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Jazz (JAZZ) Increases Share Buyback Authorization by $400M

In an effort to add shareholder value, Jazz Pharmaceuticals plc JAZZ announced that its board of directors has approved a $400 million increase in the company's share repurchase program.

Under this authorization, the company will make share buybacks from time to time in the open market at prevailing market prices through private transactions, self-tender offers or structured repurchase transactions. The program has no expiration date.

Earlier, Jazz’s board members had authorized $620 million under the company's share repurchase endeavor, of which shares worth $194 million were bought back through Sep 30, 2018. Ever since, the company repurchased the remaining shares.

As of Sep 30, 2018, Jazz’s cash, cash equivalents and investments were $1.1 billion and the outstanding principal balance of long-term debt totaled $1.8 billion.

Shares of Jazz have gained 3.7% so far this year versus the industry’s decline of 11.4%.


Jazz’s key sleep disorder drug Xyrem has immense commercial potential considering that it is the only FDA approved product for both cataplexy and excessive daytime sleepiness (EDS). Xyrem witnessed lower-than-expected growth in 2017. However, volume trends improved in 2018 supported by the company’s disease awareness education efforts, which further led to an increased diagnosis rate of new narcolepsy patients. Management seems confident of generating volume growth in the near future.

The company is also striving to expand Xyrem’s label. In October 2018, the FDA granted an approval to Xyrem’s supplemental new drug application (sNDA) for including the pediatric patients with cataplexy or EDS. Moreover, settlement of all patent litigation related to generic version remains an overhang. There is no generic competition expected until 2022 as of now.

Zacks Rank & Stocks to Consider

Jazz currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the same sector are BioSpecifics Technologies Corp. BSTC, Hikma Pharmaceuticals Plc HKMPF and Melinta Therapeutics, Inc. MLNT. While BioSpecifics and Hikma sport a Zacks Rank #1 (Strong Buy), Melinta carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BioSpecifics’ earnings estimates have been revised 9.6% upward for 2018 and 16.8% for 2019 over the past 60 days. The stock has surged 41.7% year to date.

Hikma’s earnings estimates have been raised 22.1% for 2018 and 17.6% for 2019 over the past 60 days. The stock has soared 59% year to date.

Melinta’ loss per share estimates has been narrowed 7.3% for 2018 and 19.7% for 2019 in the last 60 days.

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Jazz Pharmaceuticals PLC (JAZZ) : Free Stock Analysis Report
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