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Jazz (JAZZ) Lags on Q1 Earnings & Sales, Reaffirms '23 View
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Jazz Pharmaceuticals (JAZZ - Free Report) reported adjusted earnings of $3.95 per share in first-quarter 2023, missing the Zacks Consensus Estimate and our model estimate of $4.26 and $3.98, respectively. However, earnings rose 6% year over year.
Total revenues in the reported quarter rose 10% year over year to $892.8 million. The upside was driven by sales of new drugs and drugs added from the acquisition of GW Pharmaceuticals. While total revenues missed the Zacks Consensus Estimate of $898.1 million, it did beat our model estimate of $885.8 million.
Net product sales increased 9% from the year-ago quarter’s levels to $884.2 million. During the quarter, Jazz recorded $2.1 million as royalty revenues from high-sodium oxybate authorized generic (AG). Other royalties and contract revenues surged 67% to $6.5 million in the quarter.
In the year so far, Jazz’s shares have declined 14.3% against the industry’s rise of 1.5%.
Image Source: Zacks Investment Research
Neuroscience Products
Sales of Jazz’s neuroscience products increased 7.0% to $651.9 million.
Net product sales for the combined oxybate business (Xyrem + Xywav) increased 5% to $455.9 million in the quarter. During the quarter, average active oxybate patients rose 5% year over year to approximately 17,400.
Sales of the sleep disorder drug Xyrem declined 28% year over year to $178.1 million due to patients switching to Xywav. In January, an authorized generic version of Xyrem was launched and management expects more generic launches later this year.
Xywav, a low-sodium formulation of Xyrem, recorded sales of $277.8 million in the quarter, up 49% 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 largest product by net sales.
Sales of the epilepsy drug Epidiolex/Epidyolex rose 20% to $188.9 million. The drug was added to Jazz’s pipeline with the GW Pharmaceuticals’ acquisition in 2021. It is making significant progress related to the launch of Epidyolex in Europe and other ex-U.S. markets.
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 $7.1 million in the quarter, up 50% year over year.
Oncology Products
Oncology product sales increased 16% to $228.9 million.
New drug Rylaze recorded sales of $85.9 million in the quarter, up 58% 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 ALL drug was filed in Europe in May 2022.
Zepzelca, approved for small cell lung cancer, recorded sales worth $67.2 million in the quarter, up 13% 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 $36.7 million, up 9% from the year-ago period’s levels.
Defitelio sales were down 21% year over year at $39.1 million in the quarter.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses were flat year-over-year at $260.5 million.
Adjusted research and development (R&D) expenses rose 49% to $173.9 million, mainly due to the support for the increased costs for developing pipeline candidates.
2023 Guidance
Jazz reiterated its financial guidance for full year 2023.
Management expects 2023 adjusted earnings in the range of $16.90 - $17.85 per share.
Total revenues are expected to be in the range of $3.68-$3.88 billion, suggesting 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 expected in the range of $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, indicating growth of 14.4% at the midpoint compared to 2022.
While adjusted SG&A expenses are anticipated between $1.05 billion and $1.11 billion, adjusted R&D expenses are expected to be in the band of $675 million to $725 million.
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 currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the overall healthcare sector are Allogene Therapeutics (ALLO - Free Report) , Athira Pharma (ATHA - Free Report) and Ligand Pharmaceuticals . While Ligand sports a Zacks Rank #1 (Strong Buy) at present, Allogene and Athira Pharma carry a Zacks Ranks #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the estimate for Ligand’s 2023 earnings per share has increased from $4.15 to $4.16. During the same period, the earnings estimate per share for 2024 has increased from $4.28 to $4.58. In the year so far, the shares of Ligand have risen 16.2%.
Ligand Pharmaceuticals beat earnings estimates in two of the last four quarters, while missing the mark on the other two occasions. On average, the company’s earnings witnessed an earnings surprise of 21.50%. In the last reported quarter, LGND delivered an earnings surprise of 121.36%.
In the past 60 days, the estimate for Allogene’s 2023 loss per share has improved from $2.56 to $2.31. During the same period, the loss estimate per share for 2024 has narrowed from $2.53 to $2.20. In the year so far, the shares of Allogene have risen 1.1%.
Allogene Therapeutics beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. On average, the company’s earnings witnessed an earnings surprise of 5.08%. In the last reported quarter, Allogene delivered a negative earnings surprise of 7.94%.
In the past 60 days, the estimate for Athira’s 2023 loss per share has improved from $2.88 to $2.64. During the same period, the loss estimate per share for 2024 has narrowed from $5.22 to $4.76. In the year so far, the shares of Athira have lost 4.1%.
Athira Pharma beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. On average, the company’s earnings witnessed an earnings surprise of 5.17%. In the last reported quarter, Athira delivered a negative earnings surprise of 12.86%.
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Jazz (JAZZ) Lags on Q1 Earnings & Sales, Reaffirms '23 View
Jazz Pharmaceuticals (JAZZ - Free Report) reported adjusted earnings of $3.95 per share in first-quarter 2023, missing the Zacks Consensus Estimate and our model estimate of $4.26 and $3.98, respectively. However, earnings rose 6% year over year.
Total revenues in the reported quarter rose 10% year over year to $892.8 million. The upside was driven by sales of new drugs and drugs added from the acquisition of GW Pharmaceuticals. While total revenues missed the Zacks Consensus Estimate of $898.1 million, it did beat our model estimate of $885.8 million.
Net product sales increased 9% from the year-ago quarter’s levels to $884.2 million. During the quarter, Jazz recorded $2.1 million as royalty revenues from high-sodium oxybate authorized generic (AG). Other royalties and contract revenues surged 67% to $6.5 million in the quarter.
In the year so far, Jazz’s shares have declined 14.3% against the industry’s rise of 1.5%.
Image Source: Zacks Investment Research
Neuroscience Products
Sales of Jazz’s neuroscience products increased 7.0% to $651.9 million.
Net product sales for the combined oxybate business (Xyrem + Xywav) increased 5% to $455.9 million in the quarter. During the quarter, average active oxybate patients rose 5% year over year to approximately 17,400.
Sales of the sleep disorder drug Xyrem declined 28% year over year to $178.1 million due to patients switching to Xywav. In January, an authorized generic version of Xyrem was launched and management expects more generic launches later this year.
Xywav, a low-sodium formulation of Xyrem, recorded sales of $277.8 million in the quarter, up 49% 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 largest product by net sales.
Sales of the epilepsy drug Epidiolex/Epidyolex rose 20% to $188.9 million. The drug was added to Jazz’s pipeline with the GW Pharmaceuticals’ acquisition in 2021. It is making significant progress related to the launch of Epidyolex in Europe and other ex-U.S. markets.
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 $7.1 million in the quarter, up 50% year over year.
Oncology Products
Oncology product sales increased 16% to $228.9 million.
New drug Rylaze recorded sales of $85.9 million in the quarter, up 58% 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 ALL drug was filed in Europe in May 2022.
Zepzelca, approved for small cell lung cancer, recorded sales worth $67.2 million in the quarter, up 13% 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 $36.7 million, up 9% from the year-ago period’s levels.
Defitelio sales were down 21% year over year at $39.1 million in the quarter.
Cost Discussion
Adjusted selling, general and administrative (SG&A) expenses were flat year-over-year at $260.5 million.
Adjusted research and development (R&D) expenses rose 49% to $173.9 million, mainly due to the support for the increased costs for developing pipeline candidates.
2023 Guidance
Jazz reiterated its financial guidance for full year 2023.
Management expects 2023 adjusted earnings in the range of $16.90 - $17.85 per share.
Total revenues are expected to be in the range of $3.68-$3.88 billion, suggesting 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 expected in the range of $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, indicating growth of 14.4% at the midpoint compared to 2022.
While adjusted SG&A expenses are anticipated between $1.05 billion and $1.11 billion, adjusted R&D expenses are expected to be in the band of $675 million to $725 million.
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 #3 (Hold). Some better-ranked stocks in the overall healthcare sector are Allogene Therapeutics (ALLO - Free Report) , Athira Pharma (ATHA - Free Report) and Ligand Pharmaceuticals . While Ligand sports a Zacks Rank #1 (Strong Buy) at present, Allogene and Athira Pharma carry a Zacks Ranks #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the estimate for Ligand’s 2023 earnings per share has increased from $4.15 to $4.16. During the same period, the earnings estimate per share for 2024 has increased from $4.28 to $4.58. In the year so far, the shares of Ligand have risen 16.2%.
Ligand Pharmaceuticals beat earnings estimates in two of the last four quarters, while missing the mark on the other two occasions. On average, the company’s earnings witnessed an earnings surprise of 21.50%. In the last reported quarter, LGND delivered an earnings surprise of 121.36%.
In the past 60 days, the estimate for Allogene’s 2023 loss per share has improved from $2.56 to $2.31. During the same period, the loss estimate per share for 2024 has narrowed from $2.53 to $2.20. In the year so far, the shares of Allogene have risen 1.1%.
Allogene Therapeutics beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. On average, the company’s earnings witnessed an earnings surprise of 5.08%. In the last reported quarter, Allogene delivered a negative earnings surprise of 7.94%.
In the past 60 days, the estimate for Athira’s 2023 loss per share has improved from $2.88 to $2.64. During the same period, the loss estimate per share for 2024 has narrowed from $5.22 to $4.76. In the year so far, the shares of Athira have lost 4.1%.
Athira Pharma beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. On average, the company’s earnings witnessed an earnings surprise of 5.17%. In the last reported quarter, Athira delivered a negative earnings surprise of 12.86%.