Jazz Pharmaceuticals Plc Q4 FY2024 earnings call

Management Statement and Operational Highlights

• 2024 was a record year for Jazz with over $4 billion in total annual revenue and Q4 revenue of nearly $1.1 billion, the highest ever.
• R&D milestones: Accelerated approval of Ziihera for second-line HER2-positive biliary tract cancer, positive Phase III Zepzelca results for first-line small cell lung cancer, and HERIZON-GEA-01 Phase III trial data readout expected in the second-half of 2025.
• Commercial execution: Sleep, epilepsy, and oncology portfolios each annualize at over $1 billion. Epidiolex is set to reach blockbuster status, and Ziihera launched in the fourth quarter for second-line HER2-positive BTC.
• CEO transition: Bruce Cozadd retiring as CEO, remaining as Chairman of the Board, with a focus on strategic investments continuing during the transition period.

Segment Performance

• Sleep Portfolio: Xywav net product sales grew 16% in 2024 to approximately $1.5 billion, with ~14,150 patients using it at the end of 2024. Total sweep revenue (including Xywav, Xyrem, and AG royalties) was $506 million in the fourth quarter and exceeded $1.9 billion for the full year. Xywav remains the number one branded treatment for narcolepsy.
• Epilepsy: Epidiolex net product revenues grew 15% in 2024 to approximately $972 million, poised to reach blockbuster status in 2025.
• Oncology: Oncology revenues grew 9% in 2024 to a record over $1.1 billion. Zepzelca had full-year net product sales of approximately $320 million (up 11%), Ziihera had ~$1 million in net product sales in the fourth quarter following FDA approval, and Rylaze had $411 million full-year sales (up 4%, with temporary impact from pediatric protocols affecting second-half 2024 revenues).

Guidance

• 2025 total revenue guidance ranges from $4.15 billion to $4.4 billion, representing 5% year-over-year growth, driven by Xywav growth, Epidiolex reaching blockbuster status, and AG royalty revenue.
• R&D spend guidance is $720 million to $770 million, an 8% decrease from 2024, focusing on priority programs like zanidatamab.
• Ziihera is expected to have modest revenues in 2025 due to the small biliary tract cancer patient population, but a successful launch is key for future opportunities.

Risks

• Impact of true generics on Xyrem revenue and uncertainty regarding the impact on Xywav's market position.
• Competition affecting products like Zepzelca and other oncology treatments.
• Regulatory and clinical trial risks that could delay pipeline milestones and affect product approvals.

Question and Answer Q: Marc Goodman asked about orexin 441 and the Epidiolex settlement.

A: Bruce Cozadd stated Epidiolex settlements with ANDA filers go to very late 2030s due to confidentiality, and Rob Iannone had no update on the orexin 441 trial.

Q: Jessica Fye inquired about the HERIZON-GEA trial enrollment.

A: Robert Iannone confirmed completing enrollment for the upsized 918-patient target, noted enrollment for the originally planned 714 patients was completed, and said the blinded trial results make the event rate maturation neutral for success probability.

Q: Jason Gerberry asked about M&A strategy and CEO transition.

A: Bruce Cozadd mentioned deleveraging since the GW deal and Phil Johnson highlighted financial resources for M&A, while Bruce provided an update on the CEO search being thorough and ongoing.