Jazz Pharma (JAZZ) Q4 Earnings Beat, Sales Miss Estimates
Jazz Pharmaceuticals Public Limited Company JAZZ reported fourth-quarter 2016 earnings of $1.91 per share which beat the Zacks Consensus Estimate of $1.65.
However, adjused earnings of $2.31 per share (including stock based compensation expense), declined 4.5% from the year-ago figure.
Jazz’s shares outperformed Zacks classified Medical-Drugs industry so far this year. The company’s shares gained 21.6%, while the industry registered an increase of 7.9%.
Total revenue in the reported quarter climbed 16.3% year over year to $396.6 million, mainly due to higher sales of Xyrem and Defitelio. Reported revenues, however, fell short of the Zacks Consensus Estimate of $401 million.
Quarter in Detail
Net product sales in fourth-quarter 2016 increased 15.9% from the year-ago quarter to 392.6 million.
In the reported quarter, Xyrem sales rose 15.6% to $291.2 million. The company reported 6% bottle volume growth of Xyrem in the quarter.
Xyrem is currently facing patent challenges from several companies. A decision on the Roxane Laboratories case will be announced in the second quarter of 2017, while the trial dates for other patent challenges are yet to be set.
Erwinaze/Erwinase generated revenues of $56.7 million, up 12.7% year over year. However, the performance was negatively impacted in 2016 by raw material supply challenges. This led to fluctuations in inventory levels and temporary disruptions in the company's ability to supply certain markets, including the U.S. The company expects these temporary supply interruptions to continue in 2017.
Prialt revenues came in at $6.1 million, down 6.2% from the year-ago period. Psychiatry product sales plunged 67% to $2.9 million.
The company recorded Defitelio sales of $29.7 million in the fourth quarter, up 60.5% year over year. Sales benefited from the Apr 2016 launch of the drug in the U.S., where the drug garnered sales of $9.7 million in the fourth quarter.
Adjusted selling, general and administrative (SG&A) expenses (excluding stock-based compensation expenses) during the quarter rose 23.8% to $108.2 million, primarily due to a higher headcount and an increase in other expenses related to business expansion.
Adjusted research and development (R&D) expenses increased 52.3% to $39.6 million due to costs related to the development of its pipeline candidate JZP-110, including accelerated enrollment in the narcolepsy studies, oxybate-related R&D programs, study for Defitelio, the Xyrem phase III pediatric study activities and costs related to Vyxeos rolling NDA submission.
Pipeline Update
Notably, JZP-110 is in phase III safety and efficacy studies for the treatment of excessive daytime sleepiness in patients suffering from narcolepsy or obstructive sleep apnea (OSA). In Sep 2016, the company completed enrollment in two phase III studies and expects preliminary data from these studies in the first quarter of 2017.
In the same month, the company initiated the rolling NDA submission to the FDA for Vyxeos for the treatment of acute myeloid leukemia (AML). The company expects to complete the submission in the first quarter of 2017. Vyxeos has Fast Track designation in the U.S. and plans to request for priority review as well.
Moreover, the company has activated clinical sites for a phase III study on Defitelio for the prevention of veno-occlusive disease (VOD) in high-risk patients following hematopoietic stem cell transplantation. The study is expected to enroll 400 patients from 100 sites globally. In Jan 2017, the company enrolled the first patient in the phase III study.
In Nov 2016, enrollment in a phase III study on Xyrem in pediatric narcolepsy patients with cataplexy was completed.
2016 Results
Full-year sales increased 12.9% year over year to $1.49 billion. Sales were in line with the Zacks Consensus Estimate.
The full-year earnings of $8.54 per share surpassed Zacks Consensus Estimate of $6.12. The company posted earnings of $8.00 per share a year ago.
2017 Guidance
The company estimates earnings in the range of $10.70–$11.30 per share (excluding stock based compensation expenses) in 2017. Jazz expects revenues in the band of $1.62–$1.70 billion during the same period. Total product sales are still expected in the range of $1.62–$1.69 billion.
Xyrem sales are expected in the range of $1.22–$1.25 billion. Erwinaze/Erwinase sales are anticipated in the range of $205–$225 million. Defitelio revenues are now projected in the range of $130–$150 million.
The company projects adjusted SG&A expenses in the range of $440–$460 million, while R&D costs are expected in the range of $165–$180 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 currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Cellectis S.A. CLLS, Celgene Corp. CELG and Sunesis Pharmaceuticals, Inc. SNSS. Each of these stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cellectis’ loss per share estimates narrowed from $2.33 to $1.80 for 2016 and from $2.94 to $1.69 for 2017 over the last 30 days. The company posted positive surprises in three of the four trailing quarters with an average beat of 111.20%.
Celgene’s earnings per share estimates increased from $6.52 to $6.60 for 2017 and from $8.15 to $8.16 for 2018 over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters with an average beat of 5.08%.
Sunesis’ loss per share estimates narrowed from $2.57 to $2.44 for 2016 and from $2.16 to $1.97 for 2017 over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters with an average beat of 0.54%.
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