Company Reports

Strong uptake of Xywav for cataplexy and excessive daytime sleepiness; the blood cancer drug Rylaze; and the seizure drug Epidiolex are driving sales for Jazz Pharmaceuticals, as these three drugs posted a combined 27% year-over-year increase in revenue in 2023. Jazz's results are tracking our expectations, and we maintain our fair value estimate of $187 per share. We believe shares are trading at an attractive entry point in 4-star territory and about 37% below our fair value estimate. We forecast Xywav, Rylaze, and Epidiolex will continue to deliver double-digit percentage growth in 2024, and we anticipate Jazz will reach over $4.1 billion in total revenue.

Jazz Pharmaceuticals added its leading drug, Xyrem, to its portfolio in 2005 with the acquisition of Orphan Medical for about $123 million. This was a great price for the then newly approved drug, which became a blockbuster. At that point, Xyrem was the only approved treatment for cataplexy (sudden muscle weakness or paralysis) in narcolepsy; it has since garnered additional approvals for excessive daytime sleepiness in patients with narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty for the company. Jazz reached a settlement in 2017 with Hikma Pharmaceuticals to not allow generics on the market until January 2023. While Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, we are seeing the negative impact of generic entry on Xyrem's sales.

Jazz Pharmaceuticals reported third-quarter results highlighted by total revenue of $972 million, representing a 3% increase from the prior-year period. Xywav, which is the low-sodium version of Xyrem for the treatment of cataplexy and excessive daytime sleepiness, has continued to see strong patient uptake, and sales grew 30% year over year. Over 12,000 patients are actively taking the medicine at the end of the third quarter, up from 9,500 at the same time last year.

Jazz Pharmaceuticals reported second-quarter results highlighted by total revenue of $957 million, representing a 3% increase from the prior-year period. The strong patient uptake of Xywav (the low-sodium version of Xyrem for the treatment of cataplexy and excessive daytime sleepiness) continued to drive growth for the firm. Jazz’s results are tracking our expectations, and we maintain our fair value estimate of $187 per share. We believe shares are trading at an attractive entry point in 4-star territory.

Jazz Pharmaceuticals reported healthy first-quarter results highlighted by total revenue of $893 million, representing a 10% increase from the prior-year period thanks to the company’s commercialization efforts. Strong performances from Xywav (for excessive daytime sleepiness), Epidiolex (for childhood epilepsy), and Rylaze (for leukemia) have continued to be Jazz’s primary growth drivers. We maintain our $187 fair value estimate and believe the shares are currently trading at an attractive entry point, about 28% below our fair value estimate.

Jazz Pharmaceuticals added its leading drug, Xyrem, to its portfolio in 2005 with the acquisition of Orphan Medical for about $123 million. This was a great price for the then newly approved drug, which became a blockbuster. At that point, Xyrem was the only approved treatment for cataplexy (sudden muscle weakness or paralysis) in narcolepsy; it has since garnered additional approvals for excessive daytime sleepiness in patients with narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty for the company. Jazz reached a settlement in 2017 with Hikma Pharmaceuticals to not allow generics on the market until January 2023. While Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, we expect its returns to decline following Xyrem's generic entry.

Jazz Pharmaceuticals reported solid fourth-quarter results and ended 2022 with total revenue of $3.7 billion, representing an 18% increase over 2021. Continued strong performance from Xywav (for excessive daytime sleepiness), Epidiolex (for childhood epilepsy), and Rylaze (for leukemia) have been Jazz’s primary growth drivers. We maintain our fair value estimate of $187 per share, and we believe shares are currently trading at an attractive entry point, about 21% below our fair value estimate.

Jazz Pharmaceuticals announced it received Food and Drug Administration approval for the expansion of Rylaze’s label to include a Monday/Wednesday/Friday dosing schedule. Rylaze was first approved in the U.S. in June 2021 for adult and pediatric patients with acute lymphoblastic leukemia and lymphoblastic lymphoma. We maintain our fair value estimate of $187 per share, and shares are currently trading at an attractive entry point about 22% below our fair value estimate. We forecast about $3.7 billion in revenue in 2022, representing about 19% growth, which is driven by the company’s strong drug launches. We maintain our no-moat and negative trend ratings.

Jazz increased its 2022 guidance based on the strong uptake of Xywav (for narcolepsy and idiopathic hypersomnia) and Rylaze (for acute lymphoblastic leukemia), which have generated greater than expected prescriber and patient adoption. As a result, we’ve increased our fair value estimate to $187 per share from $172. We believe shares are currently trading at an attractive entry point in 4-star territory. We maintain our no-moat and negative trend ratings.

Jazz Pharmaceuticals added its leading drug, Xyrem, to its portfolio in 2005 with the acquisition of Orphan Medical for about $123 million. This was a great price for the then newly approved drug, which became a blockbuster. At that point, Xyrem was the only approved treatment for cataplexy (sudden muscle weakness or paralysis) in narcolepsy; it has since garnered additional approvals for excessive daytime sleepiness in patients with narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty for the company. Jazz reached a settlement in 2017 with Hikma Pharmaceuticals to not allow generics on the market until January 2023. While Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, we expect its returns to decline following Xyrem's generic entry.

Jazz Pharmaceuticals added its leading drug, Xyrem, to its portfolio in 2005 with the acquisition of Orphan Medical for about $123 million. This was a great price for the then newly approved drug, which became a blockbuster. At that point, Xyrem was the only approved treatment for cataplexy (sudden muscle weakness or paralysis) in narcolepsy; it has since garnered additional approvals for excessive daytime sleepiness in patients with narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty for the company. Jazz reached a settlement in 2017 with Hikma Pharmaceuticals to not allow generics on the market until January 2023. Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, but we expect its returns to decline following Xyrem's generic entry.

Jazz reported strong fourth-quarter results highlighted by revenue of nearly $897 million. The company achieved 2021 sales over $3 billion thanks to additional revenue from its GW Pharmaceuticals acquisition, which closed in May 2021. Management provided stronger-than-expected 2022 guidance due to anticipated robust performance from recently approved drugs Rylaze (for leukemia), Epidiolex (for childhood epilepsy), and Xywav (for excessive daytime sleepiness). We’ve increased our fair value estimate to $172 per share from $140 due to an improved near-term outlook. We believe shares are currently trading at an attractive entry point, about 11% below our fair value estimate. We forecast about 16% revenue growth in 2022 with sales reaching about $3.6 billion.

After taking a fresh look at Jazz Pharmaceuticals, we’ve relaunched coverage with a fair value estimate of $140 per share, a no-moat rating, and a negative moat trend. Jazz is currently trading in 3-star territory about 11% below our fair value estimate. In 2005 Jazz added its leading drug, Xyrem (for narcolepsy), into its portfolio with the acquisition of Orphan Medical for about $123 million, which was a great price for the then newly approved drug that became a blockbuster. We do not believe Jazz possesses an economic moat given its reliance on Xyrem, which accounted for 74% of Jazz’s 2020 revenue. Generic entry of Xyrem is now on the horizon, leaving a cloud of uncertainty for the company.

Jazz Pharmaceuticals added its leading drug, Xyrem, to its portfolio in 2005 with the acquisition of Orphan Medical for about $123 million. This was a great price for the then newly approved drug, which became a blockbuster. At that point, Xyrem was the only approved treatment for cataplexy (sudden muscle weakness or paralysis) in narcolepsy; it has since garnered additional approvals for excessive daytime sleepiness in patients with narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty for the company. Jazz reached a settlement in 2017 with Hikma Pharmaceuticals to not allow generics on the market until January 2023. Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, but we expect its returns to decline following Xyrem's generic entry.

We are dropping coverage of Jazz Pharmaceuticals. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

We are placing Jazz under review as we evaluate analyst stock coverage decisions. As a reminder, we provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

No-moat Jazz’s solid second-quarter results reported on Aug. 4 follow the July 22 news of the regulatory approval of Xywav, a low-sodium version of the company’s flagship product for sleep disorders, Xyrem, and the June 15 news of the regulatory approval of Zepzelca for metastatic small-cell lung cancer. This recent cascade of good news for Jazz highlights the potential of Jazz’s portfolio in sleep disorders and hematology/oncology. After considering the challenges that lie ahead with Xyrem generics, we believe shares are trading at a wide margin of safety to our maintained $135 fair value estimate, and investors should wake up and take a look at Jazz.

Jazz Pharmaceuticals uncovered a blockbuster drug with its 2005 acquisition of Orphan Medical and sleep drug Xyrem for a stellar price of about $150 million. Xyrem is the only drug approved by the Food and Drug Administration for cataplexy and excessive daytime sleepiness, or EDS, in narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty around the undiversified biotech. Jazz has agreements with generic manufacturers that keeps Xyrem protected from generic entry until January 2023, so it has a few years to fill its pipeline. Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, but nonetheless, we expect its returns to decline following generic entry.

Jazz reported mixed first-quarter results, with key drug Xyrem for sleep disorders driving top-line growth, but recently launched Sunosi posting disappointing sales numbers. Further, the company's bottom line suffered from a $136 million impairment charge due to the termination of a phase 3 trial of Defitelio in the prevention of veno-occlusive disease after an interim analysis indicated it would likely not reach statistical significance.

Jazz Pharmaceuticals uncovered a blockbuster drug with its 2005 acquisition of Orphan Medical and sleep drug Xyrem for a stellar price of about $150 million. Xyrem is the only drug approved by the Food and Drug Administration for cataplexy and excessive daytime sleepiness, or EDS, in narcolepsy. Its strong efficacy has propelled its success in the difficult-to-treat sleep indication, but generic entry is on the horizon, leaving a cloud of uncertainty around the undiversified biotech. Jazz has agreements with generic manufacturers that keeps Xyrem protected from generic entry until January 2023, so it has a few years to fill its pipeline. Jazz will retain some economic profit from royalties on generic sales and a shared distribution program, but nonetheless, we expect its returns to decline following generic entry.