authorized generic (AG) royalties:
•Xyrem net product sales decreased 59% to $233.8 million in 2024 and decreased 54% to $49.3 million in 4Q24 compared to the same periods in 2023.
•Royalties from high-sodium oxybate AGs increased by $141.7 million to $217.6 million in 2024 and increased $15.9 million to $55.3 million in 4Q24, compared to the same periods in 2023.

Epidiolex/Epidyolex (cannabidiol):
•Epidiolex/Epidyolex net product sales increased 15% to $972.4 million in 2024 and increased 14% to $275.0 million in 4Q24 compared to the same periods in 2023.
•Outside of the U.S., Epidyolex is approved in more than 35 countries.
•Presented data at the American Epilepsy Society 2024 Annual meeting, including novel findings from the BECOME-LTC, BECOME-TSC and EpiCom studies, demonstrating the meaningful impact of Epidiolex in the treatment of patients with rare epilepsies including benefits of Epidiolex’s benefits beyond seizure control.
•Remain confident in achieving blockbuster status for Epidiolex/Epidyolex in 2025.

Rylaze/Enrylaze (asparaginase erwinia chrysanthemi (recombinant)-rywn):
•Rylaze/Enrylaze net product sales increased 4% to $410.8 million in 2024 and were in line in 4Q24 compared to the same periods in 2023 despite headwinds from Children’s Oncology Group (COG) protocol changes that impacted timing of asparaginase administration.
•The temporary impact to Rylaze net product sales due to previously announced COG pediatric acute lymphoblastic leukemia (ALL) protocol updates is still expected to normalize by early 2025.

Zepzelca (lurbinectedin):
•Zepzelca net product sales increased 11% to $320.3 million in 2024 and increased 6% to $78.3 million in 4Q24 compared to the same periods in 2023.
•Based on potentially practice-changing positive results from the Phase 3 IMforte trial, the Company plans to submit a supplemental New Drug Application (sNDA) for Zepzelca’s use in combination with Tecentriq as maintenance therapy in first-line (1L) extensive-stage (ES) small cell lung cancer (SCLC) in 1H25.

Ziihera (zanidatamab-hrii):
•Ziihera net product sales were $1.1 million in 2024 and 4Q24 after the initial product launch and availability in December of 2024 following FDA approval in November.
•Initial positive reception by prescribers with the first patient treated in December.
•Ziihera added to National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines in Oncology.

•Ziihera added to European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Clinical Practice Guidelines for Biliary Tract Cancers.

Key Pipeline Highlights
Zanidatamab:
•In 4Q24, announced U.S. FDA granted accelerated approval of Ziihera (zanidatamab-hrii) for the treatment of adults with previously treated, unresectable or metastatic HER2-positive (IHC 3+) biliary tract cancer (BTC).
•The pivotal HERIZON-GEA-01 trial, evaluating zanidatamab in 1L gastroesophageal adenocarcinoma (GEA), is expected to read out in 2H25 based on an updated assessment of progression events. Recruitment for the trial remains on track.
•Data presented at the San Antonio Breast Cancer Symposium 2024 continued to underscore zanidatamab’s potential for patients previously treated with trastuzumab deruxtecan (T-DXd) and showcased the advancement of our clinical program in breast cancer.
•The Phase 3 EmpowHER-BC-303 trial to evaluate zanidatamab plus chemotherapy or trastuzumab plus chemotherapy in patients with HER2-positive breast cancer whose disease has progressed on previous T-DXd treatment continues to enroll patients.
•First patient enrolled in the Phase 2 pan-tumor trial to evaluate HER2-positive solid tumors.

Financial Highlights
Three Months Ended
December 31, Year Ended
December 31,
(In thousands, except per share amounts) 2024 2023 2024 2023
Total revenues $ 1,088,173 $ 1,011,935 $ 4,068,950 $ 3,834,204
GAAP net income $ 191,115 $ 94,154 $ 560,120 $ 414,832
Non-GAAP adjusted net income $ 405,863 $ 345,286 $ 1,369,729 $ 1,295,824
GAAP earnings per share $ 3.11 $ 1.42 $ 8.65 $ 6.10
Non-GAAP adjusted EPS $ 6.60 $ 5.02 $ 20.90 $ 18.29

GAAP net income for 2024 was $560.1 million, or $8.65 per diluted share, compared to $414.8 million, or $6.10 per diluted share, for 2023. GAAP net income for 4Q24 was $191.1 million, or $3.11 per diluted share, compared to a GAAP net income of $94.2 million, or $1.42 per diluted share, for 4Q23.
Non-GAAP adjusted net income for 2024 was $1,369.7 million, or $20.90 per diluted share, compared to $1,295.8 million, or $18.29 per diluted share, for 2023. Non-GAAP adjusted net income for 4Q24 was $405.9 million, or $6.60 per diluted share, compared to $345.3 million, or $5.02 per diluted share, for 4Q23.
Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.

Total Revenues
Three Months Ended
December 31, Year Ended
December 31,
(In thousands) 2024 2023 2024 2023
Xywav $ 400,964 $ 337,019 $ 1,473,202 $ 1,272,977
Xyrem 49,290 106,721 233,816 569,730
Epidiolex/Epidyolex 275,047 240,622 972,423 845,468
Sativex 5,173 5,137 18,877 19,668
Total Neuroscience 730,474 689,499 2,698,318 2,707,843
Rylaze/Enrylaze 101,487 101,747 410,846 394,226
Zepzelca 78,328 74,010 320,318 289,533
Defitelio/defibrotide 57,650 51,083 216,565 184,000
Vyxeos 53,247 46,912 162,595 147,495
Ziihera 1,051 — 1,051 —
Total Oncology 291,763 273,752 1,111,375 1,015,254
Other 2,974 4,088 11,471 13,846
Product sales, net 1,025,211 967,339 3,821,164 3,736,943
High-sodium oxybate AG royalty revenue 55,307 39,387 217,575 75,918
Other royalty and contract revenues 7,655 5,209 30,211 21,343
Total revenues $ 1,088,173 $ 1,011,935 $ 4,068,950 $ 3,834,204

Total revenues increased 6% in 2024 and 8% in 4Q24 compared to the same periods in 2023.
Total neuroscience revenue, including high-sodium oxybate AG royalty revenue, was $2,915.9 million in 2024, an increase of 5% compared to $2,783.8 million in 2023 and $785.8 million in 4Q24, an increase of 8% compared to $728.9 million in 4Q23. The increase in 2024 and 4Q24 was due to higher Xywav and Epidiolex/Epidyolex net product sales together with increased high-sodium oxybate AG royalty revenue, partially offset by decreased Xyrem net product sales.
Oncology net product sales were $1,111.4 million in 2024, an increase of 9% compared to $1,015.3 million in 2023 and $291.8 million in 4Q24, an increase of 7% compared to $273.8 million in 2023, and included higher net product sales from Defitelio/defibrotide which increased 18% in 2024 and 13% in 4Q24 and Zepzelca which increased 11% in 2024 and 6% in 4Q24. In 4Q24, Rylaze net product sales were negatively impacted due to an update to the COG pediatric treatment protocols for ALL, which impacts the timing of asparaginase administration.

Operating Expenses and Effective Tax Rate
Three Months Ended
December 31, Year Ended
December 31,
(In thousands, except percentages) 2024 2023 2024 2023
GAAP:
Cost of product sales $ 128,713 $ 107,243 $ 445,713 $ 435,577
Gross margin 87.4% 88.9% 88.3% 88.3%
Selling, general and administrative $ 369,287 $ 396,034 $ 1,385,294 $ 1,343,105
% of total revenues 33.9% 39.1% 34.0% 35.0%
Research and development $ 240,500 $ 216,608 $ 884,000 $ 849,658
% of total revenues 22.1% 21.4% 21.7% 22.2%
Acquired in-process research and development $ — $ 18,000 $ 10,000 $ 19,000
Income tax benefit1
$ (57,912) $ (33,089) $ (91,429) $ (119,912)
Effective tax rate 1
(43.5)% (53.8)% (19.4)% (40.2)%

_________________________
1.The GAAP income tax benefit increased in the three months ended December 31, 2024, compared to the same period in 2023, primarily due to patent box benefits recognized in the period and decreased in the year ended December 31, 2024, compared to the same period in 2023, primarily due to the change in income mix across our jurisdictions, partially offset by patent box benefits.

Three Months Ended
December 31, Year Ended
December 31,
(In thousands, except percentages) 2024 2023 2024 2023
Non-GAAP adjusted:
Cost of product sales $ 86,492 $ 71,238 $ 295,897 $ 269,079
Gross margin 91.6% 92.6% 92.3% 92.8%
Selling, general and administrative $ 323,167 $ 300,520 $ 1,226,724 $ 1,110,948
% of total revenues 29.7% 29.7% 30.1% 29.0%
Research and development $ 220,857 $ 201,107 $ 809,327 $ 784,811
% of total revenues 20.3% 19.9% 19.9% 20.5%
Acquired in-process research and development $ — $ 18,000 $ 10,000 $ 19,000
Income tax expense1
$ 308 $ 20,475 $ 131,307 $ 93,260
Effective tax rate1
0.1% 5.6% 8.7% 6.7%

_________________________
1.The non-GAAP income tax expense decreased in the three months ended December 31, 2024, compared to the same period in 2023, primarily due to patent box benefits recognized in the period and increased in the year ended December 31, 2024, compared to the same period in 2023, due to the change in income mix across our jurisdictions, partially offset by patent box benefits.

Changes in operating expenses in 2024 and 4Q24 over the prior year periods are primarily due to the following:
•Cost of product sales, on a GAAP and non-GAAP adjusted basis, increased in 2024 and 4Q24, compared to the same periods in 2023, primarily due to higher inventory provisions and changes in product mix. Cost of product sales, on a GAAP basis, included lower acquisition accounting inventory fair value step up expense in 2024 as compared to the previous period.
•Selling, general and administrative (SG&A) expenses, on a GAAP and non-GAAP adjusted basis, increased in 2024 compared to the same period in 2023, primarily due to higher compensation-related expenses, increased investment in sales and marketing and increased litigation costs, partially offset, on a GAAP basis, by costs related to impairment of facility assets and program terminations in 2023. SG&A expenses, on a GAAP basis, decreased in 4Q24 compared to the same period in 2023, primarily due to the impairment of facility assets in 4Q23, partially offset by higher compensation related expenses. SG&A expenses, on a non-GAAP adjusted basis, increased in 4Q24 primarily due to higher compensation-related expenses.
•Research and development (R&D) expenses, on a GAAP and non-GAAP adjusted basis, increased in 2024 and 4Q24, compared to the same period in 2023, primarily due to increased compensation related expenses and clinical study costs primarily related to zanidatamab, partially offset by reduced costs related to JZP150 and JZP385.
•Acquired in-process research and development (IPR&D) expense in 2024, on a GAAP and non-GAAP adjusted basis, related to an upfront payment made in connection with our asset purchase and collaboration agreement with Redx Pharma plc. Acquired IPR&D expense in 2023, on a GAAP and non-GAAP adjusted basis, primarily related to an upfront payment made in connection with our licensing and collaboration agreement with Autifony Therapeutics Limited.

Cash Flow and Balance Sheet
As of December 31, 2024, cash, cash equivalents and investments were $3.0 billion, and the outstanding principal balance of the Company’s long-term debt was $6.2 billion. In addition, the Company had undrawn borrowing capacity under a revolving credit facility of $885.0 million. For the year ended December 31, 2024, the Company generated $1.4 billion of cash from operations reflecting strong business performance and continued financial discipline. In January 2025, the Company made a voluntary prepayment of $750.0 million principal amount on the Term Loan B.

2025 Financial Guidance
Jazz Pharmaceutical’s full year 2025 financial guidance is as follows:

(In millions) Guidance
Total Revenues $4,150 – $4,400

(In millions, except per share amounts and percentages) GAAP Non-GAAP
Gross margin % 88%
92%1,6
SG&A expenses $1,404 – $1,483
$1,250 – $1,3102,6
R&D expenses $792 – $851
$720 – $7703,6
Effective tax rate (5)% – 10%
13% – 15%4,6
Net income $560 – $720
$1,400 – $1,5005,6
Net income per diluted share $9.15 – $11.50
$22.50 – $24.005,6
Weighted-average ordinary shares used in per share calculations 62 – 63 62 – 63

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 2024 full year and 4Q24 results and 2025 guidance.
Audio webcast/conference call:
U.S. Dial-In Number: +1 800 715 9871
Ireland Dial-In Number: +353 1800 943 926
Additional global dial-in numbers are available here.
Passcode: 5080203

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.