Jazz Pharmaceuticals Announces First Quarter 2018 Financial Results

Jazz Pharmaceuticals Announces First Quarter 2018 Financial Results

Total Revenues Increased 18% to $445 Million

Supplemental New Drug Application Submitted to FDA for Xyrem in the Treatment of Pediatric Narcolepsy Patients with Cataplexy and Excessive Daytime Sleepiness

DUBLIN, May 8, 2018 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the first quarter of 2018 and updated financial guidance for 2018.

"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.

Financial Highlights


                                   Three Months Ended
                                       March 31,
                                       ---------

    (In thousands, except per
     share amounts and
     percentages)             2018                    2017 Change
                              ----                    ---- ------

    Total revenues                   $444,613              $376,053   18%

    GAAP net income                   $45,991               $86,511 (47)%

    Adjusted net income              $182,371              $141,222   29%

    GAAP EPS                            $0.75                 $1.41 (47)%

    Adjusted EPS                        $2.98                 $2.31   29%

Total Revenues


                                      Three Months Ended
                                           March 31,
                                           ---------

    (In thousands)               2018                     2017

    Xyrem(R) (sodium oxybate)
     oral solution                       $316,777                $272,326

    Erwinaze(R) /Erwinase(R)
     (asparaginase Erwinia
     chrysanthemi)             50,627                     51,388

    Defitelio(R) (defibrotide
     sodium) /defibrotide      35,061                     35,900

    Vyxeos(R) (daunorubicin
     and cytarabine) liposome
     for injection             26,228                          -

    Prialt(R) (ziconotide)
     intrathecal infusion       6,126                      7,717

    Other                       6,028                      6,347
                                -----                      -----

    Product sales, net        440,847                    373,678

    Royalties and contract
     revenues                   3,766                      2,375

    Total revenues                       $444,613                $376,053
                                         ========                ========

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


                                                Three Months Ended
                                                    March 31,
                                                    ---------

    (In thousands, except percentages)   2018                      2017
                                         ----                      ----

    GAAP:

    Cost of product sales                        $33,919                       $25,065

    Gross margin                        92.3%                           93.3%

    Selling, general and administrative         $207,213                      $144,255

    % of total revenues                 46.6%                           38.4%

    Research and development                     $62,667                       $44,928

    % of total revenues                 14.1%                           11.9%


                                              Three Months Ended
                                                  March 31,
                                                  ---------

    (In thousands, except percentages)   2018                      2017
                                         ----                      ----

    Non-GAAP adjusted:

    Cost of product sales                        $32,225                       $23,819

    Gross margin                        92.7%                           93.6%

    Selling, general and administrative         $131,979                      $118,450

    % of total revenues                 29.7%                           31.5%

    Research and development                     $47,292                       $40,786

    % of total revenues                 10.6%                           10.8%

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.

2018 Financial Guidance

Jazz Pharmaceuticals is updating its full year 2018 financial guidance as follows (in millions, except per share amounts and percentages):


    Revenues*                                        $1,880-$1,930

    Total net product sales*                         $1,865-$1,910

    -Xyrem net sales*                                $1,320-$1,350

    -Erwinaze/Erwinase net sales                         $190-$220

    -Defitelio/defibrotide net sales                     $145-$165

    -Vyxeos net sales                                    $130-$155

    GAAP gross margin %                                      93%

    Non-GAAP adjusted gross margin %1,5                        93%

    GAAP SG&A expenses*                                  $660-$699

    Non-GAAP adjusted SG&A expenses2,5                   $525-$555

    GAAP R&D expenses*                                   $232-$255

    Non-GAAP adjusted R&D expenses3,5                    $205-$225

    GAAP effective tax rate                                18%-21%

    Non-GAAP adjusted effective tax rate4,5                17%-19%

    GAAP net income per diluted share*                 $6.60-$7.70

    Non-GAAP adjusted net income per diluted share*5 $12.75-$13.25

    ________________________________

    *             Updated May 8, 2018

            1.     Excludes $6-$9 million of share-based compensation expense from estimated
                   GAAP gross margin.

            2.     Excludes $78-$87 million of share-based compensation expense and $57
                   million of estimated loss contingency from estimated GAAP SG&A expenses.

            3.     Excludes $16-$19 million of share-based compensation expense and $11
                   million of milestone payments from estimated GAAP R&D expenses.

            4.     Excludes the income tax effect of adjustments between GAAP reported and non-
                   GAAP adjusted net income.

            5.     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 2018 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. 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.

About Jazz Pharmaceuticals plc

Jazz Pharmaceuticals plc (Nasdaq: JAZZ) is an international biopharmaceutical company focused on improving patients' lives by identifying, developing and commercializing meaningful products that address unmet medical needs. The company has a diverse portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology. In these areas, Jazz Pharmaceuticals markets Xyrem® (sodium oxybate) oral solution, Erwinaze® (asparaginase Erwinia chrysanthemi), Defitelio® (defibrotide sodium) and Vyxeos® (daunorubicin and cytarabine) liposome for injection in the U.S. and markets Erwinase® and Defitelio® (defibrotide) in countries outside the U.S. For country-specific product information, please visit www.jazzpharmaceuticals.com/products. For more information, please visit www.jazzpharmaceuticals.com and follow us on Twitter at @JazzPharma.

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 reported GAAP net income (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 non-GAAP adjustments. In this regard, the components of non-GAAP adjusted net income, including non-GAAP cost of product sales, non-GAAP selling, general and administrative expenses and non-GAAP research and development 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. In particular, the company believes 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 and 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 condensed 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 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.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals' future financial and operating results, including 2018 financial guidance, the company's expectations for advancing its promising R&D pipeline, fueling its portfolio with innovative product candidates and delivering on multiple regulatory milestones and product launches, the company's expectations for future Erwinaze supply challenges and inter-quarter variability in Defitelio net sales, the company's potential use of the PRV to accelerate the review process by the FDA for one of its future regulatory submissions 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 Xyrem, such as the potential U.S. introduction of a generic version of Xyrem before the entry dates specified in the company's settlements with certain companies that have filed abbreviated new drug applications with the FDA seeking approval to market a generic version of Xyrem or on terms that are different from those contemplated by the settlements; ongoing patent litigation and related proceedings; effectively commercializing the company's other products and product candidates; the time-consuming and uncertain regulatory approval process, including the risk that the company's regulatory submissions, including the solriamfetol NDA, the Xyrem supplemental NDA and the marketing authorization application for Vyxeos in the European Union, may not be approved by applicable regulatory authorities in a timely manner or at all; protecting and enhancing the company's intellectual property rights; 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; government investigations and other actions, including the risk that the company may not ultimately reach a final settlement with the DOJ to resolve an investigation relating to the company's support of 501(c)(3) organizations that provide financial assistance to Medicare patients; obtaining and maintaining appropriate pricing and reimbursement for the company's products; pharmaceutical product development and the uncertainty of clinical success, including risks related to failure or delays in initiating or completing clinical trials; identifying and acquiring, in-licensing or developing additional products or product candidates, financing these transactions and successfully integrating acquired businesses; potential restrictions on the company's ability and flexibility to pursue share repurchases and future strategic opportunities as a result of its substantial outstanding debt obligations; the ability to achieve expected future financial performance and results and the uncertainty of future tax and other provisions and estimates; 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 plc's Securities and Exchange Commission filings and reports (Commission File No. 001-33500), including the company's Annual Report on Form 10-K for the year ended December 31, 2017 and future filings and reports by the company, including the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018. 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. The forward-looking statements herein are made only as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by the company on its website or otherwise. The company undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made.


                                     JAZZ PHARMACEUTICALS PLC

                            CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                             (In thousands, except per share amounts)

                                            (Unaudited)


                                                  Three Months Ended
                                                    March 31,

                                           2018                            2017
                                           ----                            ----

    Revenues:

    Product
     sales, net                                    $440,847                       $373,678

    Royalties
     and
     contract
     revenues                             3,766                             2,375
                                          -----                             -----

    Total
     revenues                           444,613                           376,053

    Operating expenses:

    Cost of
     product
     sales
     (excluding
     amortization
     of
     intangible
     assets)                             33,919                            25,065

    Selling,
     general and
     administrative                     207,213                           144,255

    Research and
     development                         62,667                            44,928

    Intangible
     asset
     amortization                        53,007                            25,665

    Total
     operating
     expenses                           356,806                           239,913
                                        -------                           -------

    Income from
     operations                          87,807                           136,140

    Interest
     expense,
     net                               (20,605)                         (18,844)

    Foreign
     exchange
     loss                               (1,728)                          (1,464)
                                         ------                            ------

    Income
     before
     income tax
     provision
     and equity
     in loss of
     investees                           65,474                           115,832

    Income tax
     provision                           19,146                            29,160

    Equity in
     loss of
     investees                              337                               161
                                            ---                               ---

    Net income                                      $45,991                        $86,511
                                                    =======                        =======


    Net income per ordinary
     share:

    Basic                                             $0.77                          $1.44
                                                      =====                          =====

    Diluted                                           $0.75                          $1.41
                                                      =====                          =====

    Weighted-
     average
     ordinary
     shares used
     in per
     share
     calculations
     - basic                             59,928                            59,880
                                         ======                            ======

    Weighted-
     average
     ordinary
     shares used
     in per
     share
     calculations
     - diluted                           61,178                            61,178
                                         ======                            ======


                                                                            JAZZ PHARMACEUTICALS PLC

                                                                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                 (In thousands)

                                                                                  (Unaudited)


                                                                                                           March 31,            December 31,
                                                                                                                2018                      2017
                                                                                                                ----                      ----

                                                         ASSETS

    Current assets:

    Cash and cash equivalents                                                                                          $453,169                    $386,035

    Investments                                                                                              255,000                     215,000

    Accounts receivable, net of allowances                                                                   281,424                     224,129

    Inventories                                                                                               46,384                      43,245

    Prepaid expenses                                                                                          27,476                      23,182

    Other current assets                                                                                      62,868                      76,686

    Total current assets                                                                                   1,126,321                     968,277

    Property, plant and equipment, net                                                                       178,920                     170,080

    Intangible assets, net                                                                                 2,953,146                   2,979,127

    Goodwill                                                                                                 960,509                     947,537

    Deferred tax assets, net                                                                                  38,103                      34,559

    Deferred financing costs                                                                                   7,144                       7,673

    Other non-current assets                                                                                  22,985                      16,419
                                                                                                              ------                      ------

    Total assets                                                                                                     $5,287,128                  $5,123,672
                                                                                                                     ==========                  ==========

                                          LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:

    Accounts payable                                                                                                    $46,933                     $24,368

    Accrued liabilities                                                                                      240,544                     198,779

    Current portion of long-term debt                                                                         45,117                      40,605

    Income taxes payable                                                                                      36,048                      21,577

    Deferred revenue                                                                                           6,977                       8,618
                                                                                                               -----

    Total current liabilities                                                                                375,619                     293,947

    Deferred revenue, non-current                                                                             13,641                      16,115

    Long-term debt, less current portion                                                                   1,537,044                   1,540,433

    Deferred tax liabilities, net                                                                            382,072                     383,472

    Other non-current liabilities                                                                            192,181                     176,608

    Total shareholders' equity                                                                             2,786,571                   2,713,097

    Total liabilities and shareholders' equity                                                                       $5,287,128                  $5,123,672
                                                                                                                     ==========                  ==========


                                                          JAZZ PHARMACEUTICALS PLC

                                                           SUMMARY OF CASH FLOWS

                                                               (In thousands)

                                                                (Unaudited)


                                                                                            Three Months Ended
                                                                                              March 31,
                                                                                              ---------

                                                                                       2018                  2017
                                                                                       ----                  ----

    Net cash provided by operating activities                                               $162,359                          $164,540

    Net cash used in investing activities                                          (47,149)                         (3,574)

    Net cash used in financing activities                                          (47,575)                       (181,674)

    Effect of exchange rates on cash and cash equivalents                             (501)                           1,740
                                                                                       ----                            -----

    Net increase (decrease) in cash and cash equivalents                                     $67,134                         $(18,968)
                                                                                             =======                          ========


                                      JAZZ PHARMACEUTICALS PLC

                  RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

                              (In thousands, except per share amounts)

                                             (Unaudited)


                                                   Three Months Ended
                                                     March 31,
                                                     ---------

                                            2018                             2017
                                            ----                             ----

    GAAP
     reported
     net income                                      $45,991                         $86,511

    Intangible
     asset
     amortization                         53,007                             25,665

    Share-
     based
     compensation
     expense                              24,303                             25,193

    Estimated
     loss
     contingency                          57,000                                  -

    Upfront and
     milestone
     payments                             11,000                                  -

    Expenses
     related to
     certain
     legal
     proceedings                               -                             6,000

    Non-cash
     interest
     expense                              10,617                              5,615

    Income tax
     effect                             (19,547)                           (7,762)

    Non-GAAP
     adjusted
     net income                                     $182,371                        $141,222
                                                    ========                        ========


    GAAP
     reported
     net income
     per
     diluted
     share                                             $0.75                           $1.41
                                                       =====                           =====

    Non-GAAP
     adjusted
     net income
     per
     diluted
     share                                             $2.98                           $2.31
                                                       =====                           =====

    Weighted-
     average
     ordinary
     shares
     used in
     diluted
     per share
     calculations                         61,178                             61,178
                                          ======                             ======


                                                                                                                   JAZZ PHARMACEUTICALS PLC

                                                                                               RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

                                                                                                           CERTAIN LINE ITEMS AND OTHER INFORMATION

                                                                                                   (In thousands, except per share amounts and percentages)

                                                                                                                          (Unaudited)


                                                                   Three Months Ended
                                                                   ------------------

                                        March 31, 2018                                                            March 31, 2017
                                                                                                                    --------------

                          GAAP               Adjustments          Non-GAAP                         GAAP                    Adjustments                 Non-GAAP
                        Reported                                  Adjusted                      Reported                                               Adjusted
                        --------                                  --------                      --------                                               --------

    Total revenues                $444,613                                 $                 -                                             $444,613                              $376,053                 $      -      $376,053

    Cost of product
     sales (excluding
     amortization of
     intangible assets)    33,919                         (1,694)              (a)                  32,225                                    25,065                    (1,246)            (a)   23,819

    Selling, general
     and administrative   207,213                        (75,234)               (b)                 131,979                                   144,255                   (25,805)            (b)  118,450

    Research and
     development           62,667                        (15,375)               (c)                  47,292                                    44,928                    (4,142)            (c)   40,786

    Intangible asset
     amortization          53,007                        (53,007)                                         -                                   25,665                   (25,665)                       -

    Interest expense,
     net                   20,605                        (10,617)               (d)                   9,988                                    18,844                    (5,615)            (d)   13,229

    Foreign exchange
     loss                   1,728                               -                                    1,728                                     1,464                          -                   1,464

    Income before
     income tax
     provision and
     equity in loss of
     investees             65,474                         155,927               (e)                 221,401                                   115,832                     62,473             (e)  178,305

    Income tax
     provision             19,146                          19,547               (f)                  38,693                                    29,160                      7,762             (f)   36,922

    Effective tax rate
     (g)                    29.2%                                                       17.5%                                    25.2%                                            20.7%

    Equity in loss of
     investees                337                               -                                      337                                       161                          -                     161

    Net income                     $45,991                                            $136,380                (h)                           $182,371                               $86,511                  $54,711 (h)   $141,222

    Net income per
     diluted share                   $0.75                                                                          $2.98                                        $1.41                                       $2.31

    ________________________________

    Explanation of Adjustments and Certain Line Items (in
     thousands):


    (a)              Share-based compensation expense of $1,694 and $1,246 for the three months
                     ended March 31, 2018 and 2017, respectively.

    (b)              Share-based compensation expense of $18,234 and $19,805, estimated loss
                     contingency of $57,000 and $0 and expenses related to certain legal
                     proceedings of $0 and $6,000 for the three months ended March 31, 2018 and
                     2017, respectively.

    (c)              Upfront and milestone payments of $11,000 and $0 and share-based
                     compensation expense of $4,375 and $4,142 for the three months ended March
                     31, 2018 and 2017, respectively.

    (d)              Non-cash interest expense associated with debt discount and debt issuance
                     costs for the respective three-month period.

    (e)              Sum of adjustments (a) through (d) plus the adjustment for intangible asset
                     amortization for the respective three-month period.

    (f)              Income tax effect of adjustments between GAAP reported and non-GAAP
                     adjusted net income for the respective three-month period.

    (g)              Income tax provision divided by income before income tax provision and
                     equity in loss of investees for the respective three-month period.

    (h)             Net of adjustments (e) and (f) for the respective three-month period.


                                                                                          JAZZ PHARMACEUTICALS PLC

                                                                    RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2018 NET INCOME GUIDANCE

                                                                                   (In millions, except per share amounts)

                                                                                                 (Unaudited)


    GAAP net income                                                                                                                                    $405 - $470

    Intangible asset amortization                                                                                                         200 - 220

    Share-based compensation expense                                                                                                      100 - 115

    Estimated loss contingency                                                                                                                                  57

    Milestone payments                                                                                                                                          11

    Non-cash interest expense                                                                                                              40 - 50

    Income tax effect of adjustments                                                                                                     (60) - (75)

    Non-GAAP adjusted net income                                                                                                                       $780 - $815
                                                                                                                                                       ===========


    GAAP net income per diluted share                                                                                                                  $6.60-$7.70
                                                                                                                                                       ===========

    Non-GAAP adjusted net income per diluted share                                                                                                   $12.75-$13.25
                                                                                                                                                     =============


    Weighted-average ordinary shares used in per share calculations                                                                                             61

CONTACT: Investors: Kathee Littrell, Vice President, Investor Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 634 7887, U.S., +1 650 496 2717, or Media: Jacqueline Kirby, Vice President, Corporate Affairs & Government Relations, Jazz Pharmaceuticals plc, Ireland, +353 1 697 2141, U.S., +1 215 867 4910

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SOURCE Jazz Pharmaceuticals plc