On May 8, 2018 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the first quarter of 2018 and updated financial guidance for 2018 (Press release, Jazz Pharmaceuticals, MAY 8, 2018, View Source;p=RssLanding&cat=news&id=2347828 [SID1234526236]).

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"The first quarter was highlighted by strong revenue growth, cash flow generation and execution across the organization that led to significant progress toward our 2018 goals," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "The recent submission of our supplemental NDA for Xyrem for pediatric narcolepsy patients and FDA acceptance of our NDA for solriamfetol for excessive sleepiness in patients with narcolepsy or OSA result from our focused investment in advancing our promising R&D pipeline. Over the next 18 months, we look forward to fueling our portfolio with innovative product candidates and delivering on multiple regulatory milestones and product launches."

GAAP net income for the first quarter of 2018 was $46.0 million, or $0.75 per diluted share, compared to $86.5 million, or $1.41 per diluted share, for the first quarter of 2017.

Adjusted net income for the first quarter of 2018 was $182.4 million, or $2.98 per diluted share, compared to $141.2 million, or $2.31 per diluted share, for the first quarter of 2017. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.

Total revenues increased 18% in the first quarter of 2018 compared to the same period in 2017 due to an increase in net product sales of Xyrem and the launch of Vyxeos.

Xyrem net product sales increased 16% in the first quarter of 2018 compared to the same period in 2017.

Erwinaze/Erwinase net product sales in the first quarter were consistent with the same period in 2017. The company is currently experiencing supply disruptions and expects that there may be further supply challenges during 2018.

Defitelio/defibrotide net product sales in the first quarter of 2018 were consistent with the same period in 2017. The company continues to expect inter-quarter variability in Defitelio net sales given that veno-occlusive disease is an ultra-rare disease.

Vyxeos net product sales were $26.2 million in the first quarter of 2018. Vyxeos launched in the U.S. in August 2017.

Operating expenses changed over the prior year period primarily due to the following:

Selling, general and administrative (SG&A) expenses increased in the first quarter of 2018 compared to the same period in 2017 on a GAAP and on a non-GAAP adjusted basis due to higher expenses resulting from expansion of the company’s business, including expenses supporting the potential EU launch of Vyxeos and U.S. launch of solriamfetol. SG&A expenses in the first quarter of 2018 on a GAAP basis also included an estimated loss contingency of $57.0 million related to an ongoing U.S. Department of Justice (DOJ) investigation of our support of 501(c)(3) organizations that provide financial assistance to Medicare patients. In April 2018, the company reached an agreement in principle with the DOJ on a proposal for a civil settlement of potential claims relating to the investigation, subject to negotiation of a definitive settlement agreement and other contingencies.
Research and development (R&D) expenses increased in the first quarter of 2018 compared to the same period in 2017 on a GAAP and on a non-GAAP adjusted basis due to an increase in expenses related to the company’s ongoing pre-clinical and clinical development programs and regulatory activities. R&D expenses in the first quarter of 2018 on a GAAP basis also included milestone payments of $11.0 million related to the U.S. Food and Drug Administration’s (FDA) acceptance for filing of the company’s New Drug Application (NDA) for solriamfetol.
Cash Flow and Balance Sheet

As of March 31, 2018, cash, cash equivalents and investments were $708.2 million, and the outstanding principal balance of the company’s long-term debt was $1.8 billion. During the first quarter of 2018, we generated $162.4 million of cash from operations, used $34.5 million to repurchase approximately 238,000 ordinary shares under the company’s share repurchase program at an average cost of $145.34 per ordinary share and made milestone payments totaling $11.0 million.

Recent Developments

In March 2018, the FDA accepted for filing with standard review the company’s NDA seeking marketing approval for solriamfetol, an investigational medicine for the treatment of excessive sleepiness in adult patients with narcolepsy or obstructive sleep apnea (OSA). The Prescription Drug User Fee Act (PDUFA) date for an FDA decision is December 20, 2018.

In April 2018, the company entered into an agreement with Spark Therapeutics, Inc. to purchase a rare pediatric disease priority review voucher (PRV) for $110 million that will allow the company to accelerate the review process by the FDA for one of its future regulatory submissions.

In April 2018, the company submitted a supplemental NDA to the FDA seeking marketing approval for Xyrem in the treatment of pediatric narcolepsy patients with cataplexy and excessive daytime sleepiness.

Conference Call Details

Jazz Pharmaceuticals will host an investor conference call and live audio webcast today at 4:30 p.m. EDT (9:30 p.m. IST) to provide a business and financial update and discuss its 2018 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 9868758.

A replay of the conference call will be available through May 15, 2018 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 9868758. 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.