Jazz (JAZZ) Beats on Q2 Earnings & Sales, Raises '23 View
Jazz Pharmaceuticals JAZZ reported adjusted earnings of $4.51 per share in second-quarter 2023, beating the Zacks Consensus Estimate of $4.46. The reported figure rose 5% year over year.
Total revenues in the reported quarter rose 3% year over year to $957.3 million. The upside was driven by sales of Xywav, Epidiolex and Rylaze. Total revenues beat the Zacks Consensus Estimate of $952.4 million.
Quarter in Detail
Net product sales increased 2% from the year-ago quarter’s levels to $947 million. The reported figure beat the Zacks Consensus Estimate and our model estimates of $940 million and $939 million, respectively.
Jazz recorded $5.5 million during the quarter as royalty revenues from high-sodium oxybate authorized generic (AG).
Other royalties and contract revenues rose 5% to $4.8 million in the quarter.
Neuroscience Products
Sales of Jazz’s neuroscience products dropped 1% to $691.4 million.
Net product sales for the combined oxybate business (Xyrem + Xywav) dropped 4% to $486.3 million in the quarter. During the quarter, average active oxybate patients fell 5% year over year to approximately 16,200. This combined revenue figure beat the Zacks Consensus Estimate and our model estimates of $485 million and $483 million, respectively.
Sales of the sleep disorder drug Xyrem plunged 41% year over year to $159.8 million due to patients switching to Xywav and the launch of an AG version of Xyrem this January. An AG version of the drug was also launched by Amneal Pharmaceuticals last month, with many more AG versions expected to follow.
Xywav, a low-sodium formulation of Xyrem, recorded sales of $326.6 million in the quarter, up 39% 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 15% to $202.2 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 missed the Zacks Consensus Estimate and our model estimates of $210 million and $211 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 $2.8 million in the quarter, down 32% year over year.
Oncology Products
Oncology product sales increased 10% to $252.2 million.
New drug Rylaze recorded sales of $101.7 million in the quarter, up 39% year over year. Jazz stated that demand remained strong during the quarter. Rylaze is only approved in the United States for treating acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LBL) patients. A regulatory application seeking approval for this drug seeking approval for ALL and LBL indications is currently under review in Europe, with a decision expected later this year.
Rylaze sales beat the Zacks Consensus Estimate and our model estimates of $84 million and $80 million, respectively.
Zepzelca, approved for small cell lung cancer, recorded sales worth $70.3 million in the quarter, up 3% year over year. Per management, the drug continued as the treatment of choice in the second-line small cell lung cancer (SCLC) setting.
Acute myeloid leukemia drug, Vyxeos, generated sales of $34.1 million, up 1% from the year-ago period’s levels.
Defitelio sales were down 16% year over year at $46.1 million in the quarter.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses were down 2% year over year at $276.9 million.
Adjusted research and development (R&D) expenses rose 55% to $192 million, mainly due to the support for the increased costs of developing pipeline candidates.
2023 Guidance
Jazz revised its financial guidance for the full year 2023.
Management now expects 2023 adjusted earnings in the range of $18.15-$19.00 per share, up from the previous guidance of $16.90-$17.85.
Jazz’s shares were up 2.8% in after-market trading on Aug 9, likely due to the raised earnings per share guidance. In the year so far, Jazz’s shares have declined 16.5% compared to the industry’s 1.7% fall.
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Total revenues are now expected to be in the range of $3.73-$3.88 billion, a $50 million raise in the lower limit of the previously provided guidance range of $3.68-$3.88 billion. The revised guidance suggests approximately 3% year-over-year growth at the midpoint compared with 2022 levels. In 2023, Jazz expects continued growth in net sales of Xywav, Epidiolex and its oncology portfolio.
Neuroscience sales are now expected to be $2.72-$2.83 billion (previous guidance: $2.68-$2.83 billion), implying flat year-over-year growth at the midpoint compared to 2022. The Oncology franchise is expected to record sales in the range of $0.95-$1.05 billion (unchanged), indicating growth of 14% at the midpoint compared with 2022 levels.
While adjusted SG&A expenses are anticipated between $1.05 billion and $1.11 billion (unchanged), adjusted R&D expenses are expected to be in the band of $675 million to $725 million (unchanged).
Based on the royalty structures within the AG agreements, the company expects to record significantly higher royalty revenue from high-sodium oxybate AG in second-half 2023 when compared to the first half.
Jazz Pharmaceuticals PLC Price
Jazz Pharmaceuticals PLC price | Jazz Pharmaceuticals PLC Quote
Zacks Rank & Other Stock to Consider
Jazz currently has a Zacks Rank #2 (Buy). Some better-ranked stocks in the overall healthcare sector include Achilles Therapeutics ACHL, Corcept Therapeutics CORT and Dynavax Technologies DVAX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Achilles Therapeutics’ loss estimates for 2023 have narrowed from $1.68 to $1.63 per share in the past 30 days. During the same period, the loss estimates per share for 2024 have narrowed from $1.70 to $1.66. Year to date, Achilles Therapeutics’ stock has risen 8.9%.
Achilles Therapeutics missed earnings estimates in three of the last four quarters while beating the mark on one occasion. On average, the company’s earnings witnessed a negative earnings surprise of 3.94%. In the last reported quarter, ACHL’s earnings missed estimates by 5.00%.
In the past 30 days, estimates for Corcept Therapeutics’ 2023 earnings per share have increased from 62 cents to 75 cents. During the same period, the earnings estimates per share for 2024 have risen from 61 cents to 81 cents. Shares of Corcept Therapeutics are up 48.6% in the year-to-date period.
Earnings of Corcept Therapeutics beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an average earnings surprise of 6.99%. In the last reported quarter, Corcept Therapeutics’ earnings beat estimates by 66.67%.
In the past 30 days, the loss estimates for Dynavax Technologies’ 2023 and 2024 EPS have improved from 56 cents to 34 cents and 24 cents to 14 cents, respectively. Shares of Dynavax Technologies are up 35.0% in the year-to-date period.
Earnings of Dynavax Technologies beat estimates in two of the last four quarters while missing the mark on other two occasions. On average, the company witnessed an average earnings surprise of 25.78%. In the last reported quarter, Dynavax Technologies’ earnings beat estimates by 133.33%.
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