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Jazz (JAZZ) Q3 Earnings Lag, Revenues in Line With Estimates
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Jazz Pharmaceuticals (JAZZ - Free Report) reported adjusted earnings of $5.02 per share in fourth-quarter 2023, missing the Zacks Consensus Estimate of $5.26. In the year-ago period, the company reported an adjusted loss of 7 cents per share.
Total revenues in the reported quarter rose 4% year over year to $1.01 billion. Sales of Xywav, Epidiolex and Rylaze drove the upside. Total revenues were in line with the Zacks Consensus Estimate. Per management, this was the first time where the company achieved a billion dollars in quarterly sales.
Jazz’s shares were down 1.5% in after-market trading on Feb 28, likely due to the lower-than-expected earnings reported during the quarter.
Year to date, Jazz’s shares have risen 5.5% compared with the industry’s 4.7% growth.
Image Source: Zacks Investment Research
Quarter in Detail
Net product sales were flat year over year at $967.3 million. The reported figure beat the Zacks Consensus Estimate and our model estimates of $963 million and $951 million, respectively.
Jazz recorded $39.4 million during the quarter as royalty revenues from high-sodium oxybate authorized generic (AG), beating the Zacks Consensus Estimate and our model estimates of $34 million.
Other royalties and contract revenues rose 13% to $5.2 million in the quarter.
Neuroscience Products
Sales of Jazz’s neuroscience products dropped 7% to $689.5 million.
Net product sales for the combined oxybate business (Xyrem + Xywav) fell 16% to $443.7 million in the quarter. This combined revenue figure was in line with the Zacks Consensus Estimate but missed our model estimates of $449 million.
Sales of the sleep disorder drug Xyrem plunged 57% year over year to $106.7 million due to patients switching to Xywav and the launch of AGs last year.
Xywav, a low-sodium formulation of Xyrem, recorded sales of $337 million in the quarter, up 20% year over year. The upside can be attributed to the encouraging uptake of the drug in narcolepsy and idiopathic hypersomnia (IH) indications. The drug is currently Jazz’s most extensive product by net sales.
Sales of the epilepsy drug Epidiolex/Epidyolex rose 16% to $240.6 million. The drug was added to Jazz’s portfolio with the GW Pharmaceuticals’ acquisition in 2021. Jazz is making significant progress related to the launch of Epidyolex in Europe and other ex-U.S. markets. Epidiolex sales beat the Zacks Consensus Estimate and our model estimates of $229 million and $226 million, respectively.
Another drug added with the GW Pharma acquisition was Sativex, a cannabis-based mouth spray for multiple sclerosis-related spasticities, approved in Europe but not in the United States. The drug recorded sales of $5.1 million in the quarter, up 9% year over year.
Oncology Products
Oncology product sales increased 22% to $273.8 million.
New drug Rylaze recorded sales of $101.7 million in the quarter, up 26% year over year. Jazz stated that demand remained strong during the quarter. Rylaze is approved in the United States for treating acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LBL) patients. The drug was recently approved in Europe for a similar indication, where it was commercially launched in fourth-quarter 2023 under the trade name Enrylaze.
Rylaze sales missed the Zacks Consensus Estimate and our model estimates of $113 million and $109 million, respectively.
Zepzelca, approved for small cell lung cancer, recorded sales worth $74 million in the quarter, up 3% year over year.
Acute myeloid leukemia drug Vyxeos generated sales of $46.9 million, up 55% from the year-ago period’s levels.
Defitelio sales were up 26% year over year at $51.1 million in the quarter.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses were down 6% year over year at $300.5 million due to lower compensation-related and litigation expenses incurred during the quarter.
Adjusted research and development (R&D) expenses rose 26% to $201.1 million, mainly due to the support for the increased costs of developing pipeline candidates.
Full-Year 2023 Results
Jazz reported adjusted earnings of $18.29 per share in 2023, up 39% year over year.
Total revenues in the reported quarter rose 5% year over year to $3.8 billion. The total revenues included neuroscience and oncology revenues of $2.8 billion and $1 billion, respectively.
2024 Guidance
Jazz issued fresh financial guidance for the full year 2024.
Total revenues are expected to be in the range of $4.0-$4.2 billion, suggesting approximately 7% year-over-year growth at the midpoint compared with 2023 levels. In 2023, Jazz expects continued growth in net sales of Xywav, Epidiolex, its oncology portfolio and royalties on net sales of AG.
Neuroscience sales are expected in the range of $2.80-$2.95 billion, suggesting a 3.3% year-over-year growth at the midpoint compared with 2023 levels. Management also expects high-sodium oxybate AG royalty revenue to exceed $200 million in 2024. The Oncology franchise is expected to record sales in the range of $1.12-$1.22 billion, indicating growth of 15% at the midpoint compared to 2023.
While adjusted SG&A expenses are anticipated to be between $1.17 billion and $1.23 billion, adjusted R&D expenses are expected to be in the band of $800-$850 million.
The company expects 2024 adjusted earnings in the range of $18.15-$19.35 per share.
Jazz currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the overall healthcare sector include Adicet Bio (ACET - Free Report) , ADMA Biologics (ADMA - Free Report) and Puma Biotechnology (PBYI - Free Report) . While Puma Biotechnology sports a Zacks Rank #1 (Strong Buy) at present, Adicet and ADMA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share (EPS) have risen from 69 cents to 71 cents. Year to date, shares of PBYI have rallied 52.4%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same on one occasion. Puma delivered a four-quarter average earnings surprise of 76.55%.
In the past 60 days, estimates for Adicet Bio’s 2024 loss per share have improved from $2.11 to $1.81. Year to date, shares of ACET have rallied 23.3%.
Earnings of Adicet Bio beat estimates in two of the trailing four quarters while missing the mark on the other two occasions. On average, Adicet came up with a four-quarter negative earnings surprise of 8.36%.
In the past 60 days, estimates for ADMA Biologics’ 2024 EPS have risen from 18 cents to 22 cents. Year to date, shares of ADMA have risen 19.0%.
Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting the same on one occasion. ADMA delivered a four-quarter average earnings surprise of 63.57%.
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Jazz (JAZZ) Q3 Earnings Lag, Revenues in Line With Estimates
Jazz Pharmaceuticals (JAZZ - Free Report) reported adjusted earnings of $5.02 per share in fourth-quarter 2023, missing the Zacks Consensus Estimate of $5.26. In the year-ago period, the company reported an adjusted loss of 7 cents per share.
Total revenues in the reported quarter rose 4% year over year to $1.01 billion. Sales of Xywav, Epidiolex and Rylaze drove the upside. Total revenues were in line with the Zacks Consensus Estimate. Per management, this was the first time where the company achieved a billion dollars in quarterly sales.
Jazz’s shares were down 1.5% in after-market trading on Feb 28, likely due to the lower-than-expected earnings reported during the quarter.
Year to date, Jazz’s shares have risen 5.5% compared with the industry’s 4.7% growth.
Image Source: Zacks Investment Research
Quarter in Detail
Net product sales were flat year over year at $967.3 million. The reported figure beat the Zacks Consensus Estimate and our model estimates of $963 million and $951 million, respectively.
Jazz recorded $39.4 million during the quarter as royalty revenues from high-sodium oxybate authorized generic (AG), beating the Zacks Consensus Estimate and our model estimates of $34 million.
Other royalties and contract revenues rose 13% to $5.2 million in the quarter.
Neuroscience Products
Sales of Jazz’s neuroscience products dropped 7% to $689.5 million.
Net product sales for the combined oxybate business (Xyrem + Xywav) fell 16% to $443.7 million in the quarter. This combined revenue figure was in line with the Zacks Consensus Estimate but missed our model estimates of $449 million.
Sales of the sleep disorder drug Xyrem plunged 57% year over year to $106.7 million due to patients switching to Xywav and the launch of AGs last year.
Xywav, a low-sodium formulation of Xyrem, recorded sales of $337 million in the quarter, up 20% year over year. The upside can be attributed to the encouraging uptake of the drug in narcolepsy and idiopathic hypersomnia (IH) indications. The drug is currently Jazz’s most extensive product by net sales.
Sales of the epilepsy drug Epidiolex/Epidyolex rose 16% to $240.6 million. The drug was added to Jazz’s portfolio with the GW Pharmaceuticals’ acquisition in 2021. Jazz is making significant progress related to the launch of Epidyolex in Europe and other ex-U.S. markets. Epidiolex sales beat the Zacks Consensus Estimate and our model estimates of $229 million and $226 million, respectively.
Another drug added with the GW Pharma acquisition was Sativex, a cannabis-based mouth spray for multiple sclerosis-related spasticities, approved in Europe but not in the United States. The drug recorded sales of $5.1 million in the quarter, up 9% year over year.
Oncology Products
Oncology product sales increased 22% to $273.8 million.
New drug Rylaze recorded sales of $101.7 million in the quarter, up 26% year over year. Jazz stated that demand remained strong during the quarter. Rylaze is approved in the United States for treating acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LBL) patients. The drug was recently approved in Europe for a similar indication, where it was commercially launched in fourth-quarter 2023 under the trade name Enrylaze.
Rylaze sales missed the Zacks Consensus Estimate and our model estimates of $113 million and $109 million, respectively.
Zepzelca, approved for small cell lung cancer, recorded sales worth $74 million in the quarter, up 3% year over year.
Acute myeloid leukemia drug Vyxeos generated sales of $46.9 million, up 55% from the year-ago period’s levels.
Defitelio sales were up 26% year over year at $51.1 million in the quarter.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses were down 6% year over year at $300.5 million due to lower compensation-related and litigation expenses incurred during the quarter.
Adjusted research and development (R&D) expenses rose 26% to $201.1 million, mainly due to the support for the increased costs of developing pipeline candidates.
Full-Year 2023 Results
Jazz reported adjusted earnings of $18.29 per share in 2023, up 39% year over year.
Total revenues in the reported quarter rose 5% year over year to $3.8 billion. The total revenues included neuroscience and oncology revenues of $2.8 billion and $1 billion, respectively.
2024 Guidance
Jazz issued fresh financial guidance for the full year 2024.
Total revenues are expected to be in the range of $4.0-$4.2 billion, suggesting approximately 7% year-over-year growth at the midpoint compared with 2023 levels. In 2023, Jazz expects continued growth in net sales of Xywav, Epidiolex, its oncology portfolio and royalties on net sales of AG.
Neuroscience sales are expected in the range of $2.80-$2.95 billion, suggesting a 3.3% year-over-year growth at the midpoint compared with 2023 levels. Management also expects high-sodium oxybate AG royalty revenue to exceed $200 million in 2024. The Oncology franchise is expected to record sales in the range of $1.12-$1.22 billion, indicating growth of 15% at the midpoint compared to 2023.
While adjusted SG&A expenses are anticipated to be between $1.17 billion and $1.23 billion, adjusted R&D expenses are expected to be in the band of $800-$850 million.
The company expects 2024 adjusted earnings in the range of $18.15-$19.35 per share.
Jazz Pharmaceuticals PLC Price
Jazz Pharmaceuticals PLC price | Jazz Pharmaceuticals PLC Quote
Zacks Rank & Key Picks
Jazz currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the overall healthcare sector include Adicet Bio (ACET - Free Report) , ADMA Biologics (ADMA - Free Report) and Puma Biotechnology (PBYI - Free Report) . While Puma Biotechnology sports a Zacks Rank #1 (Strong Buy) at present, Adicet and ADMA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share (EPS) have risen from 69 cents to 71 cents. Year to date, shares of PBYI have rallied 52.4%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same on one occasion. Puma delivered a four-quarter average earnings surprise of 76.55%.
In the past 60 days, estimates for Adicet Bio’s 2024 loss per share have improved from $2.11 to $1.81. Year to date, shares of ACET have rallied 23.3%.
Earnings of Adicet Bio beat estimates in two of the trailing four quarters while missing the mark on the other two occasions. On average, Adicet came up with a four-quarter negative earnings surprise of 8.36%.
In the past 60 days, estimates for ADMA Biologics’ 2024 EPS have risen from 18 cents to 22 cents. Year to date, shares of ADMA have risen 19.0%.
Earnings of ADMA Biologics beat estimates in three of the last four quarters while meeting the same on one occasion. ADMA delivered a four-quarter average earnings surprise of 63.57%.