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]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"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.