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Jazz Pharmaceuticals Announces First Quarter 2011 Financial Results

PALO ALTO, Calif., May 3, 2011 /PRNewswire/ --Jazz Pharmaceuticals, Inc. (Nasdaq: JAZZ) today announced financial results for the first quarter of 2011.

Total revenues for the quarter ended March 31, 2011 were $50.9 million, compared to $35.2 million for the first quarter of 2010.  Total revenues included net product sales, royalties and contract revenues.

GAAP net income for the first quarter of 2011 was $21.8 million, or $0.48 per diluted share, compared to $1.5 million, or $0.04 per diluted share, for the first quarter of 2010.  Adjusted net income for the first quarter of 2011 was $26.8 million, or $0.59 per diluted share, compared to $6.1 million, or $0.18 per diluted share, for the first quarter of 2010.  A reconciliation of GAAP net income to adjusted net income and the related per diluted share amounts is included with this press release.

Net sales of Xyrem® (sodium oxybate) oral solution increased 49 percent to $42.8 million for the first quarter of 2011, compared to net sales of $28.7 million for the first quarter of 2010.  Net sales of once-daily Luvox CR® (fluvoxamine maleate) were $7.1 million for the first quarter of 2011, compared to $5.5 million for the prior year period, an increase of 29 percent.

"Our first quarter results reflect strong sales momentum for Xyrem," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals.  "We are committed to helping patients suffering from narcolepsy."

Selling, general and administrative expenses for the first quarter of 2011 were $19.9 million, compared to $16.8 million for the first quarter of 2010, primarily due to higher headcount related expenses, including stock based compensation, and legal and information technology expenses.  Research and development expenses for the first quarter of 2011 were $3.7 million, compared to $6.2 million for the first quarter of 2010, reflecting lower product development spending.Interest expense for the first quarter of 2011 was $0.8 million, compared to $5.8 million for the prior year period.  As of March 31, 2011, cash and cash equivalents were $65.1 million, an increase of 45 percent from $44.8 million at December 31, 2010.

Pipeline DevelopmentsJazz Pharmaceuticals is also providing an update on its JZP-6 and JZP-8 development programs:

  • The company has decided that it will not proceed with the additional clinical studies to support the development of JZP-6 (sodium oxybate) in fibromyalgia requested by the Food and Drug Administration (FDA) in its October 2010 complete response letter.  This decision follows an internal analysis of the cost, development time and likelihood of regulatory success associated with further clinical development.
  • Given the estimated costs, development timeline and competitive environment for JZP-8 (intranasal clonazepam), the company is reevaluating whether or how to proceed with additional development.  

  • 2011 Financial Guidance Jazz Pharmaceuticals is providing updated full year 2011 financial guidance as follows:- Total product sales

    $ 237 - 250 million - Xyrem

    $ 205 – 215 million- Luvox CR

    $ 32 – 35 million- Gross margin

    greater than 90%- R&D and SG&A combined expenses

    $ 105 – 110 million- GAAP net income per diluted share

    $ 2.50 – 2.66- Adjusted net income per diluted share*

    $ 2.95 – 3.10 *  A reconciliation of GAAP net income to adjusted net income and the related per diluted share amounts is included with this press release.Conference Call DetailsJazz Pharmaceuticals will host an investor conference call and live audio webcast today at 1:30 p.m. PT/4:30 p.m. ET to provide a business update and discuss 2011 first quarter results and updated 2011 financial guidance.  The live webcast may be accessed from the Investors section of the company’s 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.  Investors may participate in the conference call by dialing 866-510-0712 in the U.S., or 617-597-5380 outside the U.S., and entering passcode 13279408.

    An archived version of the webcast will be available for at least one week on the investors section of the Jazz Pharmaceuticals' website at

    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

    Non-GAAP Financial Measures To supplement our financial results and financial guidance presented on a GAAP basis, we use the non-GAAP measures adjusted net income and adjusted net income per diluted share.  We believe these non-GAAP financial measures are helpful in understanding our past financial performance and our potential future results.  They are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.  Our management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions.  Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures.  In addition, we believe that the use of these non-GAAP measures enhances the ability of investors to compare our results from period to period.  Investors should note that adjusted net income and adjusted net income per diluted share, as used by Jazz Pharmaceuticals, may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by our competitors and other companies.  Adjusted net income and adjusted net income per diluted share exclude from the comparable GAAP measures:  revenue related to upfront and milestone payments, amortization of intangible assets, stock-based compensation, and non-cash interest expense associated with a debt discount and debt issuance costs.

    "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995This press release contains forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals’ commercial success, financial performance, growth potential and future financial performance, including 2011 financial guidance, and statements related to future product development.  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: Jazz Pharmaceuticals’ dependence on sales of Xyrem and its ability to increase sales of its Xyrem and Luvox CR products; competition, including potential generic competition; Jazz Pharmaceuticals’ dependence on single source suppliers and manufacturers; the ability of Jazz Pharmaceuticals to protect its intellectual property and defend its patents; regulatory risks; Jazz Pharmaceuticals’ cash flow and the sufficiency of its cash resources; and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in Jazz Pharmaceuticals' Securities and Exchange Commission filings and reports, including in its annual report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission on March 8, 2011.  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.

    JAZZ PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended March 31,20112010 Revenues: Product sales, net

    $   49,903$
    34,283 Royalties, net

    693605 Contract revenues

    285285 Total revenues

    50,88135,173 Operating expenses: Cost of product sales

    2,8092,882 Selling, general and administrative

    19,91116,790 Research and development

    3,6956,215 Intangible asset amortization

    1,8622,057 Total operating expenses

    28,27727,944 Income from operations

    22,6047,229 Interest income

    12 Interest expense

    (777)(5,767) Other expense

    (1)- Net income  

    $   21,827$
    ,464 Net income per share: Basic

    .05 Diluted

    .04 Weighted-average common shares used in computing   net income per share: Basic

    40,36231,412 Diluted

    45,69734,926 JAZZ PHARMACEUTICALS, INC. SUMMARY OF PRODUCT SALES, NET (In thousands) (Unaudited) Three Months Ended March 31,20112010Xyrem

    $   42,778$
    28,745Luvox CR


    $   49,903$
    34,283JAZZ PHARMACEUTICALS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) (Unaudited) March 31,December 31,20112010ASSETSCurrent assets:Cash and cash equivalents

    $   65,061$
    44,794Restricted cash

    400400Accounts receivable, net of allowances


    5,0175,046Prepaid expenses

    2,5771,858Other current assets

    402279Total current assets

    94,84074,458Property and equipment, net

    652690Intangible assets, net


    38,21338,213Other long-term assets

    302335Total assets

    $ 154,178$
    35,729LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:Revolving credit facility

    7,350Accounts payable

    3,6483,049Accrued liabilities

    23,27423,572Current portion of long-term debt

    16,13116,064Purchased product rights liability

    4,6254,500Liability under government settlement

    8,2024,128Deferred revenue

    1,5611,273Total current liabilities

    61,44159,936Deferred rent

    7782Deferred revenue, non-current

    8,7689,053Purchased product rights liability, non-current

    3,2504,500Liability under government settlement, non-current

    -6,978Long-term debt, less current portion

    20,56924,629Total stockholders' equity

    60,07330,551Total liabilities and stockholders' equity

    $ 154,178$
    35,729JAZZ PHARMACEUTICALS, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share amounts) (Unaudited) Three Months Ended March 31,20112010 GAAP net income  

    $   21,827$
    ,464 Add: Intangible asset amortization

    1,8622,057 Stock-based compensation expense

    3,1481,832 Non-cash interest expense

    2061,050 Deduct: Contract revenues

    (285)(285) Adjusted net income  

    $   26,758$
    ,118 GAAP net income per diluted share

    .04 Adjusted net income per diluted share

    .18 Shares used in computing GAAP and adjusted net income per diluted share amounts

    45,69734,926 JAZZ PHARMACEUTICALS, INC. RECONCILIATION OF GAAP TO NON-GAAP 2011 FINANCIAL GUIDANCE (In millions, except per share amounts) GAAP net income

    $115-125 Add: Intangible asset amortization

    7 Stock-based compensation expense

    14 Non-cash interest expense

    1 Deduct: Contract revenues

    (1) Adjusted net income

    $136-146 GAAP net income per diluted share

    $2.50-2.66 Adjusted net income per diluted share

    $2.95-3.10 Shares used in computing GAAP and adjusted net income per diluted share amounts


    SOURCE Jazz Pharmaceuticals, Inc.
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