Earnings call transcript: Jazz Pharmaceuticals beats Q3 2025 forecasts, stock dips

Jazz Pharmaceuticals PLC (JAZZ) reported its third-quarter earnings for 2025, surpassing market expectations with an earnings per share (EPS) of $8.13, significantly above the forecasted $5.93. Revenue also exceeded predictions, reaching $1.13 billion compared to the expected $1.11 billion. Despite these positive results, the company's stock saw a slight decline of 0.44% in after-hours trading, closing at $137.82.

Key Takeaways

• Jazz Pharmaceuticals reported a 37.1% EPS surprise, beating market expectations.
• Revenue grew by 7% year-over-year, driven by strong product sales.
• Stock declined 0.44% in after-hours trading despite earnings beat.
• The company narrowed its full-year revenue guidance to $4.175-$4.275 billion.
• Jazz continues to expand its product portfolio with recent FDA approvals.

Company Performance

Jazz Pharmaceuticals demonstrated robust performance in Q3 2025, with total revenues increasing by 7% compared to the same period last year. The company continues to capitalize on its leadership in the rare disease and oncology markets, with notable sales growth in key products like Xywav and Epidiolex. The acquisition of Chimerix and strategic licensing agreements further strengthen its competitive position.

Financial Highlights

• Revenue: $1.126 billion, up 7% year-over-year
• Adjusted net income: $501 million
• Cash and investments: $2 billion at quarter end
• Xywav sales: $431 million, 11% increase
• Epidiolex sales: $303 million, 20% increase

Earnings vs. Forecast

Jazz Pharmaceuticals exceeded both EPS and revenue forecasts, with an EPS of $8.13 compared to the expected $5.93, a 37.1% surprise. Revenue was $1.13 billion, surpassing the forecast of $1.11 billion by 1.8%. This performance marks a significant improvement over previous quarters, highlighting the company's operational efficiency and product demand.

Market Reaction

Despite the earnings beat, Jazz Pharmaceuticals' stock experienced a slight decrease of 0.44% in after-hours trading, closing at $137.82. This movement contrasts with the broader market trend and might reflect investor caution regarding future challenges, such as potential generic competition and market saturation.

Outlook & Guidance

Jazz Pharmaceuticals narrowed its full-year revenue guidance to a range of $4.175-$4.275 billion. The company is preparing for potential generic competition in the sleep market and anticipates top-line results from the Zanidatamab Horizon GEA trial this quarter. Jazz remains focused on CNS and oncology development, exploring combination strategies with orexin agonists.

Executive Commentary

CEO Renee Gala emphasized Jazz's commitment to innovation, stating, "We delivered two FDA approvals that underscore Jazz's ability to bring highly differentiated therapies to patients with serious unmet needs." CFO Phil Johnson highlighted the company's financial strength, noting, "We continue to generate robust cash flow with nearly $1 billion recorded for the first nine months of 2025."

Risks and Challenges

• Potential generic entry of Xyrem in 2026 could impact market share.
• Market saturation in the sleep segment may limit growth.
• Macroeconomic pressures could affect consumer spending and healthcare budgets.
• Regulatory hurdles in expanding product approvals.
• Competition from emerging therapies in the CNS and oncology markets.

Q&A

During the earnings call, analysts inquired about the potential impact of generic Xyrem market entry and the differentiation of Xywav versus emerging therapies. The management also addressed changes in the Zanidatamab trial population and the potential of the KCNQ2/3 epilepsy program, reflecting investor interest in Jazz's strategic initiatives and future growth prospects.

Full transcript - Jazz Pharmaceuticals PLC (JAZZ) Q3 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the Jazz Pharmaceuticals 2025 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press Star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Star 11 again. We ask that all analysts please limit themselves to one question. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jack Spinks, Executive Director, Investor Relations. Please go ahead.

Jack Spinks, Executive Director, Investor Relations, Jazz Pharmaceuticals: Thank you, Operator. Good afternoon, everyone. Today, Jazz Pharmaceuticals reported its third quarter 2025 financial results. The slide presentation accompanying this webcast is available on the Investor section of our website. Investors should also refer to the press release and the quarterly report on Form 10Q that we issued earlier today. Both are available on our website and filed with the SEC. On the call today are Renee Gala, President and Chief Executive Officer; Sam Pierce, Executive Vice President and Chief Commercial Officer; Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer; and Phil Johnson, Executive Vice President and 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, regulatory and commercial milestones, 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 these risks and uncertainties described in today's press release and under the captioned risk factors in our annual report on Form 10-K for the fiscal year ended December 31, 2024, and our subsequent filings with the SEC, including our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2025, which identified certain 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 our 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 Investor section of our website. I'll now turn the call over to Renee.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Thanks, Jack. Good afternoon, everyone, and thank you for joining us to discuss Jazz's third quarter 2025 results. I'm delighted to be speaking with you today as Jazz's CEO. The past three months have been energizing and productive. We delivered two FDA approvals that underscore Jazz's ability to bring highly differentiated therapies to patients with serious unmet needs. These milestones reflect the strength of our execution, dedication of our teams, and our continued momentum to drive sustainable growth and meaningful value for our patients and our shareholders. Beginning on slide five, the results of the quarter reflect that momentum. Starting with commercial, we achieved our highest-ever revenue quarter, over $1.1 billion, driven by robust growth from Xywav, Epidiolex, and the early successful launch of Dordaviprone, the first and only drug treatment for recurrent H3K27M-mutant diffuse midline glioma, an ultra-rare and aggressive brain tumor.

Approval of Modeso followed the acquisition of Chimerix earlier this year, reinforcing our ability to strengthen our portfolio through corporate development. We also secured FDA approval for Zepzelca in combination with Tecentriq as a first-line maintenance therapy for extensive-stage small cell lung cancer. Both therapies are now included in NCCN guidelines, reflecting the meaningful advancements these therapies bring to patients. Moving on to our pipeline, we look forward to sharing the highly anticipated top-line results from the phase III Zanidatamab Horizon trial in gastroesophageal adenocarcinoma, or GEA, later this quarter. In addition, we strengthened our early-stage epilepsy pipeline through a global licensing agreement with Saniona. This agreement provides Jazz with worldwide rights to develop and commercialize SAM2355, a promising preclinical candidate designed to overcome the limitations of non-selective KCNQ-targeting compounds. On the financial front, we remain strongly positioned to invest in the key growth drivers of our business.

We narrowed our 2025 revenue guidance to a range of $4.175-$4.275 billion, reflecting increased confidence in our outlook at this point in the year. In addition, we were pleased to have reached settlement agreements across the entirety of the Xyrem antitrust litigation and the litigation with Abidel. With these matters behind us, we can focus squarely on executing our strategy, maximizing our impact for patients, and creating meaningful value for our shareholders. Finally, we're thrilled to welcome Dr. Ted Love to our Board of Directors. Ted's extensive leadership in the biopharmaceutical industry and track record of driving scientific innovation, commercial success, and shareholder value will complement the capabilities of our existing board and deepen our commitment to innovating for patients.

In summary, we delivered a highly productive third quarter with record revenues, FDA approval, and rapid launch of Modeso, completion of the Saniona licensing agreement, and in October, litigation settlements and first-line maintenance combination approval for Zepzelca, all of which position us for a strong close of the year. I'll now turn the call over to Sam to discuss our commercial performance, after which Rob will cover our R&D pipeline. Phil will provide a financial update, and after that, we'll open the call to Q&A. Sam?

Sam Pierce, Executive Vice President and Chief Commercial Officer, Jazz Pharmaceuticals: Thank you, Renee. I'm looking forward to sharing the progress of our growing and increasingly diversified commercial portfolio today. Starting on slide seven, during the third quarter, we continued to build on the positive momentum we've seen across our sleep portfolio this year. Total revenue from our sleep therapeutic area, which includes Xywav, Xyrem, and high-sodium oxybate authorized generic royalties, was $520 million. Xywav net product sales grew 11% year over year to $431 million. We're pleased with the strong execution of our field teams, which drove an increase of 450 net patient adds exiting the third quarter, with 125 net patient adds from narcolepsy and 325 from IH. Our field teams' efforts have been bolstered by our disease awareness digital campaigns that have now been expanded to include narcolepsy in addition to IH. Our field nurse educator program continues to drive positive impact for patients starting therapy.

This program enables new Xywav patients to interact in person with a registered nurse to receive education on titrating and optimizing their oxybate therapy and has been effective in helping patients remain on treatment. The health benefits of reducing sodium intake continue to resonate with HCPs and patients, solidifying Xywav's position in the market as the only oxybate that provides a significant and clinically meaningful reduction of sodium. In August, the American Heart Association and American College of Cardiology published the 2025 high blood pressure guidelines, which recommend daily sodium intake should not exceed 2,300 milligrams per day. For patients predisposed to high blood pressure, the daily intake of sodium should be less than 1,500 milligrams per day, a level which is exceeded by the recommended daily dose of all high-sodium oxybate treatment options.

These recommendations are supported by the recently published Xylo study that showed switching to low-sodium Xywav from high-sodium Xyrem was associated with a clinically meaningful reduction in blood pressure. These guidelines, alongside the Xylo data, reinforce our belief that every patient taking an oxybate to treat narcolepsy or IH should have the opportunity to benefit from Xywav. We carry very strong momentum with low-sodium Xywav into 2026, which is a year that brings the potential entry of one or more generic versions of our high-sodium Xyrem. As a reminder, generics of Xyrem are able to enter the market early next year. The revenue impact to Jazz will depend on which companies enter the market, how many may enter, and how these products will be priced. We therefore recognize that the availability of generics could result in payer actions that cause some level of disruption to Xywav revenue.

However, even in a market with generic competitors, Xywav offers a differentiated profile, and we will partner with payers to ensure that patients continue to have strong access to Xywav, the only low-sodium oxybate on the market and the only FDA-approved treatment for IH. Moving to slide eight in Epidiolex, net product sales were $303 million, resulting in a 20% increase compared to the third quarter of 2024. We continue to see healthy underlying demand for Epidiolex, with 10% volume growth in the quarter. Revenue this quarter also benefited from the release of reserves following refinements of certain accrual rates here in the U.S. We are seeing sustained benefit from the robust body of real-world evidence supporting both seizure and non-seizure benefits of Epidiolex, with new data from the EpiCom study expected at the AES annual meeting next month.

In addition, the Nurse Navigator program has driven a meaningful improvement in persistency amongst Epidiolex patients enrolled in the program. Given our solid year-to-date performance, we remain confident that Epidiolex will reach blockbuster status this year. Moving to oncology on slide nine, for the third quarter of 2025, Rylaze net product sales were $100 million, representing a 1% increase compared to the third quarter of 2024. Whilst overall asparaginase use has declined following implementation of updated pediatric protocols, the use of Rylaze within the asparaginase class for pediatric treatment has remained stable. Our efforts continue to be focused on ensuring optimal use of Rylaze in the pediatric setting, ensuring patients are switched to Rylaze at the first sign of a hypersensitivity reaction, and increasing Rylaze use in the adolescent and young adult population.

On slide ten, net product sales for Zepzelca for the third quarter of 2025 were approximately $79 million, a decrease of 8% year over year due to continued competitive dynamics in the second-line setting. We were pleased to have received FDA approval for the combination of Zepzelca plus Tecentriq, expanding Zepzelca's indication into first-line maintenance therapy for extensive-stage small cell lung cancer. Data from the phase III and IVA trial demonstrated a statistically significant improvement in overall survival for Zepzelca in combination with Tecentriq, reducing the risk of death by 27% compared to the Tecentriq-only arm of the trial. We believe these data are practice-changing, and we are excited about the opportunity to help improve patient outcomes. We currently have the right team and capabilities in place to deliver a successful launch of Zepzelca in this new indication.

Turning to slide 11, Modeso became commercially available less than two weeks after receiving accelerated approval, generating $11 million in net product sales during the third quarter of 2025. We were pleased to receive early inclusion into the NCCN Guidelines as a preferred treatment for both adult and pediatric use. Given the very high unmet need, exceptionally high awareness of Modeso, and strong patient advocacy support, we've seen rapid uptake in this early phase of the launch, with more than 200 patients having received Modeso at the end of the third quarter. The majority of these patients were new patients, with a smaller proportion transitioning from the early access program. We're hearing positive early feedback amongst physicians. Our comprehensive launch plan includes direct engagement with about 3,000 healthcare providers, with an additional 7,000 targeted through non-personal promotion, focusing primarily on academic centers of excellence where these complex cases are treated.

We've implemented robust patient access and support services through our exclusive distribution partnership with Onco360. These investments were made to ensure patients can access treatment quickly and easily, and we're pleased with the strong payer access thus far. The launch of Modeso highlights Jazz's proven ability to advance rare disease and oncology programs through regulatory approval and commercial launch. I'll now turn it over to Rob for an update on our pipeline and upcoming milestones. Rob?

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Thank you, Sam. Slide 13 provides an overview of the key clinical programs in our diversified pipeline, including the comprehensive clinical development program that is underway for Zanidatamab. There are multiple ongoing registrational trials for Zanidatamab, including the confirmatory first-line BTC trial, the Horizon GEA 01 trial in first-line GEA, and the advanced breast cancer trial evaluating Zanidatamab's efficacy following treatment with TDXD. In addition, we have earlier trials like the Discover Pan-206 Pan-Tumor trial and the Neoadjuvant Adjuvant Breast Cancer trial. These trials are progressing well with significant interest from sites, and we look forward to sharing an update on potential timelines for these trials as appropriate. Regarding our confirmatory phase III action trial of Dordaviprone in newly diagnosed H3K27M-mutant diffuse midline glioma, we are in active dialogue with the FDA regarding potential updates to the trial.

Pending regulatory alignment, our intent is to increase the sample size to power the trial for a primary endpoint of overall survival, which we view as the most appropriate endpoint for this confirmatory trial. Based on these proposed updates, we currently estimate an interim analysis of the overall survival could occur in late 2026 or early 2027. The trial is active at more than 95 international sites and remains on track with more than 50% of patients enrolled. Moving to slide 14, our next major catalyst is the top-line readout of the phase III Zanidatamab Horizon GEA 01 trial. As we announced today and after alignment with FDA, we have updated the intent-to-treat patient population for PFS to now include the fully enrolled patient population, increasing the PFS cohort from the targeted 714 to 920 patients, which is the actual number of enrolled patients as detailed on clinicaltrials.gov.

As a reminder, we previously took the opportunity to expand the patient population for the overall survival analysis by expanding the sample size for that endpoint. With progression events accruing more slowly than anticipated, combined with the study being fully enrolled with sufficient follow-up on enrolled patients, we aligned with the FDA to conduct the PFS analysis on the entire randomized patient population. Following this change, we continue to have robust powering to show a benefit for PFS, and we remain highly confident that we will announce top-line results later this year, consistent with our prior guidance. With that, I will turn the call over to Phil for a financial update. Phil?

Phil Johnson, Executive Vice President and Chief Financial Officer, Jazz Pharmaceuticals: Thanks, Rob. I'll start on slide 16 with our top-line financial results. As a reminder, our full financial results are available in our press release and in our 10-Q. During the third quarter of 2025, we generated $1.126 billion in total revenues. This represents an increase of 7% compared to the third quarter of 2024. Epidiolex grew 20% and Xywav grew 11% compared to the third quarter of last year. Continued strong performance of these products positions us well for the rest of 2025 and beyond. In total, revenue from oncology products increased 1% compared to the third quarter of 2024. This modest increase was driven primarily by the inclusion of Modeso and Zyhera, partially offset by lower sales of Defitelio and Zepzelca. Adjusted net income, or ANI, for the third quarter of this year was $501 million.

ANI was affected by several items that you'll see outlined in our press release and 10-Q, including the recognition of deferred tax assets related to the Chimerix acquisition, charges related to litigation settlements, and the Saniona licensing agreement. Cumulatively, these items increased our third-quarter non-GAAP adjusted EPS by $0.66 per share. We continue to generate robust cash flow with nearly $1 billion recorded for the first nine months of 2025. Our balance sheet remains strong with $2 billion in cash and investments at quarter end. Turning to slide 17 in guidance, revenue is tracking to our expectations. With just one quarter left in the year, we're narrowing our full-year revenue guidance to $4.175-$4.275 billion. We've also made several adjustments to our non-revenue guidance.

In terms of ongoing run rate, we've reflected lower litigation costs in our revised SG&A guidance, as well as continued portfolio optimization and prioritization in our reduced R&D guidance range. In addition, we've also incorporated the additional antitrust, as well as Avadell litigation settlements into our revised SG&A guidance, have included the additional IPR&D charge from the Saniona deal, and have reflected the Chimerix income tax benefit I mentioned earlier. To help as you refine your models, I'd like to reiterate a point I made on last quarter's call. In the fourth quarter, we'll have 13 shipping weeks for our U.S. oncology products. While this is a normal number of shipping weeks, it is one less week than we had in the third quarter of this year, as well as in the fourth quarter of last year.

Finally, I'll close by providing a shout-out to our internal teams who played a key role both in our acquisition of Chimerix and in the licensing of Saniona's potentially best-in-class KD7 molecule. These transactions have strengthened our oncology and epilepsy portfolios, and we remain focused on improving Jazz's growth outlook by investing in external innovation. I'm confident that in the months and quarters ahead, we'll leverage our strong financial position to execute value-creating deals that benefit patients and shareholders. With that, I'll turn the call back to Renee for closing remarks.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Thank you, Phil. I'll conclude our prepared remarks on slide 19. Jazz's third-quarter results underscore the strength of our diversified portfolio and the exceptional execution of our teams. We've delivered meaningful progress across our commercial portfolio, including the launches of Modeso and Zepzelca, and we'll continue to focus on ensuring our therapies reach more patients quickly. Looking ahead, we remain on track to share top-line results from the phase III GEA trial of Zanidatamab later this quarter, an important milestone for Jazz and for patients facing this aggressive cancer. Our focus on strong execution and disciplined capital allocation, combined with the momentum we've built, position us to deliver meaningful value to shareholders. That concludes our prepared remarks. I'd now like to turn the call over to the operator to open the line for Q&A.

Conference Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. As a reminder, we ask that all analysts please limit themselves to one question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mark Goodman. Leary, your line is now open.

Yeah, Rob, you mentioned the KD7 is potential best-in-class. Can you talk about how is that best-in-class? On the Epidiolex, can you guys just quantify what that benefit was to gross to net? Thanks.

We believe the KD7.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Oh, sorry.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Go ahead, Rob.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Thanks. Thanks, Renee. We believe the KCNQ2/3 that is in development after the Saniona deal is best-in-class because of the specificity for KCNQ2 and KCNQ3, differentiated from other molecules which have broader activity. The broader activity tends to give off-target toxicity without adding to the efficacy. We think we're in a precedented, validated mechanism that's potentially very impactful, with higher specificity that will potentially allow us to hit the relevant targets harder and stay off of the targets that are causing unwanted side effects.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: I'll just jump in on the Epidiolex question, Mark. It's Sam here. Yeah, for Epidiolex this quarter, it was a good quarter, as you saw, $303 million, 20% revenue growth. Important, I think, for us to highlight that we saw 10% volume growth this quarter. A good, healthy double-digit volume growth. The revenue in the quarter was boosted not only by the volume growth but also by the refinement of certain accrual rates here in the U.S. that gave us an impact in that third quarter. We do not expect that to have a very material impact on future quarters.

You don't want to quantify it?

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Mark, this is Phil. I'd say it's the majority of that remaining difference between the 10% volume growth and the 20% revenue growth, but it's not all of it.

Thank you.

Sure.

Conference Operator: Thank you so much. Our next question comes from the line of Jessica Fay with JPMorgan. Your line is now open.

Hey, guys. Good afternoon. Thanks for taking my question. You mentioned that 2026 brings the generic entry of one or more generic Xyrems. Can you just elaborate on how you're thinking about the potential for other filers to enter in 2026? Is your base case that there is at least one ANDA entrant? If you'll indulge me, I am so curious, the change to the population being used for the PFS analysis for the Horizon GEA trial. Can you just walk through the potential benefits of using the ITT population for the PFS analysis in addition to OS? It seems like you were already well-powered for PFS, so curious kind of what brought that about. Thank you.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Rob, why don't we start with the second question, and then we can turn to Sam.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Sure. Thanks for the question, Jess. As a reminder, when we first took the study over from Zymeworks, we knew we wanted to increase the sample size to ensure adequate power for overall survival, even though the study was clearly well-powered with the 714 for PFS. At the time, given our assumptions around how the PFS events would roll in, we thought there would be a big gap between the time that we were ready to read out PFS on 714 versus having enough maturity on the fully enrolled sample size. Over the course of time, the PFS events came in more slowly than we had predicted, as you know, and enrolled very briskly.

We found ourselves in a situation where we actually have enough maturity on the full sample size, and so it only makes sense to look at all the patients enrolled rather than a subset. We checked that with health authorities, including the FDA, and they were aligned with that approach.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Just coming to your question around Xywav. Yeah, I mean, as you know, and as a reminder, generics are able to enter into the market from the beginning of next year. At this stage, we do not know the number of generics that would enter, when they might enter, or the price at which they will enter the market. There are some unknowns there. The availability of generics could result in payer actions that cause some disruption to Xywav revenue. We are going to continue to partner with payers to ensure that patients have access to low-sodium Xywav. We believe that is important. We believe that, of course, Xywav continues to offer a really differentiated proposition to patients, being the only low-sodium oxybate in the market and the only FDA-approved treatment for IH. Yeah, that is how we are currently viewing 2026. Of course.

Still some things that we need to see how they'll play out in practice.

Conference Operator: Thank you so much. Our next question comes from the line of Andrea Flynn with Goldman Sachs. Your line is now open.

Hi, everyone. Thanks so much for taking the question. Sam, maybe I can follow up on Jess's question there. Just as you think about potential generic entrants, outside of maybe these negotiations with payers, are there any other strategies you might be willing to contemplate to defend against the competitive threat that might arise to the sleep franchise?

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Yes, thank you for the question, Andrea. We've been focused now, as you can see, that we've had very, very strong momentum with Xywav through the course of this year with 11% growth. We continue to add net patient adds each quarter. We've got the highest number of active patients on treatment now. We are carrying really strong momentum into the market. The things that we've been doing are going to be as relevant in 2026 as they are in 2025. The execution of our field teams has been very strong. The differentiation that we've been communicating to HCPs has really resonated well. Even in a changing environment in 2026, Xywav is going to be the only low-sodium oxybate on the market. We believe that that's still a really important differentiating proposition for customers and for patients. We are going to continue to invest in ensuring that.

That differentiation is understood. I think the AHA guidelines, which just reinforced the importance of having a low-sodium option, as well as our Xywav data, which shows the impact of switching from a high-sodium oxybate to a low-sodium oxybate, these are all really very important differentiating features. We will continue to communicate those to HCPs as we enter 2026. Just to add on to that, while this is not a direct strategy relative to defend against impacts, I will say, just noting that we did report in our 10Q that we entered into an amendment with HICMA, and that amendment to our agreement extends the agreement by two years. We do recognize that a portion of the narcolepsy market does continue to choose high-sodium oxybate. By providing more therapeutic options, we think that is a good thing for patients.

Of course, our royalties on the sale of authorized generics by HICMA provide us the opportunity to continue to participate in that market. We have extended the agreement by two years. Our royalty rates are the same through the end of 2025 and then subject to specific reductions. HICMA does maintain a right to launch a generic. If they do so, they no longer have access to our authorized generic or our REMs. As part of this, we also gain termination rights that we did not have previously, which allows us to better manage our business. That is another element of our business that we think makes sense for Jazz and is important to understand.

Conference Operator: Thank you so much. Our next question comes from the line of Akash Towary with Jefferies. Your line is now open.

Hey, thanks so much. We've seen some increasingly unpredictable interactions with biotech and the FDA recently. How confident is your team that the FDA is okay with Horizon GEA having no U.S. patients in the trial? Was that discussed when you updated the PFS analysis with the agency recently? Thank you.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Rob, you want to jump in on that one?

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yeah, happy to. Thanks for the question, Akash. We've had multiple interactions with the FDA and other health authorities. We're aligned on the overall design. There was a clear rationale for not accruing patients from the U.S. With the approval of Keytruda, that would have been a confounding factor. What the FDA is really focused on is not so much whether patients are being enrolled from the U.S., but whether the enrolled patient population is representative of patients in the U.S. in terms of disease characteristics, that the trial design is well-controlled using a control that's relevant to U.S. patients, and that the trial conduct, including supportive care, is in line with typical supportive care. That way, the results would be applicable to the U.S. population. We've had this discussion with the FDA over multiple interactions, and I'm comfortable that it's not an issue for us.

Conference Operator: All right. Thank you so much. Our next question comes from the line of Jason Gerbery with Bank of America. Your line is now open.

Hey, guys. Thanks for taking my question. Just another follow-up on the oxybate generics next year. I would assume by now, like November, I remember around this time, 3Q, ahead of Abbadell coming the subsequent year, you guys had a line of sight on being a parity access as an oxybate. So, yeah, I'm just wondering why that is. Maybe you don't have a line of sight. And would it be your base case that to get Xywav, you're going to have to step through a generic with most insurers? I'd love to get your thoughts just on emerging orexin data in narcolepsy type 2. I think NT1, the data and profile is pretty reasonably well understood. I think we are seeing less of a treatment effect size in NT2.

I'm just kind of curious how you think about the value proposition of that as a potential competitive threat to Xywav as well. Thanks.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Yeah, thanks for the question, Jason. Why don't you hop in on the first one, Sam? Then, Rob, you can cover the second.

Conference Operator: Yes, thank you. Thanks for the question, Jason. Yeah. So far, there has been no material change to our engagement with payers. We continue to engage with them as we normally would do. On 2026, we do not have a line of sight into exactly how 2026 will play out. We know that generics are able to enter the market, but we do not know yet how many there will be, when they might enter, and what the precise pricing conditions will be. All of that, obviously, will have a bearing on the year ahead of us. Of course, we do expect that to have an impact on Xyrem revenue, but the materiality of impact to Xywav will depend on all of those factors yet to be determined.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yeah, and happy to answer the question related to NT2. First of all, not a surprise that NT1 is more sensitive than NT2 or IH would be, given what we know about the underlying biology. I'm also not surprised to see that as data emerged that we're learning still. It's fairly early days and still learning what we'll have, which compound will have the best-in-class profile, how to dose, what half-life is maybe most optimal, and ultimately the benefit of orexin agonists relative to other options such as oxybates and Xywave. I think all of the data that are emerging continue to reinforce our position that Xywave, oxybate, Xywave being the safest of all oxybates given the low sodium, is really the only way to address the disruption and the abnormalities in nighttime sleep, which are the root cause of NT1, NT2, and idiopathic hypersomnia.

Some of the data that we published on Xywav and World Sleep recently, I think, highlighted that the benefit of Xywav in terms of improving those sleep parameters, which appear not to be improved when you look at total sleep or deep sleep, which is important, not to be improved. Based on the available data that we have on orexin agonists. In fact, orexin agonists, especially depending on the half-life, can cause insomnia and disrupt sleep. We continue to think that while orexin agonists are a very potent wake-promoting agent for daytime symptoms, the combination could be very powerful. It's always been the case for oxybates that patients sometimes take wake-promoting agents during the day, and we think that that will continue to be the case and that orexins will be another option there.

As data rollout, it continues to reinforce the value of Xywav for patients who are benefiting from it.

Conference Operator: Thank you so much. As a reminder, everyone. We ask that all analysts please limit themselves to one question. Please stand by while we compile the Q&A roster. Our next question comes from the line of Amy Fadia with Needham & Company. Your line is now open.

Hi, good afternoon. Thanks for taking my question. Maybe just a broader one. How have your business development priorities between CNS and oncology evolved with some recent successes that you've had on the oncology side, the GEA data around the corner, but also looking a little bit ahead, the changing landscape in the sleep space? How are you thinking about sort of where your priorities might be? Thank you for the question.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: First and foremost, we are highly focused on where we believe we can have a meaningful impact for patients. Whether that is within oncology, neuroscience, or neurooncology, that is where our primary focus is. Rob, do you want to comment further?

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Sure. As we highlighted in our prepared comments, we're certainly very excited about some of the near-term readouts. The fact that we now have approval in frontline small cell lung cancer completely changed paradigm, and a new standard of care for those patients who are in desperate need of new therapies. Approval of Dordaviprone, first drug therapy approved in high-grade gliomas, already having a huge impact and a very high unmet need. Danadaydimab approved in BTC and a lot of anticipation and excitement around the potential in GEA and beyond. Certainly excited about our oncology franchise, but also a lot of promise on the CNS side as well with Epidiolex evolving into the critically important drug that it is and our capabilities around epilepsy enabling us to do deals like Saniona and to develop other.

Pipeline agents that we have that have not necessarily disclosed the specifics of, but continue to make us excited about areas such as epilepsy as well.

Conference Operator: Thank you so much. Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is now open.

Great. Thank you very much for taking my question. I would love if you could comment on how should we think about the arthritis generic royalties for next year. When would you know that HICMA has opted in or opted out at this point, given that we are in November at this point? What should be our base case? Thank you.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Sure, Mohit. I'm happy to go ahead and take the question still. At this point, our assumption is that we will have the AG provided by HICMA during 2026. The royalties, as Renee mentioned, sort of stay at their current rate here this year and then will be subject to step-downs. We're not providing the specific % that will be applied other than to say it continues to be a meaningful royalty back to Jazz and a potential meaningful revenue stream for us moving forward.

Helpful. Thank you.

Conference Operator: Thank you so much. Our next question comes from the line of David Anselin with Piper Sandler. Your line is now open.

Thanks. I wanted to come back to Xywav and dynamics in 2026 with Xyrem generics in the market. You made some comments about access, shoring up access. Should we take that to mean that you are going to be making some concessions on Xywav pricing? In other words, we will see some degradation potentially in net realized price for Xywav as sort of a cost of continuing to have access and preventing switching away from Xywav? Is that a reasonable way to think about it, or is it just too early to go there? Thanks.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Yeah, this is Renee. I'll jump in on that one. I would say going into the year, we are feeling good about our current position. I would emphasize some of the comments that Sam made previously. With the availability of generics, there could be additional actions that take place that could cause some disruption. It really does depend on how the market evolves. We have a very high focus on ensuring that we have access, and that is strong access. Sam talked about where we are today with little to no step-through in order to get access to Xywav. We have focused on the clear differentiation of the product. I would say more to come as we get into 2026. We have not provided guidance for 2026 yet, nor do we typically provide guidance by product.

I would say based on where we sit today and we're poised to enter 2026. We're feeling good about the position that we're in.

Conference Operator: Thank you so much. Our next question comes from the line of Annabelle Samimi with Stifel. Your line is now open.

Hi. Great. Thanks for taking my question. I'm going to shift gears to oncology. I'm wondering from Rylaze, that seems like it was a great start. Is this a bolus? Does it include stocking? What can we expect for the cadence of uptake in the coming quarters? How familiar are docs with this treatment? I guess in the same way, for the new approval or expanded label for Zepzelca, I realize that it's probably too early, but the data has been out for some time now. Has there been any contribution yet in the first-line setting? What can we expect on the cadence for post-approval there with the compendia inclusion and the fact that it was already an available drug? Thanks.

Yeah, thanks for that.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Thanks, Annabelle. I'll start and then hand it over to Sam to cover Medazo. Why don't I just start with Zepzelca, which is it's pretty early given that we just received the actual approval. We're excited about the reaction we're hearing from physicians. They're obviously already very comfortable in using Zepzelca in the second line, but too early to tell how much use is happening in the first line. With respect to Medazo, little to no stocking. That's not really how our distribution works, but super excited about this on the back of a successful corporate development transaction. Sam?

Conference Operator: Yeah, I'll just add to that, Renee, in relation to Rylaze. We're obviously really pleased with the launch so far, I think $11 million in the first quarter. Following FDA approval in August, and obviously, we received the NCCN guidance in pediatrics and adults as well. There have been, I think, really three factors that I'd like to kind of highlight. First of all, obviously, the very, very significant unmet need. We've had very strong HCP and patient engagement. You had a question around awareness. Awareness of the product is exceptionally high, and we're seeing that in the rapid uptake. We have a really experienced team behind this product dedicated to Rylaze. I think they're doing a terrific job. Access has been really, really very strong. We've got a very good partnership with our specialist distributor who are supporting patients to get onto treatment rapidly.

In terms of we did see we had about just over 200 patients by the end of the third quarter. Some of those did come from the expanded access program. More than 60% of them were new patients, so new to Medazo. That is how we would continue now. That is the outlook for the forthcoming quarters, is these patients will all be new to Medazo. We are seeing a steady uptake there. Confident launch and really just reinforces our belief in this product as a potentially $500 million-plus peak in the US. Okay. Thank you so much. Our next question comes from the line of Brian Scortney with Bayer. Your line is now open.

Thank you for taking my question. Maybe for Rob on the GEA readout, now at a sample size of 920, can you just review, are there four separate comparative analyses here? Or B versus A, C versus A for OS and PFS? And how to think about powering across them and the alpha split? And is there any hierarchy to the analysis?

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yeah. I mean, while there were some early publications that detailed the specifics since Jazz took on the trial, as is our usual, we don't get into the nitty-gritty of the statistics. I would say that we do have the opportunity at this point to look at both PFS and an interim on overall survival. I would say a silver lining of the PFS events coming in a little more slowly is we probably have more maturity on overall survival than we might have had under protocol assumptions. Yes, there is the opportunity to make the comparisons between both of the experimental arms and the control arm. Having said that, we think we're very, very well-powered for PFS. Obviously, the trials at 918 is powered for overall survival, and that sometimes even makes it somewhat "overpowered" for PFS.

We think we're well-powered for PFS, and we have a well-timed first of three interim analyses for us.

Great. Thank you.

Conference Operator: Thank you so much. Our next question comes from the line of David Hong with Deutsche Bank. Your line is now open.

Hi. Thanks for taking my question. I just wanted to ask, I guess, another one on Horizon GEA. Can you just help us, I guess, maybe set expectations for the level of disclosure you would have in the top-line data? Would we see things like subgroups broken out by PD-L1 expression status? Once the data in hand, is your expectation to approach the FDA and be able to receive a full approval on this data? Thanks.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yeah. Thanks for the question. On the latter part of it, yes, we do expect this would as a randomized controlled trial, with a primary PFS endpoint and supportive overall survival. If we see a large enough benefit in PFS and we see meaningful support from OS, it should bring full approval. To remind you, the primary experimental question here is really, is Zanidatamab superior to Herceptin, which we think we have lots of data to support that it would be. That's the primary comparison. Then between arms B and A, and then in arm C, we have the opportunity to see if the addition of a PD-1 inhibitor, specifically Tecentriq, adds to the benefit. We certainly will be measuring PD-L1 as a subgroup. Those subgroups aren't powered in any way, but we have an opportunity to look across subgroups. The primary question is Zanidatamab versus Herceptin.

To your question of what would we be disclosing, we'll try to be as transparent as possible, as I think we were with the recent Inforte data release where we indicated StatSig clinically meaningful and tried to provide some color around that. We want to be careful about disclosing specific data in a press release ahead of a peer-reviewed publication because sometimes that can compromise our ability to publish at a high-impact congress and in a high-impact peer-reviewed journal, which then supports, of course, submission to NCCN guidelines, etc.

Conference Operator: Thank you so much for that. Our next question comes from the line of Ash Verma with UBS. Your line is now open.

Hi. Yeah. Thanks for taking our question. Rob, just on the GEA study, if you can comment on this. I think you said when you adopted from Zymeworks, the study, you wanted to change just the powering assumption for OS. Is the PFS powering assumption still the same that Zymeworks had? What I mean is the 95% for the HR of 0.65 for arm C and the 80% for 0.73 for arm B.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yeah. Thanks for the question. Yeah. I mean, what I wanted to point out is that when we did the deal, we knew that the study—and of course, Zymeworks did as well—that the study was underpowered for OS. It was for a three-arm study. It had a similar sample size to Keytruda 811, which had only two arms. We knew we wanted to increase the sample size to better support power for overall survival and give us an opportunity to have two interim analyses before the final and third overall survival. At that time, we felt that PFS was well-powered even with 714 patients under the specific protocol assumption. With the full sample size, we continue to think that it's very well-powered for PFS.

I do acknowledge that there was a publication from Zymeworks that detailed some specifics of the statistics, but we haven't commented since then on specific details of the stat. Just to reinforce that, very, very comfortable with the powering around PFS. Now we have, I think, a more robust opportunity for overall survival, including even the first two interim analyses before we have a final look.

Conference Operator: Thank you so much. Our next question comes from the line of Joseph Tommy with TD Cowen. Your line is now open.

Hi there. Good evening, and thank you for taking my question. Maybe one on the KB7 acquisition. Can you talk a little bit about where you are going to be looking at developing these therapies? Obviously, two competitors are reasonably ahead in the focal onset seizure space, but we've also seen companies look at ALS and pain. Is there any more room left in focal onset seizures, or are you looking to look elsewhere where maybe you have a little bit more of a timeline advantage? Thank you.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yeah. We have not detailed or disclosed our full development ambitions for that program yet, and we are certainly thinking through that as we bring it forward to the IND stage. I think what is critical, though, is what motivated us to do this particular partnership is that we feel it has the potential to be meaningfully best in class. In a category where I feel there is substantial scientific and clinical proof of concept around the target. What we do know is that when you hit KCNQ broadly, you not only get efficacy, but you see unwanted tolerability issues, which have been observed in the clinic. We think that we have been able to parse them out around the subtypes, so that this particular molecule, being specific for KCNQ2 and 2.3, we think has the potential to be much more on target for producing maximal efficacy and avoiding KCNQ.

7.4 and 7.5, which do not contribute meaningfully to efficacy and contribute to some of the tolerability issues that have been observed. In short, we think we have best-in-class opportunity across certainly focal onset seizures, but in other areas where it would be relevant as well.

Conference Operator: Thank you so much. Our next question comes from the line of Asim Rana with Truist Securities. Your line is now open.

Congrats on the quarter, and thanks for taking the questions. This is an awesome one for June, just a couple from us. Where are you exactly with your orexin agonist JZP-441? I know it's an open label, just curious when we can expect an update. As a follow-up, Luxacaltamide recently reported positive top-line data in essential tremor. Is there any interest in reviving cytocaltamide? Thank you.

Rob, do you want to jump in?

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Sure. Happy to. No new news yet on JZP-441. We are enrolling a small NT1 trial, and we're seeing data emerge. Nothing to disclose yet at the moment. I would say we also have a backup program that we continue to pursue. Again, we think that the mechanism is of importance, has the potential to be a meaningful daytime alerting agent, and very complementary to Xywav. We continue to be interested in that area. In terms of the recent announcement by Praxis around CAF3 and essential tremor, we read what you did. I still have some questions around what the data actually show, given that the IDMC initially called the trial futile. It will be ultimately interesting to see what data they have and what we can learn from that. From our own study, we felt that the data just did not support.

Progressing that program relative to the other really meaningful opportunities that we have in our pipeline.

Conference Operator: Thank you so much. Our next question comes from the line of Sean Lemon with Morgan Stanley. Your line is now open.

Hi. This is Michael Riadon for Sean Lemon. Thank you for taking our questions. I wanted to drill down on some of your prior commentary. The Xywav results from Duet at World Sleep seem really compelling. Can you help to contextualize the restoration of sleep architecture versus wake promotion with orexin agonists? Are they more of an accelerant instead of a competitor? If so, would you ever think about getting the results from Duet formally into the label? Are the results from Duet sufficient in that regard? Thanks so much.

Rob Iannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, Jazz Pharmaceuticals: Yes. Thanks for the question because I do agree that they are meaningful results. We had prior data on the effect of oxybate at night, and we do think that Xywav is really the only. Oxybates are the only drug that really address the root cause of narcolepsy and idiopathic hypersomnia. And Xywav, of course, is the safest option to do that, given that it's a low-sodium oxybate. Again, it reinforces that for patients like NT1 patients or even NT2 and idiopathic hypersomnia, where nighttime sleep is severely disrupted. If you take narcolepsy patients, for example, they might have over 80, on average, 80 awakenings a night. Very, let's say, disrupted or less N3 or deep sleep than a typical patient. When you give Xywav, as these studies showed, you meaningfully improve that. That results in improved daytime symptoms, both wakefulness as well as cataplexy.

We think it's critical to address the underlying root cause of the disease with any therapy in these hypersomnias. Some patients certainly will benefit from additional wake-promoting agents during the day. We just haven't seen that with any of the other wake-promoting agents, araxins included. The only data I've seen so far suggests that there may actually be insomnia, and that may be worse with drugs that have a longer half-life that just don't wash out in time for the evening. Even the PSG data, which hasn't really been fully shared, suggests that there's not improvement in key parameters such as total sleep time or deep sleep. It's concerning that the insomnia may be actually resulting in worsening sleep in that first part of the night, at least.

We continue to think that it's an important new mechanism in hypersomnias, but ideally, it will be used in combination with Xywav, certainly for those patients who are finding meaningful benefit already from Xywav. As to whether this could ultimately end up in the label, we certainly think that it's important information for prescribers to have, and that's why we published it. I won't comment on necessarily where we are in terms of discussions with FDA on label changes related to it.

Conference Operator: Thank you so much. Our next question comes from the line of Gary Nackman with Raymond James. Your line is now open.

Hey, everyone. This is Dennis Resnick on for Gary Nocklin. Thanks for taking our question. Just on Zanidatamab, assuming a positive GEA readout, how would you be thinking about pricing that scenario relative to what it currently is for BTC? Thanks so much.

Renee Gala, President and Chief Executive Officer, Jazz Pharmaceuticals: Yeah. This is Renee. When we priced Zanny for BTC, we were already looking at the GEA market and keeping that broader opportunity in mind. I would not expect to have a different price as we are launching GEA. I think with that, that was our last question. I would like to close today's call by thanking all our Jazz colleagues for their efforts, all of our partners and stakeholders for their continued confidence and their support. Thank you all for joining us.

Conference Operator: Thank you all for your participation in today's conference. This does conclude the program. You may now disconnect.

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