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Here's Why You Should Consider Buying Jazz Pharmaceuticals' Stock
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Jazz Pharmaceuticals (JAZZ - Free Report) focuses on making drugs for neuroscience and oncology. The company derives most of its revenues from its sleep disorder drugs — Xywav and Xyrem. Xywav is a low-sodium formulation of Jazz’s legacy drug, Xyrem. It also has a rapidly growing oncology portfolio. Jazz’s revenues continue to benefit from strong demand for newer drugs like Xywav, Epidiolex and Rylaze. Jazz has also regularly boosted its commercial portfolio and pipeline through acquisitions.
Jazz boasts a promising pipeline and expects to report data from at least two mid- to late-stage studies by first-half 2025.
Let us discuss all the factors in detail to better understand why Jazz stock can be a good addition to your portfolio despite its recent pipeline setbacks.
JAZZ Boasts a Strong Sleep Disorder Portfolio
Jazz’s sleep disorder portfolio looks strong with the availability of two commercialized drugs — Xyrem and Xywav — and several ongoing and planned development activities in the sleep therapeutic area.
Xywav was approved by the FDA in July 2020 for excessive daytime sleepiness and cataplexy in narcolepsy patients. In August 2021, the drug’s label was expanded to include adults with idiopathic hypersomnia (IH), making it the first and currently the only cure to treat the full condition of IH.
Patients on Xyrem are gradually switching to Xywav, which is hurting Xyrem sales but aiding Xywav’s sales growth. Being a low-sodium formulation, Xywav also does not carry warnings and precautions related to high sodium intake, which currently makes it the only approved oxybate therapy to do so.
JAZZ Oncology Drugs Boost Growth
Apart from a strong sleep disorder portfolio, Jazz also markets four oncology drugs. These products not only bring additional revenues but also diversify Jazz’s marketed portfolio. Oncology drugs generated more than a quarter of the product revenues in the first half of 2024. Sales are being driven by growth across both older drugs (Defitelio and Vyxeos) and newer drugs (Rylaze and Zepzelca), with the latter’s contribution consistently increasing over time. Management expects to generate between $1.10 billion and $1.15 billion in product sales from its oncology franchise in 2024.
The company is also developing some oncology candidates and is focused on expanding the labels of marketed drugs, Zepzelca and Vyxeos. Successful label expansion and new drug development will further boost revenues. Key pipeline candidates include zanidatamab, for which regulatory filings are currently under review in the United States and EU for second-line treatment of biliary tract cancer. A final FDA decision is expected before on Nov. 24.
Sales of JAZZ’s Epilepsy Drug Epidiolex Impressive
The acquisition of GW Pharmaceuticals in 2021 marked Jazz’s entry into cannabidiol drugs with products like Epidiolex and Sativex. The addition of these drugs, especially Epidiolex, has helped the company diversify its neuroscience portfolio. This allowed the company to narrow down its dependence on its oxybate franchise. A growing global prescriber base with multiple launches outside the United States is driving demand for Epidiolex, which is also being studied for new indications and expanded use. We expect the drug to achieve blockbuster status in 2025. Epidiolex and Sativex generated around 25% of product revenues in first-half 2024.
JAZZ Stock Price & Estimate Movement
Jazz’s stock has risen 5.3% in the past three months compared with an increase of 10.3% for the industry.
Image Source: Zacks Investment Research
Earnings estimates for 2024 have risen from $19.36 to $19.53 per share over the past 60 days. For 2025, earnings estimates have risen from $21.70 to $21.88 per share over the same timeframe.
Image Source: Zacks Investment Research
Invest in JAZZ Stock
Jazz has had its share of pipeline setbacks. In June 2024, a mid-stage study evaluating suvecaltamide in adults with essential tremors failed to achieve its primary and key secondary endpoints. In December 2023, a mid-stage study evaluating FAAH inhibitor JPZ150 in adults with post-traumatic stress disorder (PTSD) failed to achieve both its primary and key secondary endpoints. Based on these results, Jazz decided not to pursue additional development of JPZ150 in PTSD.
However, Jazz’s rising estimates, improving earnings performance, increasing contribution from new products, ongoing innovation and diversification, and regular M&A activity are good enough reasons to buy this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Some other top-ranked large drugmakers are Eli Lilly (LLY - Free Report) , Sanofi (SNY - Free Report) and AstraZeneca (AZN - Free Report) . While Lilly sports a Zacks Rank #1, Sanofi and AstraZeneca have a Zacks Rank #2 each.
Estimates for Lilly’s 2024 earnings have risen from $13.79 to $16.49 per share over the past 60 days. For 2025, earnings estimates have risen from $19.44 to $23.99 per share over the same timeframe. Year to date, Lilly’s stock has risen 51.7%.
Lilly beat estimates in each of the last four quarters, delivering a four-quarter average earnings surprise of 69.07%.
The Zacks Consensus Estimate for Sanofi’s earnings has risen from $4.19 to $4.26 per share for 2024 over the past 60 days, while that for 2025 has risen from $4.76 per share to $4.83 per share. Sanofi’s shares have risen 15.2% year to date.
Sanofi beat estimates in two of the last four quarters while missing in one and meeting in one, delivering a four-quarter average earnings surprise of 0.46%.
The Zacks Consensus Estimate for AstraZeneca’s earnings has risen from $4.04 to $4.06 per share for 2024 over the past 60 days, while that for 2025 has declined from $4.71 per share to $4.70 per share. AstraZeneca’s shares have risen 16.8% year to date.
AstraZeneca beat estimates in three of the last four quarters while missing in one, delivering a four-quarter average earnings surprise of 4.74%.
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Here's Why You Should Consider Buying Jazz Pharmaceuticals' Stock
Jazz Pharmaceuticals (JAZZ - Free Report) focuses on making drugs for neuroscience and oncology. The company derives most of its revenues from its sleep disorder drugs — Xywav and Xyrem. Xywav is a low-sodium formulation of Jazz’s legacy drug, Xyrem. It also has a rapidly growing oncology portfolio. Jazz’s revenues continue to benefit from strong demand for newer drugs like Xywav, Epidiolex and Rylaze. Jazz has also regularly boosted its commercial portfolio and pipeline through acquisitions.
Jazz boasts a promising pipeline and expects to report data from at least two mid- to late-stage studies by first-half 2025.
Let us discuss all the factors in detail to better understand why Jazz stock can be a good addition to your portfolio despite its recent pipeline setbacks.
JAZZ Boasts a Strong Sleep Disorder Portfolio
Jazz’s sleep disorder portfolio looks strong with the availability of two commercialized drugs — Xyrem and Xywav — and several ongoing and planned development activities in the sleep therapeutic area.
Xywav was approved by the FDA in July 2020 for excessive daytime sleepiness and cataplexy in narcolepsy patients. In August 2021, the drug’s label was expanded to include adults with idiopathic hypersomnia (IH), making it the first and currently the only cure to treat the full condition of IH.
Patients on Xyrem are gradually switching to Xywav, which is hurting Xyrem sales but aiding Xywav’s sales growth. Being a low-sodium formulation, Xywav also does not carry warnings and precautions related to high sodium intake, which currently makes it the only approved oxybate therapy to do so.
JAZZ Oncology Drugs Boost Growth
Apart from a strong sleep disorder portfolio, Jazz also markets four oncology drugs. These products not only bring additional revenues but also diversify Jazz’s marketed portfolio. Oncology drugs generated more than a quarter of the product revenues in the first half of 2024. Sales are being driven by growth across both older drugs (Defitelio and Vyxeos) and newer drugs (Rylaze and Zepzelca), with the latter’s contribution consistently increasing over time. Management expects to generate between $1.10 billion and $1.15 billion in product sales from its oncology franchise in 2024.
The company is also developing some oncology candidates and is focused on expanding the labels of marketed drugs, Zepzelca and Vyxeos. Successful label expansion and new drug development will further boost revenues. Key pipeline candidates include zanidatamab, for which regulatory filings are currently under review in the United States and EU for second-line treatment of biliary tract cancer. A final FDA decision is expected before on Nov. 24.
Sales of JAZZ’s Epilepsy Drug Epidiolex Impressive
The acquisition of GW Pharmaceuticals in 2021 marked Jazz’s entry into cannabidiol drugs with products like Epidiolex and Sativex. The addition of these drugs, especially Epidiolex, has helped the company diversify its neuroscience portfolio. This allowed the company to narrow down its dependence on its oxybate franchise. A growing global prescriber base with multiple launches outside the United States is driving demand for Epidiolex, which is also being studied for new indications and expanded use. We expect the drug to achieve blockbuster status in 2025. Epidiolex and Sativex generated around 25% of product revenues in first-half 2024.
JAZZ Stock Price & Estimate Movement
Jazz’s stock has risen 5.3% in the past three months compared with an increase of 10.3% for the industry.
Earnings estimates for 2024 have risen from $19.36 to $19.53 per share over the past 60 days. For 2025, earnings estimates have risen from $21.70 to $21.88 per share over the same timeframe.
Invest in JAZZ Stock
Jazz has had its share of pipeline setbacks. In June 2024, a mid-stage study evaluating suvecaltamide in adults with essential tremors failed to achieve its primary and key secondary endpoints. In December 2023, a mid-stage study evaluating FAAH inhibitor JPZ150 in adults with post-traumatic stress disorder (PTSD) failed to achieve both its primary and key secondary endpoints. Based on these results, Jazz decided not to pursue additional development of JPZ150 in PTSD.
However, Jazz’s rising estimates, improving earnings performance, increasing contribution from new products, ongoing innovation and diversification, and regular M&A activity are good enough reasons to buy this Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Some other top-ranked large drugmakers are Eli Lilly (LLY - Free Report) , Sanofi (SNY - Free Report) and AstraZeneca (AZN - Free Report) . While Lilly sports a Zacks Rank #1, Sanofi and AstraZeneca have a Zacks Rank #2 each.
Estimates for Lilly’s 2024 earnings have risen from $13.79 to $16.49 per share over the past 60 days. For 2025, earnings estimates have risen from $19.44 to $23.99 per share over the same timeframe. Year to date, Lilly’s stock has risen 51.7%.
Lilly beat estimates in each of the last four quarters, delivering a four-quarter average earnings surprise of 69.07%.
The Zacks Consensus Estimate for Sanofi’s earnings has risen from $4.19 to $4.26 per share for 2024 over the past 60 days, while that for 2025 has risen from $4.76 per share to $4.83 per share. Sanofi’s shares have risen 15.2% year to date.
Sanofi beat estimates in two of the last four quarters while missing in one and meeting in one, delivering a four-quarter average earnings surprise of 0.46%.
The Zacks Consensus Estimate for AstraZeneca’s earnings has risen from $4.04 to $4.06 per share for 2024 over the past 60 days, while that for 2025 has declined from $4.71 per share to $4.70 per share. AstraZeneca’s shares have risen 16.8% year to date.
AstraZeneca beat estimates in three of the last four quarters while missing in one, delivering a four-quarter average earnings surprise of 4.74%.