Jazz Pharmaceuticals Announces Full Year And Fourth Quarter 2019 Financial Results
DUBLIN, Feb. 25, 2020 /PRNewswire/ -- Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced financial results for the full year and the fourth quarter of 2019 and provided financial guidance for 2020.
"With more than $2 billion of revenue and double-digit top- and bottom-line growth, we delivered strong 2019 financial results while making significant investments to support the continued robust evolution of our business," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "Strong execution of our long-term sustainable growth strategy has led to six major product approvals in the past four years, and we look forward to further diversification of our revenue base through corporate development activities and by delivering on other key priorities, including the European launch of Sunosi, the anticipated U.S. launches of lurbinectedin and JZP-258, and pre-launch activities for JZP-458."
"Backed by a growing commitment to R&D, we have made significant progress strengthening and advancing our R&D pipeline with the goal of providing important new therapeutic options and improved patient outcomes in difficult-to-treat diseases," said Robert Iannone, M.D., M.S.C.E., executive vice president, research and development, of Jazz Pharmaceuticals. "Our R&D organization remains focused on optimizing and diversifying our portfolio through internal efforts and external opportunities, including utilizing innovative technologies, and working through partnerships and collaborations designed to bring new life-changing therapeutics to patients."
Financial Highlights
---
Three Months Ended
Year Ended
December 31, December 31,
(In thousands,
except per share
amounts and
percentages) 2019 2018 Change 2019 2018 Change
Total revenues $
581,740 $
476,457 22% $
2,161,761 $
1,890,922 14%
GAAP net income $
73,992 $
159,470 (54)% $
523,367 $
447,098 17%
Adjusted net
income $
253,243 $
219,951 15% $
934,231 $
838,613 11%
GAAP EPS $
1.29 $
2.64 (51)% $
9.09 $
7.30 25%
Adjusted EPS $
4.42 $
3.64 21% $
16.23 $
13.70 18%
GAAP net income for 2019 was $523.4 million, or $9.09 per diluted share, compared to $447.1 million, or $7.30 per diluted share, for 2018. GAAP net income for the fourth quarter of 2019 was $74.0 million, or $1.29 per diluted share, compared to $159.5 million, or $2.64 per diluted share, for the fourth quarter of 2018. The decrease in GAAP net income and EPS in the fourth quarter of 2019 compared to the fourth quarter of 2018 was primarily due to the amortization of the $111.1 million cost of the priority review voucher utilized in connection with the company's JZP-258 new drug application (NDA) submission.
Non-GAAP adjusted net income for 2019 was $934.2 million, or $16.23 per diluted share, compared to $838.6 million, or $13.70 per diluted share, for 2018. Non-GAAP adjusted net income for the fourth quarter of 2019 was $253.2 million, or $4.42 per diluted share, compared to $220.0 million, or $3.64 per diluted share, for the fourth quarter of 2018. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included at the end of this press release.
Key Corporate and R&D Updates
Corporate
-- The company announced today the appointment of Renée D. Galá as
Executive Vice President and Chief Financial Officer (CFO) effective
March 16, 2020. At this time, Ms. Galá will assume the duties and
responsibilities of the company's principal financial officer from Bruce
Cozadd, Chairman and Chief Executive Officer, who has been serving in
this role on an interim basis. Ms. Galá brings more than 25 years of
extensive experience across finance, strategy, leadership development
and corporate development and recently served at GRAIL, Inc. as CFO.
Prior to this, Ms. Galá served as Senior Vice President and CFO of
Theravance Biopharma, Inc. Ms. Galá serves on the board of directors
of Gossamer Bio, Inc., a clinical-stage biopharmaceutical company, where
she also chairs the audit committee. Ms. Galá holds a B.S. in
Mathematics from Vanderbilt University and an M.B.A. from Columbia
Business School.
-- The company announced today the appointment of Samantha Pearce as Senior
Vice President, Europe/Rest of World effective March 2, 2020. From March
2010 to December 2019, Ms. Pearce held various global senior management
positions with Celgene Corporation, most recently as Vice President and
General Manager, International Markets. From August 2002 to March 2010,
Ms. Pearce served in management positions at AstraZeneca plc,
culminating in her role as Director, Specialist Care. Ms. Pearce
received a B.Sc. from Birmingham University and an M.B.A. from Cranfield
University.
Sunosi® (solriamfetol)
-- In January 2020, the European Commission approved Sunosi to improve
wakefulness and reduce excessive daytime sleepiness (EDS) in adults with
narcolepsy (with or without cataplexy) or obstructive sleep apnea (OSA)
whose EDS has not been satisfactorily treated by primary OSA therapy,
such as continuous positive airway pressure. Sunosi is the only licensed
therapy in the European Union (EU) for the treatment of EDS in adults
living with OSA.
JZP-258
-- In January 2020, the company submitted an NDA to the U.S. Food and Drug
Administration (FDA) for JZP-258 for the treatment of cataplexy and EDS
in narcolepsy patients 7 years of age and older. The company redeemed
its priority review voucher for the NDA submission.
Defitelio® (defibrotide sodium) / defibrotide
-- In the fourth quarter of 2019, the company completed enrollment in its
prevention of acute graft-vs-host disease (aGvHD) Phase 2 study.
Vyxeos® (daunorubicin and cytarabine) liposome for injection
-- In the fourth quarter of 2019, the company activated sites for its Phase
1b master trial of Vyxeos in combination with various targeted agents in
first-line, fit acute myeloid leukemia.
JZP-458
-- In the fourth quarter of 2019, FDA granted Fast Track designation to
JZP-458 for the treatment of acute lymphoblastic leukemia
(ALL)/lymphoblastic lymphoma (LBL) and the company activated sites and
began enrollment in its single-arm, pivotal Phase 2/3 clinical study.
Lurbinectedin
-- In December 2019, the company announced that it had entered into an
exclusive license agreement with Pharma Mar S.A. (PharmaMar) for U.S.
commercialization and development rights to lurbinectedin. In January
2020, the transaction closed and the company made an upfront payment of
$200 million to PharmaMar.
-- In February 2020, FDA accepted the NDA and granted priority review for
lurbinectedin for the treatment of relapsed small cell lung cancer
(SCLC) with a Prescription Drug User Fee Act (PDUFA) action date of
August 16, 2020.
Select 2020 Objectives
---
Sleep and Neuroscience
Sunosi
? Initiate European rolling launch in
Germany mid-2020
? Initiate Phase 3 study for EDS in major
depressive disorder mid-2020
JZP-258
? Submit NDA for cataplexy and EDS in
narcolepsy patients 7 years and older
January 2020
? Obtain U.S. approval as early as 3Q20
?
Launch as early as 4Q20
? Complete enrollment in Phase 3 study in
idiopathic hypersomnia 2H20
JZP-385
? Initiate Phase 2b study in essential
tremor 4Q20
Hematology and Oncology
Defitelio
? Conduct interim analysis in Phase 3 study
for prevention of hepatic veno-
occlusive disease study to determine
final enrollment 1H20
? Report top-line results from Phase 2
study for prevention of aGvHD 2H20
Lurbinectedin
? Obtain U.S. accelerated approval for
relapsed SCLC and launch 3Q20
JZP-458
? Conduct interim analysis in pivotal Phase
2/3 clinical study in ALL/LBL
? Submit Biologics License Application
(BLA) to FDA as early as 4Q20
Corporate Development
? Expand portfolio through multiple
acquisitions or partnerships
Total Revenues
---
Three Months Ended
Year Ended
December 31, December 31,
(In thousands) 2019 2018 2019 2018
Xyrem(R) (sodium
oxybate) oral
solution $
435,352 $
374,830 $
1,642,525 $
1,404,866
Erwinaze(R) /
Erwinase(R)
(asparaginase
Erwinia
chrysanthemi) 54,920 24,265 177,465 174,739
Defitelio(R)
(defibrotide
sodium) /
defibrotide 47,779 37,712 172,938 149,448
Vyxeos(R)
(daunorubicin and
cytarabine)
liposome for
injection 31,521 25,618 121,407 100,835
Sunosi(R)
(solriamfetol) 2,727 3,714
Other 4,227 4,909 17,552 39,585
Product sales, net 576,526 467,334 2,135,601 1,869,473
Royalties and
contract revenues 5,214 9,123 26,160 21,449
Total revenues $
581,740 $
476,457 $
2,161,761 $
1,890,922
Total revenues increased 14% in 2019 and 22% in the fourth quarter of 2019 compared to the same periods in 2018.
Xyrem net product sales increased 17% in 2019 and 16% in the fourth quarter of 2019 compared to the same periods in 2018.
Erwinaze/Erwinase net product sales in 2019 were consistent with net product sales in 2018 and higher in the fourth quarter of 2019 compared to the same period of 2018 due to the timing of supply availability. The company experienced limited product availability during 2019 and 2018 due to ongoing supply and manufacturing issues at the sole manufacturer.
Defitelio/defibrotide net product sales increased 16% in 2019 and 27% in the fourth quarter of 2019 compared to the same periods in 2018. The company continues to expect inter-quarter variability in Defitelio net sales.
Vyxeos net product sales increased 20% in 2019 and 23% in the fourth quarter of 2019 compared to the same periods in 2018 primarily due to the ongoing European launch.
Sunosi net product sales were $3.7 million in 2019 following the U.S. launch in July 2019.
Operating Expenses and Effective Tax Rate
---
Three Months Ended
December 31,
Year Ended
December 31,
---
(In thousands,
except percentages) 2019 2018 2019 2018
---
GAAP:
Cost of product
sales $
35,348 $
26,337 $
127,930 $
121,544
Gross margin 93.9% 94.4% 94.0% 93.5%
Selling, general and
administrative $
214,275 $
161,865 $
736,942 $
683,530
% of total revenues 36.8% 34.0% 34.1% 36.1%
Research and
development $
97,382 $
56,657 $
299,726 $
226,616
% of total revenues 16.7% 11.9% 13.9% 12.0%
Impairment charges
$
$
$ $
42,896
Acquired in-process
research and
development
$
$ $
109,975
$ -
Income tax provision
(benefit) $
(34,523) $
5,144 $
(73,154) $
80,162
Effective tax rate (84.7)% 3.1% (16.1)% 15.1%
Three Months Ended Year Ended
December 31, December 31,
---
(In thousands,
except percentages) 2019 2018
2019 2018
---
Non-GAAP adjusted:
Cost of product
sales $
34,063 $
24,725 $
121,293 $
114,910
Gross margin 94.1% 94.7% 94.3% 93.9%
Selling, general and
administrative $
196,935 $
142,107 $
658,245 $
548,687
% of total revenues 33.9% 29.8% 30.4% 29.0%
Research and
development $
90,070 $
51,304 $
274,497 $
196,579
% of total revenues 15.5% 10.8% 12.7% 10.4%
Acquired in-process
research and
development
$
$ $
5,700
$ -
Income tax provision $
(2,366) $
29,220 $
132,030 $
148,515
Effective tax rate (0.9)% 11.7% 12.3% 15.0%
Operating expenses increased over the prior year periods primarily due to the following:
-- Selling, general and administrative (SG&A) expenses increased in 2019
and in the fourth quarter of 2019 compared to the same periods in 2018
on a GAAP and on a non-GAAP adjusted basis primarily due to expenses
related to the expansion of the company's business, including the U.S.
launch of Sunosi.
-- Research and development (R&D) expenses increased in 2019 and in the
fourth quarter of 2019 compared to the same periods in 2018 on a GAAP
and on a non-GAAP adjusted basis primarily due to expenses related to
the company's expanding pre-clinical and clinical development programs
and support of its partner programs, including milestone payments of
$26.0 million in 2019 to Pfenex, Inc. under a license and option
agreement to develop and commercialize multiple early stage hematology
product candidates.
The effective tax rate for the fourth quarter of 2019 on both a GAAP and on a non-GAAP adjusted basis included a benefit of $31.6 million for the years 2015 to 2019 resulting from the application of the Italian patent box incentive. The effective tax rate for 2019 on a GAAP basis included a one-time tax benefit of $112.3 million resulting from an intra-entity intellectual property asset transfer.
Cash Flow and Balance Sheet
As of December 31, 2019, cash, cash equivalents and investments were $1.1 billion, and the outstanding principal balance of the company's long-term debt was $1.8 billion. In 2019, the company generated $776.4 million of cash from operations, used $301.5 million to repurchase shares under the company's share repurchase program, made milestone payments totaling $80.5 million related to Sunosi, and made upfront payments of $52.5 million to acquire Cavion, Inc. (Cavion) and $56.0 million to Codiak BioSciences, Inc. (Codiak) under a collaboration agreement.
In 2019, the company repurchased approximately 2.3 million ordinary shares under the company's share repurchase program at an average cost of $133.97 per ordinary share. As of December 31, 2019, the remaining amount authorized for share repurchases under the company's share repurchase program was $577.7 million.
2020 Financial Guidance
Jazz Pharmaceuticals' full year 2020 financial guidance as follows (in millions, except per share amounts and percentages):
GAAP and Non-GAAP
Adjusted
Revenues
$2,320 - $2,400
Total net product sales
$2,305 - $2,375
-Oxybate franchise net sales
$1,710 - $1,760
-Sunosi net sales
$30 - $50
-Erwinaze/Erwinase net sales
$185 - $215
-Defitelio/defibrotide net sales
$180 - $200
-Vyxeos net sales
$135 - $165
GAAP Non-GAAP Adjusted
Gross
margin
% 94% 94%1,6
SG&A
expenses
$855 - $903
$770 - $8102,6
SG&A
expenses
as %
of
total
revenues 36% - 39% 32% - 35%
R&D
Expenses
$312 - $348
$285 - $3153,6
R&D
expenses
as %
of
total
revenues 13% - 15% 12% - 14%
Acquired
in-
process
research
and
development
expenses $200 $2004
Effective
tax
rate 15% - 23%
18% - 20%5,6
Net
income
per
diluted
share
$5.90 - $7.15
$12.50 - $13.404,6
____________________________
1. Excludes $8-$9 million of share-
based compensation expense from
estimated GAAP gross margin.
2. Excludes $85-$93 million of share-
based compensation expense from
estimated GAAP SG&A expenses.
3. Excludes $27-$33 million of share-
based compensation expense from
estimated GAAP R&D expenses.
4. Beginning with the presentation of
the company's financial guidance for
2020, following consultation with
the staff of the Division of
Corporation Finance of the U.S.
Securities and Exchange Commission,
the company will no longer exclude
upfront and milestone payments from
the company's non-GAAP adjusted net
income, its line item components and
non-GAAP adjusted EPS. The impact
of this change to the company's 2020
non-GAAP adjusted net income and
non-GAAP adjusted EPS guidance is
approximately $175 million or $3.13
per diluted share, respectively,
related to the post-tax impact of
the $200 million upfront payment
made to PharmaMar in January 2020.
5. Excludes the income tax effect of
adjustments between GAAP reported
and non-GAAP adjusted net income.
6. See "Non-GAAP Financial Measures"
below. Reconciliations of non-GAAP
adjusted guidance measures are
included above and in the table
titled "Reconciliation of GAAP to
Non-GAAP Adjusted 2020 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. EST (9:30 p.m. GMT) to provide a business and financial update and discuss its 2019 full year and fourth quarter results and provide 2020 financial guidance. 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 9837779.
A replay of the conference call will be available through March 3, 2020 by dialing +1 855 859 2056 in the U.S., or +1 404 537 3406 outside the U.S., and entering passcode 9837779. 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 a global biopharmaceutical company dedicated to developing life-changing medicines for people with serious diseases -- often with limited or no options. We have a diverse portfolio of marketed medicines and novel product candidates, from early- to late-stage development, in key therapeutic areas. Our focus is in neuroscience, including sleep medicine and movement disorders, and in oncology, including hematologic and solid tumors. We actively explore new options for patients including novel compounds, small molecule advancements, biologics and innovative delivery technologies. Jazz is headquartered in Dublin, Ireland and has employees around the globe, serving patients in more than 90 countries. For more information, please visit www.jazzpharmaceuticals.com and follow @JazzPharma on Twitter.
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 and, as applicable, the income tax benefit related to an intra-entity intellectual property asset transfer and the impact of the U.S. Tax Cuts and Job Act (U.S. Tax Act). In this regard, the components of non-GAAP adjusted net income, including non-GAAP cost of product sales, non-GAAP SG&A expenses and non-GAAP R&D expenses, are income statement line items prepared on the same basis as, and therefore components of, the overall non-GAAP adjusted net income measure.
The company believes that each of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors and analysts. 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 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. For example, commencing with the presentation of the company's financial guidance for 2020, the company will no longer exclude upfront and milestone payments from the company's non-GAAP adjusted net income, its line item components and non-GAAP adjusted EPS. Accordingly, while certain of such payments are excluded from its non-GAAP financial measures for the year ended December 31, 2019, as detailed in the reconciliation tables that follow, such presentation is made solely for comparability and transition purposes and will not be continued going forward. 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 the company's 2020 financial guidance and 2020 planned milestones and the anticipated timing thereof, including the rolling launch of Sunosi in Europe and the potential approval and launch of lurbinectedin and JZP-258 in the U.S.; the company's clinical development, planned BLA submission and pre-launch activities for JZP-458; the company's expectation of continuing to diversity its revenue base; the company's expectation of strengthening and advancing its pipeline to provide new therapeutic options to improve patient outcomes in difficult-to-treat diseases; the company's expectation of diversifying its portfolio through internal efforts and external opportunities; the company's expectations of inter-quarter variability in Defitelio net sales; 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; effectively commercializing the company's other products and product candidates, including with respect to Sunosi and, if approved, lurbinectedin and JZP-258; the time-consuming and uncertain regulatory approval process, including the risk that the company's current and planned regulatory submissions may not be submitted, accepted or approved by applicable regulatory authorities in a timely manner or at all; the costly and time-consuming pharmaceutical product development and the uncertainty of clinical success, including risks related to failure or delays in successfully initiating or completing clinical trials; 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; the company's ability to maintain rights to its products and product candidates, including Erwinaze; complying with applicable U.S. and non-U.S. regulatory requirements; government investigations and other actions; obtaining and maintaining adequate coverage and reimbursement for the company's products; identifying and acquiring, in-licensing or developing additional products or product candidates, financing these transactions and successfully integrating acquired product candidates, products and businesses; the company's ability to realize the anticipated benefits of its collaborations with third parties for the development of product candidates; the company's 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 and future filings and reports by the company, including the company's Annual Report on Form 10-K for the year ended December 31, 2019. Other risks and uncertainties of which the company is not currently aware may also affect the company's forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.
JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
December 31, December 31,
2019 2018 2019 2018
---
Revenues:
Product sales, net $
576,526 $
467,334 $
2,135,601 $
1,869,473
Royalties and contract
revenues 5,214 9,123 26,160 21,449
Total revenues 581,740 476,457 2,161,761 1,890,922
Operating expenses:
Cost of product sales
(excluding amortization
of acquired developed
technologies) 35,348 26,337 127,930 121,544
Selling, general and
administrative 214,275 161,865 736,942 683,530
Research and development 97,382 56,657 299,726 226,616
Intangible asset
amortization 173,490 46,543 354,814 201,498
Impairment charges - 42,896
Acquired in-process
research and
development - 109,975
Total operating expenses 520,495 291,402 1,629,387 1,276,084
Income from operations 61,245 185,055 532,374 614,838
Interest expense, net (18,244) (17,904) (72,261) (77,075)
Foreign exchange loss (2,234) (1,694) (5,811) (6,875)
Loss on extinguishment
and modification of
debt - (1,425)
Income before income tax
provision (benefit) and
equity in loss of
investees 40,767 165,457 454,302 529,463
Income tax provision
(benefit) (34,523) 5,144 (73,154) 80,162
Equity in loss of
investees 1,298 843 4,089 2,203
Net income $
73,992 $
159,470 $
523,367 $
447,098
Net income per ordinary share:
Basic $
1.31 $
2.69 $
9.22 $
7.45
Diluted $
1.29 $
2.64 $
9.09 $
7.30
Weighted-average
ordinary shares used in
per share calculations
- basic 56,418 59,323 56,749 59,976
Weighted-average
ordinary shares used in
per share calculations
- diluted 57,262 60,413 57,550 61,221
JAZZ PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31,
2019 2018
---
ASSETS
Current assets:
Cash and cash equivalents $
637,344 $
309,622
Investments 440,000 515,000
Accounts receivable, net of
allowances 355,987 263,838
Inventories 78,608 52,956
Prepaid expenses 39,434 25,017
Other current assets 78,895 67,572
Total current assets 1,630,268 1,234,005
Property, plant and equipment,
net 131,506 200,358
Operating lease assets 139,385
Intangible assets, net 2,440,977 2,731,334
Goodwill 920,018 927,630
Deferred tax assets, net 221,403 57,879
Deferred financing costs 7,426 9,589
Other non-current assets 47,914 42,696
Total assets $
5,538,897 $
5,203,491
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $
47,545 $
40,602
Accrued liabilities 267,873 264,887
Current portion of long-term
debt 33,387 33,387
Income taxes payable 10,965 1,197
Deferred revenue 4,720 5,414
Total current liabilities 364,490 345,487
Deferred revenue, non-current 4,861 9,581
Long-term debt, less current
portion 1,573,870 1,563,025
Operating lease liabilities,
less current portion 151,226
Deferred tax liabilities, net 224,095 309,097
Other non-current liabilities 109,374 218,879
Total shareholders' equity 3,110,981 2,757,422
Total liabilities and
shareholders' equity $
5,538,897 $
5,203,491
JAZZ PHARMACEUTICALS PLC
SUMMARY OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended
December 31,
2019 2018
---
Net
cash
provided
by
operating
activities $
776,401 $
798,904
Net
cash
used
in
investing
activities (155,300) (394,487)
Net
cash
used
in
financing
activities (293,745) (479,130)
Effect
of
exchange
rates
on
cash
and
cash
equivalents 366 (1,700)
Net
increase
(decrease)
in
cash
and
cash
equivalents $
327,722 $
(76,413)
JAZZ PHARMACEUTICALS PLC
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Year Ended
December 31, December 31,
---
2019 2018 2019 2018
---
GAAP reported net
income $
73,992 $
159,470 $
523,367 $
447,098
Intangible asset
amortization 173,490 46,543 354,814 201,498
Share-based
compensation expense 25,937 26,723 110,563 102,441
Loss contingency (a) - 57,000
Impairment charges and
disposal costs (b) - 43,969
Upfront and milestone
payments (c) - 104,275 11,000
Non-cash interest
expense (d) 11,981 11,291 46,396 43,960
Income tax effect of
above adjustments (32,157) (13,751) (92,910) (60,896)
Income tax benefit
related to intra-
entity intellectual
property asset
transfer - (112,274)
U.S. Tax Act impact - (10,325) (7,457)
Non-GAAP adjusted net
income $
253,243 $
219,951 $
934,231 $
838,613
GAAP reported net
income per diluted
share $
1.29 $
2.64 $
9.09 $
7.30
Non-GAAP adjusted net
income per diluted
share $
4.42 $
3.64 $
16.23 $
13.70
Weighted-average
ordinary shares used
in diluted per share
calculations 57,262 60,413 57,550 61,221
________________________________________________
Explanation of Adjustments and Certain Line Items (in
thousands):
(a) Relates to a civil settlement agreement with
the U.S. Department of Justice and the
Office of the Inspector General.
(b) Resulting from the company's sale of its
rights related to Prialt(R) (ziconotide)
intrathecal infusion.
(c) For the year ended December 31, 2019, the
amount includes $48,275 attributed to
acquired in-process research and
development expense related to the
acquisition of Cavion and a $56,000 upfront
payment to Codiak under a collaboration
agreement.
(d) Non-cash interest expense associated with
debt discount and debt issuance costs.
JAZZ PHARMACEUTICALS PLC
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS - FOR THE THREE MONTHS ENDED DECEMBER 31, 2019 and 2018
(In thousands)
(Unaudited)
Three months ended December 31, 2019
Cost of product Selling, general Research and Intangible asset Interest Income tax
sales and development amortization expense, net provision
administrative (benefit)
---
GAAP Reported $
35,348 $
214,275 $
97,382 $
173,490 $
18,244 $
(34,523)
Non-GAAP Adjustments:
Intangible asset
amortization - (173,490)
Share-based
compensation expense (1,285) (17,340) (7,312)
Non-cash interest
expense - (11,981)
Income tax effect of
above adjustments - 32,157
Total of Non-GAAP
adjustments (1,285) (17,340) (7,312) (173,490) (11,981) 32,157
Non-GAAP Adjusted $
34,063 $
196,935 $
90,070
$ $
6,263 $
(2,366)
Three months ended December 31, 2018
Cost of product Selling, general Research and Intangible asset Interest Income tax
sales and development amortization expense, net provision
administrative (benefit)
---
GAAP Reported $
26,337 $
161,865 $
56,657 $
46,543 $
17,904 $
5,144
Non-GAAP Adjustments:
Intangible asset
amortization - (46,543)
Share-based
compensation expense (1,612) (19,758) (5,353)
Non-cash interest
expense - (11,291)
Income tax effect of
above adjustments - 13,751
U.S. Tax Act impact - 10,325
Total of Non-GAAP
adjustments (1,612) (19,758) (5,353) (46,543) (11,291) 24,076
Non-GAAP Adjusted $
24,725 $
142,107 $
51,304
$ $
6,613 $
29,220
JAZZ PHARMACEUTICALS PLC
RECONCILIATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS - FOR THE YEARS ENDED DECEMBER 31, 2019 and 2018
(In thousands)
(Unaudited)
Year ended December 31, 2019
Cost of product Selling, general Research and Intangible asset Acquired IPR&D Interest Income tax
sales and development amortization expense, net provision
administrative (benefit)
---
GAAP Reported $
127,930 $
736,942 $
299,726 $
354,814 $
109,975 $
72,261 $
(73,154)
Non-GAAP Adjustments:
Intangible asset
amortization - (354,814)
Share-based
compensation expense (6,637) (78,697) (25,229)
Upfront & milestone
payments - (104,275)
Non-cash interest
expense - (46,396)
Income tax effect of
above adjustments - 92,910
Income tax benefit
related to intra-
entity intellectual
property asset
transfer - 112,274
Total of Non-GAAP
adjustments (6,637) (78,697) (25,229) (354,814) (104,275) (46,396) 205,184
Non-GAAP Adjusted $
121,293 $
658,245 $
274,497
$ $
5,700 $
25,865 $
132,030
Year ended December 31, 2018
Cost of product Selling, general Research and Intangible asset Impairment Interest Income tax
sales and development amortization charges expense, net provision
administrative (benefit)
---
GAAP Reported $
121,544 $
683,530 $
226,616 $
201,498 $
42,896 $
77,075 $
80,162
Non-GAAP Adjustments:
Intangible asset
amortization - (201,498)
Share-based
compensation expense (6,634) (76,770) (19,037)
Loss contingency - (57,000)
Impairment charges and
disposal costs - (1,073) (42,896)
Upfront & milestone
payments - (11,000)
Non-cash interest
expense - (43,960)
Income tax effect of
above adjustments - 60,896
U.S. Tax Act impact - 7,457
Total of Non-GAAP
adjustments (6,634) (134,843) (30,037) (201,498) (42,896) (43,960) 68,353
Non-GAAP Adjusted $
114,910 $
548,687 $
196,579
$
$ $
33,115 $
148,515
JAZZ PHARMACEUTICALS PLC
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED 2020 NET
INCOME GUIDANCE
(In millions, except per share amounts)
(Unaudited)
GAAP net income
$330 - $400
Intangible asset amortization
250 - 270
Share-based compensation expense
120 -135
Non-cash interest expense
45 - 55
Income tax effect of adjustments (65) -(90)
Non-GAAP adjusted net income
$700 - $750
GAAP net income per diluted share
$5.90 - $7.15
Non-GAAP adjusted net income per
diluted share
$12.50 - $13.40
Weighted-average ordinary shares
used in per share calculations 56
Contacts:
Investors:
Kathee Littrell
Vice President, Investor Relations
Jazz Pharmaceuticals plc
Ireland, +353 1 634 7887
U.S., +1 650 496 2717
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
