On May 4, 2021 Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, reported that it will report its first quarter 2021 financial and operating results on Thursday, May 13, 2021, following the close of the U.S. financial markets (Press release, Lineage Cell Therapeutics, MAY 4, 2021, View Source [SID1234579105]). Lineage management will also host a conference call and webcast on Thursday, May 13, 2021, at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss its first quarter 2021 financial and operating results and to provide a business update.

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Interested parties may access the conference call by dialing (866) 888-8633 from the U.S. and Canada and (636) 812-6629 from elsewhere outside the U.S. and Canada and should request the "Lineage Cell Therapeutics Call". A live webcast of the conference call will be available online in the Investors section of Lineage’s website. A replay of the webcast will be available on Lineage’s website for 30 days and a telephone replay will be available through May 21, 2021, by dialing (855) 859-2056 from the U.S. and Canada and (404) 537-3406 from elsewhere outside the U.S. and Canada and entering conference ID number 4996965.

On May 4, 2021 Leidos Holdings, Inc. (NYSE: LDOS), a FORTUNE 500 science and technology leader, reported financial results for the first quarter of fiscal year 2021 (Press release, Leidos, MAY 4, 2021, View Source [SID1234579104]).

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Roger Krone, Leidos Chairman and Chief Executive Officer, commented: "First quarter results reflect the perseverance, focus and tremendous execution of our employees and business partners. New quarterly record levels of revenue, non-GAAP EPS and backlog were achieved, and significant organic growth was delivered across all business segments. This early momentum favorably positions Leidos to deliver on our full year financial commitments."

Summary Results

Revenues for the quarter were $3.32 billion, compared to $2.89 billion in the prior year quarter, reflecting a 14.7% increase. Excluding our revenue growth from our acquisitions of $168 million for Dynetics, Inc. ("Dynetics"), L3Harris Technologies’ security detection and automation businesses (the "SD&A Businesses") and 1901 Group, LLC ("1901 Group"), organic revenue increased by $258 million or 8.9%. This increase was primarily attributable to program wins and a net increase in volumes on certain programs.

Operating income for the quarter was $308 million, compared to $192 million in the prior year quarter, reflecting a 60.4% increase. Operating income margin increased to 9.3% from 6.6% in the prior year quarter. Non-GAAP operating income margin for the quarter was 11.1%, compared to 8.5% in the prior year quarter, primarily attributable to a net increase in higher margin program volumes, program wins and a $26 million net benefit from an adjustment to legal reserves related to the Mission Support Alliance joint venture.

Diluted earnings per share ("EPS") attributable to Leidos common stockholders for the quarter was $1.42, compared to $0.80 in the prior year quarter. Non-GAAP diluted EPS for the quarter was $1.73, compared to $1.19 in the prior year quarter. The weighted average diluted share count for the quarter was 144 million for both the current and prior year quarters.

Defense Solutions

Defense Solutions revenues for the quarter of $1,958 million increased by $253 million, or 14.8%, compared to the prior year quarter. The increase in revenues was primarily attributable to program wins, a net increase in volumes on certain programs and a benefit in exchange rate movements. The acquisition of Dynetics contributed incremental revenues of $83 million in the current quarter, which represents an additional month of revenues as compared to the prior year quarter and our acquisition of the 1901 Group contributed $13 million of revenues. The increases in revenues were partially offset by the completion of certain contracts.

Defense Solutions operating income margin for the quarter was 7.8%, compared to 5.6% in the prior year quarter. On a non-GAAP basis, operating income margin for the quarter was 9.2%, compared to 6.8% in the prior year quarter, primarily attributable to program wins, a net increase in program volumes on higher margin contracts and lower indirect expenditures.

Civil

Civil revenues for the quarter of $766 million increased by $112 million, or 17.1%, compared to the prior year quarter. The revenue increase was primarily attributable to $72 million of revenues related to the acquisition of the SD&A Businesses in the second quarter of fiscal 2020 and a net increase in program volumes.

Civil operating income margin for the quarter was 9.7%, compared to 9.0% in the prior year quarter. On a non-GAAP basis, operating income margin for the quarter was 12.0%, compared to 10.9% in the prior year quarter, primarily attributable to a $26 million net benefit from an adjustment to legal reserves related to the Mission Support Alliance joint venture.

Health

Health revenues for the quarter of $591 million increased by $61 million, or 11.5%, compared to the prior year quarter. The revenue increase was primarily attributable to a net increase in volumes on certain programs and program wins, partially offset by the completion of certain contracts.

Health operating income margin for the quarter was 17.3%, compared to 13.8% in the prior year quarter. On a non-GAAP basis, operating income margin for the quarter was 18.6%, compared to 15.5% in the prior year quarter, primarily attributable to a net increase in higher margin program volumes.

Cash Flow Summary

Net cash provided by operating activities for the quarter was $239 million compared to $372 million in the prior year quarter. The decrease in cash inflows was primarily due to the lower customer advance payments, lower sale of accounts receivable and the timing of vendor payments.

Net cash used in investing activities for the quarter was $244 million compared to $1,685 million in the prior year quarter. The decrease in cash outflows was primarily due to net cash paid related to the acquisition of 1901 Group in the current year quarter compared to net cash paid related to the acquisition of Dynetics in the prior year quarter.

Net cash used in financing activities for the quarter was $148 million compared to net cash provided by financing activities of $1,161 million in the prior year quarter. The decrease in cash inflows was primarily due to proceeds received related to the issuance of the Bridge Facility in the prior year quarter, $100 million of open market stock repurchases in the current year quarter and the timing of quarterly principal payments, partially offset by capital contributions to Hanford Mission Integration Solutions from non-controlling interests.

As of April 2, 2021, we had $377 million in cash and cash equivalents and $4.8 billion of debt.

New Business Awards

Net bookings totaled $3.8 billion in the quarter, representing a book-to-bill ratio of 1.2.

Notable recent awards received include:

Military and Family Life Counseling Support Services: The Company was awarded a new prime contract to provide non-medical counseling to military service members and their families through the Military and Family Life Counseling (MFLC) program. Under the contract, Leidos will provide face-to-face non-medical counseling, consultation and outreach services at approximately 100 U.S. military installations or nearby civilian communities. Leidos will also provide management and logistical support for counselors to provide services in accordance with established performance measures. The award has a total estimated value of approximately $1 billion and includes a 12-month base period with four 12-month options and two 12-month award term incentive periods.
U.S. Customs and Border Protection Multi-Energy Portal Systems Support: The Company was awarded a prime contract by U.S. Customs and Border Protection (CBP) to provide Multi-Energy Portal (MEP) systems for non-intrusive inspection of commercial vehicles at land and sea ports of entry. Under the contract, Leidos will integrate, deploy and train CBP staff to use its VACIS MEP with low-energy backscatter and high-energy transmission cargo inspection system. The multiple-award indefinite delivery/indefinite quantity contract has a total value of $480 million and includes a five-year base period of performance and options up to 10 years, if exercised.
Naval Array Technical Support Center Services: The Company was awarded a prime contract by the Naval Undersea Warfare Center – Newport Division to provide engineering, technical and management services for the Naval Array Technical Support Center. Under the contract, Leidos will perform tasks for the U.S. Navy’s Sensors and SONAR Systems Department. Leidos will be responsible for production engineering, technical and logistics support of the Navy and foreign governments’ towed array assets. The single-award, indefinite delivery/indefinite quantity, cost-plus-fixed-fee and firm-fixed-price contract has a total estimated value of $149.2 million.
U.S. Intelligence Community: The Company was awarded contracts valued at $822 million, if all options are exercised, by U.S. national security and intelligence clients. Though the specific nature of these contracts is classified, they all encompass mission-critical services that help to counter global threats and strengthen national security.
Backlog at the end of the quarter was $32.6 billion, of which $7.0 billion was funded.

Forward Guidance

As a result of the Company’s year-to-date performance and updated expectations, the Company is revising its fiscal year 2021 guidance as follows:

Revenues of $13.7 billion to $14.1 billion, remained unchanged from previous guidance;
Adjusted EBITDA margins of 10.5% to 10.7%, up from 10.3% to 10.5%;
Non-GAAP diluted EPS of $6.35 to $6.65, up from $6.15 to $6.45; and
Cash flows provided by operating activities at or above $875 million, up from previous guidance of $850 million.
Non-GAAP diluted EPS excludes amortization of acquired intangible assets, acquisition, integration and restructuring costs and other tax adjustments. For additional information regarding non-GAAP diluted EPS and Leidos’ other non-GAAP financial measures, see the related explanations and reconciliations to GAAP measures included elsewhere in this release.

The Company does not provide a reconciliation of forward-looking adjusted EBITDA margins (non-GAAP) or non-GAAP diluted EPS to GAAP net income, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate projected net income may vary significantly based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income at this time. The amounts of these deductions may be material and, therefore, could result in projected GAAP net income and diluted EPS being materially less than projected adjusted EBITDA margins (non-GAAP) and non-GAAP diluted EPS.

Conference Call Information

Leidos management will discuss operations and financial results in an earnings conference call beginning at 8:00 A.M. eastern time on May 4, 2021. Analysts and institutional investors may participate by dialing +1 (877) 869-3847 (toll-free U.S.) or +1 (201) 689-8261 (international callers).

A live audio broadcast of the conference call along with a supplemental presentation will be available to the public through links on the Leidos Investor Relations website (View Source).

After the call concludes, an audio replay can be accessed on the Leidos Investor Relations website or by dialing +1 (877) 660-6853 (toll-free U.S.) or +1 (201) 612-7415 (international callers) and entering conference ID 13718327.

On May 3, 2021 Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA) ("Kiniksa"), a biopharmaceutical company with a portfolio of assets designed to modulate immunological pathways across a spectrum of diseases, reported first quarter 2021 financial results and recent corporate and portfolio activity (Press release, Kiniksa Pharmaceuticals, MAY 4, 2021, View Source [SID1234579103]).

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"The first quarter was transformational for Kiniksa with the approval of ARCALYST as the first and only FDA-approved therapy for patients with recurrent pericarditis. We are focused on the launch of ARCALYST and are confident in our commercialization strategy," said Sanj K. Patel, Chief Executive Officer and Chairman of the Board of Kiniksa. "Additionally, we are executing across our broader portfolio of immune-modulating assets. We recently reported positive data for mavrilimumab in severe COVID-19 pneumonia and hyperinflammation and remain engaged with the FDA and other government agencies to identify pathways for accelerated availability of mavrilimumab as a potential therapeutic option for this patient population. We also reported positive final Phase 1 data for our potentially best-in-class anti-CD40 program, KPL-404, and plan to initiate a Phase 2 proof-of-concept trial in the second half of 2021."

Portfolio Activity
ARCALYST (IL-1α and IL-1β cytokine trap)

Kiniksa received approval from the U.S. Food and Drug Administration (FDA) on March 18, 2021, for ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older. The commercial launch of ARCALYST in recurrent pericarditis commenced in April 2021.
Kiniksa is responsible for sales and distribution of ARCALYST for all the approved indications in the United States, including cryopyrin-associated periodic syndromes (CAPS) and deficiency of IL-1 receptor antagonist (DIRA), and will evenly split profits with Regeneron Pharmaceuticals, Inc. (Regeneron).
Kiniksa is executing on its commercial strategy, including engagement with priority accounts and payers to enable rapid and broad access to ARCALYST for patients.
Kiniksa is enrolling pediatric and adult patients with recurrent pericarditis in the RESONANCE registry.
Mavrilimumab (monoclonal antibody inhibitor targeting GM-CSFRα)

Kiniksa expects to provide next steps for mavrilimumab, including for giant cell arteritis (GCA), in the second quarter of 2021.
Kiniksa announced data from the Phase 2 portion of the Phase 2/3 clinical trial of mavrilimumab in non-mechanically ventilated patients with severe COVID-19 pneumonia and hyperinflammation receiving local standard of care. Non-mechanically ventilated patients treated with mavrilimumab demonstrated a reduction in mechanical ventilation and death at Day 29 pooled across dose cohorts.
Kiniksa continues to advance its engagement activities with the FDA and other government agencies to identify pathways to potentially accelerate availability of mavrilimumab as a therapeutic option for severe COVID-19 patients. Enrollment in the Phase 3 portion of the trial is ongoing.
Vixarelimab (monoclonal antibody inhibitor of signaling through OSMRβ)

Kiniksa is conducting a placebo-controlled Phase 2b clinical trial of vixarelimab in prurigo nodularis, evaluating a range of once-monthly dose regimens via subcutaneous (SC) injection.
The primary efficacy endpoint is the percent change from baseline in the weekly-average Worst-Itch Numeric Rating Scale at Week 16.
KPL-404 (monoclonal antibody inhibitor of signaling between CD40 and CD154)

Kiniksa announced final data today from the KPL-404 Phase 1 clinical trial in healthy volunteers. KPL-404 was well tolerated and showed dose-dependent increases in concentration across cohorts. The data support further development in patients with optionality for intravenous and/or SC administration.
Kiniksa plans to initiate a Phase 2 proof-of-concept clinical trial of KPL-404 in rheumatoid arthritis in the second half of 2021. The planned trial will provide safety and characterization of chronic dosing with SC administration over 12 weeks as well as the potential to evaluate KPL-404 across a range of other autoimmune diseases.
Scientific Conference Presentations

Kiniksa plans to present additional data from the RHAPSODY, the pivotal Phase 3 trial of rilonacept, at the American College of Cardiology virtual scientific conference, which will be available starting on May 15, 2021 at 8:00 a.m. Eastern Time. Details of the presentations are as follows:
Antonio Brucato, MD, Department of Biomedical and Clinical Science, University of Milan, Fatebenefratelli Hospital, Milan, will present a poster entitled, Tapering and discontinuation of background therapies during the transition to rilonacept monotherapy in RHAPSODY, a phase 3 clinical trial of rilonacept in patients with recurrent pericarditis.
Paul Cremer, MD, Department of Cardiovascular Medicine, Cleveland Clinic, Cleveland, will present a moderated poster entitled, Cardiac magnetic resonance imaging for guiding decision-making on treatment duration: data from RHAPSODY, a phase 3 clinical trial of rilonacept in recurrent pericarditis.
Financial Results

Net loss for the first quarter of 2021 was $49.5 million, compared to a net loss of $26.4 million for the first quarter of 2020.
Total operating expenses for the first quarter of 2021 were $49.3 million, compared to $29.4 million for the first quarter of 2020.
Non-cash, share-based compensation expense for the first quarter of 2021 was $7.1 million, compared to $4.2 million for the first quarter of 2020.
Kiniksa made a $20.0 million milestone payment to Regeneron in the first quarter of 2021 upon the FDA approval of ARCALYST in recurrent pericarditis. The milestone payment was capitalized as an intangible asset and will be amortized through cost of goods sold on a straight-line basis over the 20-year life of the asset starting in the second quarter of 2021.
As of March 31, 2021, the company had cash, cash equivalents and short-term investments of $264.0 million and no debt.
Financial Guidance

Kiniksa expects that its cash, cash equivalents and short-term investments will fund its current operating plan into 2023.

On May 4, 2021 Kaleido Biosciences, Inc. (Nasdaq: KLDO), a clinical-stage healthcare company with a differentiated, chemistry-driven approach to targeting the microbiome to treat disease and improve human health, reported financial results for the first quarter ended March 31, 2021 (Press release, Kaleido Biosciences, MAY 4, 2021, View Source [SID1234579102]).

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"Kaleido is off to a strong start in 2021 marked by positive results from our 350-patient clinical study with KB109 in outpatients with mild-to-moderate COVID-19 and a recently completed financing, which will support the continued expansion of our novel, targeted Microbiome Metabolic TherapyTM (MMT) candidates," said Dan Menichella, President and Chief Executive Officer of Kaleido. "Consistent with the interim findings we reported earlier this year, results from the full dataset demonstrated that KB109 has a favorable safety and tolerability profile and reduced COVID-19 related healthcare utilization and recovery time in patients with one or more comorbidity. Based on these results, we are investing in the manufacturing of KB109 and are initiating an IND application with the FDA."

Continued Mr. Menichella: "Beyond our COVID-19 program, we have a robust pipeline of MMT-based candidates that holds immense potential. We continue to make progress enrolling patients in our non-IND study evaluating KB295 in individuals with mild-to-moderate ulcerative colitis with topline data anticipated mid-year. We believe these data are critical as patients and clinicians express interest in novel, oral therapeutic options with a strong safety and tolerability profile."

Recent Program and Corporate Highlights

An analysis from the full dataset (n=350) of the K031 controlled non-IND study of KB109 in patients with mild-to-moderate COVID-19 demonstrated a reduction in overall COVID-19 related healthcare utilization—comprised of hospitalizations, emergency room visits, and urgent care visits. The study also demonstrated a significant reduction in recovery time for patients age 45 and older or with one or more comorbidity who received KB109 plus self-supportive care as compared to patients receiving self-supportive care alone.
In February, Kaleido closed a public offering with gross proceeds of approximately $69.4 million, before deducting underwriting discounts and commissions and other offering expenses.
In April, Kaleido announced a research collaboration with researcher Robert Jenq, M.D. Professor of Genomic Medicine, at The University of Texas MD Anderson Cancer Center, to explore the potential of Kaleido’s novel MMT in preventing febrile neutropenia—a serious complication associated with hematopoietic stem cell transplantations (HSCT).
First Quarter Financial Results

Kaleido reported a net loss of $23.0 million, or $0.58 per common share, for the first quarter of 2021 compared to $19.6 million, or $0.64 per common share, for the same period in 2020. The first quarter net loss includes non-cash stock-based compensation expenses of $4.2 million, as compared to $2.7 million in the first quarter of 2020.

Research and development (R&D) expenses were $17.2 million and $13.1 million for the three months ended March 31, 2021 and 2020, respectively. The increase was primarily due to increased spend relating to our two COVID-19 studies and the modification of the vesting provision of stock options and restricted stock units related to the resignation of our former CMO.

General and administrative (G&A) expenses were $5.5 million and $5.9 million for the three months ended March 31, 2021 and 2010, respectively. The decrease was primarily due to reduced headcount and lower utilization of outside contractors.

As of March 31, 2021, the Company reported cash and cash equivalents of $92.4 million. The Company continues to manage its operating expenses and, as a result, has cash runway into the first quarter of 2022.

About Microbiome Metabolic Therapies (MMT)

Kaleido’s Microbiome Metabolic Therapies, or MMTs, are designed to drive the function and distribution of the microbiome’s existing microbes in order to decrease or increase the production of metabolites, or to advantage or disadvantage certain bacteria in the microbiome community. The Company’s initial MMT candidates are targeted, synthetic glycans that are orally administered, have limited systemic exposure, and are selectively metabolized by enzymes in the microbiome. Kaleido utilizes its discovery and development platform to study MMTs in microbiome samples to rapidly advance MMT candidates rapidly into clinical studies in healthy subjects and patients. These human clinical studies are conducted under regulations supporting research with food, evaluating safety, tolerability and potential markers of effect. For MMT candidates that are further developed as therapeutics, the Company conducts clinical trials under an Investigational New Drug (IND) or regulatory equivalent outside the U.S., and in Phase 2 or later development.

On May 4, 2021 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the first quarter of 2021 and affirmed financial guidance for 2021 (Press release, Jazz Pharmaceuticals, MAY 4, 2021, View Source [SID1234579101]).

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"Demand for Xywav is strong, as both patients and physicians embrace the health benefits associated with reducing daily sodium intake. We also continue to see robust uptake of Zepzelca among both platinum-resistant and platinum-sensitive small cell lung cancer patients, consistent with the positive feedback we’ve received on its profile," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "We are on track to deliver significant revenue growth and diversification in 2022, are poised for two additional product launches this year and look forward to completing the acquisition of GW Pharmaceuticals this month, all key milestones in our transformation to an innovative biopharmaceutical company and neuroscience leader."

Robert Iannone, M.D., M.S.C.E., executive vice president, research and development and chief medical officer, added, "Across our R&D organization, we’ve continued our track record of strong execution. We presented positive Xywav data in idiopathic hypersomnia (IH) at the American Academy of Neurology Annual Meeting. We are also pleased to have announced that FDA granted priority review of Xywav in IH with a PDUFA goal date set for August 12, 2021, bringing us another step closer to delivering this important treatment to patients with IH, for whom there is currently no FDA-approved therapy. Further, our JZP458 program remains on track with a potential approval in mid-2021. I’m proud that our continued execution enables us to bring life-changing medicines to often overlooked patient groups with significant unmet need."

Business Updates

Corporate Development

On February 3, 2021, the Company announced that it had entered into a definitive agreement to acquire GW Pharmaceuticals plc (GW) for $220.00 per American Depositary Share, in the form of $200 in cash and $20 in Jazz ordinary shares, based on the volume weighted average price of Jazz ordinary shares on Nasdaq for the 15 consecutive trading day period beginning on the 18th trading day immediately preceding the closing date of the transaction, for a total value of approximately $7.2 billion, or $6.7 billion net of GW cash. The Company has secured $5.35 billion of financing to support the GW transaction; $1.5 billion as senior secured notes and a $3.85 billion term loan. This financing structure supports the Company’s rapid deleveraging to its stated targets.

All shareholder and regulatory approvals required for the acquisition have now been obtained. Completion of the acquisition remains subject to the sanction by the High Court of Justice of England and Wales (Court) and other customary closing conditions. The Court hearing to sanction the acquisition is currently scheduled for May 5, 2021, and the completion of the acquisition is expected to occur shortly thereafter. Upon close of the transaction, the combined company will be a leader in neuroscience with a global commercial and operational footprint, well positioned to maximize the value of its diversified portfolio.

Neuroscience

Oxybate (Xyrem and XywavTM):

Net product sales for the combined oxybate business increased 1% to $411.0 million in the first quarter of 2021 compared to the same period in 2020.
Average active oxybate patients on therapy were approximately 15,700 in the first quarter of 2021, an increase of approximately 4% compared to the same period in 2020.
Strong Xywav uptake, coupled with utilization of our patient access programs, resulted in a 3% decrease in revenue bottle volume in the first quarter of 2021 compared to the same period in 2020.
Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution:

Xywav net product sales were $75.4 million in the first quarter of 2021.
There were approximately 3,900 active patients on Xywav exiting the first quarter of 2021, following the U.S. launch in November 2020.
The Company has achieved its goal of obtaining broad payer coverage, having entered into agreements with all three of the largest pharmacy benefit managers and coverage now at 80% of commercial lives. The Company continues to work with other payers to further expand coverage.
Xyrem (sodium oxybate) oral solution:

Xyrem net product sales decreased 18% to $335.6 million in the first quarter of 2021 compared to the same period in 2020.
Xywav in Idiopathic Hypersomnia

The U.S. Food and Drug Administration (FDA) has granted Priority Review Designation and confirmed the supplemental New Drug Application (sNDA) seeking approval for Xywav in adult patients with idiopathic hypersomnia (IH). The Prescription Drug Fee User Act (PDUFA) target action date for an FDA decision has been set for August 12, 2021, which is in line with the objective of launching in the fourth quarter of 2021.
Positive Phase 3 trial results were presented at the American Academy of Neurology annual meeting in April 2021. The efficacy and safety results demonstrate the potential Xywav has for helping people living with IH, an often debilitating neurologic sleep disorder for which there are currently no approved treatments in the U.S.
Sunosi (solriamfetol):

Sunosi net product sales were $11.6 million in the first quarter of 2021, compared to $1.9 million in the same period of 2020 following the U.S. launch in July 2019.
In the first quarter of 2021, U.S. prescriptions increased 10% compared to the fourth quarter of 2020.
JZP385:

JZP385, a highly selective modulator of T-type calcium channels, is in clinical development for the potential treatment of essential tremor.
The Company expects to initiate a Phase 2b trial in mid-2021.
JZP150:

JZP150, a fatty acid amide hydrolase (FAAH) inhibitor, is in clinical development for the potential treatment of post-traumatic stress disorder.
The Company expects to initiate a Phase 2 trial in late 2021.
Oncology

Zepzelca (lurbinectedin):

Zepzelca net product sales were $54.3 million in the first quarter of 2021, with continued growth across both platinum-resistant and platinum-sensitive patients in second-line small cell lung cancer (SCLC). Zepzelca was launched in the U.S. in July 2020.
The Company anticipates initiating a Phase 3 trial evaluating immunotherapy plus lurbinectedin maintenance therapy, compared to immunotherapy alone, in patients with extensive-stage SCLC after induction chemotherapy in 2021.
The Company and Pharma Mar, S.A. (PharmaMar) continue to engage with FDA regarding the confirmatory data package.
JZP458 (recombinant Erwinia asparaginase):

In December 2020, the Company initiated the submission of a Biologics License Application (BLA) to FDA for JZP458 for intramuscular use as a component of a multi-agent chemotherapeutic regimen for the treatment of Acute Lymphoblastic Leukemia (ALL) or Lymphoblastic Lymphoma (LBL) in adult and pediatric patients who have developed hypersensitivity or silent inactivation to E. coli-derived asparaginase.
The BLA will be reviewed under the Real Time Oncology Review program (RTOR) an initiative of FDA’s Oncology Center of Excellence designed to expedite the delivery of safe and effective cancer treatments to patients.
The Company is targeting a mid-2021 launch in the U.S., subject to FDA approval.
The Company continues to prioritize global development of JZP458 with the objective of ensuring that ALL/LBL patients have access to a reliably-produced, high-quality recombinant asparaginase.
Enrollment in the pivotal Phase 2/3 trial continues beyond the current RTOR submission, with the recent initiation of the intravenous cohort.
Vyxeos (daunorubicin and cytarabine) liposome for injection:

Vyxeos net product sales increased 1% to $33.2 million in the first quarter of 2021 compared to the same period in 2020.
FDA approved a revised label for Vyxeos to include a new indication for newly-diagnosed therapy-related acute myeloid leukemia (t-AML) or AML with myelodysplasia-related changes (AML-MRC) in pediatric patients aged one year and older.
Defitelio (defibrotide sodium) / defibrotide:

Defitelio/defibrotide net product sales increased 5% to $49.6 million in the first quarter of 2021 compared to the same period in 2020.
Erwinaze / Erwinase (asparaginase Erwinia chrysanthemi):

Erwinaze/Erwinase net product sales increased 9% to $41.1 million in the first quarter of 2021 compared to $37.7 million for the same period in 2020.
The Company’s agreement with Porton Biopharma Limited terminated on December 31, 2020. The Company has the right to sell certain Erwinaze inventory post-termination and expects to distribute this Erwinaze inventory during the first half of 2021. Once sales of available inventory are complete, the Company will cease recording net sales of Erwinaze.
Financial Highlights

GAAP net income for the first quarter of 2021 was $121.8 million, or $2.09 per diluted share, compared to a GAAP net loss of $157.8 million, or $2.82 per diluted share, for the first quarter of 2020. Non-GAAP adjusted net income for the first quarter of 2021 was $228.8 million, or $3.92 per diluted share, compared to $25.8 million, or $0.45 per diluted share, for the first quarter of 2020.

The GAAP net loss and non-GAAP adjusted net income for the first quarter of 2020 included the post-tax impact of a $200.0 million upfront payment made to PharmaMar for the exclusive U.S. commercialization and development rights to Zepzelca. The GAAP net loss for the first quarter of 2020 also included the post-tax impact of an impairment charge of $136.1 million following the Company’s decision to stop enrollment in its Phase 3 clinical trial of defibrotide for the prevention of veno-occlusive disease (VOD).

Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.

Total revenues increased 14% in the first quarter of 2021 compared to the same period in 2020.

Products launched since 2019 accounted for 23% of total net product sales in the first quarter of 2021.
Neuroscience net product sales in the first quarter of 2021 increased 3% to $422.6 million compared to the same period in 2020 and oxybate net product sales increased to $411.0 million led by strong Xywav net product sales of $75.4 million partially offset by a decrease in Xyrem net product sales driven by the strong adoption of Xywav by existing Xyrem patients. Oxybate revenue bottle volumes were impacted by our patient access programs. Sunosi net product sales increased by $9.7 million compared to the first quarter of 2020.
Oncology net product sales in the first quarter of 2021 increased 51% to $178.2 million compared to the same period in 2020 driven primarily by robust Zepzelca net product sales of $54.3 million. Zepzelca launched in the U.S. in July 2020.
Operating expenses changed over the prior year periods primarily due to the following:

Selling, general and administrative (SG&A) expenses increased in the first quarter of 2021 compared to the same period in 2020 on a GAAP and on a non-GAAP adjusted basis primarily due to increased investment in sales, marketing and launch activities with the commencement of the Sunosi direct-to-consumer television marketing campaign and the continuation of the launches of Xywav and Zepzelca in the U.S., as well as an increase in other expenses primarily related to the expansion of the commercial operations. SG&A expenses in the first quarter of 2021 on a GAAP basis also included transaction expenses related to the proposed GW acquisition.
Research and development expenses decreased in the first quarter of 2021 compared to the same period in 2020, on a GAAP and on a non-GAAP adjusted basis, primarily due to a decrease in expenses related to the Company’s clinical programs.
Acquired in-process research and development (IPR&D) expense in the first quarter of 2020 on a GAAP and on a non-GAAP adjusted basis primarily related to a $200.0 million upfront payment to PharmaMar for the exclusive U.S. commercialization and development rights to Zepzelca.
In the first quarter of 2020, the Company recorded an impairment charge of $136.1 million on a GAAP basis following the Company’s decision to stop enrollment in its Phase 3 clinical trial of defibrotide for the prevention of VOD.
The effective tax rate for the first quarter of 2021 compared to the same period in 2020 decreased on a GAAP basis primarily due to the impact of the defibrotide IPR&D asset impairment charge, the acquired IPR&D expense primarily relating to the $200.0 million upfront payment to PharmaMar, and changes in income mix among the various jurisdictions in which we operate.
Cash Flow and Balance Sheet

As of March 31, 2021, cash, cash equivalents and investments were $2.4 billion, and the outstanding principal balance of the Company’s long-term debt was $2.4 billion. In the first quarter of 2021, the Company generated $285.0 million of cash from operations.

2021 Financial Guidance1

The Company is affirming its full year 2021 financial guidance as follows:

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. IST) to provide a business and financial update and discuss its 2021 first quarter 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 8765706.

A replay of the conference call will be available through May 11, 2021 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 8765706. 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.