Jazz Pharmaceuticals plc Price & Performance (JAZZ)

The slide presentation accompanying this webcast is available on the Investors section of our website as of the press release we issued earlier today.

On the call are Bruce Khodzad, Chairman and Chief Executive Officer Renee Gala, President and Chief Operating Officer Rob Yunone, Executive Vice President, Global Head of R and D and Phil Johnson, Chief Financial Officer.

On Slide two, I'd like to remind you that today's webcast includes forward looking statements such as those related to our future financial and operating results, growth potential and anticipated development and commercialization milestones and goals. Which involve risks and uncertainties that could cause actual events performance and results to differ materially from those contained in these forward looking statements. We encourage you to review the statements contained in today's press release, in our slide deck and the risks and uncertainties described under the caption Risk Factors in our annual report on Form 10 ks for the fiscal year ended December 31, 2023, our quarter report on Form 10 Q for the quarter ended 09/30/2024 and our subsequent filings with the SEC, including our annual report on Form 10 ks for the fiscal year December 3139, and our annual report on Form 10 ks for the fiscal year ended December 3138, and our annual report on Form 10 ks for the fiscal year ended December 31, 2024, which identifies certain risk factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward looking statements made on today's webcast. We undertake no duty or obligation to update these forward looking statements.

As noted on Slide three, we will discuss non GAAP financial measures on this webcast. Descriptions of these non GAAP financial measures and reconciliations of GAAP to non GAAP financial measures are included in today's press release and the slide presentation available on the Investors section of our website. I'll now turn the call over to Bruce. Thanks, Jeff.

Good afternoon, everyone. Thank you for joining us today to discuss Jazz's fourth quarter and full year 2024 results. I'll start on Slide five. I'm very pleased to report that 2024 was another record year for Jazz, Our strong commercial execution, resulted in more than $4,000,000,000 in total annual revenue and fourth quarter revenue of nearly $1,100,000,000 our highest ever. Importantly, we helped more patients who benefit from our highly differentiated therapies in areas with limited or no therapeutic options. These achievements reflect the tenacity, and dedication of our talented employees around the world, On the R and D front, we achieved several important development and regulatory milestones in 2024. Headlined by the accelerated approval of Zaihara in The U. S. For the treatment of second line HER2 positive biliary tract cancer or BTC, in November. In addition, we believe the positive results from the Phase three ZEPZELCA clinical trial in first line maintenance for small cell lung cancer will support expansion into an earlier line of treatment potentially benefiting a broader patient population. We plan to further diversify our commercial and pipeline portfolios through strategic corporate development, which remains a key focus for Jazz, As part of our ongoing search, we're evaluating neuroscience and oncology assets while also contemplating other rare and orphan diseases.

In addition, durability of revenue, efficiency of commercial call points, and alignment with our expanded R and D capabilities are part of our considerations as we assess opportunities to maximize long term shareholder value, through corporate development Turning to Slide six, I'm pleased to confirm we achieved our 2024 guidance. Delivering top line growth at the upper end of our range, and $1,370,000,000 in adjusted net income, on a non GAAP basis. Phil will discuss our 2024 financial results, and 2025 guidance in more detail later in the call.

On the commercial front, our sleep, epilepsy and oncology portfolios are each annualizing at over $1,000,000,000 based on fourth quarter net product sales. ZY WAVE remains the number one branded treatment for narcolepsy based on revenue and the only FDA approved therapy to treat idiopathic hypersomnia or IH. We've been pleased with our execution across narcolepsy and IH as our team has navigated the entry of high sodium fixed dose branded oxyvate, an authorized generic or AG competition since their introduction in 2023. Epidiolex net product revenues grew 24 compared to 2023, and it is poised to reach blockbuster status this year. Oncology revenues grew 9% in 2024 to a record of more than $1,100,000,000 even with changes to pediatric protocols, which temporarily impacted Riley's revenue in the second half of twenty twenty four. Renee will discuss our commercial performance in greater detail. Overall, our 2024 total revenue grew 6% compared to 2023, reflecting our strong execution of the commercial strategies we are implementing. We continue to advance promising opportunities in our pipeline. We look forward to the data readout from the Horizon Phase III trial evaluating zenidatumam in first line gastroesophageal adenocarcinoma or GEA for top line progression free survival readout, based on our more mature projections of events accrued to date, we now expect data readout in the second half of this year.

Rob will share additional color on this trial a bit later in the call. The first line BTC confirmatory trial Phase three breast cancer trial, and Phase two pan tumor trial are all progressing well. In addition, we plan to submit a supplemental new drug application or sNDA for ZUPZELCA as maintenance therapy in first line extensive stage small cell lung cancer. In the first half of twenty twenty five. We remain focused on driving growth while maintaining a discipline and strategic approach to capital allocation.

Our financial strength and cash flow enable us to invest in our commercial portfolio, pipeline and future corporate development opportunities. Before we move on, as previously shared, I'll be retiring from my role as CEO this year. It's been a privilege to lead Jazz through the growth and significant diversification that has transformed the business into the fully integrated biopharma company it is today. Importantly, we remain committed to reaching more patients by making strategic investments through corporate development. A focus that will continue during the CEO transition period. After a successor is appointed, I'll continue serving as Chairman of the Board of Directors. Providing ongoing leadership and strategic guidance. I'm confident Jazz's next leader will continue delivering for patients, employees, partners and shareholders. I'll now turn the call over to Renee to discuss our commercial performance after which Rob will cover our R and D pipeline. Phil will then provide a financial overview and review our 2025 guidance.

And then we'll open the call for Q and A. Renee? Thanks, Bruce.

Before I cover individual commercial products, I'd like to thank the Jazz team for their tremendous efforts across the year which resulted in each of our promoted commercial products achieving their highest ever annual revenues in 2024. Beginning on Slide eight in our sleep portfolio, our focused efforts to educate physicians and patients on the benefits of ZYWAV including the importance of meaningfully reducing sodium intake, continue to resonate in the market. We view every high sodium oxybate patient as one who could benefit from low sodium XY waves as people living with narcolepsy are at a two to three times higher risk of cardiovascular comorbidities, such as stroke and heart failure, In addition, results from the RYTHM study demonstrated patients with IH experienced a higher likelihood of comorbid conditions across multiple clinical categories including cardiovascular conditions. There were approximately fourteen thousand one hundred and fifty patients representing approximately eighteen fifty net patient adds compared to the end of twenty twenty three. In the fourth quarter, there was a meaningful increase of approximately five twenty five net patient adds comprised of one hundred and seventy five narcolepsy patients, and three fifty IH patients. Total sleep revenue which includes Xywave and Xyrem net product sales, plus royalties from high sodium oxybate AG was $5.00 $6,000,000 in the fourth quarter and exceeded $1,900,000,000 for the full year.

Ziwei's net product sales grew 16% year over year to approximately $1,500,000,000 in 2024 and were $4.00 $1,000,000 in the fourth quarter of twenty twenty four.

The initiatives we implemented at the end of twenty twenty three and throughout 2024 including field force expansion, digital and media campaigns and the field nurse educator program, coupled with our Jazz Care services contributed to both patient demand and persistency across narcolepsy and IH. We believe the IH market we are building with the first and only FDA approved therapy to treat IH represents the most opportunity for patient growth and is a durable segment of our sleep portfolio. Our field team continues to expand the breadth and depth of HCP's prescribing XYWAY for IH, by highlighting the significant unmet patient needs and the benefits of treating multiple symptoms of IH with Xyray. On Slide nine, we turn to Epidiolex, with net product sales of $275,000,000 in the fourth quarter representing a 14% increase compared to the same quarter in 2020 For the full year 2024, Epidiolex revenue was approximately $972,000,000 up 15% year over year primarily driven by underlying demand. Key drivers of demand growth in The U. S. Included continued positive response to data on the benefits of Epidiolex, beyond seizure control reaching adult patients and long term care facilities, along with broad quality access. In December, we presented nurse reported response that showed Epidiolex treatment was associated with an overall reduction in seizure frequency and improvements in patients' abilities such as communication, cognition and emotional functioning.

We expect this continued data generation and increased penetration in the adult patient setting and long term care facilities will drive demand. Growth in the adult patient setting is supported in part by data showing many LGS patients reach adulthood without a specific LGS diagnosis. And by providing healthcare professionals with clear diagnostic tools to identify adult LGS patients. Further, we believe Epidiolex is a durable long lived asset I'm pleased to share we recently settled with all 10 current AND filers. Under the settlement agreements, we granted each of those ANDA filers a license to manufacture market and sell its own generic version of Epidiolex beginning in the very late 2030s or earlier under certain circumstances, We're pleased with the momentum and growth of Epidiolex and expect it to reach blockbuster status in 2025. Moving to oncology on Slide 10. Ryalase net product sales were approximately $101,000,000 for the fourth quarter twenty twenty four approximately $411,000,000 for the full year representing a 4% year over year increase compared to full year 2023. In our third quarter earnings, we reported a temporary negative impact to RyLACE revenue due to an update to Children's Oncology Group pediatric treatment protocols for acute lymphoblastic leukemia or ALL.

This update impacts the timing of asparaginase administration. Pushing back the use of Rylase by ten weeks. It's important to note the protocol changes do not change the recommended total number of asparaginase doses and we don't anticipate an impact to underlying demand for Rylase. Revenues are still expected to normalize early this year. We see the most opportunity for growth in the adolescent and young adult or AYA market and we are continuing to educate oncologists who treat these patients on the benefits of asparaginase therapy. On Slide 11, I'll discuss sepsalka. Net product sales for the full year twenty twenty four were approximately $320,000,000 up 11% year over year. In the fourth quarter, Zevselka net product sales increased 6% year over year to approximately $78,000,000 Zepsilk remains the treatment of choice for second line small cell lung cancer and we continue to hear positive feedback from physicians on its clinical benefit and ease of use and administration for patients in their healthcare practices, Expansion into first line maintenance therapy for extensive stage small cell lung cancer represents an opportunity to extend the duration of treatment while reaching patients earlier in their disease progression We plan to submit an sNDA for Zepseldka in this indication in the first half of this year.

Moving to Slide 12 to cover Zayara. We had an exciting fourth quarter with the FDA approval of Zaihara the first and only dual HER2 targeted bispecific antibody approved for HER2 positive second line BTC in The U. S. Our experienced oncology team swiftly initiated the commercial first BTC patient was treated with ZYHERA in December. We recognized approximately $1,000,000 of net product sales in 4Q twenty twenty four. The initial reception from HCPs has been positive Physicians currently diagnosing and treating BTC patients significantly overlap with our existing sepsalcocall universe. Positioning us to leverage our current footprint to help accelerate the launch and uptake of Zayara for second line HER2 positive BTC. Zayara has the potential to deliver greater efficacy out outcomes compared to the current standard of care for BTC while providing better tolerability and safety to maximize patient outcomes and benefit. Although BTC represents a small patient population, this initial launch will help establish Zaihara with healthcare professionals and allow them to get meaningful experience with it. With that, I'll turn it over to Rob for an update of our pipeline and upcoming milestones. [indiscernible] Thanks, Renee. I'll begin on Slide 14. We achieved an important milestone for patients, our company in 2024 with the FDA approval of zanidatumab in second line BTC.

Along with the initiation of our first line BTC confirmatory trial Beyond BTC, we significantly advanced nanodatumab development including our ongoing first line GEA trial and the initiation of the Phase three EMPOWUR breast cancer trial. And Phase two pan tumor trial.

As Bruce mentioned earlier, we are now expecting the top line PFS readout from our Phase three frontline DEA trial evaluating zatadamab with standard of care chemotherapy with and without the addition of a PD-one agent, in the second half of twenty twenty five.

Recruitment for this trial is on track and we expect to complete enrollment within the next few weeks. As a reminder, this is an events driven trial and our updated estimate is based on a more mature projection of progression events relative to the initial protocol assumptions. While we as the sponsor remain blinded to the results of the trial, we are encouraged by the positive results from two independent Phase two trials of zanodatumab that have demonstrated increased median PFS duration of response and confirmed objective response rates. If positive, we expect the PFS data from this trial will support registration. Moving to other programs, In October 2024, we reported highly encouraging results from the Phase three FORTE trial of ZYPELCA in combination with atezolizumab compared to atezolizumab alone, when administered as maintenance therapy, in first line extensive stage small cell lung cancer. The combination demonstrated statistically significant and clinically meaningful improvements in the primary endpoints of overall survival and progression free survival. The results have the potential to be practice changing. And we look forward to presenting the data at a medical meeting this year.

Which is an important step toward potential inclusion in NCC guidelines and Compendia listings. As Renee mentioned, we plan to submit an sNDA to FDA in the first half of twenty twenty five to expand the ZYPZELCA label, to include first line maintenance. The Epidiolex trial in Japan remains ongoing as we collect long term safety data which was included in the trial design for twenty six and fifty two week analyses. Numeric improvements were observed in the primary, and several secondary endpoints and we expect to have substantive discussions with PMDA by mid-twenty twenty five. Turning to Slide 15, I'll review the unique clinical profile of Sahara. Ozanimatedamab and why we believe it has the potential to become the HER2 targeted agent of choice. Datadamab has demonstrated activity in multiple HER2 expressing cancers. [indiscernible] results in multiple mechanisms of action all resulting in tumor cell death. Dany has been shown to interfere with HER2 signaling which also disrupts heterodimerization of HER2 and HER3, further inhibiting tumor cell signaling and growth. Datadamap also causes inducing immune destruction through ADCC, ADCP, and CDC. We think that ZanadataMab induces complement dependent cytotoxicity at a level that is highly differentiated in the category. [indiscernible] includes established safety and tolerability, ease of administration, single agent activity without chemotherapy, and it combines well with other therapies including chemotherapy.

We believe zanidatumab has the potential to be a best in class HER2 targeted therapy for multiple HER2 positive solid tumors. Importantly, Daihara was added to the NCCN and ESMO guidelines. For biliary tract cancer After approval, as part of an off cycle review, highlighting the meaningful advance IHara represents for HER2 positive BTC patients. Slide 16 highlights the potential for zanodatumab in BTC and beyond. In addition to FDA approval for BTC, the European Medicines Agency validated the marketing authorization application [indiscernible] in second line BTC in 2024 and we await potential approval as early as 2Q twenty twenty five. We've already discussed the opportunity we are pursuing in GEA. Additionally, we initiated the Phase three EMPOWUR trial. Which is designed to evaluate savodatumab in combination with chemotherapy in breast cancer patients who have progressed on or are intolerant to and hurt to. With this ongoing Phase three trial, we have the opportunity to be the first HER2 targeted therapy to demonstrate efficacy and safety in breast cancer patients post in HER2.

We also have multiple ongoing trials in early stage breast cancer including through our collaboration with MD Anderson Cancer Center Venetiimab monotherapy has shown promising activity across a range of tumor types. And we initiated a Phase two pan tumor trial to generate additional data across a variety of HER2 expressing solid tumors. Overall, we are incredibly excited about the opportunity that zavadataMab represents for patients with HER2 expressing tumor. Now I will turn the call over to Phil for a financial update. [indiscernible] Thanks, Rob. I'll start with our top line results on Slide 18. As a reminder, our full financial results are available in today's press release and in our 10 ks will be filed tomorrow morning. In the fourth quarter of twenty twenty four, we achieved nearly $1,100,000,000 in total revenues, We were pleased to deliver this top line growth which was driven by increased ZIWAY of Epidiolex and oncology revenue. And for full year 2024, we recorded approximately $4,100,000,000 in total revenues, representing 6% growth over 2023.

This marks our twentieth consecutive year of top line growth and as you've seen in our guidance, we expect 2025 to be our twenty first consecutive year. Turning to Slide 19, our full year 2024 non GAAP adjusted net income was a approximately $1,370,000,000 and we reported non GAAP adjusted EPS of $20.9 We continue to generate significant cash from our business demonstrating the strength and diversity of our portfolio. We recorded approximately $1,400,000,000 of cash operations for the full year 2024 and ended the year with $3,000,000,000 in cash on hand. Consistent with our prior communications, in January, we made a voluntary repayment of $750,000,000 to reduce the principal amount of our Term Loan B. During 2024, we continue to utilize our share repurchase spent approximately $311,000,000 repurchasing shares. Going forward, if not used for corporate development investments to enhance our future growth prospects, we expect a significant portion of free cash flow to go toward debt paydown share repurchases or some combination thereof. Finally, our overall financial position and robust operating cash flows provide significant flexibility to invest in value driving commercial and R and D programs as well as in promising corporate development opportunities. We're pleased to share our full year financial guidance for 2025 beginning on Slide 20.

Our 2025 total revenue guidance range of $4,150,000,000 to $4,400,000,000 represents 5% year over year top line growth at the midpoint. Driven by our diversified commercial portfolio, spanning sleep, epilepsy and oncology.

Top line growth in 2025 is underpinned by our expectation continued growth of Xyweave, Epidiolex reaching blockbuster status and the assumption that high sodium oxybate AG royalty revenue continue for the [indiscernible] As a reminder, if Hickman and others enter the market with true generics, our AG royalty revenue will go away and we could have rapid erosion of remaining Xyrem revenue. What we believe will be well positioned with the Xyrem, given it's not AB rated to all other high sodium oxibates including generics, the impact of true generic Xyrem on Xyrem revenue is uncertain and will depend on a number of factors such as the continued recognition by HCPs, patients and payers of the value of low sodium. Other dynamics we anticipate throughout the year include decline of Xyrem revenue and normalization of Ryley's revenue early this year. We anticipate modest revenues from Xihira given the small BTC patient population although a successful BTC launch is key to ahead of the potential launch in GA. Finally, while we don't provide quarterly guidance, I do want to note our first quarter revenues have historically been affected by several factors. Including re authorizations and inventory build in the latter part of the prior year which can contribute to lower revenues in the first quarter compared to other quarters.

Now I'd like to draw your attention to several items on Slide 21. With regard to operating expenses, our non GAAP adjusted SG and A guidance range is $1,250,000,000 to $1,310,000,000 The increase in non GAAP adjusted SG and A reflects continued investment in our lead commercial products. We remain focused on operational excellence and from last year to further drive growth of our diversified portfolio. Our non GAAP adjusted R and D guidance range of $720,000,000 to $770,000,000 represents an 8% decrease from 2024.

We're continuing to focus investments on priority programs including the broad venudatumab development program that has the potential to positively impact many patients and deliver significant shareholder value.

The decrease from 2024 is primarily driven by a reduction in clinical study and outside service costs relating to JZP-three eighty five and continued portfolio prioritization. On the bottom line, we expect adjusted net income in 2025 to be $1,400,000,000 to $1,500,000,000 This reflects our expectation of continued strong commercial performance and disciplined expense management while continuing to invest in our highly differentiated commercial portfolio and pipeline. I'll now turn the call back to Bruce for closing remarks. I'll conclude our prepared remarks on Slide 23. 2024 was a record year for our promoted commercial products and we expect to deliver continued strong execution in 2025. Epidiolex remains poised to reach blockbuster status in 2025 and we expect ZiWAV to remain the number one branded narcolepsy treatment with continued growth in IH. Zaihara represents a significant growth opportunity with an estimated $2,000,000,000 plus in peak sales potential. We look forward to submitting the sNDA for Zepzalka with the potential to help more patients for a longer duration and extend survival. Our proven strength in commercial and pipeline execution and corporate development are supported by our continued focus on operational excellence and strategic capital allocation, I'm confident Jazz is well positioned to deliver our twenty first consecutive year of top line growth in 2025 drive meaningful shareholder value with data readouts, such as the Phase III GEA trial and pursue strategic corporate development opportunities to deliver long term sustainable growth That concludes our prepared remarks.

I'd now like to turn the call over to the operator to open the line for Q and A. Thank you. We will now begin the Q question and answer session. And your first question comes from the line of Mark Goodman with Leerink. Please go ahead. Rob, can you talk about the Oraxen-four 41? Any type of comment you can make? Have you figured out the safety margin? Is your low dose kind of doing what you wanted to do? Any comments there would be helpful. And then just on the settlement with Epidiolex, is there any reason you're being so cagey Can you actually give us the date? Thanks. So Mark, this is Bruce. Maybe I'll jump in on your second question first.

We actually think saying our Epidiolex settlements with all 10 and the filers go out to the very late 2030s is being pretty specific I'll remind you those agreements have confidentiality provisions limit what else we can say. So that's all we're going to have to say at the moment is very late 2030s. Rob, I'll kick it over to you for 04:41 update.

Thanks, Bruce. So Mark, we don't have an update on the trial that we said we are initiating. This is a trial with four forty one in NT1 patients. Small number we thought about 10 or so. But so far no updates on that. But we do think that that even in a small number of patients that will help us define a better therapeutic index. No updates at this time.

Your next question comes from the line of Jessica Fye with JPMorgan. Please go ahead. Hey guys, good afternoon. Thanks for taking my questions. For the Horizon GEA trial, I think you said you'll complete enrollment in the next few weeks. So just to confirm, is that for the upsized nine eighteen patient target enrollment Can you remind us when you completed enrollment of the originally planned seven fourteen patients And then I guess while I'm at it on this trial, Rob, when you see the event rate maturing differently than initially projected as it seems to be here, Do you take that as positive, neutral or negative for probability of success? Thank you. Go ahead, Rob.

Okay. Hi, Jess. So we are referring to the nine eighty when we say we'll be completing enrollment In the coming weeks, We hadn't said when the 07/14 was enrolled. As you know, we are blinded to the results of the trial. And so we we can't say what's driving the slower accrual of events, whether that's coming from control arm or the experimental arms. Generally speaking, it certainly could be a good thing. That the experimental arms are having a significant effect and pushing that out. But we don't see the data so we don't know for sure. I would say that The control arm certainly could be behaving differently than prior trials. However, we've seen three Phase three trials in this setting and the control arm has been pretty consistent across those. So I don't expect a big surprise on the control arm. But again, we are blinded to that information We have an external vendor who is tracking events and gives us periodic updates. But as we said, we're confident in the second half of this year. Depending on how the events continue to roll in, that certainly could come in 3Q.

Your next question comes from the line of Jason Gerberry with Bank of America. Please ahead.

Mine just on M and A, you guys seem to be flagging that again this year. And I guess it's been a dominant part of the Jazz investor discussion for a while now, but you really haven't like swung the bat in a big way since GW. And so I'm just kind of curious maybe why that is ultimately if you can reflect upon that? And then with this Epidiolex patent settlement in place and now having a runway on a $1,000,000,000 franchise plus well into next decade. Just how does that alter how you guys think about M and A having that longevity of assets now?

So Jason, this is Bruce. I'll jump in with a little historical perspective and then maybe I have Phil give you a more forward looking view Just as a reminder, we completed the GWF and levered up to some degree to do that and spent some time after that bringing leverage back down quickly and considerably. And during that period, we were needless to say not pursuing larger transactions as we had forecast To say we haven't done anything, I think would forget that we did the Zany Datamab transaction.

Which while it had a smaller upfront, certainly has been a a major focus for us in terms of value creation potential for the company and we remain excited about it. Phil, maybe you could take the part of the question that refers to what we're expecting going forward. [indiscernible] Sorry, I'm I have a bad connection here. So I was trying to get on to handheld, not use speakerphone. Give me a second. Jason, as Bruce mentioned, we've delivered substantially from the time of GW deal.

I think we closed effect at that point in time Jazz of the end of 2024. Was down to 1.8x. So we certainly have significant financial resources bolstered by the strong cash flow that we generate as well. To engage in M and A and licensing activities sort of various sizes. We do have active efforts looking at each of our verticals to continue to build our growth prospects in those that would include epilepsy where The very long runway with Epidiolex has been and continues to be a strong point, I think, for the overall CHAS story, Jazz well as making it an even more attractive area for us to be investing in. So we do look at opportunities to build out that franchise further As Bruce mentioned in his prepared remarks, we do look at areas that would be either adjacencies to and in some cases, newer areas that share characteristics with where we've been successful in the past.

Often we use our more orphan indications more focused call points, the ability to add significant value with services in a Just product and leverage those capabilities that we've built and honed over the years. So continue to be very active looking. I certainly would not take the lack of announcing a large deal as lack of activity or interest in doing things and certainly to comment in the past, see no expectation of those activities slowing down as we move into the coming quarters.

So stay tuned. We're active and looking Do feel there's opportunities value to Jazz and if patients don't see valuations at this point in time being a significant impediment to transacting in the areas where we're looking. So I hope that gives you some color.

Your next question comes from the line of Annabel Samimy with Stifel. Please [indiscernible] Hi. Thanks for taking my question. Just quickly on Zobelka, just curious if there was any strange trend. At the end of the year, we saw it compressing a little bit. And then what can we expect from Zepsilkad this year? I know you're filing the sNDA. The approval is not expected till expected until 2026, but could we be seeing some end NTC and guideline list compendialisting for this specific indication? Thanks. Yes. Thanks for the question. This is Renee. So in terms of what we've seen with SABELCA, we we have continued to see strong performance I would say typically from Q3 to Q4, we do have a dynamic where there are less buying days for our distributor in Q4 compared to Q3. We had a similar dynamic in 2023. So that did have some impact.

I will note though that as we mentioned on the call, our sales increased 11% to $320,000,000 in 2024. That was the highest year ever Zepsilka and that is with a competitive entrant in the market with INVELTRO. As we look at 2025, we mentioned we plan to file in the first half of this year for our first line extensive stage with our first line extensive stage data We will not be promoting, of course, in the first line until we have that approval. We would hope to get on treatment guidelines as soon as we have the data out and available and in a peer reviewed journal, which we're working diligently on And then I would also say that the benefit, of course, in the first line is to be able to reach patients earlier in their overall treatment journey we do believe there's a larger group of patients to access 27,000 in first line versus 17,000 in the second line and about seventy percent of those first line patients are [indiscernible] also longer duration of treatment in the first line. So we do expect to see growth in ZYPELCA, but again, we won't be promoting in the first line until we have an actual approval.

And then if I just step back and think about Zepelka's positioning in the second line, while we would expect to see IMDELTRA as a new competitive entrant to to see some gain in the second line I'd also say we continue to receive a lot of positive feedback from physicians on Zepselka in terms of its clinical benefit, the ease of use, it does not require extended monitoring or an inpatient stay, which is of course different from INDEULTRA. So we do expect to continue to see some strength in Zab Selka and we look forward to having the ability to promote in the first line. Your next question comes from the line of Andrea Newkirk with Goldman Sachs.

Please go ahead. Good afternoon. Thanks for taking our questions.

Bruce, I was just wondering if you might be willing to provide an update on the CEO search and the background or fit that the Board is looking for And then in the context of that this ongoing transition, as a follow-up to the M and A or BD question earlier, how should we think about that strategy and the timing for a potential transaction to occur this year.

Thanks for the question.

So I'm not going to give a detailed update on the CEO selection As was true when this was announced back in December, We're going to take our time and get it right. We're not in a hurry. We want to make the right choice and the right choice is dictated by where the company is today and where we want to take it.

I will say, we're just starting to reach out in the marketplace and we're getting positive feedback that the position is an attractive one in terms of where the company is positioned today. We're obviously coming off a very strong 2024 and our excited about our prospects for 2025.

On the M and A BD side, we're really well positioned right now. We've got strong operating results Our commercial teams, our R and D teams are executing well across the board. We feel ready to take on additional programs and or products And as Phil mentioned, from a financial perspective, whether it's our balance sheet, our cash on hand, our cash flow, Again, we feel very well positioned to really take advantage of our infrastructure, leverage it, and continue to add growth opportunities to our business.

Your next question comes from the line of Troy Langford with TD Cowen. Please go ahead.

Hi, congrats on all the progress this quarter and thanks for taking our question. Just a really quick one on the opportunity for Zaihara in breast cancer.

About how many breast cancer patients total do you think would fall into that in HER progression or intolerance bucket that Zayara could potentially address should it succeed in the Phase three trial?

So, Renee, I don't know if you want to make an overarching comment about the opportunity we see for zanidatumumab including in breast cancer. And then Rob, maybe you could talk a little bit more about how we see this fitting into the breast cancer landscape Sure. Thanks, Bruce.

So as we step back and look at the broader market opportunity, we do see this as a $2 plus billion that includes BTC, GA, breast cancer, as well as pan tumor. Now BTC, we've said consistently that we expect the revenues to be quite modest there given the very small patient pop [indiscernible] GEA, we look at 63,000 patients across The U. S. Europe and Japan as compared to 12,000 for BTC. And then as we progress into breast cancer, we're looking at more than 150,000 across those same geographies. So while we haven't broken that up into the different elements, we do feel quite confident that there is a much broader opportunity to go after there.

Rob, Yes, I would just add that HER2 positive breast cancer patients in the metastatic setting. Tend to get multiple lines of therapy. Currently that's the Cleopatra regimen followed by HER2. There is an ongoing frontline HER2 trial and there's there's optimism that that will ultimately become the standard of care in frontline. So whether it be third line plus or second line plus, We think with positive results from the trial that we have ongoing that Zayara would become the treatment of choice After patients have progressed on HER2, And we think that captures high proportion of patients given that these patients tend to and to be able to go on to subsequent lines of therapy.

Your next question comes from the line of Akash Tewari with Jefferies.

Please go ahead.

Hi. This is Amy on for Akash. Thanks so much for taking a question. How should we think about the pricing strategy for XANTI to depending on whether the doublet or triplet arm hits in Horizon GA If pricing remains consistent, how would the outcome of these arms impact your sales estimates? Renee?

Yes, I'm happy to jump in there. So we have priced Zayara for BTC with a twenty eight day cycle WAC cost of approximately $35,550 Now when we priced it for BTC, there was also a view of thinking about GA coming shortly thereafter. We haven't given specificity around GA. I'll say the cycle there is twenty one days versus the twenty eight day cycle for BTC. And then the weight based dosing is slightly different for BTC. We're looking at more of a average median weight of a patient when we give the twenty eight day cycle price But with respect to GA, what we're looking at is a threshold above and below a certain weight you would be going with a certain dosing. We're not looking specifically at the doublet triplet arm and giving specific guidance with respect to the pricing or the peak, what we're really focused on is ensuring that we're able to capture a meaningful opportunity with GEA and then as Rob had mentioned also a much larger opportunity with breast cancer. Your next question comes from the line of Mohit Bansal with Wells Fargo. Please go ahead.

Great. Thank you very much for taking my question and congrats on the progress.

Rob, if you could help me understand the the ARM C of GEA trial in little bit detail, It seems like in the context of commercial aspect, it is Power to show benefit over ARM. We so it seems like you are looking at just Zani's benefit over Herceptin, that may be enough. So in that contest, could you help us understand like how would you look at RMC how should investors like us look at RMC when the data come out? In the context of market opportunity here? Thank you.

So for starters, I would say that the proportion of patients for whom the standard of care remains for septum chemo we think is quite high. The KEYNOTE-eight 11 trial we don't think represents the true epidemiology. It's likely that that trial was enriched for PD L1 positive quote PD L1 positive patients given the ubiquitous PD L1 testing during when that trial was conducted, We also think there's a question around how to define PD L1 positive. Are all patients with one CPS score of one or higher truly benefiting or would that optimal cut off be higher? And if it's higher, It really does drive that proportion of patients who truly benefit from from a PD-one down quite a bit. Having said that, we think Dyerra has the opportunity to be the HER2 agent of choice regardless of PD L1 Status RMB demonstrate that in ZAYAR combined with chemotherapy and RMC has the opportunity to demonstrate that in combination additionally with tizilizumab. We haven't spoken to the specific power of a a comparison to ARM C versus B and we don't necessarily think of that as being required. I mean, certainly for for the RMC regimen of both Sahara and fizilizumab in combo with chemo to be approved, it has to be better than RMA.

And it also has to be from a broad benefit risk perspective, better than giving Xyair alone with chemotherapy. And so we'll have an opportunity to look at all those data as part of this trial Again, we think Zaihara will be regardless of PD L1 status, the HER2 of choice. Your next question comes from the line of David Amsellem with Piper Sandler. Thanks. So, how are you thinking about Zepzelka's exclusivity runway Particularly with the label expansion opportunity, in first line. So that's number one. And then secondly, to the extent that your own Oraxane program doesn't pan out, I guess question here is, how badly do you need to be in the Eurexin game, so to speak? In other words, would you continue to pursue other arexins? Or do you feel like there's other areas in terms of M and A and does Dev dev that you would then turn your focus on? Just trying to get a better sense of how you're thinking about sleep franchise to the extent there isn't an orexin that moves forward in your pipeline? Thanks. Renee, you want to start on the ZYP Salka question?

Sure. Happy to do that. So with respect to exclusivity, we have a composition of matter patent that extends to December 2029. And then we have additional patent applications that could extend that IAP protection further. I don't think we have any comments beyond that. To offer today, but stay tuned.

And then on your specific question on the Oraxens space, we continue to watch as we all do data emerging from different agents in terms of what we're seeing as the benefits of Oraxent therapy, certainly an exciting new mechanism of action across these serious sleep disorders, little less clear right now whether the benefits at night are are positive or whether there are in fact potential concerns with what it would do to nighttime sleep certainly believe there's a role for ongoing use of OxiBate as a nighttime agent that helps consolidate sleep and produce additional daytime benefits as we've seen with other daytime agents that are currently available or have been studied, In terms of do we need to be in that space we're of course interested in the sleep space where we are a leader We're also interested in other potential areas across neuroscience oncology Jazz we've talked about a rare disease where we've got relevant capabilities. So I don't want to narrow us down to only one area, but we're looking broadly across each of these areas for opportunities we think would be a good fit Meeting and unmet need, good fit with our capabilities on the commercial side, efficient call point, good durability and an opportunity to diversify and produce sustainable growth over the longer term.

Your next question comes from the line of Amy Fadia with Needham. Good evening. Thanks for taking my question. Perhaps to switch gears to the Oxaluit franchise. Could you talk about some of the dynamics in the ancillary market and how you're seeing Loomrise impact either your business or the overall market? Are you seeing switches from Xyrem or Xyrem to LUMRISE or any switchbacks And then also, as the AGs have the ability to launch their own generics at the end of the year, How should we think about sort of shoring up the Xyrem revenues and switching them to Xywei or and maybe just sort of what type of payer dynamics you expect once additional generics come to market and how that might impact XYZ Thank you.

Yes, I mean that was a multi part question for sure. But, Renee, maybe you could talk about just what we're seeing in the oxibate space and in particular how we think XiWave has continued to be positioned.

Yes, absolutely happy to step through that. So I'd say just looking at our full year results in the fourth quarter results that we had, we're really pleased. With what we're seeing with XiWave. We had record revenues in the fourth quarter, 19% year over year.

Five twenty five patient adds that includes of course narcolepsy and IH. And when we look at where our ads are coming from, in narcolepsy, that's coming from both new to oxybate patients as well as patients switching from high sodium oxibate and that's across all the high sodium oxibates In terms of how we think about AG, so when we look at 2026, you heard Phil earlier say that our assumptions with respect to our 2025 guidance include the fact that we will be receiving royalty revenues from AGs throughout 2025 Jazz. So if we're thinking about the market in that way and of course, we don't know if any authorized generics will decide to launch early. That would be if Hikma were to decide specifically to launch early, that would invite other author sorry, other generics into the market before early twenty twenty six And in that case, for full generic, they would need to have their own grams because right now the authorized generics are distributed through our REMS. So as we look at twenty twenty six, what that then looks like is a situation where our ability to continue to drive revenues with XiWave is dependent on the continued appreciation of the differentiation of low sodium and the importance of that to long term health In twenty twenty six, if we see full generics on the market, those royalty revenues would cease to exist.

And then we would also expect further erosion of Xyrem, which we do not actively promote and have not actively promoted since we launched XI Wave. We continue to educate on the benefits of reducing sodium, including generating important data in this area, with SIAWASE being the only low sodium oxivate and therefore the only one that doesn't carry a warning related to high sodium oxyvate [indiscernible] We can see clearly that physicians and patients are choosing that long term health benefits as well as the flexible dosing that comes with XYwave. Maintaining strong payer coverage of course, is important throughout this. We have the vast majority of our patients that are commercial today and we had great coverage with more than ninety percent of commercial lives covered. And so we will continue to educate on the benefits of reducing sodium and continue to generate data. And we have already shared data that makes it clear that with both narcolepsy and idiopathic hypersomnia, there's an increased prevalence of cardiovascular comorbidities including heart failure and stroke compared to the general population. Those findings came from both CB Bond and CB rhythms studies. So stepping back, we'll be continuing to focus on strengthening the differentiation of Xywave with physicians, customers and payers do believe we're well positioned for 2026.

ZiwaVE is not AB rated relative to generics.

And as we look at the market with narcolepsy and idiopathic hypersomnia, we see the most opportunity for growth with idiopathic hypersomnia. We're continuing to build that market, but we're still early, very low penetration currently and definitely additional room for growth.

And I'll just jump in to remind people that percentage of our revenues coming from the high sodium business, the old Xyrem branded sales [indiscernible] royalties has continued to decline over time now probably in the latest quarter maybe dipping below 10 Your next question comes from the line of Gary Nachman with Raymond James.

Thanks. Good afternoon. On the 2025 guidance, you didn't break down the revenue components specifically this time. So you give us more of a sense of how you expect the neuro and oncology franchises to relative to the overall revenue growth of 5% that you said this year, And then just on the R and D, as you're scaling back at expenses relative to last year, down 8%, just talk more about the reprioritizations of the pipeline and what's the right level of spend going forward for R and D a percentage of revenue, Thank you.

Phil, you want to jump in on that? Yes. Drew, I'm happy to. So on revenue, what might be helpful as you think about the pushes and pulls for the year sort of step through the various products. Let me start with the larger ones first and work my way down. So XiWave, as Ernie had mentioned, really strong momentum growing 18% in the full year last year, 19% in the fourth quarter. Really strong net patient adds five twenty five in the fourth quarter. So well positioned for continued growth there. Similarly up at Dialux, really strong momentum, again, 15% growth for the full year, 14% in the fourth quarter and well positioned to reach blockbuster status in 2025 and very pleased with the longevity of that franchise moving forward. RyLAY's, about 4% growth for the full year relatively flat in the fourth quarter. Reflecting that negative impact that we've mentioned in the second half of twenty twenty four coming from the COG protocol change where we continue to expect revenue to normalize early this year. ZELPZELKA, again, 11% growth for the full year that did dip down to 6% in the fourth quarter in part for the number of days that we had for shipping Jazz Renee mentioned We feel really good about prospects for Zepzelka.

We get the first line maintenance indication included treatment guidelines, and get it into label when approved by FDA. And in the interim, we may see some weakness in Zepzylka sales as Emdaltra gained share in that second line plus setting. Defitelio, really strong growth particularly in the second half of the year in The U. S. We mentioned in the past, we're monitoring that situation to understand how much of that uptick you saw in the second half is sustainable, providing a new base for the product and much of that may be transitory, this really relates to use of netuzumab to prepare patients for their procedures that can lead to an increased incidence or DoD. So again, we'll see in coming quarters if that's durable. And then on the high sodium oxybate front, as Renee mentioned, think about the AG royalty revenue that nearly tripled in twenty twenty twenty four compared to 2023. That was largely due to the significant increase in the royalty rate in late twenty twenty three Jazz well as additional volume coming through that channel in 2024. With that royalty rate increase now fully annualized, growth from that royalty revenue should moderate accordingly in 2025 And then finally, Usai REM, revenue was less than half in 2024, what it was in 2023 with revenue coming down 59%.

So mathematically, the drag from lower Xyrem revenue has to moderate in 2025 and be a bit of a a buoy, if you will, less of a drag on growth. This year than it was last year. So that gives us some color across the portfolio. In terms of R and D spend, you've mentioned at the very end of your question Gary, the sort of percent of revenue we're not necessarily thinking of it in that way. We do think we have some very good opportunities, particularly with dandibatumab that make a lot of sense to invest behind. And when we've got those great investment opportunities, we will fund those and that will cause funding level as a percent of revenue to moderate. Up or down depending on how many of the opportunities that we have And the mentioning of in the call text and then prior answer to questions and some of the prioritization on R and D really reflects some of the readouts we had last year, three eighty five to a certain extent, 150 as well. Where those programs are no longer investing behind given those [indiscernible] We do expect to be active in corporate development activities that certainly would add to our portfolio.

Behind, so that can lead to additional uptick. And then we'll see as we go forward with the data readout for any datumab and we more fully talk about the full program of how to invest time in that asset drive the most value for Jazz and impact the most patients, sort of additional investments that will come there. Those are just some of the pushes and pulls that I'd cite.

Your next question comes from the line of Gregory Renza with RBC Capital Markets. Please go ahead.

Guys. It's Anish on for Greg. Thanks for the updates this quarter and for taking our questions.

As you look at Zaihara's Phase three GA top line now guided for the second half, how should we be thinking about timelines for subsequent analyses including the second and third interim overall survival analysis? And quickly on Epidiolex, what levers can be pulled or hang ups removed to enhance uptake across the treatment segments? Thanks so much. Rob, why don't you start on zenidatumab a readout timing and then Renee, you can comment on Epidiolex.

Yes.

So the projected readout that we just revised is based on progression events and at the time of that PFS analysis, we would have the first interim analysis for overall survival. So Jazz you've seen that timeline get pushed out, of course, that also allows for greater maturity and overall survival. So we'd expect more maturity at that first interim than we might have had if the readout were sooner. Again, we're not referring specifically to the the pace of overall survival events So this This new projection Jazz no implications for the second survival analysis or the final.

There are three in total.

And then I'll jump in on the Epidiolex question. So I would say we're really pleased with the growth that we're seeing. We do have quite a bit of runway now that we're really excited about. In closing the GW transaction, we were quite confident in the durability and long lived nature of this asset and we're pleased to be in a point now where we can have greater clarity on what that looks like. So as we look at what's driving the increased growth right now and what will continue to lean into, Epidiolex is highly differentiated and that's supported by the data that we've generated for both seizure and non seizure benefits and that data really resonates with physicians Jazz well as with caregivers We have great momentum in the adult and long term care setting. And that's an area we're making investments in. The breadth and quality of our access continues to improve and that's having a positive impact as we see pull through We excuse me, persistency has always been a hallmark of this brand and we're seeing great impact even additional benefit to persistency [indiscernible] Nurse Navigator programs and we're also piloting new programs within this area where we're seeing some early success, highly targeted consumer ads and all also things like we've added virtual account manager positions.

So this is an area where we continue to learn and we're really thrilled with the results that we're seeing. Your next question comes from the line of Jun Li with Truist Securities.

Congrats on the quarter and thanks for taking the questions. This is awesome one for June. Just a couple from us.

I know you haven't updated us completely on the four forty one program.

But what are you thinking in terms of the amount of dose reduction And just going off to David's question earlier, around how much longer could the pending patents for Zev Zelka extend exclusivity beyond December 2020 I hate to do this to you on the last question, but I don't think we're going to provide additional information on either of those Obviously, we've talked about the ability to go to a lower dose in in patients than in healthy normals on four forty one. So that's one of the things we're exploring even in a small number of patients And then on Zep Zelka, we don't have specific additional information on what that could mean in terms of longer exclusivity for that agent at this point. Conference back over to Bruce Kozad, Chairman and Chief Executive Officer for closing remarks. Yes. Thank you, operator. And I apologize to the couple cell siders we didn't get to. We were given at our best shot to get through everything and hope hopefully we'll talk to you later this evening.

I'd like to just close today's call by recognizing our Jazz colleagues for their efforts. And thank our partners and shareholders for their continued confidence and support. And thank you all for joining us today.