Jazz announced its first-quarter results after the market closed on Tuesday. Did investors receive good news or bad news this time around? Here are the highlights from the company's Q1 update.
By the numbers
Jazz announced Q1 revenue of $508.2 million, a 14% increase from the $444.6 million reported in the same quarter of the previous year. The company's reported revenue was well above the average analysts' revenue estimate of $465.9 million.
The company's GAAP net income in the first quarter was $85.2 million, or $1.47 per share. This was a huge jump over Jazz's result in the prior-year period, when it announced net income of $46 million, or $0.75 per share.
On a non-GAAP adjusted basis, Jazz's net income in the first quarter was $213.2 million, or $3.67 per share. This reflected a 17% increase from the prior-year period adjusted net income of $182.4 million, or $2.98 per share. Wall Street analysts estimated that Jazz would post earnings of $3.16 per share in the quarter.
Behind the numbers
Solid growth in revenue for Jazz's Q1 was primarily due to Xyrem. Sales for the narcolepsy drug increased by 16% to $368.3 million. The company's other top-branded drugs also had growth this quarter. Sales for cancer drug Erwinaze rose 20% to $60.9 million in Q1. Sales for liver disease drug Defitelio increased 18% to $41.5 this period. And leukemia drug Vyxeos' sales grew 10% year over year to $28.9 million.
Why didn't Jazz Pharmaceuticals' adjusted earnings growth look as great as its revenue growth? Selling, general, and administrative (SG&A) expenses rose on a non-GAAP basis because of higher expenses with the launch of the new narcolepsy drug Sunosi in the U.S. and other compensation-related expenses that helped support expansion of the business.
Research and development expenses also increased for Jazz on a non-GAAP basis due to higher expenses with pre-clinical and clinical development programs. The expense increase also included partner programs, regulatory activities, and related headcount increases, which helped support the development programs.
Jazz Pharmaceuticals projects sales to be between $2.05 billion and $2.13 billion for full-year 2019. The company anticipates GAAP earnings per share (EPS) to come in between $6.80 and $8.50, with adjusted non-GAAP EPS between $14.30 and $15.
CEO Bruce Cozadd was enthusiastic about the company's continuation in investing "in our business to support the successful launch of Sunosi in the U.S. and pre-launch activities in the EU, to generate data for our existing products, and to fuel further advancement and diversification of our pipeline." This launch and the pipeline advances should give Jazz investors plenty of things to look forward to in the coming months.