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Jazz Pharma (JAZZ) Q2 Earnings & Revenues Miss, View Intact


Jazz Pharmaceuticals Public Limited Company JAZZ reported second-quarter 2017 earnings of $1.72 per share, which missed the Zacks Consensus Estimate of $1.85.

Adjusted earnings of $2.12 per share – including stock based compensation expenses – decreased 6.2% from the year-ago figure.

Jazz’s shares have decreased more than 5% in after-hours trading. However, the company’s shares have significantly outperformed the industry so far this year, having surged 31.5%. While the industry has registered an increase of 0.2%.

Total revenue in the reported quarter rose 3% year over year to $394.4 million owing to higher sales of the company’s marketed drug, Xyrem. However, the top line fell short of the Zacks Consensus Estimate of $410 million.

Quarter in Detail

Net product sales in the second quarter increased 3% from the year-ago quarter to $389.7 million.

In the reported quarter, Xyrem (sodium oxybate) sales rose 6% to $298 million. The company reported 2% bottle volume growth of Xyrem in the quarter.

Erwinaze/Erwinase generated revenues worth $49 million, almost in line with the year-ago figure. Sales in the quarter were affected by raw material supply issues, leading to fluctuations in inventory levels and temporary disruptions in the company’s ability to cater to certain markets, including the U.S. The company expects these supply interruptions to continue through the rest of 2017.

Prialt revenues came in at $5.7 million, down 29.6% from the year-ago period, primarily due to inventory restocking in the first quarter of 2017, following a temporary supply disruption. Other product sales decreased 5.6% to $6.7 million.

Defitelio sales declined 9% year over year to $30.2 million in the second quarter. This decrease in sales can be attributed to some initial inventory stocking at the distributor following Defitelio’s launch in April, last year. Also, unfavorable foreign exchange rates impacted the sales in the reported quarter. Moreover, sales of the drug also declined 15.9% sequentially.

Adjusted selling, general and administrative (SG&A) expenses (excluding stock-based compensation expenses) during the quarter rallied 12.1% to $111.5 million, primarily due to higher headcount and an increase in other expenses related to business expansion.

Adjusted research and development (R&D) expenses decreased 2.8% to $35 million, mainly owing to completion of the phase III studies for the company’s lead pipeline candidate, JZP-110.

Pipeline Update

Earlier this month, the company announced that the FDA has granted an approval to Vyxeos for treatment of adults with acute myeloid leukemia (AML) or AML with myelodysplasia-related changes. This approval was followed by a rolling NDA submitted by Jazz in March.

The company is enrolling patients 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.

Additionally, the company is working on a study protocol for another phase II proof-of-concept trial on Defitelio for prevention of acute graft versus host disease. Jazz expects to initiate this study later this year.

In June, the company presented positive top-line efficacy results from phase II/III study, evaluating Xyrem for treatment of cataplexy in pediatric patients with narcolepsy.

2017 Guidance Intact

The company continues to expect earnings in the range of $10.70–$11.30 per share (excluding stock based compensation expenses) in 2017. Jazz also maintained its revenue guidance in the band of $1.63–$1.70 billion during the same period. Total product sales are still projected in the range of $1.62–$1.69 billion.

Xyrem sales are estimated in the range of $1.20–$1.23 billion, while Erwinaze/Erwinase sales are anticipated in the range of $205–$225 million. Plus, Defitelio revenues are 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 #2 (Buy). Some other top-ranked stocks in the pharma sector include Summit Therapeutics PLC SMMT, Aduro Biotech, Inc. ADRO and Enzo Biochem, Inc. ENZ. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Summit’s loss estimates narrowed from $2.59 to 32 cents for 2017 over the last 60 days. The company delivered positive earnings surprise in each of the four trailing quarters with an average beat of 25.55%. Its share price is up 66.6% so far this year.

Enzo Biochem’s loss estimates narrowed from 12 cents to 7 cents for 2017 over the last 60 days. The company came up with a positive earnings surprise in all the four trailing quarters with an average beat of 55.83%. The stock is up 62.7% so far this year.

Aduro Biotech’s loss per share estimates narrowed from $1.46 to $1.36 for 2017 over the last 30 days. The company delivered a positive surprise in two of the four trailing quarters with an average beat of 2.53%. The stock is up 7.9% so far this year.

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