|
|
ý
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Ireland
|
98-1032470
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
ý
|
|
Accelerated filer
|
¨
|
|
|
|
|
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Item 1.
|
Financial Statements
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
998,859
|
|
|
$
|
684,042
|
|
Accounts receivable, net of allowances
|
195,816
|
|
|
186,371
|
|
||
Inventories
|
30,018
|
|
|
30,037
|
|
||
Prepaid expenses
|
21,275
|
|
|
12,800
|
|
||
Deferred tax assets, net
|
50,006
|
|
|
48,440
|
|
||
Other current assets
|
18,969
|
|
|
21,322
|
|
||
Assets held for sale
|
—
|
|
|
32,833
|
|
||
Total current assets
|
1,314,943
|
|
|
1,015,845
|
|
||
Property and equipment, net
|
83,452
|
|
|
58,363
|
|
||
Intangible assets, net
|
1,270,777
|
|
|
1,437,435
|
|
||
Goodwill
|
669,029
|
|
|
702,713
|
|
||
Deferred tax assets, net, non-current
|
76,391
|
|
|
75,494
|
|
||
Deferred financing costs
|
24,315
|
|
|
33,174
|
|
||
Other non-current assets
|
25,393
|
|
|
15,931
|
|
||
Total assets
|
$
|
3,464,300
|
|
|
$
|
3,338,955
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
29,124
|
|
|
$
|
25,126
|
|
Accrued liabilities
|
166,375
|
|
|
164,091
|
|
||
Current portion of long-term debt
|
117,589
|
|
|
9,428
|
|
||
Income taxes payable
|
16,357
|
|
|
7,588
|
|
||
Deferred tax liability, net
|
9,417
|
|
|
9,430
|
|
||
Deferred revenue
|
1,330
|
|
|
1,138
|
|
||
Total current liabilities
|
340,192
|
|
|
216,801
|
|
||
Deferred revenue, non-current
|
3,646
|
|
|
4,499
|
|
||
Long-term debt, less current portion
|
1,172,103
|
|
|
1,333,000
|
|
||
Deferred tax liability, net, non-current
|
325,216
|
|
|
375,054
|
|
||
Other non-current liabilities
|
59,666
|
|
|
38,393
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
|||
Shareholders’ equity:
|
|
|
|
||||
Jazz Pharmaceuticals plc shareholders' equity
|
|
|
|
||||
Ordinary shares
|
6
|
|
|
6
|
|
||
Non-voting euro deferred shares
|
55
|
|
|
55
|
|
||
Capital redemption reserve
|
471
|
|
|
471
|
|
||
Additional paid-in capital
|
1,534,032
|
|
|
1,458,005
|
|
||
Accumulated other comprehensive loss
|
(231,277
|
)
|
|
(122,097
|
)
|
||
Retained earnings
|
260,176
|
|
|
34,704
|
|
||
Total Jazz Pharmaceuticals plc shareholders’ equity
|
1,563,463
|
|
|
1,371,144
|
|
||
Noncontrolling interests
|
14
|
|
|
64
|
|
||
Total shareholders’ equity
|
1,563,477
|
|
|
1,371,208
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,464,300
|
|
|
$
|
3,338,955
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
338,754
|
|
|
$
|
304,407
|
|
|
$
|
977,895
|
|
|
$
|
838,493
|
|
Royalties and contract revenues
|
2,118
|
|
|
2,177
|
|
|
6,027
|
|
|
6,240
|
|
||||
Total revenues
|
340,872
|
|
|
306,584
|
|
|
983,922
|
|
|
844,733
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales (excluding amortization and impairment of intangible assets)
|
28,385
|
|
|
26,994
|
|
|
78,496
|
|
|
88,610
|
|
||||
Selling, general and administrative
|
104,044
|
|
|
93,501
|
|
|
323,564
|
|
|
300,420
|
|
||||
Research and development
|
50,784
|
|
|
22,423
|
|
|
105,798
|
|
|
60,622
|
|
||||
Acquired in-process research and development
|
—
|
|
|
75,000
|
|
|
—
|
|
|
202,000
|
|
||||
Intangible asset amortization
|
26,127
|
|
|
30,630
|
|
|
74,472
|
|
|
94,607
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
32,806
|
|
||||
Total operating expenses
|
209,340
|
|
|
248,548
|
|
|
582,330
|
|
|
779,065
|
|
||||
Income from operations
|
131,532
|
|
|
58,036
|
|
|
401,592
|
|
|
65,668
|
|
||||
Interest expense, net
|
(12,650
|
)
|
|
(14,530
|
)
|
|
(44,707
|
)
|
|
(36,035
|
)
|
||||
Foreign currency gain (loss)
|
(977
|
)
|
|
6,483
|
|
|
(646
|
)
|
|
6,680
|
|
||||
Loss on extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
(16,815
|
)
|
|
—
|
|
||||
Income before income tax provision
|
117,905
|
|
|
49,989
|
|
|
339,424
|
|
|
36,313
|
|
||||
Income tax provision
|
29,945
|
|
|
24,221
|
|
|
92,651
|
|
|
60,598
|
|
||||
Net income (loss)
|
87,960
|
|
|
25,768
|
|
|
246,773
|
|
|
(24,285
|
)
|
||||
Net income (loss) attributable to noncontrolling interests, net of tax
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
(1,060
|
)
|
||||
Net income (loss) attributable to Jazz Pharmaceuticals plc
|
$
|
87,960
|
|
|
$
|
25,766
|
|
|
$
|
246,774
|
|
|
$
|
(23,225
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Jazz Pharmaceuticals plc per ordinary share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.43
|
|
|
$
|
0.43
|
|
|
$
|
4.04
|
|
|
$
|
(0.39
|
)
|
Diluted
|
$
|
1.39
|
|
|
$
|
0.41
|
|
|
$
|
3.91
|
|
|
$
|
(0.39
|
)
|
Weighted-average ordinary shares used in per share calculation - basic
|
61,435
|
|
|
60,305
|
|
|
61,145
|
|
|
59,457
|
|
||||
Weighted-average ordinary shares used in per share calculation - diluted
|
63,154
|
|
|
62,680
|
|
|
63,072
|
|
|
59,457
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss)
|
$
|
87,960
|
|
|
$
|
25,768
|
|
|
$
|
246,773
|
|
|
$
|
(24,285
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
16,779
|
|
|
(117,089
|
)
|
|
(109,174
|
)
|
|
(113,293
|
)
|
||||
Other comprehensive income (loss)
|
16,779
|
|
|
(117,089
|
)
|
|
(109,174
|
)
|
|
(113,293
|
)
|
||||
Total comprehensive income (loss)
|
104,739
|
|
|
(91,321
|
)
|
|
137,599
|
|
|
(137,578
|
)
|
||||
Comprehensive income (loss) attributable to noncontrolling interests, net of tax
|
14
|
|
|
(8
|
)
|
|
5
|
|
|
(1,067
|
)
|
||||
Comprehensive income (loss) attributable to Jazz Pharmaceuticals plc
|
$
|
104,725
|
|
|
$
|
(91,313
|
)
|
|
$
|
137,594
|
|
|
$
|
(136,511
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2015
|
|
2014
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
246,773
|
|
|
$
|
(24,285
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Intangible asset amortization
|
74,472
|
|
|
94,607
|
|
||
Share-based compensation
|
67,233
|
|
|
50,618
|
|
||
Impairment charges
|
—
|
|
|
32,806
|
|
||
Depreciation
|
7,143
|
|
|
5,037
|
|
||
Acquired in-process research and development
|
—
|
|
|
202,000
|
|
||
Loss on disposal of property and equipment
|
117
|
|
|
—
|
|
||
Excess tax benefit from share-based compensation
|
320
|
|
|
(4,075
|
)
|
||
Acquisition accounting inventory fair value step-up adjustments
|
—
|
|
|
10,477
|
|
||
Deferred income taxes
|
(25,368
|
)
|
|
(36,246
|
)
|
||
Provision for losses on accounts receivable and inventory
|
4,021
|
|
|
2,873
|
|
||
Loss on extinguishment and modification of debt
|
16,815
|
|
|
—
|
|
||
Amortization of debt discount and deferred financing costs
|
17,348
|
|
|
7,603
|
|
||
Other non-cash transactions
|
(3,834
|
)
|
|
(7,382
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(10,661
|
)
|
|
(50,690
|
)
|
||
Inventories
|
(3,595
|
)
|
|
(10,184
|
)
|
||
Prepaid expenses and other current assets
|
(5,298
|
)
|
|
4,262
|
|
||
Other long-term assets
|
(9,555
|
)
|
|
(5,775
|
)
|
||
Accounts payable
|
4,826
|
|
|
(33,865
|
)
|
||
Accrued liabilities
|
4,642
|
|
|
19,468
|
|
||
Income taxes payable
|
8,993
|
|
|
19,003
|
|
||
Deferred revenue
|
(659
|
)
|
|
(918
|
)
|
||
Contingent consideration
|
—
|
|
|
(14,900
|
)
|
||
Other non-current liabilities
|
18,469
|
|
|
12,910
|
|
||
Net cash provided by operating activities
|
412,202
|
|
|
273,344
|
|
||
Investing activities
|
|
|
|
||||
Net proceeds from sale of business
|
33,703
|
|
|
—
|
|
||
Purchases of property and equipment
|
(32,591
|
)
|
|
(22,799
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(828,676
|
)
|
||
Acquisition of in-process research and development
|
—
|
|
|
(202,000
|
)
|
||
Net cash provided by (used in) investing activities
|
1,112
|
|
|
(1,053,475
|
)
|
||
Financing activities
|
|
|
|
||||
Net proceeds from issuance of debt
|
898,960
|
|
|
1,195,366
|
|
||
Proceeds from employee equity incentive and purchase plans and exercise of warrants
|
34,025
|
|
|
48,452
|
|
||
Repayments of long-term debt
|
(896,363
|
)
|
|
(7,090
|
)
|
||
Payment of employee withholding taxes related to share-based awards
|
(25,402
|
)
|
|
(17,306
|
)
|
||
Share repurchases
|
(21,302
|
)
|
|
(29,973
|
)
|
||
Excess tax benefit from share-based compensation
|
(320
|
)
|
|
4,075
|
|
||
Acquisition of noncontrolling interests
|
(60
|
)
|
|
(136,950
|
)
|
||
Payment of contingent consideration
|
—
|
|
|
(35,100
|
)
|
||
Repayments under revolving credit facility
|
(80,000
|
)
|
|
(300,000
|
)
|
||
Net cash provided by (used in) financing activities
|
(90,462
|
)
|
|
721,474
|
|
||
Effect of exchange rates on cash and cash equivalents
|
(8,035
|
)
|
|
(2,807
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
314,817
|
|
|
(61,464
|
)
|
||
Cash and cash equivalents, at beginning of period
|
684,042
|
|
|
636,504
|
|
||
Cash and cash equivalents, at end of period
|
$
|
998,859
|
|
|
$
|
575,040
|
|
•
|
Growing sales of the existing products in our portfolio, including by identifying new growth opportunities;
|
•
|
Acquiring additional differentiated products that are on the market or product candidates that are in late-stage development; and
|
•
|
Pursuing focused development of a pipeline of post-discovery differentiated product candidates.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Jazz Pharmaceuticals plc
|
$
|
87,960
|
|
|
$
|
25,766
|
|
|
$
|
246,774
|
|
|
$
|
(23,225
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average ordinary shares used in per share calculation - basic
|
61,435
|
|
|
60,305
|
|
|
61,145
|
|
|
59,457
|
|
||||
Dilutive effect of employee equity incentive and purchase plans
|
1,719
|
|
|
2,288
|
|
|
1,927
|
|
|
—
|
|
||||
Dilutive effect of warrants
|
—
|
|
|
87
|
|
|
—
|
|
|
—
|
|
||||
Weighted-average ordinary shares used in per share calculation - diluted
|
63,154
|
|
|
62,680
|
|
|
63,072
|
|
|
59,457
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Jazz Pharmaceuticals plc per ordinary share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.43
|
|
|
$
|
0.43
|
|
|
$
|
4.04
|
|
|
$
|
(0.39
|
)
|
Diluted
|
$
|
1.39
|
|
|
$
|
0.41
|
|
|
$
|
3.91
|
|
|
$
|
(0.39
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
1.875% exchangeable senior notes due 2021
|
2,878
|
|
|
1,502
|
|
|
2,878
|
|
|
506
|
|
Options to purchase ordinary shares and RSUs
|
1,644
|
|
|
883
|
|
|
1,517
|
|
|
5,475
|
|
Warrants to purchase ordinary shares
|
—
|
|
|
—
|
|
|
—
|
|
|
618
|
|
Ordinary shares under ESPP
|
—
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
September 30, 2015
|
||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Cash and Cash Equivalents
|
||||||||||
Cash
|
$
|
193,256
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193,256
|
|
|
$
|
193,256
|
|
Time deposits
|
805,603
|
|
|
—
|
|
|
—
|
|
|
805,603
|
|
|
805,603
|
|
|||||
Totals
|
$
|
998,859
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
998,859
|
|
|
$
|
998,859
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2014
|
||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Cash and
Cash
Equivalents
|
||||||||||
Cash
|
$
|
338,262
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
338,262
|
|
|
$
|
338,262
|
|
Time deposits
|
345,780
|
|
|
—
|
|
|
—
|
|
|
345,780
|
|
|
345,780
|
|
|||||
Totals
|
$
|
684,042
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
684,042
|
|
|
$
|
684,042
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Total
Estimated Fair Value |
|
Significant
Other Observable Inputs (Level 2) |
|
Total
Estimated Fair Value |
||||||||
Time deposits
|
$
|
805,603
|
|
|
$
|
805,603
|
|
|
$
|
345,780
|
|
|
$
|
345,780
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Raw materials
|
$
|
3,437
|
|
|
$
|
3,570
|
|
Work in process
|
12,587
|
|
|
9,870
|
|
||
Finished goods
|
13,994
|
|
|
16,597
|
|
||
Total inventories
|
$
|
30,018
|
|
|
$
|
30,037
|
|
Balance at December 31, 2014
|
$
|
702,713
|
|
Foreign exchange
|
(33,684
|
)
|
|
Balance at September 30, 2015
|
$
|
669,029
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||
|
Remaining
Weighted- Average Useful Life (In years) |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||||||||
Acquired developed technologies
|
12.2
|
|
$
|
1,350,676
|
|
|
$
|
(305,982
|
)
|
|
$
|
1,044,694
|
|
|
$
|
1,450,606
|
|
|
$
|
(259,889
|
)
|
|
$
|
1,190,717
|
|
Manufacturing contracts
|
2.3
|
|
12,037
|
|
|
(5,088
|
)
|
|
6,949
|
|
|
13,012
|
|
|
(3,060
|
)
|
|
9,952
|
|
||||||
Trademarks
|
—
|
|
2,891
|
|
|
(2,891
|
)
|
|
—
|
|
|
2,914
|
|
|
(2,896
|
)
|
|
18
|
|
||||||
Total finite-lived intangible assets
|
|
|
1,365,604
|
|
|
(313,961
|
)
|
|
1,051,643
|
|
|
1,466,532
|
|
|
(265,845
|
)
|
|
1,200,687
|
|
||||||
Acquired IPR&D assets
|
|
|
219,134
|
|
|
—
|
|
|
219,134
|
|
|
236,748
|
|
|
—
|
|
|
236,748
|
|
||||||
Total intangible assets
|
|
|
$
|
1,584,738
|
|
|
$
|
(313,961
|
)
|
|
$
|
1,270,777
|
|
|
$
|
1,703,280
|
|
|
$
|
(265,845
|
)
|
|
$
|
1,437,435
|
|
Year Ending December 31,
|
Estimated
Amortization
Expense
|
||
2015 (remainder)
|
$
|
24,172
|
|
2016
|
92,510
|
|
|
2017
|
92,510
|
|
|
2018
|
89,623
|
|
|
2019
|
89,399
|
|
|
Thereafter
|
663,429
|
|
|
Total
|
$
|
1,051,643
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Construction-in-progress
|
$
|
61,061
|
|
|
$
|
37,145
|
|
Computer software
|
14,050
|
|
|
10,634
|
|
||
Computer equipment
|
11,266
|
|
|
7,670
|
|
||
Leasehold improvements
|
8,782
|
|
|
7,931
|
|
||
Machinery and equipment
|
5,862
|
|
|
6,408
|
|
||
Furniture and fixtures
|
2,339
|
|
|
2,220
|
|
||
Land and buildings
|
1,775
|
|
|
1,547
|
|
||
Subtotal
|
105,135
|
|
|
73,555
|
|
||
Less accumulated depreciation and amortization
|
(21,683
|
)
|
|
(15,192
|
)
|
||
Property and equipment, net
|
$
|
83,452
|
|
|
$
|
58,363
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Rebates and other sales deductions
|
$
|
63,676
|
|
|
$
|
51,899
|
|
Employee compensation and benefits
|
33,893
|
|
|
46,143
|
|
||
Accrued milestone payment
|
25,000
|
|
|
—
|
|
||
Sales returns reserve
|
7,757
|
|
|
14,039
|
|
||
Royalties
|
5,340
|
|
|
7,964
|
|
||
Professional fees
|
3,808
|
|
|
3,295
|
|
||
Accrued interest
|
1,927
|
|
|
10,327
|
|
||
Accrued construction-in-progress
|
1,690
|
|
|
4,931
|
|
||
Other
|
23,284
|
|
|
25,493
|
|
||
Total accrued liabilities
|
$
|
166,375
|
|
|
$
|
164,091
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
1.875% exchangeable senior notes due 2021
|
$
|
575,000
|
|
|
$
|
575,000
|
|
Unamortized discount on 1.875% exchangeable senior notes due 2021
|
(113,108
|
)
|
|
(124,735
|
)
|
||
1.875% exchangeable senior notes due 2021, net
|
461,892
|
|
|
450,265
|
|
||
Term loans
|
747,250
|
|
|
890,479
|
|
||
Borrowings under revolving credit facility
|
80,000
|
|
|
—
|
|
||
Other borrowings
|
550
|
|
|
1,684
|
|
||
Total debt
|
1,289,692
|
|
|
1,342,428
|
|
||
Less current portion
|
117,589
|
|
|
9,428
|
|
||
Total long-term debt
|
$
|
1,172,103
|
|
|
$
|
1,333,000
|
|
Year Ending December 31,
|
Scheduled Long-Term Debt Maturities
|
||
2015 (remainder)
|
$
|
9,397
|
|
2016
|
37,590
|
|
|
2017
|
42,280
|
|
|
2018
|
61,037
|
|
|
2019
|
79,792
|
|
|
Thereafter
|
1,175,454
|
|
|
Total
|
$
|
1,405,550
|
|
Year Ending December 31,
|
Lease
Payments
|
||
2015 (remainder)
|
$
|
2,874
|
|
2016
|
11,683
|
|
|
2017
|
12,556
|
|
|
2018
|
8,054
|
|
|
2019
|
7,197
|
|
|
Thereafter
|
73,296
|
|
|
Total
|
$
|
115,660
|
|
|
Attributable to:
|
||||||||||
|
Jazz Pharmaceuticals plc
|
|
Noncontrolling interests
|
|
Total Shareholders' Equity
|
||||||
Shareholders' equity at January 1, 2015
|
$
|
1,371,144
|
|
|
$
|
64
|
|
|
$
|
1,371,208
|
|
Acquisition of noncontrolling interests
|
(5
|
)
|
|
(55
|
)
|
|
(60
|
)
|
|||
Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans
|
34,025
|
|
|
—
|
|
|
34,025
|
|
|||
Employee withholding taxes related to share-based awards
|
(25,402
|
)
|
|
—
|
|
|
(25,402
|
)
|
|||
Share-based compensation
|
67,729
|
|
|
—
|
|
|
67,729
|
|
|||
Tax benefit from employee share options
|
(320
|
)
|
|
—
|
|
|
(320
|
)
|
|||
Shares repurchased
|
(21,302
|
)
|
|
—
|
|
|
(21,302
|
)
|
|||
Other comprehensive income (loss)
|
(109,180
|
)
|
|
6
|
|
|
(109,174
|
)
|
|||
Net income (loss)
|
246,774
|
|
|
(1
|
)
|
|
246,773
|
|
|||
Shareholders' equity at September 30, 2015
|
$
|
1,563,463
|
|
|
$
|
14
|
|
|
$
|
1,563,477
|
|
|
Attributable to:
|
||||||||||
|
Jazz Pharmaceuticals plc
|
|
Noncontrolling interests
|
|
Total Shareholders' Equity
|
||||||
Shareholders' equity at January 1, 2014
|
$
|
1,295,534
|
|
|
$
|
—
|
|
|
$
|
1,295,534
|
|
Noncontrolling interests from the Gentium Acquisition
|
—
|
|
|
136,578
|
|
|
136,578
|
|
|||
Acquisition of noncontrolling interests
|
(1,529
|
)
|
|
(135,421
|
)
|
|
(136,950
|
)
|
|||
Issuance of 1.875% exchangeable senior notes due 2021
|
126,862
|
|
|
—
|
|
|
126,862
|
|
|||
Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans and warrant exercises
|
48,452
|
|
|
—
|
|
|
48,452
|
|
|||
Employee withholding taxes related to share-based awards
|
(17,306
|
)
|
|
—
|
|
|
(17,306
|
)
|
|||
Share-based compensation
|
50,919
|
|
|
—
|
|
|
50,919
|
|
|||
Tax benefit from employee share options
|
4,075
|
|
|
—
|
|
|
4,075
|
|
|||
Shares repurchased
|
(29,973
|
)
|
|
|
|
(29,973
|
)
|
||||
Other comprehensive loss
|
(113,286
|
)
|
|
(7
|
)
|
|
(113,293
|
)
|
|||
Net loss
|
(23,225
|
)
|
|
(1,060
|
)
|
|
(24,285
|
)
|
|||
Shareholders' equity at September 30, 2014
|
$
|
1,340,523
|
|
|
$
|
90
|
|
|
$
|
1,340,613
|
|
|
Foreign
Currency Translation Adjustments |
|
Total
Accumulated Other Comprehensive Loss |
||||
Balance at December 31, 2014
|
$
|
(122,097
|
)
|
|
$
|
(122,097
|
)
|
Other comprehensive loss
|
(109,180
|
)
|
|
(109,180
|
)
|
||
Balance at September 30, 2015
|
$
|
(231,277
|
)
|
|
$
|
(231,277
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Xyrem
®
(sodium oxybate) oral solution
|
$
|
242,899
|
|
|
$
|
204,337
|
|
|
$
|
703,435
|
|
|
$
|
556,081
|
|
Erwinaze
®
/Erwinase
®
(asparaginase
Erwinia chrysanthemi
)
|
56,317
|
|
|
52,121
|
|
|
152,821
|
|
|
146,910
|
|
||||
Defitelio
®
(defibrotide)/defibrotide
|
19,639
|
|
|
18,892
|
|
|
52,259
|
|
|
51,345
|
|
||||
Prialt
®
(ziconotide) intrathecal infusion
|
6,042
|
|
|
6,282
|
|
|
19,944
|
|
|
16,422
|
|
||||
Psychiatry
|
9,910
|
|
|
10,833
|
|
|
28,375
|
|
|
32,431
|
|
||||
Other
|
3,947
|
|
|
11,942
|
|
|
21,061
|
|
|
35,304
|
|
||||
Product sales, net
|
338,754
|
|
|
304,407
|
|
|
977,895
|
|
|
838,493
|
|
||||
Royalties and contract revenues
|
2,118
|
|
|
2,177
|
|
|
6,027
|
|
|
6,240
|
|
||||
Total revenues
|
$
|
340,872
|
|
|
$
|
306,584
|
|
|
$
|
983,922
|
|
|
$
|
844,733
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
United States
|
$
|
305,585
|
|
|
$
|
264,719
|
|
|
$
|
877,397
|
|
|
$
|
727,200
|
|
Europe
|
26,076
|
|
|
32,578
|
|
|
82,837
|
|
|
87,608
|
|
||||
All other
|
9,211
|
|
|
9,287
|
|
|
23,688
|
|
|
29,925
|
|
||||
Total revenues
|
$
|
340,872
|
|
|
$
|
306,584
|
|
|
$
|
983,922
|
|
|
$
|
844,733
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Express Scripts
|
71
|
%
|
|
67
|
%
|
|
71
|
%
|
|
66
|
%
|
McKesson
|
14
|
%
|
|
1
|
%
|
|
5
|
%
|
|
5
|
%
|
Accredo Health Group, Inc.
|
—
|
%
|
|
14
|
%
|
|
8
|
%
|
|
14
|
%
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Ireland
|
$
|
60,447
|
|
|
$
|
37,775
|
|
United States
|
12,255
|
|
|
9,795
|
|
||
Italy
|
8,424
|
|
|
8,462
|
|
||
Other
|
2,326
|
|
|
2,331
|
|
||
Total long-lived assets
|
$
|
83,452
|
|
|
$
|
58,363
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Selling, general and administrative
|
$
|
19,542
|
|
|
$
|
14,834
|
|
|
$
|
54,843
|
|
|
$
|
40,051
|
|
Research and development
|
2,786
|
|
|
3,177
|
|
|
10,137
|
|
|
8,862
|
|
||||
Cost of product sales
|
786
|
|
|
240
|
|
|
2,253
|
|
|
1,705
|
|
||||
Total share-based compensation expense, pre-tax
|
23,114
|
|
|
18,251
|
|
|
67,233
|
|
|
50,618
|
|
||||
Tax benefit from share-based compensation expense
|
(6,658
|
)
|
|
(5,469
|
)
|
|
(19,722
|
)
|
|
(15,171
|
)
|
||||
Total share-based compensation expense, net of tax
|
$
|
16,456
|
|
|
$
|
12,782
|
|
|
$
|
47,511
|
|
|
$
|
35,447
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Shares underlying options granted (in thousands)
|
106
|
|
|
135
|
|
|
1,056
|
|
|
942
|
|
||||
Grant date fair value
|
$
|
60.34
|
|
|
$
|
51.73
|
|
|
$
|
57.85
|
|
|
$
|
60.40
|
|
Black-Scholes option pricing model assumption information:
|
|
|
|
|
|
|
|
||||||||
Volatility
|
40
|
%
|
|
42
|
%
|
|
39
|
%
|
|
45
|
%
|
||||
Expected term (years)
|
4.2
|
|
|
4.3
|
|
|
4.2
|
|
|
4.3
|
|
||||
Range of risk-free rates
|
1.3-1.4%
|
|
|
1.3-1.4%
|
|
|
1.1-1.4%
|
|
|
1.1-1.4%
|
|
||||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
RSUs granted (in thousands)
|
40
|
|
|
68
|
|
|
406
|
|
|
459
|
|
||||
Grant date fair value
|
$
|
179.10
|
|
|
$
|
145.58
|
|
|
$
|
175.22
|
|
|
$
|
160.00
|
|
|
Termination Benefits
|
|
Facility Closure Costs
|
|
Total
|
||||||
Balance at December 31, 2014
|
$
|
1,823
|
|
|
$
|
118
|
|
|
$
|
1,941
|
|
Costs incurred during the period
|
381
|
|
|
172
|
|
|
553
|
|
|||
Cash payments
|
(2,204
|
)
|
|
(290
|
)
|
|
(2,494
|
)
|
|||
Balance at September 30, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Xyrem
®
(sodium oxybate) oral solution
, the only product approved by the U.S. Food and Drug Administration, or FDA, for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in patients with narcolepsy;
|
•
|
Erwinaze
®
(asparaginase
Erwinia chrysanthemi
)
, a treatment approved in the United States and in certain markets in Europe (where it is marketed as Erwinase
®
) for patients with acute lymphoblastic leukemia, or ALL, who have developed hypersensitivity to
E. coli
-derived asparaginase; and
|
•
|
Defitelio
®
(defibrotide)
, a product approved in Europe for the treatment of severe hepatic veno-occlusive disease, or VOD, in adults and children undergoing hematopoietic stem cell transplantation, or HSCT, therapy.
|
•
|
Growing sales of the existing products in our portfolio, including by identifying new growth opportunities;
|
•
|
Acquiring additional differentiated products that are on the market or product candidates that are in late-stage development; and
|
•
|
Pursuing focused development of a pipeline of post-discovery differentiated product candidates.
|
Project
|
|
Disease Area
|
|
Status
|
Sleep
|
|
|
|
|
JZP-110
|
|
EDS in narcolepsy
|
|
Phase 3 clinical trial initiated in the second quarter of 2015
|
|
|
EDS in obstructive sleep apnea, or OSA
|
|
Two Phase 3 clinical trials initiated in the second quarter of 2015
|
JZP-386
|
|
EDS in narcolepsy
|
|
Phase 1 clinical trials completed
|
Xyrem
|
|
Cataplexy in narcolepsy in children and adolescents
|
|
Phase 3 clinical trial initiated in the fourth quarter of 2014
|
Hematology/Oncology
|
|
|
||
Defibrotide
|
|
VOD with evidence of multi-organ dysfunction following HSCT
|
|
NDA accepted for filing with priority review by the FDA in the third quarter of 2015
|
JZP-416
|
|
ALL
|
|
Phase 1 clinical trial in Europe completed; enrollment suspended in pivotal Phase 2 clinical trial in North America in first quarter of 2015
|
Leukotac
TM
|
|
Steroid refractory acute graft vs. host disease, or GvHD
|
|
Phase 3 clinical trial completed in the second quarter of 2015; development discontinued in fourth quarter of 2015
|
•
|
JZP-110
. JZP-110 is a late-stage investigational compound being developed for potential treatment of EDS in patients with narcolepsy and EDS in patients with OSA. We acquired worldwide development, manufacturing and commercial rights to JZP-110 from Aerial BioPharma LLC, or Aerial, in January 2014, other than in certain jurisdictions in Asia where SK Biopharmaceuticals Co., Ltd, or SK, retains rights. We initiated patient enrollment in our Phase 3 clinical program in the second quarter of 2015. We are conducting one Phase 3 clinical trial in patients with EDS associated with narcolepsy and two Phase 3 clinical trials in patients with EDS associated with OSA. Approximately 880 patients are expected to be enrolled in these three trials in the aggregate.
In addition, we are evaluating the long-term safety of JZP-110 in an open label extension trial and expect to enroll up to 450 patients from two of our Phase 3 clinical trials in this extension trial.
|
•
|
JZP-386
. JZP-386 is a deuterium-modified analog of sodium oxybate, the active pharmaceutical ingredient in Xyrem, which we licensed from Concert Pharmaceuticals, Inc. in February 2013. We have conducted preclinical research and development work on JZP-386 for its potential use in patients with narcolepsy. The first study of JZP-386 in humans to evaluate the safety, pharmacokinetics and pharmacodynamics of the compound was conducted in 2014 under an approved investigational medicinal product dossier for JZP-386 in Europe. We completed a second Phase 1 study in the second quarter of 2015. Clinical data from this Phase 1 study demonstrated that JZP-386 provided favorable deuterium-related effects, including higher serum concentrations and correspondingly increased pharmacodynamics effects at clinically relevant time points compared to Xyrem. The safety profile of JZP-386 was similar to that observed with Xyrem. Although we determined that the results did not support advancing into a later-stage clinical trial of JZP-386 at that time, we are further evaluating JZP-386, including exploring formulation options designed to enhance the positive effects observed in the studies to achieve an improved product profile.
|
•
|
Xyrem
. While in many patients narcolepsy can begin during childhood and adolescence, there is limited information on the treatment of pediatric narcolepsy patients with Xyrem. We have worked with the FDA and several leading specialists to design a clinical trial to generate additional data on the treatment of pediatric narcolepsy patients with Xyrem. As a result, in the fourth quarter of 2014, we initiated a Phase 3 clinical trial to assess the safety and efficacy of Xyrem in children and adolescents aged seven to 17 who have narcolepsy with cataplexy.
|
•
|
Defibrotide
. We are engaged in activities related to the potential approval of defibrotide in the United States. In September 2015, the FDA accepted for filing with priority review our NDA for defibrotide for the treatment of VOD with evidence of multi-organ dysfunction following HSCT. We are also assessing the potential for approval of defibrotide in other countries and for development of defibrotide in additional indications.
|
•
|
JZP-416 (formerly known as Asparec)
. We completed a Phase 1 clinical trial in Europe of JZP-416 (pegcrisantaspase), a PEGylated recombinant
Erwinia chrysanthemi
L-asparaginase, being developed for the treatment of patients with ALL who are hypersensitive to
E. coli
-derived asparaginase. In addition, we initiated our first study of JZP-416 in children in a pivotal Phase 2 clinical trial in North America in late 2014. In February 2015, we voluntarily suspended patient enrollment in this trial. Our decision to suspend enrollment and to discontinue treatment with JZP-416 for enrolled patients was based on the occurrence of hypersensitivity-like reactions following the administration of JZP-416 in some treated patients. We are in the process of collecting and evaluating the available data and plan to conduct additional research and analysis prior to determining whether to resume the study and determining next steps regarding the development of JZP-416.
|
•
|
Leukotac
. In the second quarter of 2015, we completed a Phase 3 clinical trial in Europe of Leukotac (inolimomab), an anti-CD25 monoclonal antibody for the treatment of steroid-refractory acute GvHD. Based on our analysis of trial data, we recently decided to discontinue development of Leukotac.
|
•
|
the challenges of protecting and enhancing our intellectual property rights;
|
•
|
delays or problems in the supply or manufacture of our products, particularly with respect to certain products as to which we maintain limited inventories, including products for which our supply demands are growing, and our dependence on single source suppliers to continue to meet our ongoing commercial demand or our requirements for clinical trial supplies;
|
•
|
the need to obtain and maintain appropriate pricing and reimbursement for our products in an increasingly challenging environment due to, among other things, the attention being paid to healthcare cost containment and prescription drug pricing in the United States and worldwide;
|
•
|
the challenges of compliance with the requirements of the FDA, the U.S. Drug Enforcement Administration, or DEA, and non-U.S. regulatory agencies, including with respect to product labeling, requirements for distribution, obtaining sufficient DEA quotas where needed, marketing and promotional activities, adverse event reporting and product recalls or withdrawals;
|
•
|
the challenges of achieving and maintaining commercial success of our products, such as obtaining sustained acceptance and support of our products by patients, physicians and payors;
|
•
|
the risks and costs associated with business combination or product or product candidate acquisition transactions, such as the challenges inherent in the integration of acquired businesses with our historic business, the increase in geographic dispersion among our centers of operation, taking on the operation of a manufacturing plant as a result of the Gentium Acquisition and the risks that we may acquire unanticipated liabilities along with acquired businesses or otherwise fail to realize the anticipated benefits (commercial or otherwise) from such transactions;
|
•
|
the difficulty and uncertainty of pharmaceutical product development, including the timing thereof, and the uncertainty of clinical success, such as the risk that results from preclinical studies and/or early clinical trials may not be predictive of results obtained in later and larger clinical trials that we are conducting or that we plan to conduct for our product candidates;
|
•
|
the inherent uncertainty associated with the regulatory approval process, especially as we continue to undertake increased activities and make growing investment in our product pipeline development projects;
|
•
|
our potential inability to identify and acquire, in-license or develop additional products or product candidates to grow our business; and
|
•
|
possible restrictions on our ability and flexibility to pursue certain future corporate development and other opportunities as a result of our substantial outstanding debt obligations.
|
|
Three Months Ended
September 30, |
|
Increase/
|
|
Nine Months Ended
September 30, |
|
Increase/
|
||||||||||||||
|
2015
|
|
2014 (1)
|
|
(Decrease)
|
|
2015
|
|
2014 (1)
|
|
(Decrease)
|
||||||||||
Product sales, net
|
$
|
338,754
|
|
|
$
|
304,407
|
|
|
11
|
%
|
|
$
|
977,895
|
|
|
$
|
838,493
|
|
|
17
|
%
|
Royalties and contract revenues
|
2,118
|
|
|
2,177
|
|
|
(3
|
)%
|
|
6,027
|
|
|
6,240
|
|
|
(3
|
)%
|
||||
Cost of product sales (excluding amortization and impairment of intangible assets)
|
28,385
|
|
|
26,994
|
|
|
5
|
%
|
|
78,496
|
|
|
88,610
|
|
|
(11
|
)%
|
||||
Selling, general and administrative
|
104,044
|
|
|
93,501
|
|
|
11
|
%
|
|
323,564
|
|
|
300,420
|
|
|
8
|
%
|
||||
Research and development
|
50,784
|
|
|
22,423
|
|
|
126
|
%
|
|
105,798
|
|
|
60,622
|
|
|
75
|
%
|
||||
Acquired in-process research and development
|
—
|
|
|
75,000
|
|
|
N/A(2)
|
|
|
—
|
|
|
202,000
|
|
|
N/A(2)
|
|
||||
Intangible asset amortization
|
26,127
|
|
|
30,630
|
|
|
(15
|
)%
|
|
74,472
|
|
|
94,607
|
|
|
(21
|
)%
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
N/A(2)
|
|
|
—
|
|
|
32,806
|
|
|
N/A(2)
|
|
||||
Interest expense, net
|
12,650
|
|
|
14,530
|
|
|
(13
|
)%
|
|
44,707
|
|
|
36,035
|
|
|
24
|
%
|
||||
Foreign currency (gain) loss
|
977
|
|
|
(6,483
|
)
|
|
N/A(2)
|
|
|
646
|
|
|
(6,680
|
)
|
|
N/A(2)
|
|
||||
Loss on extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
N/A(2)
|
|
|
16,815
|
|
|
—
|
|
|
N/A(2)
|
|
||||
Income tax provision
|
29,945
|
|
|
24,221
|
|
|
24
|
%
|
|
92,651
|
|
|
60,598
|
|
|
53
|
%
|
||||
Net income (loss) attributable to noncontrolling interests, net of tax
|
—
|
|
|
2
|
|
|
N/A(2)
|
|
|
(1
|
)
|
|
(1,060
|
)
|
|
N/A(2)
|
|
(1)
|
Our financial results include the financial results of the historic Gentium business following the closing of the Gentium Acquisition on January 23, 2014.
|
(2)
|
Comparison to prior period not meaningful.
|
|
Three Months Ended
September 30, |
|
Increase/
|
|
Nine Months Ended
September 30, |
|
Increase/
|
||||||||||||||
|
2015
|
|
2014
|
|
(Decrease)
|
|
2015
|
|
2014
|
|
(Decrease)
|
||||||||||
Xyrem
®
(sodium oxybate) oral solution
|
$
|
242,899
|
|
|
$
|
204,337
|
|
|
19
|
%
|
|
$
|
703,435
|
|
|
$
|
556,081
|
|
|
26
|
%
|
Erwinaze
®
/Erwinase
®
(asparaginase
Erwinia chrysanthemi
)
|
56,317
|
|
|
52,121
|
|
|
8
|
%
|
|
152,821
|
|
|
146,910
|
|
|
4
|
%
|
||||
Defitelio
®
(defibrotide)/defibrotide
|
19,639
|
|
|
18,892
|
|
|
4
|
%
|
|
52,259
|
|
|
51,345
|
|
|
2
|
%
|
||||
Prialt
®
(ziconotide) intrathecal infusion
|
6,042
|
|
|
6,282
|
|
|
(4
|
)%
|
|
19,944
|
|
|
16,422
|
|
|
21
|
%
|
||||
Psychiatry
|
9,910
|
|
|
10,833
|
|
|
(9
|
)%
|
|
28,375
|
|
|
32,431
|
|
|
(13
|
)%
|
||||
Other
|
3,947
|
|
|
11,942
|
|
|
(67
|
)%
|
|
21,061
|
|
|
35,304
|
|
|
(40
|
)%
|
||||
Product sales, net
|
338,754
|
|
|
304,407
|
|
|
11
|
%
|
|
977,895
|
|
|
838,493
|
|
|
17
|
%
|
||||
Royalties and contract revenues
|
2,118
|
|
|
2,177
|
|
|
(3
|
)%
|
|
6,027
|
|
|
6,240
|
|
|
(3
|
)%
|
||||
Total revenues
|
$
|
340,872
|
|
|
$
|
306,584
|
|
|
11
|
%
|
|
$
|
983,922
|
|
|
$
|
844,733
|
|
|
16
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Clinical studies and outside services
|
$
|
15,732
|
|
|
$
|
10,535
|
|
|
$
|
47,045
|
|
|
$
|
29,287
|
|
Personnel expenses
|
8,437
|
|
|
9,201
|
|
|
28,291
|
|
|
25,166
|
|
||||
Milestone
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
||||
Other
|
1,615
|
|
|
2,687
|
|
|
5,462
|
|
|
6,169
|
|
||||
Total
|
$
|
50,784
|
|
|
$
|
22,423
|
|
|
$
|
105,798
|
|
|
$
|
60,622
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2015
|
|
2014 (1)
|
|
2015
|
|
2014 (1)
|
||||||||
GAAP reported net income (loss) attributable to Jazz Pharmaceuticals plc
|
$
|
87,960
|
|
|
$
|
25,766
|
|
|
$
|
246,774
|
|
|
$
|
(23,225
|
)
|
Intangible asset amortization
|
26,127
|
|
|
30,630
|
|
|
74,472
|
|
|
94,607
|
|
||||
Share-based compensation expense
|
23,114
|
|
|
18,251
|
|
|
67,233
|
|
|
50,618
|
|
||||
Upfront and milestone payments
|
25,000
|
|
|
75,000
|
|
|
25,000
|
|
|
202,000
|
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
553
|
|
|
—
|
|
||||
Transaction and integration costs
|
—
|
|
|
878
|
|
|
155
|
|
|
23,518
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
32,806
|
|
||||
Acquisition accounting inventory fair value step-up adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
10,477
|
|
||||
Non-cash interest expense
|
5,300
|
|
|
4,065
|
|
|
17,348
|
|
|
7,603
|
|
||||
Loss on extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
16,815
|
|
|
—
|
|
||||
Income tax adjustments (2)
|
(8,162
|
)
|
|
(10,649
|
)
|
|
(11,762
|
)
|
|
(27,493
|
)
|
||||
Adjustments for amount attributable to noncontrolling interests (3)
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(1,504
|
)
|
||||
Non-GAAP adjusted net income attributable to Jazz Pharmaceuticals plc
|
$
|
159,339
|
|
|
$
|
143,939
|
|
|
$
|
436,586
|
|
|
$
|
369,407
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP reported net income (loss) attributable to Jazz Pharmaceuticals plc per diluted share
|
$
|
1.39
|
|
|
$
|
0.41
|
|
|
$
|
3.91
|
|
|
$
|
(0.39
|
)
|
Non-GAAP adjusted net income attributable to Jazz Pharmaceuticals plc per diluted share
|
$
|
2.52
|
|
|
$
|
2.30
|
|
|
$
|
6.92
|
|
|
$
|
5.91
|
|
Weighted-average ordinary shares used in diluted per share calculation - GAAP
|
63,154
|
|
|
62,680
|
|
|
63,072
|
|
|
59,457
|
|
||||
Weighted-average ordinary shares used in diluted per share calculation - non-GAAP
|
63,154
|
|
|
62,680
|
|
|
63,072
|
|
|
62,532
|
|
(1)
|
For purposes of comparability with our 2015 presentation, non-GAAP adjusted financial measures for 2014 do not include an adjustment for depreciation expense.
|
(2)
|
Tax adjustments to convert the income tax provision to the estimated amount of taxes payable in cash.
|
(3)
|
The noncontrolling interests’ share of the above adjustments, as applicable.
|
|
Nine Months Ended
September 30, |
||||||
|
2015
|
|
2014
|
||||
Net cash provided by operating activities
|
$
|
412,202
|
|
|
$
|
273,344
|
|
Net cash provided by (used in) investing activities
|
1,112
|
|
|
(1,053,475
|
)
|
||
Net cash provided by (used in) financing activities
|
(90,462
|
)
|
|
721,474
|
|
||
Effect of exchange rates on cash and cash equivalents
|
(8,035
|
)
|
|
(2,807
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
314,817
|
|
|
$
|
(61,464
|
)
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations (1)
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 years
|
||||||||||
Term and other loans - principal
|
$
|
750,550
|
|
|
$
|
37,589
|
|
|
$
|
93,942
|
|
|
$
|
619,019
|
|
|
$
|
—
|
|
Term and other loans - interest (2)
|
65,290
|
|
|
16,178
|
|
|
28,669
|
|
|
20,443
|
|
|
—
|
|
|||||
2021 Notes - principal
|
575,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
575,000
|
|
|||||
2021 Notes - interest (3)
|
64,688
|
|
|
10,781
|
|
|
21,563
|
|
|
21,563
|
|
|
10,781
|
|
|||||
Revolving credit facility - principal (2)
|
80,000
|
|
|
80,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Revolving credit facility - interest (2)
|
130
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Revolving credit facility - commitment fee (4)
|
11,261
|
|
|
2,792
|
|
|
4,556
|
|
|
3,913
|
|
|
—
|
|
|||||
Milestone (1)
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations (5)
|
27,127
|
|
|
25,566
|
|
|
400
|
|
|
431
|
|
|
730
|
|
|||||
Operating lease obligations (6)
|
115,660
|
|
|
11,408
|
|
|
21,815
|
|
|
14,178
|
|
|
68,259
|
|
|||||
Total
|
$
|
1,714,706
|
|
|
$
|
209,444
|
|
|
$
|
170,945
|
|
|
$
|
679,547
|
|
|
$
|
654,770
|
|
(1)
|
This table does not include potential future milestone payment or royalty obligations to third parties under asset purchase, product development, license and other agreements as the timing and likelihood of such milestone payments are not known, and, in the case of royalty obligations, as the amount of such obligations are not estimable. In 2014, we signed a definitive agreement with Aerial under which we acquired worldwide development, manufacturing and commercial rights to JZP-110 (other than in certain jurisdictions in Asia where SK retains rights). Aerial and SK are currently eligible to receive milestone payments up to an aggregate of $270.0 million based on development, regulatory and sales milestones and tiered royalties from high single digits to mid-teens based on potential future sales of JZP-110. In 2014, we entered into a definitive agreement to acquire rights to defibrotide in the United States and all other countries in the Americas from Sigma-Tau Pharmaceuticals, Inc., or Sigma-Tau. In September 2015, the FDA accepted for filing with priority review our NDA for defibrotide and, as a result, a milestone payment of $25.0 million to Sigma-Tau was included within accrued liabilities as of September 30, 2015. Sigma-Tau is eligible to receive up to an additional $150.0 million based on the timing of potential FDA approval of defibrotide for VOD.
Potential future milestone payments to other third parties under other agreements could be up to an aggregate of $286.0 million, of which up to $120.0 million will become due and payable to Perrigo Company plc (formerly Elan Pharmaceuticals, Inc.) in tiered contingent payments, with the first such payment becoming due if net sales of Prialt of at least $75.0 million are achieved in a calendar year. The remainder would become due and payable to other third parties upon the achievement of certain developmental, clinical, regulatory and/or commercial milestones, the timing and likelihood of which are not known. We are also obligated under these agreements to pay royalties on net sales of certain products at specified rates, which royalties are dependent on future product sales and are not provided for in the table above as they are not estimable.
|
(2)
|
The interest rate for our term loan was
2.09%
at
September 30, 2015
, which we used to estimate interest owed on the term loan outstanding on
September 30, 2015
until the maturity date in June 2020. The interest rate for the revolving credit facility was
1.96%
at
September 30, 2015
, which we used to estimate interest owed on borrowings from the revolving credit facility on
September 30, 2015
until we repaid the revolving credit facility in full in October 2015. The balance outstanding under our revolving credit facility at
September 30, 2015
of
$80.0 million
was included within current liabilities based on our intent to repay this amount in October 2015.
|
(4)
|
Our revolving credit facility has a commitment fee payable on the undrawn amount ranging from 0.25% to 0.35% per annum based upon our secured leverage ratio. In the table above, we used a rate of 0.30% and assumed undrawn amounts of $668.9 million as of September 30, 2015 and $748.9 million as of October 2015 to estimate commitment fees owed. Undrawn borrowing capacity does not include an amount of $1.1 million committed under an outstanding letter of credit.
|
(5)
|
Consists primarily of non-cancelable commitments to third party manufacturers.
|
(6)
|
Includes automobile lease payments for our sales force and the minimum lease payments for our office buildings, including a lease agreement we entered into in January 2015 to lease office space located in Palo Alto, California. We expect to occupy this office space by the end of 2017. We are obligated to make lease payments totaling approximately
$88 million
over the initial term of the lease. Not included in the table above are our estimated costs of approximately $20 million associated with the design, development and construction of tenant improvements under this lease
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
the potential introduction of a generic version of Xyrem or an alternative sodium oxybate product for treating cataplexy and/or excessive daytime sleepiness, or EDS, in narcolepsy;
|
•
|
changed or increased regulatory restrictions, including changes to our final approved risk evaluation and mitigation strategy, or REMS, the development of a single shared REMS for sodium oxybate with potential generic competitors, or regulatory actions by the FDA;
|
•
|
our manufacturing partners’ ability to obtain sufficient quota from the U.S. Drug Enforcement Administration, or DEA, to satisfy our needs for Xyrem;
|
•
|
any supply, manufacturing or distribution problems arising with any of our manufacturing and distribution partners, all of whom are sole source providers for us;
|
•
|
any increase in pricing pressure from or restrictive conditions for reimbursement required by, and the availability of reimbursement from, third party payors;
|
•
|
changes in healthcare laws and policy, including changes in requirements for rebates, reimbursement and coverage by federal healthcare programs;
|
•
|
continued acceptance of Xyrem by physicians and patients, even in the face of negative publicity that surfaces from time to time;
|
•
|
changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem;
|
•
|
any failure to transition to the final approved REMS to the satisfaction of the FDA; and
|
•
|
any further operational disruptions at the central pharmacy as a result of the transition to the final approved Xyrem REMS and resulting adverse impacts on Xyrem product sales.
|
•
|
the increased complexity and costs inherent in managing international operations;
|
•
|
diverse regulatory, financial and legal requirements, and any future changes to such requirements, in one or more countries where we are located or do business;
|
•
|
country-specific tax, labor and employment laws and regulations;
|
•
|
applicable trade laws, tariffs, export quotas, custom duties or other trade restrictions and any changes to them;
|
•
|
challenges inherent in efficiently managing employees in diverse geographies, including the need to adapt systems, policies, benefits and compliance programs to differing labor and other regulations, as well as maintaining positive interactions with unionized employees in one of our international locations;
|
•
|
liabilities for activities of, or related to, our international operations, products or product candidates;
|
•
|
changes in currency rates; and
|
•
|
regulations relating to data security and the unauthorized use of, or access to, commercial and personal information.
|
•
|
the clinical indications for which a product is approved, including any restrictions placed upon the product in connection with its approval, such as a REMS, patient registry or labeling restrictions;
|
•
|
the prevalence of the disease or condition for which the product is approved and the severity of side effects;
|
•
|
acceptance by physicians and patients of each product as a safe and effective treatment;
|
•
|
perceived advantages over alternative treatments;
|
•
|
relative convenience and ease of administration;
|
•
|
physician and patient assessment of the burdens associated with obtaining or maintaining the certifications required under the Xyrem REMS;
|
•
|
the cost of treatment in relation to alternative treatments, including generic products;
|
•
|
the extent to which the product is approved for inclusion on formularies of hospitals and managed care organizations; and
|
•
|
the conditions for reimbursement required by, and appropriate pricing and availability of reimbursement from, third party payors.
|
•
|
high acquisition costs;
|
•
|
the need to incur substantial debt or engage in dilutive issuances of equity securities to pay for acquisitions;
|
•
|
the potential disruption of our historical core business;
|
•
|
the strain on, and need to continue to expand, our existing operational, technical, financial and administrative infrastructure;
|
•
|
the difficulties in assimilating employees and corporate cultures;
|
•
|
the failure to retain key managers and other personnel;
|
•
|
the challenges in controlling additional costs and expenses in connection with and as a result of any acquisition;
|
•
|
the need to write down assets or recognize impairment charges;
|
•
|
the diversion of our management’s attention to integration of operations and corporate and administrative infrastructures; and
|
•
|
any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates.
|
•
|
delays or failures in obtaining regulatory authorization to commence a trial because of safety concerns of regulators relating to our product candidates or similar product candidates of our competitors or failure to follow regulatory guidelines;
|
•
|
delays or failures in obtaining clinical materials and manufacturing sufficient quantities of the product candidate for use in trials;
|
•
|
delays or failures in reaching agreement on acceptable terms with prospective study sites;
|
•
|
delays or failures in obtaining approval of our clinical trial protocol from an institutional review board, also known as Ethics Committees in Europe, to conduct a clinical trial at a prospective study site;
|
•
|
delays or failures in recruiting patients to participate in a clinical trial;
|
•
|
failure of our clinical trials and clinical investigators to be in compliance with the FDA and other regulatory agencies’ good clinical practice guidelines;
|
•
|
unforeseen safety issues, including negative results from ongoing preclinical studies and clinical trials and adverse events associated with product candidates;
|
•
|
inability to monitor patients adequately during or after treatment;
|
•
|
difficulty monitoring multiple study sites;
|
•
|
failure of our third party clinical trial managers to satisfactorily perform their contractual duties, comply with regulations or meet expected deadlines; or
|
•
|
insufficient funds to complete the trials.
|
•
|
others may be able to make products that are similar to our product candidates but that are not covered by the claims of our patents, or for which we are not licensed under our license agreements;
|
•
|
we or our licensors or partners might not have been the first to invent or file, as appropriate, subject matters covered by our issued patents or pending patent applications or the pending patent applications or issued patents of our licensors or partners;
|
•
|
others may independently develop similar or alternative products without infringing our intellectual property rights;
|
•
|
our pending patent applications may not result in issued patents;
|
•
|
our issued patents and the issued patents of our licensors or partners may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties;
|
•
|
our issued patents may not cover our competitors’ products;
|
•
|
our issued patents and the issued patents of our licensors or partners may be vulnerable to legal challenges as a result of changes in applicable law;
|
•
|
we may not develop additional proprietary products that are patentable; or
|
•
|
the patents of others may have an adverse effect on our business.
|
•
|
limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes;
|
•
|
limit our ability to use our cash flow or obtain additional financing for working capital, capital expenditures, acquisitions or other general business purposes;
|
•
|
require us to use a substantial portion of our cash flow from operations to make debt service payments;
|
•
|
limit our flexibility to plan for, or react to, changes in our business and industry;
|
•
|
result in dilution to our existing shareholders in the event exchanges of our 2021 Notes are settled in our ordinary shares;
|
•
|
place us at a competitive disadvantage compared to our less leveraged competitors; and
|
•
|
increase our vulnerability to the impact of adverse economic and industry conditions.
|
•
|
incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons;
|
•
|
issue redeemable preferred stock;
|
•
|
pay dividends or distributions or redeem or repurchase capital stock;
|
•
|
prepay, redeem or repurchase certain debt;
|
•
|
make loans, investments, acquisitions (including acquisitions of exclusive licenses) and capital expenditures;
|
•
|
enter into agreements that restrict distributions from our subsidiaries;
|
•
|
sell assets and capital stock of our subsidiaries;
|
•
|
enter into certain transactions with affiliates; and
|
•
|
consolidate or merge with or into, or sell substantially all of our assets to, another person.
|
•
|
the revenues from our commercial products, which may be affected by many factors, including the extent of generic competition for our products;
|
•
|
the costs of our commercial operations;
|
•
|
the costs of integration activities related to any future strategic transactions we may engage in;
|
•
|
the cost of acquiring and/or in-licensing any new products and product candidates;
|
•
|
the scope, rate of progress, results and costs of our development and clinical activities;
|
•
|
the cost and timing of obtaining regulatory approvals and of compliance with laws and regulations;
|
•
|
the cost of preparing, filing, prosecuting, defending and enforcing patent claims and other intellectual property rights;
|
•
|
the cost of investigations, litigation and/or settlements related to regulatory oversight and third party claims; and
|
•
|
changes in laws and regulations, including, for example, healthcare reform legislation.
|
•
|
impose advance notice requirements for shareholder proposals and nominations of directors to be considered at shareholder meetings;
|
•
|
stagger the terms of our board of directors into three classes;
|
•
|
require the approval of a supermajority of the voting power of the shares of our share capital entitled to vote generally at a meeting of shareholders to amend or repeal our articles of association; and
|
•
|
permit our board of directors to issue one or more series of preferred shares with rights and preferences, as our shareholders may determine by ordinary resolution.
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share (2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (4)
|
||||||
July 1 - July 31, 2015
|
2,000
|
|
|
$
|
170.00
|
|
|
2,000
|
|
|
$
|
9,315,403
|
|
August 1 - August 31, 2015
|
50,708
|
|
|
$
|
182.83
|
|
|
50,708
|
|
|
$
|
—
|
|
September 1 - September 30, 2015
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
52,708
|
|
|
$
|
182.35
|
|
|
52,708
|
|
|
|
(1)
|
This table does not include ordinary shares that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting or exercise of restricted stock units.
|
(2)
|
Average price paid per ordinary share includes brokerage commissions.
|
(3)
|
On May 7, 2013, we announced that our board of directors authorized the use of up to $200 million, exclusive of any brokerage commissions, to repurchase our ordinary shares, which we refer to below as the May 2013 repurchase program. This authorization had no expiration date. The ordinary shares reported in the table above were all purchased on the open market pursuant to the May 2013 repurchase program.
|
(4)
|
The dollar amount shown represents, as of the end of each period, the approximate dollar value of ordinary shares that may yet be purchased under the May 2013 repurchase program, exclusive of any brokerage commissions. We completed the May 2013 share repurchase program in August 2015.
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description of Document
|
2.1
|
Agreement and Plan of Merger and Reorganization, dated as of September 19, 2011, by and among Azur Pharma Limited (now Jazz Pharmaceuticals plc), Jaguar Merger Sub Inc., Jazz Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the Indemnitors’ Representative (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on September 19, 2011).
|
2.2
|
Letter Agreement, dated as of January 17, 2012, by and among Jazz Pharmaceuticals plc, Jaguar Merger Sub Inc. Jazz Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the Indemnitors’ Representative (incorporated by reference to Exhibit 2.2 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).
|
2.3
|
Agreement and Plan of Merger, dated as of April 26, 2012, by and among Jazz Pharmaceuticals plc, Jewel Merger Sub Inc., EUSA Pharma Inc., and Essex Woodlands Health Ventures, Inc., Mayflower L.P., and Bryan Morton, in their capacity as the representatives of the equity holders of EUSA Pharma Inc. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on April 27, 2012).
|
2.4
|
Assignment, dated as of June 11, 2012, by and between Jazz Pharmaceuticals plc and Jazz Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 2.1B in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 12, 2012).
|
2.5
|
Tender Offer Agreement, dated December 19, 2013, by and among Jazz Pharmaceuticals Public Limited Company, Jazz Pharmaceuticals Italy S.r.l. and Gentium S.p.A. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K/A (File No. 001-33500), as filed with the SEC on December 20, 2013).
|
2.6†
|
Asset Purchase Agreement, dated January 13, 2014, by and among Jazz Pharmaceuticals International III Limited, Aerial BioPharma, LLC and Jazz Pharmaceuticals plc (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 13, 2014).
|
2.7†
|
Assignment Agreement, dated July 1, 2014, by and among Jazz Pharmaceuticals International II Limited, Sigma-Tau Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and Gentium S.p.A. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on August 5, 2014).
|
2.8
|
Amended and Restated Agreement for the Acquisition of the Topaz Portfolio Business of Jazz Pharmaceuticals plc, dated March 20, 2015, between Jazz Pharmaceuticals plc and Essex Bidco Limited (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on March 23, 2015).
|
3.1
|
Memorandum and Articles of Association of Jazz Pharmaceuticals plc (incorporated herein by reference to Exhibit 3.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).
|
4.1
|
Reference is made to Exhibit 3.1.
|
4.2A
|
Investor Rights Agreement, dated July 7, 2009 by and between Jazz Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by reference to Exhibit 10.88 in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on July 7, 2009).
|
4.2B
|
Assignment, Assumption and Amendment Agreement, dated as of January 18, 2012, by and among Jazz Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and the other parties named therein (incorporated herein by reference to Exhibit 4.7B in the annual report on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28, 2012).
|
4.3A
|
Indenture, dated as of August 13, 2014, by and among Jazz Pharmaceuticals plc, Jazz Investments I Limited and U.S. Bank National Association (incorporated herein by reference to Exhibit 4.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on August 13, 2014).
|
4.3B
|
Form of 1.875% Exchangeable Senior Note due 2021 (included in Exhibit 4.3A).
|
10.1+
|
Amended and Restated Offer Letter, dated as of July 29, 2015, from Jazz Pharmaceuticals, Inc. to Karen Smith, M.D., Ph.D.
|
31.1
|
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
32.1*
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Exhibit
Number
|
Description of Document
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
+
|
Indicates management contract or compensatory plan.
|
†
|
Confidential treatment has been granted for portions of this exhibit. Omitted portions have been filed separately with the SEC.
|
*
|
The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
Jazz Pharmaceuticals Public Limited Company
(Registrant)
|
|
/s/ Bruce C. Cozadd
|
Bruce C. Cozadd
|
Chairman and Chief Executive Officer and Director
(Principal Executive Officer)
|
|
/s/ Matthew P. Young
|
Matthew P. Young
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
/s/ Karen J. Wilson
|
Karen J. Wilson
|
Senior Vice President, Finance
(Principal Accounting Officer)
|
Exhibit
Number
|
Description of Document
|
2.1
|
Agreement and Plan of Merger and Reorganization, dated as of September 19, 2011, by and among Azur Pharma Limited (now Jazz Pharmaceuticals plc), Jaguar Merger Sub Inc., Jazz Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the Indemnitors’ Representative (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on September 19, 2011).
|
2.2
|
Letter Agreement, dated as of January 17, 2012, by and among Jazz Pharmaceuticals plc, Jaguar Merger Sub Inc. Jazz Pharmaceuticals, Inc. and Seamus Mulligan, solely in his capacity as the Indemnitors’ Representative (incorporated by reference to Exhibit 2.2 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).
|
2.3
|
Agreement and Plan of Merger, dated as of April 26, 2012, by and among Jazz Pharmaceuticals plc, Jewel Merger Sub Inc., EUSA Pharma Inc., and Essex Woodlands Health Ventures, Inc., Mayflower L.P., and Bryan Morton, in their capacity as the representatives of the equity holders of EUSA Pharma Inc. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on April 27, 2012).
|
2.4
|
Assignment, dated as of June 11, 2012, by and between Jazz Pharmaceuticals plc and Jazz Pharmaceuticals, Inc. (incorporated herein by reference to Exhibit 2.1B in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on June 12, 2012).
|
2.5
|
Tender Offer Agreement, dated December 19, 2013, by and among Jazz Pharmaceuticals Public Limited Company, Jazz Pharmaceuticals Italy S.r.l. and Gentium S.p.A. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K/A (File No. 001-33500), as filed with the SEC on December 20, 2013).
|
2.6†
|
Asset Purchase Agreement, dated January 13, 2014, by and among Jazz Pharmaceuticals International III Limited, Aerial BioPharma, LLC and Jazz Pharmaceuticals plc (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 13, 2014).
|
2.7†
|
Assignment Agreement, dated July 1, 2014, by and among Jazz Pharmaceuticals International II Limited, Sigma-Tau Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and Gentium S.p.A. (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on August 5, 2014).
|
2.8
|
Amended and Restated Agreement for the Acquisition of the Topaz Portfolio Business of Jazz Pharmaceuticals plc, dated March 20, 2015, between Jazz Pharmaceuticals plc and Essex Bidco Limited (incorporated herein by reference to Exhibit 2.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on March 23, 2015).
|
3.1
|
Memorandum and Articles of Association of Jazz Pharmaceuticals plc (incorporated herein by reference to Exhibit 3.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on January 18, 2012).
|
4.1
|
Reference is made to Exhibit 3.1.
|
4.2A
|
Investor Rights Agreement, dated July 7, 2009 by and between Jazz Pharmaceuticals, Inc. and the other parties named therein (incorporated herein by reference to Exhibit 10.88 in Jazz Pharmaceuticals, Inc.’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on July 7, 2009).
|
4.2B
|
Assignment, Assumption and Amendment Agreement, dated as of January 18, 2012, by and among Jazz Pharmaceuticals, Inc., Jazz Pharmaceuticals plc and the other parties named therein (incorporated herein by reference to Exhibit 4.7B in the annual report on Form 10-K (File No. 001-33500) for the period ended December 31, 2011, as filed by Jazz Pharmaceuticals plc on behalf of and as successor to Jazz Pharmaceuticals, Inc. with the SEC on February 28, 2012).
|
4.3A
|
Indenture, dated as of August 13, 2014, by and among Jazz Pharmaceuticals plc, Jazz Investments I Limited and U.S. Bank National Association (incorporated herein by reference to Exhibit 4.1 in Jazz Pharmaceuticals plc’s current report on Form 8-K (File No. 001-33500), as filed with the SEC on August 13, 2014).
|
4.3B
|
Form of 1.875% Exchangeable Senior Note due 2021 (included in Exhibit 4.3A).
|
10.1+
|
Amended and Restated Offer Letter, dated as of July 29, 2015, from Jazz Pharmaceuticals, Inc. to Karen Smith, M.D., Ph.D.
|
31.1
|
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
32.1*
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
+
|
Indicates management contract or compensatory plan.
|
†
|
Confidential treatment has been granted for portions of this exhibit. Omitted portions have been filed separately with the SEC.
|
*
|
The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
1.
|
Duties and Responsibilities
. Your initial assignment will be as Global Head of Research & Development and Chief Medical Officer, reporting to me. This offer is for a full time position, located at Jazz Pharmaceuticals’ offices in Palo Alto. The position will require you to travel to other locations, including internationally, as necessary to fulfill your responsibilities. As part of your employment relationship, you agree to comply with Jazz Pharmaceuticals’ policies and procedures in effect from time to time during your employment. As an exempt employee, you are expected to work the number of hours required to do your job well.
|
2.
|
Compensation.
Contingent upon approval of the Compensation Committee of the Jazz Pharmaceuticals plc Board of Directors (“Compensation Committee”)
:
|
a.
|
Salary and Bonus
. Your initial annual base salary will be $475,000 payable in accordance with Jazz Pharmaceuticals’ customary payroll practices, for all hours worked. Salary is subject to periodic review and adjustment by Jazz Pharmaceuticals, in accordance with its normal practices; we have a company-wide performance review process that takes place early in each calendar year. The Company has a cash bonus plan under which annual bonuses may be given based on the Company meeting its annual objectives, and each employee’s meeting of his or her objectives. In your role,
you will be eligible for an annual incentive bonus with a target currently set at 45% of your annual base salary, prorated for 2015. Whether there will be a bonus in any year, and the size of any bonus if there is one, is within the discretion of the Board of Directors.
|
b.
|
Signing Bonus
.
Jazz Pharmaceuticals will pay you a signing bonus of $100,000, less all required withholdings, payable on the first regular pay date occurring 90 days after your employment start date, subject to your continued employment in good standing with Jazz Pharmaceuticals through that time. Should you voluntarily resign within one year of your employment start date, you will be expected to repay to Jazz Pharmaceuticals the full amount of the signing bonus paid to you on or within 30 days of the later of your resignation or termination date.
|
c.
|
Equity
.
If you accept the offer to become an employee of Jazz Pharmaceuticals, we will recommend to the Compensation Committee at a meeting held prior to commencement of your employment that you be granted equity with a value of $2.5 million. Half of the equity value would be in the form of a grant of options to purchase Jazz Pharmaceuticals plc ordinary shares, and half of the equity value would be in the form of a grant of restricted stock units (“RSUs”) giving you a right to receive Jazz Pharmaceuticals plc ordinary shares at a future date. The number of options and RSUs to be granted would be based on an approximation of grant date fair value, as determined in accordance with the Compensation Committee’s usual methodology for executive officer equity grants. Subject to your continued employment on each vesting date, the options would generally vest 1/4
th
of the total granted on the first anniversary of your start date and 1/48
th
of the total
granted
per month thereafter, and the RSUs would vest 1/4
th
annually over four years from the date of grant. The options would have an exercise price that equals the fair market value of Jazz Pharmaceuticals plc ordinary shares on the date of the grant as determined under the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan (the “EIP”). The RSUs would have no exercise price.
|
d.
|
Additional equity
.
If you accept the offer to become an employee of Jazz Pharmaceuticals, in addition to the equity grants described above, we will recommend to the Compensation Committee at the meeting contemplated above that you receive a grant of RSUs with a value of $50,000 that would vest in full one year from the date of commencement of your employment. The number of RSUs granted would be determined in the same manner as described above. The RSUs would have no exercise price.
|
e.
|
Relocation Assistance
. The Company will pay moving expenses associated with movement of your household goods to the Palo Alto area during 2015. In addition, Jazz Pharmaceuticals will pay you a relocation bonus of $190,000, less all required withholdings, to cover additional expenses associated with a move in 2015, which shall be paid to you in one or more lump sum payment(s) as soon as practicable after your employment start date (but in any event before March 15, 2016). The Company will also make available to you, at the Company’s expense, the assistance of a relocation service retained by the Company and agreed upon related services arranged by the relocation service. All taxable reimbursements of expenses will be made in accordance with Section 409A of the Internal Revenue Code of 1986. Should you voluntarily resign within one year of your employment start date, you will be required to reimburse Jazz Pharmaceuticals for $75,000 on or within 30 days of the later of your resignation or termination date.
|
3.
|
Benefits
. You generally will be eligible to receive all benefits which are extended to other similarly-situated employees at Jazz Pharmaceuticals, including medical and dental benefits, life insurance and other benefits offered to regular employees. You will be eligible for paid time off and holidays in accordance with Jazz Pharmaceuticals’ policies, and, as a Senior Vice President, you will be a participant in the Company’s Amended and Restated Executive Change in Control and Severance Benefit Plan.
|
4.
|
Confidential Information; Employee Confidential Information and Inventions Agreement
. To enable Jazz Pharmaceuticals to safeguard its proprietary and confidential information, it is a condition of employment
|
5.
|
Code of Conduct
. Jazz Pharmaceuticals is committed to integrity and the pursuit of excellence in all we do. We fulfill these commitments while upholding a high level of ethical conduct. The Code of Conduct is one element of Jazz Pharmaceuticals’ efforts to ensure lawful and ethical conduct by the Company and its subsidiaries and their employees, officers and directors. It is a condition of employment that you read, agree to and sign Jazz Pharmaceuticals’ Code of Conduct in the first week of employment. If you have questions about the Code of Conduct, please let Human Resources know and we will ensure that you receive answers to your inquiries as quickly as possible.
|
6.
|
At-Will Employment
.
Should you decide to accept our offer, you will be an “at-will” employee of Jazz Pharmaceuticals. This means that either you or Jazz Pharmaceuticals may terminate the employment relationship with or without cause at any time. Participation in any benefit, compensation or bonus program does not change the nature of the employment relationship, which remains “at-will.”
|
7.
|
Authorization to Work
. Federal government regulations require that all prospective employees present documentation verifying their identity and demonstrating that they are authorized to work in the United States. If you have any questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, please contact Heather McGaughey, our Senior Vice President, Human Resources. Your employment is contingent on your ability to prove your identity and authorization to work in the United States, and your complying with the government’s employment verification requirements.
|
8.
|
Complete Offer and Agreement
. This letter contains our complete understanding and agreement regarding the terms of your employment by Jazz Pharmaceuticals. This letter replaces and supersedes your prior offer letter from Jazz Pharmaceuticals dated March 25, 2015. There are no other, different or prior agreements or understandings on this or related subjects. Changes to the terms of your employment can be made only in writing signed by you and the Chief Operating Officer of Jazz Pharmaceuticals, although it is understood that as part of the policy of employment at will, Jazz Pharmaceuticals may, from time to time, in its sole discretion, adjust your salary, incentive compensation and benefits, as well as your job title, location, duties, responsibilities, assignments and reporting relationships.
|
9.
|
Acceptance of Offer
. If our offer is acceptable to you, please sign the enclosed copy of this letter in the space indicated and return it to me by August 7, 2015.
|
10.
|
Severability.
If any provision of this offer is held to be invalid, void or unenforceable, the remainder of the agreement set forth herein will remain unaffected, and you and Jazz Pharmaceuticals will work together to achieve the intent of the affected provisions.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Jazz Pharmaceuticals Public Limited Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 9, 2015
|
By:
|
/s/ Bruce C. Cozadd
|
|
|
Bruce C. Cozadd
Chairman and Chief Executive Officer and Director
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Jazz Pharmaceuticals Public Limited Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 9, 2015
|
By:
|
/s/ Matthew P. Young
|
|
|
Matthew P. Young
Executive Vice President and Chief Financial Officer
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2015
, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Bruce C. Cozadd
|
Bruce C. Cozadd
|
Chairman and Chief Executive Officer and Director
|
|
/s/ Matthew P. Young
|
Matthew P. Young
|
Executive Vice President and Chief Financial Officer
|
(1)
|
This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Jazz Pharmaceuticals Public Limited Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Jazz Pharmaceuticals Public Limited Company and will be retained by Jazz Pharmaceuticals Public Limited Company and furnished to the Securities and Exchange Commission or its staff upon request.
|