Jazz Pharmaceuticals : UK Holdings Limited - 4.6% Fixed Rate Note due 15 January 2029 - 2025 Interim Financials - Form 10K

Published: 2025-05-08 09:13:10 ET JAZZ

Published on 05/08/2025 at 09:13

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary shares, nominal value $0.0001 per share

JAZZ

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

‌Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2025, 61,632,841 ordinary shares of the registrant, nominal value $0.0001 per share, were outstanding.

PART I - FINANCIAL INFORMATION

Defined Terms and Products3

Item 1. Financial Statements8

Condensed Consolidated Balance Sheets - March 31, 2025 and December 31, 20248

Condensed Consolidated Statements of Loss - Three Months Ended March 31, 2025 and 2024 9

Condensed Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2025 and

2024 10

Condensed Consolidated Statements of Shareholders' Equity - Three Months Ended March 31, 2025 and 202411

Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2025 and 202412

Notes to Condensed Consolidated Financial Statements 13

Item 2. Management's Discussion and Analy sis of Financial Condition and Results of Operations 36

Item 3. Q uantitative and Q ualitative Disclosures About Market Risk 52

Item 4. Controls and Procedures 52

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.

Exhibits

SIGNATURES

Defined terms

We use several terms in this Form 10-Q, including but not limited to those that are finance, regulation and disease-state related as well as names of other companies, which are given below.

2024 Notes 1.50% exchangeable senior notes due 2024

2026 Notes 2.00% exchangeable senior notes due 2026

2030 Notes 3.125% exchangeable senior notes due 2030

Aetna Aetna Inc.

On July 31, 2020, a class action lawsuit was filed in the United States District Court for the Southern District of New York

AFL Plan Lawsuit

by the A.F. of L.-A.G.C. Building Trades Welfare Plan on behalf of itself and all others similarly situated, against Jazz Pharmaceuticals plc

AG authorized generic

ALL acute lymphoblastic leukemia

Almaject Almaject Inc., Alvogen, Inc., and Alvogen PB Research and Development LLC

Amended Credit Agreement

Credit Agreement amended to include the Repricing Amendment No. 1, the Repricing Amendment No. 2 and Amendment No. 3

Amended Revolving Credit Facility

Revolving credit facility amended to increase the Initial Revolving Credit Facility to $885.0 million and extend the maturity date

Amendment No. 3 amendment to the Credit Agreement entered into by Jazz Lux in November 2024

AML acute myeloid leukemia

Amneal Amneal Pharmaceuticals LLC

ANDA abbreviated new drug application

API active pharmaceutical ingredient

ASD ASD Specialty Healthcare LLC

ASU Accounting Standards Update

Avadel Avadel Pharmaceuticals plc

BCBS Blue Cross and Blue Shield Association

BCBS Defendants

Roxane Laboratories, Inc., Hikma Pharmaceuticals USA Inc., Eurohealth (USA), Inc., Hikma Pharmaceuticals plc, Amneal Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., Lupin Pharmaceuticals Inc., and Lupin Inc.

BCBS Lawsuit

On June 17, 2020, a class action lawsuit was filed in the United States District Court for the Northern District of Illinois by BCBS against Company Defendants

BLA Biologics License Application

BTC biliary tract cancers

Chimerix Chimerix, Inc.

Chimerix Acquisition our acquisition of Chimerix in April 2025

Chimerix Merger Agreement Agreement and plan of Merger dated March 4, 2025 among Jazz Pharmaceuticals plc, Pinetree and Chimerix

Chimerix Shareholder Litigation

two suits filed in the Supreme Court of the State of New York, County of New York, by purported Chimerix shareholders against Chimerix and its Board of Directors, but which do not name any Jazz Pharmaceuticals parties

Chimerix Transaction Litigation

the Rosenthal Lawsuit as well as the Chimerix Shareholder Litigation

CHMP Committee for Medicinal Products for Human Use

City of Providence Defendants

Jazz Pharmaceuticals plc, and Roxane Laboratories, Inc., West-Ward Pharmaceuticals Corp., Hikma Labs Inc., Hikma Pharmaceuticals USA Inc., and Hikma Pharmaceuticals plc

CMS U.S. Centers for Medicare & Medicaid Services

CODM chief operating decision maker

COG Children's Oncology Group

Company Defendants Jazz Pharmaceuticals plc, Jazz Pharmaceuticals, Inc., and Jazz Pharmaceuticals Ireland Limited

Credit Agreement entered into on May 5, 2021, by and among us, Jazz Lux, and certain of our other subsidiaries, as

Credit Agreement

borrowers, the lenders and issuing banks from time to time party thereto, Bank of America, N.A., as administrative agent and U.S. Bank Trust Company, National Association, as collateral trustee

DDI drug-drug interaction

Defendants

Express Scripts, Inc., Express Scripts Holding Company, Express Scripts Specialty Distribution Services, Inc., Curascript, Inc. d/b/a Curascript, S.D., Priority Healthcare Distribution, Inc. d/b/a Curascript SD and Curascript Specialty Distribution SD, Caring Voice Coalition, and Adira Foundation (collectively with the Company Defendants)

Dollar Term Loan our former seven-year $3.1 billion term loan B facility under the Credit Agreement

DS Dravet syndrome

EC European Commission

EDS excessive daytime sleepiness

EEA European Economic Area

EMA European Medicines Agency

Epidiolex ANDA Filers

Teva Pharmaceuticals, Inc.; Padagis US LLC; Apotex Inc.; API Pharma Tech LLC and InvaGen Pharmaceuticals, Inc.; Lupin Limited; Taro Pharmaceutical Industries Ltd.; Zenara Pharma Private Limited and Biophore Pharma, Inc.; MSN Laboratories Pvt. Ltd. and MSN Pharmaceuticals, Inc.; Alkem Laboratories Ltd.; and Ascent Pharmaceuticals, Inc.

Epidiolex Patent Litigation

On January 3, 2023, we filed a patent infringement suit against the Epidiolex ANDA Filers in the United States District Court for the District of New Jersey.

ESPP employee stock purchase plan

ESSDS Express Scripts Specialty Distribution Services, Inc.

EU European Union

Euro Term Loan our now repaid seven-year €625.0 million term loan B facility under the Credit Agreement

Exchange Act Securities Exchange Act of 1934, as amended

Exchangeable Senior Notes our 2026 Notes and 2030 Notes

Fair value step-up expense

the acquisition accounting inventory fair value step-up expense

FASB Financial Accounting Standards Board

FDA U.S. Food and Drug Administration

FTC Federal Trade Commission

GEA gastroesophageal adenocarcinoma

GEHA Lawsuit

Class action lawsuits filed on June 23, 2020 against the Company Defendants and the BCBS Defendants by Government Employees Health Association Inc. in the United States District Court for the Northern District of Illinois

GW GW Pharmaceuticals plc

GW Acquisition our acquisition of GW Pharmaceuticals plc in May 2021

HHS U.S. Department of Health and Human Services

Hikma Hikma Pharmaceuticals PLC

HSCT post-hematopoietic stem-cell transplantation

IFNα interferon alpha

IH idiopathic hypersomnia

IM intramuscular

Initial Revolving Credit Facility

our five-year $500.0 million revolving credit facility under the Credit Agreement entered into in May 2021

IPR&D in-process research and development

IRA Inflation Reduction Act of 2022

Jazz Investments Jazz Investments I Limited

Jazz Lux Jazz Financing Lux S.à.r.l.

KRAS Kirsten rat sarcoma virus

LBL lymphoblastic lymphoma

LGS Lennox-Gastaut syndrome

Lupin Lupin Inc.

McKesson McKesson Corporation

MDS Myelodysplastic Syndrome

NDA New Drug Application

New Repurchase Program our share repurchase program announced on July 31, 2024

NHS U.K. National Health Service

ODE Orphan Drug Exclusivity in the U.S.

OECD Organisation for Economic Co-operation and Development

Old Repurchase Program our share repurchase program authorized by our board of directors in November 2016

Orange Book FDA's publication "Approved Drug Products with Therapeutic Equivalence Evaluations"

Par Par Pharmaceutical, Inc.

PBMs pharmacy benefit managers

PDUFA Prescription Drug User Fee Act

PharmaMar Pharma Mar, S.A.

Pillar Two

the OECD framework proposal to implement a global minimum tax rate of 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis

Pinetree Pinetree Acquisition Sub, Inc., an indirect, wholly-owned subsidiary of Jazz Pharmaceuticals plc

PRC People's Republic of China

PRSUs Performance-based restricted stock units

PRV Priority Review Voucher

R&D research and development

R/R relapsed/refractory

Recommendation Statement Chimerix's Schedule 14D-9 Solicitation/Recommendation Statement

Redx Redx Pharma plc

REMS risk evaluation and mitigation strategy

Repricing Amendment No.1 amendment to the Credit Agreement entered into by Jazz Lux in January 2024

Repricing Amendment No.2 amendment to the Credit Agreement entered into by Jazz Lux in July 2024

RK Pharma RK Pharma, Inc., Apicore US LLC, Archis Pharma LLC, Vgyaan Pharmaceuticals LLC

Roche F. Hoffmann-La Roche Ltd

Rosenthal Lawsuit

a lawsuit filed in the Supreme Court of the State of New York, County of Chemung, by David Rosenthal, purportedly on behalf of Chimerix Shareholders

RSUs restricted stock units

sBLA supplemental Biologics License Application

SCLC small cell lung cancer

SEC U.S. Securities and Exchange Commission

Section 232 Section 232 of the Trade Expansion Act of 1962

Secured Notes our issued $1.5 billion in aggregate principal amount of 4.375% senior secured notes, due 2029

On August 14, 2020, a class action lawsuit was filed in the United States District Court for the Southern District of New York by the Self-Insured Schools of California on behalf of itself and all others similarly situated, against the Company Defendants, as well as Hikma Pharmaceuticals plc, Eurohealth (USA) Inc., Hikma Pharmaceuticals USA, Inc., West-Ward

Self-Insured Schools Lawsuit

Pharmaceuticals Corp., Roxane Laboratories, Inc., Amneal Pharmaceuticals LLC, Endo International, plc, Endo Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., Lupin Pharmaceuticals Inc., Lupin Inc., Sun Pharmaceutical Industries Ltd., Sun Pharmaceutical Holdings USA, Inc., Sun Pharmaceutical Industries, Inc., Ranbaxy Laboratories Ltd., Teva Pharmaceutical Industries Ltd., Watson Laboratories, Inc., Wockhardt Ltd., Morton Grove Pharmaceuticals, Inc., Wockhardt USA LLC, Mallinckrodt plc, and Mallinckrodt LLC

sNDA supplemental New Drug Application

Sumitomo Sumitomo Pharma Co., Ltd

sVOD severe VOD

T-DXd trastuzumab deruxtecan

Tender Offer Documents our Tender Offer Statement together with the Recommendation Statement

Teva Teva Pharmaceuticals, Inc.

Tranche B-1 Dollar Term Loans

upon entry into the Repricing Amendment No.1, the then outstanding Dollar Term Loan was refinanced into a new tranche of U.S. dollar term loans

Tranche B-2 Dollar Term Loans

upon entry into the Repricing Amendment No.2, the then outstanding Tranche B-1 Dollar Term Loans were refinanced into a new tranche of U.S. dollar term loans

TSC tuberous sclerosis complex

U.S. United States of America

U.S. GAAP U.S. generally accepted accounting principles

UFCW Defendants

Jazz Pharmaceuticals Ireland Ltd., Jazz Pharmaceuticals, Inc., Roxane Laboratories, Inc., Hikma Pharmaceuticals plc, Eurohealth (USA), Inc. and West-Ward Pharmaceuticals Corp.

UFCW Lawsuit

On June 30, 2020, a class action lawsuit was filed in the United States District Court for the Northern District of Illinois by UFCW Local 1500 Welfare Fund on behalf of itself and all others similarly situated, against the UFCW Defendants

UHS Lawsuit

On March 18, 2021, United Healthcare Services, Inc. filed a lawsuit in the United States District Court for the District of Minnesota against the Company Defendants, Hikma Pharmaceuticals plc, Roxane Laboratories, Inc., Hikma Pharmaceuticals USA Inc., Eurohealth (USA) Inc., Amneal Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., and Lupin Pharmaceuticals, Inc.

USPTO U.S. Patent and Trademark Office

VOD veno-occlusive disease

Werewolf Werewolf Therapeutics, Inc.

Sandoz Inc., InvaGen Pharmaceuticals, Inc., CIPLA USA, Inc. CIPLA (EU) Limited, CIPLA Limited, Zydus Lifesciences

Zepzelca ANDA Filers

Global FZE, Zydus Pharmaceuticals (USA) Inc., Zydus Lifesciences Limited, RK Pharma, Inc., Apicore US LLC, Archis Pharma LLC, Vgyaan Pharmaceuticals LLC, MSN Pharmaceuticals Inc., and MSN Laboratories PVT. LTD.

Zymeworks Zymeworks Inc.

Products

The brand names of our products, our delivery devices and certain of our product candidates and their associated generic names are given below.

CombiPlex CombiPlex® (delivery technology platform)

Defitelio Defitelio® (defibrotide sodium), Defitelio® (defibrotide)

dordaviprone Dordaviprone (ONC201)

Epidiolex

Epidiolex® (cannabidiol) oral solution, Epidyolex® (the trade name in Europe and other countries outside the U.S. for Epidiolex)

Rylaze

Rylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn), Enrylaze® (the trade name in Europe and other countries outside the U.S. and Canada for Rylaze)

Sativex Sativex® (nabiximols) oral solution

Suvecaltamide Suvecaltamide (JZP385)

Vyxeos

Vyxeos® (daunorubicin and cytarabine) liposome for injection, Vyxeos® liposomal 44 mg/100 mg powder for concentrate for solution for infusion

Xyrem Xyrem® (sodium oxybate) oral solution

Xywav Xywav® (calcium, magnesium, potassium, and sodium oxybates) oral solution

Zepzelca Zepzelca® (lurbinectedin)

Ziihera Ziihera® (zanidatamab-hrii)

‌We own or have rights to various copyrights, trademarks, and trade names used in our business in the U.S. and/or other countries, including the following: Jazz Pharmaceuticals®, Xywav®(calcium, magnesium, potassium, and sodium oxybates) oral solution, Xyrem®(sodium oxybate) oral solution, Epidiolex®(cannabidiol) oral solution, Epidyolex®(the trade name in Europe and other countries outside the U.S. for Epidiolex), Rylaze®(asparaginase erwinia chrysanthemi (recombinant)-rywn), Enrylaze®(the trade name in Europe and other countries outside the U.S. and Canada for Rylaze), Zepzelca®(lurbinectedin), Defitelio®(defibrotide sodium), Defitelio®(defibrotide), Vyxeos®(daunorubicin and cytarabine) liposome for injection, Vyxeos®liposomal 44 mg/100 mg powder for concentrate for solution for infusion, CombiPlex®, Sativex®(nabiximols) oral solution and Ziihera® (zanidatamab-hrii).

This Quarterly Report on Form 10-Q also includes trademarks, service marks and trade names of other companies. Trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

‌Item 1. Financial Statements

‌JAZZ PHARMACEUTICALS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

March 31,

2025

December 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

$ 1,861,946

$ 2,412,864

Investments

710,000

580,000

Accounts receivable, net of allowances

652,992

716,765

Inventories

492,776

480,445

Prepaid expenses

150,280

177,411

Other current assets

259,823

261,543

Total current assets

4,127,817

4,629,028

Property, plant and equipment, net

178,869

173,413

Operating lease assets

49,181

53,582

Intangible assets, net

4,718,158

4,755,695

Goodwill

1,760,045

1,716,323

Deferred tax assets, net

575,097

560,245

Deferred financing costs

8,999

9,489

Other non-current assets

116,516

114,482

Total assets

$ 11,534,682

$ 12,012,257

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 95,930

$ 77,869

Accrued liabilities

1,063,918

910,947

Current portion of long-term debt

31,000

Income taxes payable

31,762

18,757

Total current liabilities

1,222,610

1,038,573

Long-term debt, less current portion

5,336,481

6,077,640

Operating lease liabilities, less current portion

38,780

38,938

Deferred tax liabilities, net

670,801

676,736

Other non-current liabilities

91,119

86,614

Commitments and contingencies (Note 9)

Shareholders' equity:

Ordinary shares

Non-voting euro deferred shares

Capital redemption reserve

473

Additional paid-in capital

3,925,161

3,913,542

Accumulated other comprehensive loss

(785,610)

(947,667)

Retained earnings

1,034,806

1,127,347

Total shareholders' equity

4,174,891

4,093,756

Total liabilities and shareholders' equity

$ 11,534,682

$ 12,012,257

The accompanying notes are an integral part of these condensed consolidated financial statements.

2025

2024

Revenues:

Product sales, net

$ 839,418

$ 842,102

Royalties and contract revenues

58,423

59,881

Total revenues

897,841

901,983

Operating expenses:

Cost of product sales (excluding amortization of acquired developed technologies)

104,620

95,487

Selling, general and administrative

514,013

351,712

Research and development

180,652

222,847

Intangible asset amortization

154,448

155,730

Acquired in-process research and development

10,000

Total operating expenses

953,733

835,776

Income (loss) from operations

(55,892)

66,207

Interest expense, net

(53,706)

(66,116)

Foreign exchange loss

(213)

(1,693)

Loss before income tax (benefit) expense and equity in loss of investees

(109,811)

(1,602)

Income tax (benefit) expense

(17,812)

11,669

Equity in loss of investees

542

1,347

Net loss

$ (92,541)

$ (14,618)

Net loss per ordinary share:

Basic and diluted

$ (1.52)

$ (0.23)

Weighted-average ordinary shares used in per share calculations - basic and diluted

60,979

62,537

The accompanying notes are an integral part of these condensed consolidated financial statements.

2025

2024

Net loss

$ (92,541)

$ (14,618)

Other comprehensive income (loss):

Foreign currency translation adjustments

162,896

(44,068)

Unrealized gain (loss) on cash flow hedging activities, net of income tax (benefit) expense of $(147) and $1,720

respectively

(443)

5,177

Gain on cash flow hedging activities reclassified from accumulated other comprehensive loss to interest expense, net of income tax expense of $132 and $451 respectively

(396)

(1,356)

Other comprehensive income (loss)

162,057

(40,247)

Total comprehensive income (loss)

$ 69,516

$ (54,865)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Amount

Redemption

Reserve

Paid-in

Capital

Loss

Retained

Earnings

Total

Equity

Balance at December 31, 2024

60,631

$ 6

4,000

$ 55

$ 473

$ 3,913,542

$ (947,667)

$ 1,127,347

$ 4,093,756

Issuance of ordinary shares in conjunction with exercise of share options

11,447

Issuance of ordinary shares in conjunction with vesting of restricted stock units

811

Issuance of ordinary shares in conjunction with vesting of performance-based restricted stock units

Shares withheld for payment of employee's withholding tax liability

(67,163)

Share-based compensation

67,335

Other comprehensive income

162,057

Net loss

(92,541)

Balance at March 31, 2025

61,623

$ 6

4,000

$ 55

$ 473

$ 3,925,161

$ (785,610)

$ 1,034,806

$ 4,174,891

Balance at December 31, 2023

62,255

$ 6

4,000

$ 55

$ 473

$ 3,699,954

$ (842,147)

$ 878,656

$ 3,736,997

Issuance of ordinary shares in conjunction with exercise of share options

494

Issuance of ordinary shares in conjunction with vesting of restricted stock units

686

Issuance of ordinary shares in conjunction with vesting of performance-based restricted stock units

Shares withheld for payment of employee's withholding tax liability

(49,296)

Share-based compensation

63,131

Other comprehensive loss

(40,247)

Net loss

(14,618)

Balance at March 31, 2024

63,028

$ 6

4,000

$ 55

$ 473

$ 3,714,283

$ (882,394)

$ 864,038

$ 3,696,461

The accompanying notes are an integral part of these condensed consolidated financial statements.

2025

2024

Operating activities

Net loss

$ (92,541)

$ (14,618)

Adjustments to reconcile net loss to net cash provided by operating activities:

Intangible asset amortization

154,448

155,730

Share-based compensation

67,653

61,441

Acquisition accounting inventory fair value step-up adjustment

29,880

28,943

Non-cash interest expense

17,066

5,988

Depreciation

10,425

7,653

Provision for losses on accounts receivable and inventory

5,319

7,403

Acquired in-process research and development

10,000

Deferred tax benefit

(43,833)

(66,385)

Other non-cash transactions

(6,537)

14,674

Changes in assets and liabilities:

Accounts receivable

66,049

(8,443)

Inventories

(35,621)

(12,844)

Prepaid expenses and other current assets

36,277

54,947

Operating lease assets

5,913

3,703

Other non-current assets

(752)

(4,090)

Accounts payable

19,131

(19,597)

Accrued liabilities

181,038

34,677

Income taxes payable

12,988

14,858

Operating lease liabilities, less current portion

(1,090)

(2,980)

Other non-current liabilities

3,971

(3,831)

Net cash provided by operating activities

429,784

267,229

Investing activities

Acquisition of investments

(440,050)

(375,000)

Acquisition of intangible assets

(25,000)

Purchases of property, plant and equipment

(13,881)

(6,904)

Proceeds from maturity of investments

310,000

120,000

Acquired in-process research and development

(10,000)

Net cash used in investing activities

(168,931)

(271,904)

Financing activities

Repayments of long-term debt

(757,750)

(7,750)

Payment of employee withholding taxes related to share-based awards

(67,163)

(49,296)

Proceeds from employee equity incentive and purchase plans

11,447

494

Net cash used in financing activities

(813,466)

(56,552)

Effect of exchange rates on cash and cash equivalents

1,695

(1,698)

Net decrease in cash and cash equivalents

(550,918)

(62,925)

Cash and cash equivalents, at beginning of period

2,412,864

1,506,310

Cash and cash equivalents, at end of period

$ 1,861,946

$ 1,443,385

The accompanying notes are an integral part of these condensed consolidated financial statements.

Jazz Pharmaceuticals plc is a global biopharmaceutical company whose purpose is to innovate to transform the lives of patients and their families. We are dedicated to developing life-changing medicines for people with serious diseases - often with limited or no therapeutic options. We have a diverse portfolio of marketed medicines, including leading therapies for sleep disorders and epilepsy, and a growing portfolio of cancer treatments. Our patient-focused and science-driven approach powers pioneering research and development advancements across our robust pipeline of innovative therapeutics in oncology and neuroscience.

Our lead marketed products, listed below, are approved in countries around the world to improve patient care.

Rylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn), a product approved by FDA in June 2021 and launched in the U.S. in July 2021 for use as a component of a multi-agent chemotherapeutic regimen for the treatment of ALL or LBL in adults and pediatric patients aged one month or older who have developed hypersensitivity to E. coli-derived asparaginase. In September 2023, the European Commission granted marketing authorization under the trade name Enrylaze. This therapy is also approved in markets including Great Britain, Canada and Switzerland.

U.S. in December 2024 for the treatment of adults with previously treated, unresectable or metastatic HER2-positive (IHC 3+) BTC, as detected by an FDA-approved test.

Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated or the context otherwise requires, all references to "Jazz Pharmaceuticals," "the registrant," "the Company," "we," "us," and "our" refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries. Throughout this Quarterly Report on Form 10-Q, all references to "ordinary shares" refer to Jazz Pharmaceuticals plc's ordinary shares.

Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared following the requirements of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. GAAP can be condensed or omitted. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our annual audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.

In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and include all adjustments, consisting only of normal recurring

adjustments, considered necessary for the fair presentation of our financial position and operating results. The results for the three months ended

March 31, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025, for any other interim period or for any future period.

Our significant accounting policies have not changed substantially from those previously described in our Annual Report on Form 10-K for the year ended December 31, 2024.

These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated.

Our operating segment is reported in a manner consistent with the internal reporting provided to the CODM. Our CODM has been identified as our chief executive officer. We have determined that we operate in one business segment, which is the identification, development and commercialization of meaningful pharmaceutical products that address unmet medical needs. The CODM assesses performance and decides how to allocate resources for the segment based on net income (loss) and measure of segment assets which is reported on the Consolidated Statements of Loss and Consolidated Balance Sheet.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Adoption of New Accounting Standards

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures", which requires enhanced tax disclosures providing greater disaggregation of information in the Company's effective tax rate reconciliation and disaggregates income taxes paid by jurisdiction. The amendments are effective on a prospective basis, with the option to apply it retrospectively, for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 will expand our income tax disclosures in our Annual Report on Form 10-K, but will have no impact on reported income tax (benefit) expense or related tax assets or liabilities.

Significant Risks and Uncertainties

We expect that our business will continue to meaningfully depend on oxybate revenues; however, there is no guarantee that oxybate revenues will remain at current levels. In this regard, our ability to maintain oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties including, without limitation, those related to the commercialization of Xywav for the treatment of IH in adults and adoption in that indication; competition from the introduction of two AG versions of high-sodium oxybate and a branded fixed-dose, high-sodium oxybate, Avadel's Lumryz, for treatment of cataplexy and/or EDS in narcolepsy in the U.S. market, as well as potential future competition from additional AG versions of high-sodium oxybate and from generic versions of high-sodium oxybate and from other competitors; increased pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third party payors, including our ability to maintain adequate coverage and reimbursement for Xywav; increased rebates required to maintain access to our products; challenges to our intellectual property around Xywav and/or Xyrem, including from pending antitrust and intellectual property litigation; and continued acceptance of Xywav by physicians and patients. A significant decline in oxybate revenues could cause us to reduce our operating expenses or seek to raise additional funds and would have a material adverse effect on our business, financial condition, results of operations and growth prospects, including on our ability to acquire, in-license or develop new products to grow our business.

Our financial condition, results of operations and growth prospects are also dependent on our ability to maintain or increase sales of Epidiolex/Epidyolex in the U.S. and Europe, which is subject to many risks and there is no guarantee that we will be able to continue to successfully commercialize Epidiolex/Epidyolex for its approved indications. The commercial success of Epidiolex/Epidyolex depends on the extent to which patients and physicians accept and adopt Epidiolex/Epidyolex as a treatment for seizures associated with LGS, DS and TSC, and we do not know whether our or others' estimates in this regard will be accurate. Physicians may not prescribe Epidiolex and patients may be unwilling to use Epidiolex/Epidyolex if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost. Additionally, any negative development for Epidiolex/Epidyolex in the market, in clinical development for additional indications, or in regulatory processes in other jurisdictions, may adversely impact the commercial results and potential of Epidiolex/Epidyolex.

In addition to risks related specifically to Xywav and Epidiolex/Epidyolex, we are subject to other challenges and risks related to successfully commercializing a portfolio of oncology products and other neuroscience products, and other risks

specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: ongoing clinical research activity and related outcomes; obtaining regulatory approval of our late-stage product candidates, including dordaviprone; effectively commercializing our approved products such as Rylaze, Zepzelca and Ziihera; obtaining and maintaining adequate coverage and reimbursement for our products; contracting and rebates to pharmacy benefit managers and similar organizations that reduce our net revenue; increasing scrutiny of pharmaceutical product pricing and resulting changes in healthcare laws and policy; market acceptance; regulatory concerns with controlled substances generally and the potential for abuse; future legislation; action by the U.S. Federal Government authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved cannabinoid products; delays or problems in the supply of our products; loss of single source suppliers or failure to comply with manufacturing regulations; delays or problems with third parties that are part of our manufacturing and supply chain; identifying, acquiring or in-licensing additional products or product candidates; our ability to realize the anticipated benefits of acquired or in-licensed products or product candidates, such as Ziihera and dordaviprone, at the expected levels, with the expected costs and within the expected timeframe; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; complying with applicable regulatory requirements; the impact of new or increased tariffs and escalating trade tensions; and possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt obligations.

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, investments and derivative contracts. Our investment policy permits investments in U.S. federal government and federal agency securities, corporate bonds or commercial paper issued by U.S. corporations, money market instruments, certain qualifying money market mutual funds, certain repurchase agreements, and tax-exempt obligations of U.S. states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and investments to the extent recorded on the balance sheet.

We manage our foreign currency transaction risk and interest rate risk within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. As of March 31, 2025 and December 31, 2024, we had foreign exchange forward contracts with notional amounts totaling $240.1 million and $461.2 million, respectively. As of March 31, 2025 and December 31, 2024, the outstanding foreign exchange forward contracts had a net asset fair value of $6.8 million and a net liability fair value of $7.9 million, respectively. As of March 31, 2025 and December 31, 2024, we had interest rate swap contracts with notional amounts totaling

$500.0 million. As of March 31, 2025 and December 31, 2024, these outstanding interest rate swap contracts had a net liability fair value of $0.1 million and a net asset fair value of $1.0 million, respectively. The counterparties to these contracts are large multinational commercial banks, and we believe the risk of nonperformance is not significant.

We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in the U.S., and to other international distributors and hospitals. Customer creditworthiness is monitored and collateral is not required. We monitor economic conditions in certain European countries which may result in variability of the timing of cash receipts and an increase in the average length of time that it takes to collect accounts receivable outstanding. Historically, we have not experienced significant credit losses on our accounts receivable and, as of March 31, 2025 and December 31, 2024, allowances on receivables were not material. As of March 31, 2025, five customers accounted for 83% of gross accounts receivable, including ESSDS, which accounted for 44% of gross accounts receivable, ASD, which accounted for 16% of gross accounts receivable and McKesson, which accounted for 11% of gross accounts receivable. As of December 31, 2024, five customers accounted for 80% of gross accounts receivable, including ESSDS, which accounted for 39% of gross accounts receivable, ASD, which accounted for 15% of gross accounts receivable and McKesson, which accounted for 13% of gross accounts receivable.

We depend on single source suppliers for most of our products, product candidates and their APIs. With respect to our oxybate products, the API is manufactured for us by a single source supplier and the finished products are manufactured both by us in our facility in Athlone, Ireland and by our U.S.-based supplier, which is certified to produce Xyrem and Xywav.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) - Disaggregation of Income Statement Expenses", which requires additional disclosure in the notes to the financial statements of the nature of certain expenses included in the income statement. The amendments are effective on a prospective basis, with the option to apply it retrospectively, for fiscal years beginning after December 15, 2026. We are currently evaluating the impact of adopting this new accounting guidance.

In November 2024, the FASB issued ASU 2024-04, "Induced Conversions of Convertible Debt Instruments", which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt. The amendments are effective on a prospective basis, with the option to apply it retrospectively, for fiscal years beginning after December 15, 2025. We are currently evaluating the impact of adopting this new accounting guidance.

Cash, cash equivalents and investments consisted of the following (in thousands):

Cash

$ 841,568

$ - $ - $ 841,568

$ 841,568

$ -

Time deposits

770,000

- - 770,000

60,000

710,000

Money market funds

960,378

- - 960,378

960,378

Totals

$ 2,571,946

$ - $ - $ 2,571,946

$ 1,861,946

$ 710,000

Cash

$ 948,894

$ - $ - $ 948,894

$ 948,894

$ -

Time deposits

790,000

- - 790,000

210,000

580,000

Money market funds

1,253,970

- - 1,253,970

1,253,970

Totals

$ 2,992,864

$ - $ - $ 2,992,864

$ 2,412,864

$ 580,000

Cash equivalents and investments are considered available-for-sale securities. We use the specific-identification method for calculating realized gains and losses on securities sold and include them in interest expense, net in the condensed consolidated statements of loss. Our investment balances represent time deposits with original maturities of greater than three months and less than one year. Interest income from available-for-sale securities was $27.6 million and $23.3 million in the three months ended March 31, 2025 and 2024, respectively.

The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of March 31, 2025 and December 31, 2024, that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands):

Identical Assets (Level 1)

Observable

Inputs (Level 2)

Total

Estimated Fair Value

Identical Assets (Level 1)

Observable

Inputs (Level 2)

Total

Estimated Fair Value

Assets:

Available-for-sale securities:

Money market funds

$ 960,378

$ -

$ 960,378

$ 1,253,970

$ -

$ 1,253,970

Time deposits

770,000

790,000

Foreign exchange forward contracts

6,817

2,250

Interest rate contracts

991

Totals

$ 960,378

$ 776,853

$ 1,737,231

$ 1,253,970

$ 793,241

$ 2,047,211

Liabilities:

Interest rate contracts

$ -

$ 163

$ -

Foreign exchange forward contracts

10,198

Totals

$ -

$ 163

$ -

$ 10,198

As of March 31, 2025 and December 31, 2024, our available-for-sale securities included money market funds and time deposits and their carrying values were approximately equal to their fair values. Money market funds were measured using quoted prices in active markets, which represent Level 1 inputs and time deposits were measured at fair value using Level 2 inputs. Level 2 inputs are obtained from various third party data providers and represent quoted prices for similar assets in active markets, or these inputs were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data.

Our derivative assets and liabilities include interest rate and foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk as well as an evaluation of our counterparties' credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the fair value hierarchy.

There were no transfers between the different levels of the fair value hierarchy in 2025 or 2024.

As of March 31, 2025 and December 31, 2024, the carrying amount of investments measured using the measurement alternative for equity investments without a readily determinable fair value was $4.3 million. The carrying amount, which is recorded within other non-current assets, is based on the latest observable transaction price.

As of March 31, 2025 and December 31, 2024, the estimated fair values of the 2026 Notes, the 2030 Notes and the Secured Notes were $1.0 billion,

$1.1 billion and $1.4 billion, respectively. The estimated fair value of the Tranche B-2 Dollar Term Loans as of March 31, 2025 and December 31, 2024 was $1.9 billion and $2.7 billion, respectively. The fair values of each of these debt facilities was estimated using quoted market prices obtained from brokers (Level 2).

We are exposed to certain risks arising from operating internationally, including fluctuations in foreign exchange rates primarily related to the translation of sterling and euro denominated net monetary liabilities, including intercompany balances, held by subsidiaries with a U.S. dollar functional currency and fluctuations in interest rates on our outstanding term loan borrowings. We manage these exposures within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.

We enter into foreign exchange forward contracts, with durations of up to 12 months, designed to limit the exposure to fluctuations in foreign exchange rates related to the translation of certain non-U.S. dollar denominated liabilities, including intercompany balances. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of March 31, 2025 and

December 31, 2024, the notional amount of foreign exchange contracts where hedge accounting is not applied was $240.1 million and $461.2 million, respectively.

The foreign exchange loss in our condensed consolidated statements of loss included the following gains (losses) associated with foreign exchange contracts not designated as hedging instruments (in thousands):

Gain (loss) recognized in foreign exchange loss $ 8,607 $ (4,086)

To achieve a desired mix of floating and fixed interest rates on our variable rate debt, we entered into interest rate swap agreements in April 2023, which are effective until April 2026. These agreements hedge contractual term loan interest rates. As of March 31, 2025, the interest rate swap agreements had a notional amount of $500.0 million. As a result of these agreements, the interest rate on a portion of our term loan borrowings is fixed at 3.9086%, plus the borrowing spread, until April 30, 2026.

The impact on accumulated other comprehensive loss and earnings (loss) from derivative instruments that qualified as cash flow hedges was as follows (in thousands):

Interest Rate Contracts:

2025

2024

Gain (loss) recognized in accumulated other comprehensive loss, net of tax

(443) $

5,177

Gain reclassified from accumulated other comprehensive loss to interest expense, net of tax

(396)

(1,356)

The cash flow effects of our derivative contracts for the three months ended March 31, 2025 and 2024 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows.

The following tables summarize the fair value of outstanding derivatives (in thousands):

Classification

2025

2024

Assets

Derivatives designated as hedging instruments:

Interest rate contracts Other current assets

959

Other non-current assets

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts

Other current assets

6,817

2,250

Total fair value of derivative asset instruments

$ 6,853

$ 3,241

Liabilities

Derivatives designated as hedging instruments:

Interest rate contracts

Other non-current liabilities

$ 163

$ -

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts

Accrued liabilities

10,198

Total fair value of derivative liability instruments

$ 163

$ 10,198

Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate and foreign exchange forward contracts subject to such provisions (in thousands):

Derivative assets

$ 6,853

$ - $ 6,853

$ (121)

$ - $ 6,732

Derivative liabilities

(163)

- (163)

121

- (42)

Derivative assets

$ 3,241

$ - $ 3,241

$ (2,910)

$ - $ 331

Derivative liabilities

(10,198)

- (10,198)

2,910

- (7,288)

Inventories consisted of the following (in thousands):

March 31,

2025

December 31,

2024

Raw materials

$ 33,484

$ 20,161

Work in process

320,252

311,752

Finished goods

139,040

148,532

Total inventories

$ 492,776

$ 480,445

As of March 31, 2025 and December 31, 2024, inventories included $166.7 million and $191.2 million, respectively, related to the purchase accounting inventory fair value step-up on inventory acquired as part of our GW acquisition.

Disclaimer

Jazz Pharmaceuticals plc published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 13:12 UTC.