Jazz Pharma slips as it lowers full-year guidance
Irish drug group reports 27% rise in sales but profit slips and supply disruptions remain
Bruce Cozadd, chief executive and chairman of Jazz Pharmaceuticals, which saw its shares fall more than 6 per cent overnight as it lowered full-year guidance. Photograph: Dara Mac Dónaill
Shares in Irish orphan drug group Jazz Pharmaceuticals fell more than 6 per cent per cent overnight as it lowered earnings guidance for the full year.
The revision comes as the company reported a 27 per cent jump in revenues in the second quarter of 2018 to top $500 million (€431 million) following strong growth in sales for its main drugs.
Jazz said sales of its blockbuster sleep therapy Xyrem had grown 19 per cent on the year ago period while Erwinase, which is used to treat certain forms of leukaemia, saw revenues jump 20 per cent.
However, profit after tax at the specialty drug group fell 13 per cent to $92.3 million in the three months to June 30th. Earnings per share of $1.53 compare with $1.76 for the same period in 2017.
Jazz, which had been trading up on the day, at $179.90, as formal trading closed on the Nasdaq, later fell to $168 in after-hours trading following the release of the results late on Tuesday in the United States.
The company, which specialises in treatments for relatively rare conditions or those that have few treatment options, spent $55.6 million on an agreed share buyback programme during the second quarter and also took a $44 million impairment charge.
Apart from Xyrem and Erwinase, Jazz makes defitelio/defibrotide, a drug that is used to address complications in stem cell transplant patients, and Vyxeos, another leukaemia drug.
In a statement, Jazz said it continued to experience supply disruptions, which have been a feature for the company in the past couple of years. It said this accounted for some “fluctuation” in quarterly results. Jazz said it expects “continued supply challenges” during the rest of the year.
The Nasdaq-listed company, which relocated its domicile to Ireland following its 2012 acquisition of Azur Pharma, said it now expects earnings per share for the full year to come in at between $5.70 and $6.90 a share. That’s down from a range of $7.15 to $8.45 previously.
Full-year revenues have also been pulled back, though product sales are now expected to be slightly better than earlier projections, particularly for the company’s blockbuster, Xyrem. It is now expected to deliver sales of more than $1.35 billion, and possibly as much as $1.38 billion. That would account for more than 70 per cent of all product sales by the company.
Xyrem is a central nervous system depressant used to treat cataplexy, a sudden loss of muscle strength, and reduce daytime sleepiness in patients with narcolepsy. Narcolepsy is a sleep disorder characterised by excessive sleepiness, sleep paralysis and hallucinations.
Jazz expects a decision in October from the FDA on whether it can extend the use of Xyrem to children with narcolepsy.
During the second quarter, the drug firm refinanced its borrowing facilities, increasing its capacity to $1.6 billion from $1.25 billion previously and pushing out the date of maturity to June 2023 from July 2021.
Jazz chairman and chief executive Bruce Cozadd announced last week that the company plans to increase its 150-strong Irish headcount by 10 per cent as it brings new drugs to deal with narcolepsy and sleep apnoea to market.
The company has its global headquarters in Dublin and opened a $50 million manufacturing plant in Athlone in 2016.