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Jazz Pharmaceuticals (JAZZ) Q4 Earnings Miss, Sales Up Y/Y
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Jazz Pharmaceuticals Public Limited Company (JAZZ - Free Report) reported fourth-quarter 2017 adjusted earnings of $2.95 per share, marginally missing the Zacks Consensus Estimate of $2.98. However, the bottom line increased 9% from the year-ago figure.
Total revenues in the quarter rose 10% year over year to $436.4 million owing to higher sales of the company’s marketed drug, Xyrem, and sales from the launch of Vyxeos in the United States last August. However, the top line fell short of the Zacks Consensus Estimate of $441 million.
Shares of Jazz decreased almost 3% in after-hours trading on Feb 27 due to lower-than-expected earnings and revenues. However, the same has outperformed the industry in a year’s time, rallying 8.4% against the industry’s 0.8% gain.
Quarter in Detail
Net product sales in the fourth quarter increased 9.5% to $430.1 million from the year-ago quarter.
Xyrem (sodium oxybate) sales gained 7% to $312.5 million in the reported period. Sales were driven by a 5% rise in active Xyrem patients compared with the year-ago figure.
However, Xyrem has witnessed lower-than-expected growth in the second half of 2017 on the negative impact of payer mix and operational changes leading to delayed prescription fulfillment.
Erwinaze/Erwinase generated revenues worth $47.8 million, down 16% compared with the prior-year figure. This downside can mainly be attributed to increased ordering of Erwinaze in fourth-quarter 2016 upon re-availability of supply following an extended supply disruption in late 2016.
We remind investors that Jazz is facing raw material supply issues for Erwinaze inducing fluctuations in inventory levels as well as temporary disruptions in the company’s ability to cater to certain markets including the United States. The company anticipates additional disruptions to occur through the remaining year.
Prialt revenues came in flat at $6.1 million compared with the year-earlier period. Defitelio sales increased 22% year over year to $36.3 million in the quarter under review. This upside is driven by higher net product sales in the ex-U.S. markets. Notably, Jazz also witnessed new accounts ordering for Defitelio plus the drug sales grew 16.3% sequentially.
Vyxeos, launched in the United States for treatment of adults with acute myeloid leukemia (AML), generated sales of $24.7 million, up 154.7% sequentially. The drug is under an accelerated assessment in the EU for the same indication.
Other product sales tanked 62% to $3.4 million.
Adjusted selling, general and administrative (SG&A) expenses during the quarter rose 12.2% to $121.4 million. This uptrend was primarily on the back of higher headcount costs, increase in other expenses related to business expansion and launch costs of Vyxeos in the United States.
Adjusted research and development (R&D) expenses increased 9.3% to $43.3 million, mainly due to escalated expenses related to the company’s pipeline and Vyxeos’ regulatory activities.
Pipeline Update
The company is progressing well with its lead pipeline candidate, JZP-110, evaluated for the treatment of excessive sleepiness in obstructive sleep apnea (OSA) and narcolepsy. In December 2017, the company submitted a new drug application to the FDA supported by positive results from a phase III TONES program for addressing OSA and narcolepsy. It expects to launch the candidate in early 2019.
2017 Results
Full-year sales improved 9% year over year to $1.62 billion. The figure slightly missed the higher end of the previously guided range of $1.60-$1.65 billion.
Full-year earnings of $11.04 per share improved 9% compared with the prior-year figure. However, the bottom line too marginally missed the higher end of the previous projection of $10.70-$11.20.
2018 Guidance
Jazz expects earnings in the range of $12.65-$13.25, the mid-point of which reflects 17.3% growth over the bottom line in 2017. The company anticipates revenues in the band of $1.86-$1.93 billion, translating into a 17% rise at mid-point over the top line for 2017.
Total product sales are predicted in the range of $1.85-$1.91 billion in 2018.
Xyrem sales are estimated in the range of $1.31-$1.34 billion, representing expected growth of 11.3% at mid-point over 2017 sales. This strong outlook reflects an expected low to mid-single-digit volume expansion for the drug in 2018.
Erwinaze/Erwinase sales are forecast within $190-$220 million in 2018. The midpoint of this guided range reflects a year-over-year improvement of approximately 4%, taking anticipated supply disruptions for Erwinaze into account.
While Defitelio net sales for 2018 are estimated in the band of $145-$165 million, Vyxeos net sales are likely to be within $130-$155 million.
The company projects adjusted SG&A expenses in the range of $525-$555 million while R&D costs are expected within $205-$225 million.
Jazz Pharmaceuticals PLC Price, Consensus and EPS Surprise
Jazz carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , Ligand Pharmaceuticals Incorporated (LGND - Free Report) and Enanta Pharmaceuticals, Inc. (ENTA - Free Report) . While Regeneron sports a Zacks Rank #1 (Strong Buy), Ligand and Enanta carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron’s earnings per share estimates have moved up from $17.13 to $18.65 and from $20.38 to $21.56 for 2018 and 2019 respectively in the last 30 days. The company pulled off a positive earnings surprise in three of the last four quarters, with an average beat of 9.15%.
Ligand’s earnings per share estimates have moved up from $3.54 to $3.78 for 2018 in the last 60 days. The company delivered a positive earnings surprise in three out of the trailing four quarters, with an average beat of 24.88%. Share price of the company moved up 44.7% over a year.
Enanta Pharma delivered a positive earnings surprise in three of the last four quarters, with an average beat of 373.1%. Share price of the company surged 170.1% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Jazz Pharmaceuticals (JAZZ) Q4 Earnings Miss, Sales Up Y/Y
Jazz Pharmaceuticals Public Limited Company (JAZZ - Free Report) reported fourth-quarter 2017 adjusted earnings of $2.95 per share, marginally missing the Zacks Consensus Estimate of $2.98. However, the bottom line increased 9% from the year-ago figure.
Total revenues in the quarter rose 10% year over year to $436.4 million owing to higher sales of the company’s marketed drug, Xyrem, and sales from the launch of Vyxeos in the United States last August. However, the top line fell short of the Zacks Consensus Estimate of $441 million.
Shares of Jazz decreased almost 3% in after-hours trading on Feb 27 due to lower-than-expected earnings and revenues. However, the same has outperformed the industry in a year’s time, rallying 8.4% against the industry’s 0.8% gain.
Quarter in Detail
Net product sales in the fourth quarter increased 9.5% to $430.1 million from the year-ago quarter.
Xyrem (sodium oxybate) sales gained 7% to $312.5 million in the reported period. Sales were driven by a 5% rise in active Xyrem patients compared with the year-ago figure.
However, Xyrem has witnessed lower-than-expected growth in the second half of 2017 on the negative impact of payer mix and operational changes leading to delayed prescription fulfillment.
Erwinaze/Erwinase generated revenues worth $47.8 million, down 16% compared with the prior-year figure. This downside can mainly be attributed to increased ordering of Erwinaze in fourth-quarter 2016 upon re-availability of supply following an extended supply disruption in late 2016.
We remind investors that Jazz is facing raw material supply issues for Erwinaze inducing fluctuations in inventory levels as well as temporary disruptions in the company’s ability to cater to certain markets including the United States. The company anticipates additional disruptions to occur through the remaining year.
Prialt revenues came in flat at $6.1 million compared with the year-earlier period. Defitelio sales increased 22% year over year to $36.3 million in the quarter under review. This upside is driven by higher net product sales in the ex-U.S. markets. Notably, Jazz also witnessed new accounts ordering for Defitelio plus the drug sales grew 16.3% sequentially.
Vyxeos, launched in the United States for treatment of adults with acute myeloid leukemia (AML), generated sales of $24.7 million, up 154.7% sequentially. The drug is under an accelerated assessment in the EU for the same indication.
Other product sales tanked 62% to $3.4 million.
Adjusted selling, general and administrative (SG&A) expenses during the quarter rose 12.2% to $121.4 million. This uptrend was primarily on the back of higher headcount costs, increase in other expenses related to business expansion and launch costs of Vyxeos in the United States.
Adjusted research and development (R&D) expenses increased 9.3% to $43.3 million, mainly due to escalated expenses related to the company’s pipeline and Vyxeos’ regulatory activities.
Pipeline Update
The company is progressing well with its lead pipeline candidate, JZP-110, evaluated for the treatment of excessive sleepiness in obstructive sleep apnea (OSA) and narcolepsy. In December 2017, the company submitted a new drug application to the FDA supported by positive results from a phase III TONES program for addressing OSA and narcolepsy. It expects to launch the candidate in early 2019.
2017 Results
Full-year sales improved 9% year over year to $1.62 billion. The figure slightly missed the higher end of the previously guided range of $1.60-$1.65 billion.
Full-year earnings of $11.04 per share improved 9% compared with the prior-year figure. However, the bottom line too marginally missed the higher end of the previous projection of $10.70-$11.20.
2018 Guidance
Jazz expects earnings in the range of $12.65-$13.25, the mid-point of which reflects 17.3% growth over the bottom line in 2017. The company anticipates revenues in the band of $1.86-$1.93 billion, translating into a 17% rise at mid-point over the top line for 2017.
Total product sales are predicted in the range of $1.85-$1.91 billion in 2018.
Xyrem sales are estimated in the range of $1.31-$1.34 billion, representing expected growth of 11.3% at mid-point over 2017 sales. This strong outlook reflects an expected low to mid-single-digit volume expansion for the drug in 2018.
Erwinaze/Erwinase sales are forecast within $190-$220 million in 2018. The midpoint of this guided range reflects a year-over-year improvement of approximately 4%, taking anticipated supply disruptions for Erwinaze into account.
While Defitelio net sales for 2018 are estimated in the band of $145-$165 million, Vyxeos net sales are likely to be within $130-$155 million.
The company projects adjusted SG&A expenses in the range of $525-$555 million while R&D costs are expected within $205-$225 million.
Jazz Pharmaceuticals PLC Price, Consensus and EPS Surprise
Jazz Pharmaceuticals PLC Price, Consensus and EPS Surprise | Jazz Pharmaceuticals PLC Quote
Zacks Rank & Key Picks
Jazz carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , Ligand Pharmaceuticals Incorporated (LGND - Free Report) and Enanta Pharmaceuticals, Inc. (ENTA - Free Report) . While Regeneron sports a Zacks Rank #1 (Strong Buy), Ligand and Enanta carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron’s earnings per share estimates have moved up from $17.13 to $18.65 and from $20.38 to $21.56 for 2018 and 2019 respectively in the last 30 days. The company pulled off a positive earnings surprise in three of the last four quarters, with an average beat of 9.15%.
Ligand’s earnings per share estimates have moved up from $3.54 to $3.78 for 2018 in the last 60 days. The company delivered a positive earnings surprise in three out of the trailing four quarters, with an average beat of 24.88%. Share price of the company moved up 44.7% over a year.
Enanta Pharma delivered a positive earnings surprise in three of the last four quarters, with an average beat of 373.1%. Share price of the company surged 170.1% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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