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Jazz Pharmaceuticals, Inc. Announces First Quarter 2008 Financial Results

- LUVOX(R) CR Approved and Launched

- Screening Closed in First Phase III Fibromyalgia Clinical Trial

PALO ALTO, Calif., May 13 /PRNewswire-FirstCall/ -- Jazz Pharmaceuticals, Inc. (Nasdaq: JAZZ) today announced financial results for the quarter ended March 31, 2008.

Total revenues for the quarter ended March 31, 2008 were $14.6 million, compared to $14.1 million for the quarter ended March 31, 2007. XYREM(R) (sodium oxybate oral solution) net sales for the first quarter of 2008 increased 32 percent to $11.3 million, compared with $8.6 million for the first quarter of 2007.

Once-Daily LUVOX CR(R) (fluvoxamine maleate) Extended-Release Capsules was approved by the U.S. Food and Drug Administration (FDA) on February 28, 2008 for the treatment of both obsessive compulsive disorder (OCD) and social anxiety disorder (SAD), and the product was shipped to wholesalers late in the first quarter.

"The launch of LUVOX CR in the U.S. is progressing very well," said Robert Myers, President of Jazz Pharmaceuticals. "Our commercial team is focused on introducing this important new treatment option to physicians for their patients with OCD and SAD."

"We are off to a great start in 2008, with significant product development achievements in addition to our commercial success," said Samuel Saks, M.D., Chief Executive Officer. "We recently completed screening of subjects in the first of our Phase III pivotal studies of JZP-6 for the treatment of fibromyalgia syndrome, a key milestone in this program. We look forward to obtaining results from this Phase III trial in the fourth quarter of 2008."

Research and development expenses for the first quarter of 2008 were $21.2 million, compared to $14.9 million for first quarter of 2007. The increase primarily reflects higher expenses associated with later stage development programs, particularly JZP-6.

Selling, general and administrative expenses for first quarter of 2008 were $32.8 million, compared to $14.3 million for the first quarter of 2007. The increase was primarily due to spending in preparation for the launch of LUVOX CR, increased headcount and higher expenses to support the larger sales force.

Net loss for the first quarter of 2008 was $46.7 million, compared to a $19.6 million net loss for the first quarter of 2007.

Jazz Pharmaceuticals' unrestricted cash and marketable securities balance as of March 31, 2008 was $105.2 million. During the quarter ended March 31, 2008, net cash used in operating activities was $38.2 million.

Recent Highlights

-- In late March 2008, approximately $3.0 million of LUVOX CR commercial

product was shipped to wholesalers. As is common for new

pharmaceutical product launches, no LUVOX CR net sales revenue was

recognized in the first quarter of 2008.

-- In mid-April 2008, Jazz Pharmaceuticals' sales team of approximately

200 field-based professionals began communicating with psychiatrists

and select primary care physicians about the unique attributes of

LUVOX CR for OCD and SAD patients. Sales professionals are providing

samples of LUVOX CR in 100 mg and 150 mg doses. Jazz Pharmaceuticals

is also supporting non-branded disease awareness campaigns to

highlight the importance of correctly diagnosing and treating OCD and


-- Approval and launch of LUVOX CR triggered a total of $41.0 million in

milestone payments to Solvay Pharmaceuticals, $10.0 million of which

was paid in March 2008.

-- On April 25, 2008, screening of subjects was closed in the first of

Jazz Pharmaceuticals' two Phase III clinical trials of JZP-6 (sodium

oxybate) in fibromyalgia. The enrollment goal of 525 subjects has

been achieved in the first trial, and enrollment is expected to be

completed in the next several weeks. Top-line results for the first

trial are expected in the fourth quarter of 2008. Enrollment is

progressing in the second Phase III clinical trial of JZP-6 at

clinical sites in the U.S. and Europe.

-- On March 18, 2008, Jazz Pharmaceuticals announced the expansion of its

senior term debt under an agreement with an affiliate of Lehman

Brothers and certain other lenders. The transaction closed with

$40 million of gross proceeds, expanding the senior debt outstanding

from $80 million to $120 million. Jazz Pharmaceuticals has an option

under the agreement, through January 31, 2009, to borrow an additional

$30 million if sales of the company's products reach certain levels by

the end of 2008.

-- On May 8, 2008, Jazz Pharmaceuticals announced it had entered into a

Committed Equity Financing Facility (CEFF) with Kingsbridge Capital

Limited, a private investment group, in which Kingsbridge committed to

provide up to $75 million of capital through the purchase of

newly-issued shares of Jazz Pharmaceuticals' common stock. Under the

terms of the three-year agreement, Jazz Pharmaceuticals will determine

the exact timing and amount of any CEFF financings, subject to certain

conditions. The arrangement allows Jazz Pharmaceuticals to raise

capital, at its discretion, to support the company's commercial,

research and development and general corporate activities.

Jazz Pharmaceuticals will host an investor conference call and live audio webcast to discuss its financial results and provide a business update on its commercial and development activities on May 13, 2008 commencing at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time. The live webcast may be accessed on Jazz Pharmaceuticals' website at Please connect to the website prior to the start of the conference call to ensure adequate time for any software downloads that may be necessary. An archived version of the webcast will be available through May 27, 2008. Investors may participate in the conference call by dialing 800-901-5259 in the U.S., or 617-786-4514 outside the U.S., and entering passcode 91585353. A replay of this call will be available until May 27, 2008 by phone at 888-286-8010 (U.S.), or 617-801-6888 (international), using the passcode 89402608.

About Jazz Pharmaceuticals, Inc.

Jazz Pharmaceuticals is a specialty pharmaceutical company focused on identifying, developing and commercializing innovative products to meet unmet medical needs in neurology and psychiatry. For further information see

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements, including, but not limited to, statements related to the commercial launch of LUVOX CR, the continued development of Jazz Pharmaceuticals' product candidates and the timing of clinical study results. These forward-looking statements are based on the company's current expectations and inherently involve significant risks and uncertainties. Jazz Pharmaceuticals' actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the launch of LUVOX CR; risks related to the development of Jazz Pharmaceuticals' product candidates, including the risk that study or clinical trial results may require Jazz Pharmaceuticals to discontinue the development of one or more product candidates; risks related to the uncertain and time-consuming regulatory approval process; and risks relating to the need for additional funds. These and other risk factors are discussed under "Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2007 filed by Jazz Pharmaceuticals with the Securities and Exchange Commission on March 31, 2008. Jazz Pharmaceuticals undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.



(In thousands, except per share amounts)


Three Months Ended March 31,

2008 2007


Product sales, net $13,984 $11,625

Royalties, net 365 211

Contract revenues 285 2,252

Total revenues 14,634 14,088

Operating expenses:

Cost of product sales (excluding

amortization of acquired developed

technology) 2,298 2,003

Research and development 21,243 14,867

Selling, general and administrative 32,780 14,339

Amortization of intangible assets 2,121 2,362

Total operating expenses 58,442 33,571

Loss from operations (43,808) (19,483)

Interest income 897 1,091

Interest expense (3,787) (3,268)

Other expense (12) (3,069)

Gain on sale of product rights - 5,145

Net loss $(46,710) $(19,584)

Net loss per share, basic and

diluted $(1.97) $(851.48)

Weighted-average common shares used

in computing net loss per share, basic

and diluted 23,743 23



(In thousands)


Three Months Ended March 31,

2008 2007

Xyrem $11,341 $8,624

Antizol 2,643 2,636

Cystadane - 365

Total $13,984 $11,625



(In thousands)


March 31, December 31,

2008 2007


Current assets:

Cash and cash equivalents $100,771 $102,945

Restricted cash 1,998 1,939

Marketable securities 4,410 -

Accounts receivable, net 5,310 5,389

Inventories 2,200 2,213

Prepaid expenses 3,210 3,224

Other current assets 1,346 381

Total current assets 119,245 116,091

Property and equipment, net 3,875 3,941

Intangible assets, net 74,919 36,040

Goodwill 38,213 38,213

Long-term restricted cash and

investments - 12,000

Other long-term assets 2,766 1,269

Total assets $239,018 $207,554


Current liabilities:

Line of credit $3,180 $3,459

Accounts payable 8,915 2,856

Accrued liabilities 30,133 29,047

Purchased product rights liability 31,000 -

Deferred revenue 1,494 1,494

Total current liabilities 74,722 36,856

Non-current portion of deferred revenue 12,183 12,468

Liability under government settlement 13,063 14,881

Senior secured notes 113,367 75,116

Common stock subject to repurchase 13,241 13,241

Stockholders' equity 12,442 54,992

Total liabilities and stockholders'

equity $239,018 $207,554

SOURCE Jazz Pharmaceuticals, Inc.
Copyright©2008 PR Newswire.
All rights reserved

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