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Analyst Blog

Several biotech and pharma companies attend healthcare conferences where they get an opportunity to showcase their pipeline and product portfolio. These conferences also give investors a chance to know more about the company and the potential catalysts that could impact the share price.

Earlier this week, Jazz Pharmaceuticals (JAZZ - Analyst Report) attended the Piper Jaffray Healthcare Conference and provided an insight on its pipeline and future plans.

Xyrem for narcolepsy, the lead product at Jazz Pharma, continues to exhibit an impressive performance. Xyrem sales increased 50% to $153.7 million in the third quarter of 2013. On an average, volume growth of 12%–15% has been witnessed in the last four quarters.

To further boost Xyrem revenues, the company has expanded the sales force. To reach out to more physicians, Jazz Pharma has decided to expand the narcolepsy sales force from 80 territories to 100 territories. Xyrem net sales in 2013 are expected in the range of $565–$570 million as compared to $378.7 million in 2012.

However, Jazz Pharma is also facing a series of patent challenges on Xyrem. Three companies including Roxane Laboratories, Inc. are looking to market their versions of generic Xyrem and have filed abbreviated New Drug Application (ANDA) for the same. Existing patents protecting Xyrem expire between 2019 and 2024.

To protect its revenues, the company is developing JZP-386, a deuterated version of sodium oxybate (the drug in Xyrem). The company plans to move the candidate into human trials in 2014.

Apart from Xyrem, Erwinaze, an oncology drug, has also been performing well. In the third quarter of 2013, Erwinaze generated revenues of $44.1 million, up 39% year over year. For 2013, Erwinaze net sales are expected to be approximately $175 million compared with $72.1 million in the prior year.

For 2013, Jazz Pharma expects revenue in the range of $867–$877 million and adjusted earnings in the range of $6.30 to $6.40 per share. The Zacks Consensus Estimate currently stands at $5.77 per share.

The Zacks Consensus Estimate for 2013 increased 10 cents over the last 30 days on the back of positive estimate revisions. For 2014, estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 43 cents to $7.78 per share.

Jazz Pharma carries a Zacks Rank #1 (Strong Buy). Other players which look attractive at current levels, include Aeterna Zentaris Inc. , Actelion Ltd. (ALIOF) and Questcor Pharmaceuticals Inc. . All these stocks carry the same Zacks Rank as Jazz Pharma.

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