Le Lézard
Classified in: Health, Business
Subjects: ERN, ERP

Jazz Pharmaceuticals Announces Full Year and Fourth Quarter 2023 Financial Results and Provides 2024 Financial Guidance


? 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. Sleep1 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."

Key Highlights

_______________________

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

Zanidatamab:

Suvecaltamide (JZP385):

JZP898:

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.

Total Revenues


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

Sunosi1

?


?


?


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 rate1

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 - $1,2302,6

SG&A expenses as % of total revenues

32% - 36%


28% - 31%

R&D expenses

$877 - $935


$800 - $8503,6

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 - $1,3506

Net income per diluted share5

$5.80 - $7.70


$18.15 - $19.356

Weighted-average ordinary shares used in per share calculations5

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.

The Company believes that each of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors and analysts and that each of these non-GAAP financial measures, when considered together with the Company's financial information prepared in accordance with GAAP, can enhance investors' and analysts' ability to meaningfully compare the Company's results from period to period, to its forward-looking guidance, and to identify operating trends in the Company's business. In addition, these non-GAAP financial measures are regularly used by investors and analysts to model and track the Company's financial performance. Jazz Pharmaceuticals' management also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate the Company's business and to make operating decisions, and compensation of executives is based in part on certain of these non-GAAP financial measures. Because these non-GAAP financial measures are important internal measurements for Jazz Pharmaceuticals' management, the Company also believes that these non-GAAP financial measures are useful to investors and analysts since these measures allow for greater transparency with respect to key financial metrics the Company uses in assessing its own operating performance and making operating decisions. 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 the reconciliation tables that follow. 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. 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 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 reported1

$    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 costs2

61,727


0.89


19,681


0.31


85,215


1.18


77,306


1.06

Non-cash interest expense3

6,123


0.09


5,971


0.10


22,378


0.31


37,973


0.52

Intangible asset impairment
charge4

?


?


?


?


?


?


133,648


1.84

(Income) costs related to
disposal of a business5

?


?


(1,783)


(0.03)


?


?


47,756


0.66

Transaction and integration
related expenses6

?


?


?


?


?


?


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 adjusted1

$  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 Notes1

?




?




?




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 %












1.

The GAAP and non-GAAP effective tax rate decreased in 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.

 

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 DILUTED 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



Contacts:

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

 

Jazz Pharmaceuticals Logo (PRNewsFoto/Jazz Pharmaceuticals plc) (PRNewsFoto/Jazz Pharmaceuticals plc)

SOURCE Jazz Pharmaceuticals plc


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