|
|
☒
|
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.)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Ordinary shares, nominal value $0.0001 per share
|
JAZZ
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
Page
|
|
||
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
Item 1.
|
Financial Statements
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
795,175
|
|
|
$
|
309,622
|
|
Investments
|
275,000
|
|
|
515,000
|
|
||
Accounts receivable, net of allowances
|
267,031
|
|
|
263,838
|
|
||
Inventories
|
71,108
|
|
|
52,956
|
|
||
Prepaid expenses
|
30,841
|
|
|
25,017
|
|
||
Other current assets
|
81,401
|
|
|
67,572
|
|
||
Total current assets
|
1,520,556
|
|
|
1,234,005
|
|
||
Property, plant and equipment, net
|
129,472
|
|
|
200,358
|
|
||
Operating lease assets
|
141,878
|
|
|
—
|
|
||
Intangible assets, net
|
2,593,030
|
|
|
2,731,334
|
|
||
Goodwill
|
906,725
|
|
|
927,630
|
|
||
Deferred tax assets, net
|
183,944
|
|
|
57,879
|
|
||
Deferred financing costs
|
7,971
|
|
|
9,589
|
|
||
Other non-current assets
|
44,274
|
|
|
42,696
|
|
||
Total assets
|
$
|
5,527,850
|
|
|
$
|
5,203,491
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
70,104
|
|
|
$
|
40,602
|
|
Accrued liabilities
|
238,740
|
|
|
264,887
|
|
||
Current portion of long-term debt
|
33,387
|
|
|
33,387
|
|
||
Income taxes payable
|
43,488
|
|
|
1,197
|
|
||
Deferred revenue
|
4,720
|
|
|
5,414
|
|
||
Total current liabilities
|
390,439
|
|
|
345,487
|
|
||
Deferred revenue, non-current
|
6,041
|
|
|
9,581
|
|
||
Long-term debt, less current portion
|
1,570,781
|
|
|
1,563,025
|
|
||
Operating lease liabilities, less current portion
|
153,434
|
|
|
—
|
|
||
Deferred tax liabilities, net
|
250,167
|
|
|
309,097
|
|
||
Other non-current liabilities
|
102,583
|
|
|
218,879
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|||
Shareholders’ equity:
|
|
|
|
||||
Ordinary shares
|
6
|
|
|
6
|
|
||
Non-voting euro deferred shares
|
55
|
|
|
55
|
|
||
Capital redemption reserve
|
472
|
|
|
472
|
|
||
Additional paid-in capital
|
2,209,156
|
|
|
2,113,630
|
|
||
Accumulated other comprehensive loss
|
(259,442
|
)
|
|
(197,791
|
)
|
||
Retained earnings
|
1,104,158
|
|
|
841,050
|
|
||
Total shareholders’ equity
|
3,054,405
|
|
|
2,757,422
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,527,850
|
|
|
$
|
5,203,491
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
532,321
|
|
|
$
|
465,197
|
|
|
$
|
1,559,075
|
|
|
$
|
1,402,139
|
|
Royalties and contract revenues
|
5,381
|
|
|
4,176
|
|
|
20,946
|
|
|
12,326
|
|
||||
Total revenues
|
537,702
|
|
|
469,373
|
|
|
1,580,021
|
|
|
1,414,465
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales (excluding amortization of intangible assets)
|
31,400
|
|
|
26,574
|
|
|
92,582
|
|
|
95,207
|
|
||||
Selling, general and administrative
|
178,706
|
|
|
155,873
|
|
|
522,667
|
|
|
521,665
|
|
||||
Research and development
|
79,855
|
|
|
51,160
|
|
|
202,344
|
|
|
169,959
|
|
||||
Intangible asset amortization
|
62,863
|
|
|
46,989
|
|
|
181,324
|
|
|
154,955
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
42,896
|
|
||||
Acquired in-process research and development
|
51,775
|
|
|
—
|
|
|
109,975
|
|
|
—
|
|
||||
Total operating expenses
|
404,599
|
|
|
280,596
|
|
|
1,108,892
|
|
|
984,682
|
|
||||
Income from operations
|
133,103
|
|
|
188,777
|
|
|
471,129
|
|
|
429,783
|
|
||||
Interest expense, net
|
(17,861
|
)
|
|
(18,920
|
)
|
|
(54,017
|
)
|
|
(59,171
|
)
|
||||
Foreign exchange loss
|
(1,033
|
)
|
|
(756
|
)
|
|
(3,577
|
)
|
|
(5,181
|
)
|
||||
Loss on extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,425
|
)
|
||||
Income before income tax provision (benefit) and equity in loss of investees
|
114,209
|
|
|
169,101
|
|
|
413,535
|
|
|
364,006
|
|
||||
Income tax provision (benefit)
|
10,903
|
|
|
19,348
|
|
|
(38,631
|
)
|
|
75,018
|
|
||||
Equity in loss of investees
|
1,030
|
|
|
437
|
|
|
2,791
|
|
|
1,360
|
|
||||
Net income
|
$
|
102,276
|
|
|
$
|
149,316
|
|
|
$
|
449,375
|
|
|
$
|
287,628
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per ordinary share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.80
|
|
|
$
|
2.47
|
|
|
$
|
7.90
|
|
|
$
|
4.78
|
|
Diluted
|
$
|
1.78
|
|
|
$
|
2.41
|
|
|
$
|
7.80
|
|
|
$
|
4.68
|
|
Weighted-average ordinary shares used in per share calculations - basic
|
56,674
|
|
|
60,476
|
|
|
56,860
|
|
|
60,196
|
|
||||
Weighted-average ordinary shares used in per share calculations - diluted
|
57,438
|
|
|
61,857
|
|
|
57,647
|
|
|
61,493
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
102,276
|
|
|
$
|
149,316
|
|
|
$
|
449,375
|
|
|
$
|
287,628
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(48,448
|
)
|
|
(11,984
|
)
|
|
(56,271
|
)
|
|
(43,945
|
)
|
||||
Unrealized gain (loss) on hedging activities, net of income tax (benefit) provision of ($80), $107, ($769) and $758, respectively
|
(558
|
)
|
|
746
|
|
|
(5,380
|
)
|
|
5,304
|
|
||||
Other comprehensive loss
|
(49,006
|
)
|
|
(11,238
|
)
|
|
(61,651
|
)
|
|
(38,641
|
)
|
||||
Total comprehensive income
|
$
|
53,270
|
|
|
$
|
138,078
|
|
|
$
|
387,724
|
|
|
$
|
248,987
|
|
|
Ordinary Shares
|
|
Non-voting Euro Deferred
|
|
Capital Redemption Reserve
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Total
Equity
|
||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||||||
Balance at December 31, 2018
|
57,504
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,113,630
|
|
|
$
|
(197,791
|
)
|
|
$
|
841,050
|
|
|
$
|
2,757,422
|
|
Cumulative effect adjustment from adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,848
|
|
|
4,848
|
|
|||||||
Issuance of ordinary shares in conjunction with exercise of share options
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,057
|
|
|
—
|
|
|
—
|
|
|
3,057
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
203
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,810
|
)
|
|
—
|
|
|
—
|
|
|
(13,810
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,861
|
|
|
—
|
|
|
—
|
|
|
27,861
|
|
|||||||
Shares repurchased
|
(858
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111,249
|
)
|
|
(111,249
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,883
|
)
|
|
—
|
|
|
(22,883
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85,201
|
|
|
85,201
|
|
|||||||
Balance at March 31, 2019
|
56,903
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,130,738
|
|
|
$
|
(220,674
|
)
|
|
$
|
819,850
|
|
|
$
|
2,730,447
|
|
Issuance of ordinary shares in conjunction with exercise of share options
|
98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,033
|
|
|
—
|
|
|
—
|
|
|
7,033
|
|
|||||||
Issuance of ordinary shares under employee stock purchase plan
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,032
|
|
|
—
|
|
|
—
|
|
|
6,032
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,003
|
)
|
|
—
|
|
|
—
|
|
|
(1,003
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,658
|
|
|
—
|
|
|
—
|
|
|
28,658
|
|
|||||||
Shares repurchased
|
(447
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,869
|
)
|
|
(59,869
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,238
|
|
|
—
|
|
|
10,238
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
261,898
|
|
|
261,898
|
|
|||||||
Balance at June 30, 2019
|
56,626
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,171,458
|
|
|
$
|
(210,436
|
)
|
|
$
|
1,021,879
|
|
|
$
|
2,983,434
|
|
Issuance of ordinary shares in conjunction with exercise of share options
|
110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,968
|
|
|
—
|
|
|
—
|
|
|
9,968
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,087
|
)
|
|
—
|
|
|
—
|
|
|
(1,087
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,817
|
|
|
—
|
|
|
—
|
|
|
28,817
|
|
|||||||
Shares repurchased
|
(149
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,997
|
)
|
|
(19,997
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49,006
|
)
|
|
—
|
|
|
(49,006
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,276
|
|
|
102,276
|
|
|||||||
Balance at September 30, 2019
|
56,619
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,209,156
|
|
|
$
|
(259,442
|
)
|
|
$
|
1,104,158
|
|
|
$
|
3,054,405
|
|
|
Ordinary Shares
|
|
Non-voting Euro Deferred
|
|
Capital Redemption Reserve
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Total
Equity
|
||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||||||||||
Balance at December 31, 2017
|
59,898
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
1,935,486
|
|
|
$
|
(140,878
|
)
|
|
$
|
917,956
|
|
|
$
|
2,713,097
|
|
Cumulative effect adjustment from adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|
(351
|
)
|
|
(298
|
)
|
|||||||
Issuance of ordinary shares in conjunction with exercise of share options
|
133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,588
|
|
|
—
|
|
|
—
|
|
|
10,588
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,594
|
)
|
|
—
|
|
|
—
|
|
|
(14,594
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,276
|
|
|
—
|
|
|
—
|
|
|
24,276
|
|
|||||||
Shares repurchased
|
(237
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,546
|
)
|
|
(34,546
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,057
|
|
|
—
|
|
|
42,057
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,991
|
|
|
45,991
|
|
|||||||
Balance at March 31, 2018
|
59,989
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
1,955,756
|
|
|
$
|
(98,768
|
)
|
|
$
|
929,050
|
|
|
$
|
2,786,571
|
|
Issuance of ordinary shares in conjunction with exercise of share options
|
457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,023
|
|
|
—
|
|
|
—
|
|
|
51,023
|
|
|||||||
Issuance of ordinary shares under employee stock purchase plan
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,447
|
|
|
—
|
|
|
—
|
|
|
5,447
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,429
|
)
|
|
—
|
|
|
—
|
|
|
(1,429
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,294
|
|
|
—
|
|
|
—
|
|
|
26,294
|
|
|||||||
Shares repurchased
|
(135
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,015
|
)
|
|
(21,015
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,460
|
)
|
|
—
|
|
|
(69,460
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,321
|
|
|
92,321
|
|
|||||||
Balance at June 30, 2018
|
60,386
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,037,091
|
|
|
$
|
(168,228
|
)
|
|
$
|
1,000,356
|
|
|
$
|
2,869,752
|
|
Issuance of ordinary shares in conjunction with exercise of share options
|
133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,998
|
|
|
—
|
|
|
—
|
|
|
16,998
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,169
|
)
|
|
—
|
|
|
—
|
|
|
(1,169
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,112
|
|
|
—
|
|
|
—
|
|
|
25,112
|
|
|||||||
Shares repurchased
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,454
|
)
|
|
(21,454
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,238
|
)
|
|
—
|
|
|
(11,238
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,316
|
|
|
149,316
|
|
|||||||
Balance at September 30, 2018
|
60,421
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,078,032
|
|
|
$
|
(179,466
|
)
|
|
$
|
1,128,218
|
|
|
$
|
3,027,317
|
|
|
Nine Months Ended
September 30, |
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
449,375
|
|
|
$
|
287,628
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Intangible asset amortization
|
181,324
|
|
|
154,955
|
|
||
Share-based compensation
|
84,626
|
|
|
75,718
|
|
||
Impairment charges
|
—
|
|
|
42,896
|
|
||
Depreciation
|
10,885
|
|
|
11,363
|
|
||
Acquired in-process research and development
|
109,975
|
|
|
—
|
|
||
Loss on disposal of assets
|
8
|
|
|
652
|
|
||
Deferred tax benefit
|
(167,935
|
)
|
|
(44,658
|
)
|
||
Provision for losses on accounts receivable and inventory
|
3,847
|
|
|
4,734
|
|
||
Loss on extinguishment and modification of debt
|
—
|
|
|
1,425
|
|
||
Amortization of debt discount and deferred financing costs
|
34,415
|
|
|
32,669
|
|
||
Other non-cash transactions
|
(4,437
|
)
|
|
6,970
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(4,307
|
)
|
|
(55,518
|
)
|
||
Inventories
|
(23,028
|
)
|
|
(7,583
|
)
|
||
Prepaid expenses and other current assets
|
(22,858
|
)
|
|
6,989
|
|
||
Other non-current assets
|
2,251
|
|
|
(244
|
)
|
||
Operating lease assets
|
10,919
|
|
|
—
|
|
||
Accounts payable
|
29,104
|
|
|
10,116
|
|
||
Accrued liabilities
|
(37,369
|
)
|
|
65,074
|
|
||
Income taxes payable
|
42,813
|
|
|
(13,999
|
)
|
||
Deferred revenue
|
(4,234
|
)
|
|
(5,623
|
)
|
||
Other non-current liabilities
|
(3,634
|
)
|
|
7,244
|
|
||
Operating lease liabilities, less current portion
|
(3,137
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
688,603
|
|
|
580,808
|
|
||
Investing activities
|
|
|
|
||||
Proceeds from maturity of investments
|
820,000
|
|
|
565,000
|
|
||
Net proceeds from sale of assets
|
—
|
|
|
48,092
|
|
||
Purchases of property, plant and equipment
|
(32,998
|
)
|
|
(15,221
|
)
|
||
Asset acquisition, net of cash acquired
|
(55,074
|
)
|
|
—
|
|
||
Acquired in-process research and development
|
(61,700
|
)
|
|
—
|
|
||
Acquisition of intangible assets
|
(80,500
|
)
|
|
(111,100
|
)
|
||
Acquisition of investments
|
(585,975
|
)
|
|
(921,250
|
)
|
||
Net cash provided by (used in) investing activities
|
3,753
|
|
|
(434,479
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from employee equity incentive and purchase plans
|
26,090
|
|
|
84,056
|
|
||
Payment of employee withholding taxes related to share-based awards
|
(15,900
|
)
|
|
(17,192
|
)
|
||
Repayments of long-term debt
|
(25,040
|
)
|
|
(17,370
|
)
|
||
Share repurchases
|
(191,115
|
)
|
|
(77,015
|
)
|
||
Proceeds from tenant improvement allowance on build-to-suit lease
|
—
|
|
|
1,253
|
|
||
Payment of debt modification costs
|
—
|
|
|
(6,406
|
)
|
||
Net cash used in financing activities
|
(205,965
|
)
|
|
(32,674
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
(838
|
)
|
|
(672
|
)
|
||
Net increase in cash and cash equivalents
|
485,553
|
|
|
112,983
|
|
||
Cash and cash equivalents, at beginning of period
|
309,622
|
|
|
386,035
|
|
||
Cash and cash equivalents, at end of period
|
$
|
795,175
|
|
|
$
|
499,018
|
|
•
|
Sunosi® (solriamfetol), our newest lead marketed product launched in July 2019 and approved in the U.S. to improve wakefulness in adult patients with excessive daytime sleepiness, or EDS, associated with narcolepsy or obstructive sleep apnea. We are also seeking approval for Sunosi in Europe and submitted a marketing authorization application to the European Medicines Agency in the fourth quarter of 2018;
|
•
|
Xyrem® (sodium oxybate) oral solution, the only product approved by the U.S. Food and Drug Administration, or FDA, and marketed in the U.S. for the treatment of both cataplexy and EDS in both adult and pediatric patients with narcolepsy;
|
•
|
Defitelio® (defibrotide sodium), a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio® (defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy;
|
•
|
Erwinaze® (asparaginase Erwinia chrysanthemi), a treatment approved in the U.S. and in certain markets in Europe (where it is marketed as Erwinase®) for patients with acute lymphoblastic leukemia who have developed hypersensitivity to E. coli-derived asparaginase; and
|
•
|
Vyxeos® (daunorubicin and cytarabine) liposome for injection, a product approved in the U.S. and in Europe (where it is marketed as Vyxeos® liposomal 44 mg/100 mg powder for concentrate for solution for infusion) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia, or AML, or AML with myelodysplasia-related changes.
|
•
|
Strong financial execution through growth in sales of our current lead marketed products;
|
•
|
Building a diversified product portfolio and development pipeline through a combination of our internal research and development efforts and obtaining rights to clinically meaningful and differentiated on- or near-market products and early- to late-stage product candidates through acquisitions, collaborations, licensing arrangements, partnerships and venture investments; and
|
•
|
Maximizing the value of our products and product candidates by continuing to implement our comprehensive global development plans, including through generating additional clinical data and seeking regulatory approval for new indications.
|
|
Balance at December 31,
2018 |
|
Transition Adjustments
|
|
Balance at January 1,
2019 |
||||||
Assets:
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
$
|
200,358
|
|
|
$
|
(95,397
|
)
|
|
$
|
104,961
|
|
Operating lease assets
|
—
|
|
|
149,442
|
|
|
149,442
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Accrued liabilities
|
264,887
|
|
|
8,165
|
|
|
273,052
|
|
|||
Operating lease liabilities, less current portion
|
—
|
|
|
153,158
|
|
|
153,158
|
|
|||
Deferred tax liabilities, net
|
309,097
|
|
|
1,489
|
|
|
310,586
|
|
|||
Other non-current liabilities
|
218,879
|
|
|
(113,615
|
)
|
|
105,264
|
|
|||
Shareholders' Equity:
|
|
|
|
|
|
||||||
Retained earnings
|
841,050
|
|
|
4,848
|
|
|
845,898
|
|
Consideration
|
|
||
Upfront payment for acquisition of Cavion's outstanding shares
|
$
|
52,500
|
|
Cash acquired
|
397
|
|
|
Working capital adjustment
|
(255
|
)
|
|
Transaction costs
|
2,829
|
|
|
Total consideration
|
$
|
55,471
|
|
|
|
||
Assets Acquired and Liabilities Assumed
|
|
||
Cash
|
$
|
397
|
|
In-process research and development
|
48,275
|
|
|
Deferred tax assets
|
7,995
|
|
|
Other assets and liabilities
|
(1,196
|
)
|
|
Total net assets acquired
|
$
|
55,471
|
|
|
September 30, 2019
|
||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Investments
|
||||||||||||
Cash
|
$
|
297,243
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
297,243
|
|
|
$
|
297,243
|
|
|
$
|
—
|
|
Time deposits
|
530,000
|
|
|
—
|
|
|
—
|
|
|
530,000
|
|
|
255,000
|
|
|
275,000
|
|
||||||
Money market funds
|
242,932
|
|
|
—
|
|
|
—
|
|
|
242,932
|
|
|
242,932
|
|
|
—
|
|
||||||
Totals
|
$
|
1,070,175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,070,175
|
|
|
$
|
795,175
|
|
|
$
|
275,000
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Cash and
Cash Equivalents |
|
Investments
|
||||||||||||
Cash
|
$
|
215,606
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
215,606
|
|
|
$
|
215,606
|
|
|
$
|
—
|
|
Time deposits
|
515,000
|
|
|
—
|
|
|
—
|
|
|
515,000
|
|
|
—
|
|
|
515,000
|
|
||||||
Money market funds
|
94,016
|
|
|
—
|
|
|
—
|
|
|
94,016
|
|
|
94,016
|
|
|
—
|
|
||||||
Totals
|
$
|
824,622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
824,622
|
|
|
$
|
309,622
|
|
|
$
|
515,000
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Total
Estimated Fair Value |
|
Quoted
Prices in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Total
Estimated Fair Value |
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Time deposits
|
$
|
—
|
|
|
$
|
530,000
|
|
|
$
|
530,000
|
|
|
$
|
—
|
|
|
$
|
515,000
|
|
|
$
|
515,000
|
|
Money market funds
|
242,932
|
|
|
—
|
|
|
242,932
|
|
|
94,016
|
|
|
—
|
|
|
94,016
|
|
||||||
Interest rate contracts
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
4,070
|
|
|
4,070
|
|
||||||
Foreign exchange forward contracts
|
—
|
|
|
1,008
|
|
|
1,008
|
|
|
—
|
|
|
1,194
|
|
|
1,194
|
|
||||||
Totals
|
$
|
242,932
|
|
|
$
|
531,009
|
|
|
$
|
773,941
|
|
|
$
|
94,016
|
|
|
$
|
520,264
|
|
|
$
|
614,280
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
2,082
|
|
|
$
|
2,082
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange forward contracts
|
—
|
|
|
1,676
|
|
|
1,676
|
|
|
—
|
|
|
1,460
|
|
|
1,460
|
|
||||||
Totals
|
$
|
—
|
|
|
$
|
3,758
|
|
|
$
|
3,758
|
|
|
$
|
—
|
|
|
$
|
1,460
|
|
|
$
|
1,460
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
Interest Rate Contracts:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gain (loss) recognized in accumulated other comprehensive loss, net of tax
|
$
|
(322
|
)
|
|
$
|
876
|
|
|
$
|
(4,361
|
)
|
|
$
|
5,285
|
|
Loss (gain) reclassified from accumulated other comprehensive loss to interest expense, net of tax
|
(236
|
)
|
|
(130
|
)
|
|
(1,019
|
)
|
|
19
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
Foreign Exchange Forward Contracts:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Loss recognized in foreign exchange loss
|
$
|
7,430
|
|
|
$
|
2,409
|
|
|
$
|
10,718
|
|
|
$
|
10,896
|
|
|
September 30, 2019
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Interest rate contracts
|
Other current assets
|
|
$
|
1
|
|
|
Accrued liabilities
|
|
$
|
751
|
|
|
|
|
|
|
Other non-current liabilities
|
|
1,331
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
1,008
|
|
|
Accrued liabilities
|
|
1,676
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
1,009
|
|
|
|
|
$
|
3,758
|
|
|
December 31, 2018
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Interest rate contracts
|
Other current assets
|
|
$
|
1,929
|
|
|
Accrued liabilities
|
|
$
|
—
|
|
|
Other non-current assets
|
|
2,141
|
|
|
|
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
1,194
|
|
|
Accrued liabilities
|
|
1,460
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
5,264
|
|
|
|
|
$
|
1,460
|
|
|
September 30, 2019
|
||||||||||||||||||||||
|
Gross Amounts of Recognized Assets/ Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
|
|
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet
|
||||||||||||||||
Description
|
|
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received (Pledged)
|
|
Net Amount
|
|||||||||||||||
Derivative assets
|
$
|
1,009
|
|
|
$
|
—
|
|
|
$
|
1,009
|
|
|
$
|
(772
|
)
|
|
$
|
—
|
|
|
$
|
237
|
|
Derivative liabilities
|
(3,758
|
)
|
|
—
|
|
|
(3,758
|
)
|
|
772
|
|
|
—
|
|
|
(2,986
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Gross Amounts of Recognized Assets/ Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheet
|
|
Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheet
|
||||||||||||||||
Description
|
|
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received (Pledged)
|
|
Net Amount
|
|||||||||||||||
Derivative assets
|
$
|
5,264
|
|
|
$
|
—
|
|
|
$
|
5,264
|
|
|
$
|
(935
|
)
|
|
$
|
—
|
|
|
$
|
4,329
|
|
Derivative liabilities
|
(1,460
|
)
|
|
—
|
|
|
(1,460
|
)
|
|
935
|
|
|
—
|
|
|
(525
|
)
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Raw materials
|
$
|
11,653
|
|
|
$
|
10,895
|
|
Work in process
|
33,935
|
|
|
20,743
|
|
||
Finished goods
|
25,520
|
|
|
21,318
|
|
||
Total inventories
|
$
|
71,108
|
|
|
$
|
52,956
|
|
Balance at December 31, 2018
|
$
|
927,630
|
|
Foreign exchange
|
(20,905
|
)
|
|
Balance at September 30, 2019
|
$
|
906,725
|
|
|
September 30, 2019
|
|
December 31, 2018
|
|||||||||||||||||||||||
|
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
|
13.5
|
|
|
$
|
3,136,957
|
|
|
$
|
(790,075
|
)
|
|
$
|
2,346,882
|
|
|
$
|
3,110,641
|
|
|
$
|
(632,413
|
)
|
|
$
|
2,478,228
|
|
Priority review voucher
|
|
|
111,101
|
|
|
—
|
|
|
111,101
|
|
|
111,101
|
|
|
—
|
|
|
111,101
|
|
|||||||
Manufacturing contracts
|
—
|
|
|
11,656
|
|
|
(11,656
|
)
|
|
—
|
|
|
12,256
|
|
|
(12,256
|
)
|
|
—
|
|
||||||
Trademarks
|
—
|
|
|
2,881
|
|
|
(2,881
|
)
|
|
—
|
|
|
2,896
|
|
|
(2,896
|
)
|
|
—
|
|
||||||
Total finite-lived intangible assets
|
|
|
3,262,595
|
|
|
(804,612
|
)
|
|
2,457,983
|
|
|
3,236,894
|
|
|
(647,565
|
)
|
|
2,589,329
|
|
|||||||
Acquired IPR&D assets
|
|
|
135,047
|
|
|
—
|
|
|
135,047
|
|
|
142,005
|
|
|
—
|
|
|
142,005
|
|
|||||||
Total intangible assets
|
|
|
$
|
3,397,642
|
|
|
$
|
(804,612
|
)
|
|
$
|
2,593,030
|
|
|
$
|
3,378,899
|
|
|
$
|
(647,565
|
)
|
|
$
|
2,731,334
|
|
Year Ending December 31,
|
Estimated
Amortization
Expense
|
||
2019 (remainder)
|
$
|
173,131
|
|
2020
|
246,957
|
|
|
2021
|
201,390
|
|
|
2022
|
157,785
|
|
|
2023
|
157,785
|
|
|
Thereafter
|
1,520,935
|
|
|
Total
|
$
|
2,457,983
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Leasehold improvements
|
$
|
49,614
|
|
|
$
|
33,273
|
|
Land and buildings
|
46,555
|
|
|
46,650
|
|
||
Computer software
|
28,529
|
|
|
19,062
|
|
||
Manufacturing equipment and machinery
|
27,321
|
|
|
25,837
|
|
||
Computer equipment
|
13,364
|
|
|
13,679
|
|
||
Furniture and fixtures
|
11,095
|
|
|
8,155
|
|
||
Construction-in-progress
|
5,849
|
|
|
51,243
|
|
||
Build-to-suit facility
|
—
|
|
|
52,067
|
|
||
Subtotal
|
182,327
|
|
|
249,966
|
|
||
Less accumulated depreciation and amortization
|
(52,855
|
)
|
|
(49,608
|
)
|
||
Property, plant and equipment, net
|
$
|
129,472
|
|
|
$
|
200,358
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Rebates and other sales deductions
|
$
|
86,191
|
|
|
$
|
86,495
|
|
Employee compensation and benefits
|
64,595
|
|
|
58,543
|
|
||
Current portion of operating lease liabilities
|
11,713
|
|
|
—
|
|
||
Inventory-related accruals
|
10,433
|
|
|
8,753
|
|
||
Clinical trial accruals
|
7,973
|
|
|
5,904
|
|
||
Selling and marketing accruals
|
6,705
|
|
|
6,780
|
|
||
Royalties
|
6,074
|
|
|
2,679
|
|
||
Professional fees
|
4,213
|
|
|
2,333
|
|
||
Accrued construction-in-progress
|
3,070
|
|
|
1,065
|
|
||
Sales returns reserve
|
2,872
|
|
|
2,510
|
|
||
Accrued interest
|
2,539
|
|
|
7,407
|
|
||
Derivative instrument liabilities
|
2,427
|
|
|
1,460
|
|
||
Accrued loss contingency
|
—
|
|
|
58,154
|
|
||
Other
|
29,935
|
|
|
22,804
|
|
||
Total accrued liabilities
|
$
|
238,740
|
|
|
$
|
264,887
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
2021 Notes
|
$
|
575,000
|
|
|
$
|
575,000
|
|
Unamortized discount and debt issuance costs on 2021 Notes
|
(44,566
|
)
|
|
(60,910
|
)
|
||
2021 Notes, net
|
530,434
|
|
|
514,090
|
|
||
|
|
|
|
||||
2024 Notes
|
575,000
|
|
|
575,000
|
|
||
Unamortized discount and debt issuance costs on 2024 Notes
|
(123,310
|
)
|
|
(138,914
|
)
|
||
2024 Notes, net
|
451,690
|
|
|
436,086
|
|
||
|
|
|
|
||||
Term loan
|
622,044
|
|
|
646,236
|
|
||
Total debt
|
1,604,168
|
|
|
1,596,412
|
|
||
Less current portion
|
33,387
|
|
|
33,387
|
|
||
Total long-term debt
|
$
|
1,570,781
|
|
|
$
|
1,563,025
|
|
Year Ending December 31,
|
Scheduled Long-Term Debt Maturities
|
||
2019 (remainder)
|
$
|
8,347
|
|
2020
|
33,387
|
|
|
2021
|
608,387
|
|
|
2022
|
33,387
|
|
|
2023
|
517,494
|
|
|
Thereafter
|
575,000
|
|
|
Total
|
$
|
1,776,002
|
|
Lease Cost
|
Three Months Ended
September 30, 2019 |
|
Nine Months Ended
September 30, 2019 |
||||
Operating lease cost
|
$
|
5,746
|
|
|
$
|
17,672
|
|
Short-term lease cost
|
396
|
|
|
1,616
|
|
||
Variable lease cost
|
—
|
|
|
4
|
|
||
Sublease income
|
(158
|
)
|
|
(478
|
)
|
||
Net lease cost
|
$
|
5,984
|
|
|
$
|
18,814
|
|
Leases
|
Classification
|
September 30,
2019 |
||
Assets
|
|
|
||
Operating lease assets
|
Operating lease assets
|
$
|
141,878
|
|
|
|
|
||
Liabilities
|
|
|
||
Current
|
|
|
||
Operating lease liabilities
|
Accrued liabilities
|
11,713
|
|
|
Non-current
|
|
|
||
Operating lease liabilities
|
Operating lease liabilities, less current portion
|
153,434
|
|
|
Total operating lease liabilities
|
|
$
|
165,147
|
|
Lease Term and Discount Rate
|
September 30,
2019 |
|
Weighted-average remaining lease term - operating leases (years)
|
10.0
|
|
Weighted-average discount rate - operating leases
|
5.3
|
%
|
|
Nine Months Ended
September 30, 2019 |
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash outflows from operating leases
|
$
|
11,758
|
|
Non-cash operating activities:
|
|
||
Right-of-use assets obtained in exchange for new operating lease liabilities (1)
|
$
|
153,048
|
|
(1)
|
Includes the balances recognized on January 1, 2019 on adoption of ASU No. 2016-02.
|
Year Ending December 31,
|
Operating leases
|
||
2019 (remainder)
|
$
|
4,531
|
|
2020
|
20,954
|
|
|
2021
|
20,843
|
|
|
2022
|
20,889
|
|
|
2023
|
21,260
|
|
|
Thereafter
|
128,294
|
|
|
Total lease payments
|
$
|
216,771
|
|
Less imputed interest
|
(51,624
|
)
|
|
Present value of lease liabilities
|
$
|
165,147
|
|
|
Net Unrealized
Gain (Loss) From Hedging Activities |
|
Foreign
Currency Translation Adjustments |
|
Total
Accumulated Other Comprehensive Loss |
||||||
Balance at December 31, 2018
|
$
|
3,557
|
|
|
$
|
(201,348
|
)
|
|
$
|
(197,791
|
)
|
Other comprehensive loss before reclassifications
|
(4,361
|
)
|
|
(56,271
|
)
|
|
(60,632
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
(1,019
|
)
|
|
—
|
|
|
(1,019
|
)
|
|||
Other comprehensive loss, net
|
(5,380
|
)
|
|
(56,271
|
)
|
|
(61,651
|
)
|
|||
Balance at September 30, 2019
|
$
|
(1,823
|
)
|
|
$
|
(257,619
|
)
|
|
$
|
(259,442
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
102,276
|
|
|
$
|
149,316
|
|
|
$
|
449,375
|
|
|
$
|
287,628
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average ordinary shares used in per share calculations - basic
|
56,674
|
|
|
60,476
|
|
|
56,860
|
|
|
60,196
|
|
||||
Dilutive effect of employee equity incentive and purchase plans
|
764
|
|
|
1,381
|
|
|
787
|
|
|
1,297
|
|
||||
Weighted-average ordinary shares used in per share calculations - diluted
|
57,438
|
|
|
61,857
|
|
|
57,647
|
|
|
61,493
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per ordinary share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.80
|
|
|
$
|
2.47
|
|
|
$
|
7.90
|
|
|
$
|
4.78
|
|
Diluted
|
$
|
1.78
|
|
|
$
|
2.41
|
|
|
$
|
7.80
|
|
|
$
|
4.68
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Exchangeable Senior Notes
|
5,504
|
|
|
5,504
|
|
|
5,504
|
|
|
5,504
|
|
Options, RSUs and ESPP
|
5,062
|
|
|
2,244
|
|
|
5,084
|
|
|
2,975
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Xyrem
|
$
|
425,644
|
|
|
$
|
357,251
|
|
|
$
|
1,207,173
|
|
|
$
|
1,030,036
|
|
Erwinaze/Erwinase
|
34,024
|
|
|
41,134
|
|
|
122,545
|
|
|
150,474
|
|
||||
Defitelio/defibrotide
|
37,604
|
|
|
36,177
|
|
|
125,159
|
|
|
111,736
|
|
||||
Vyxeos
|
29,581
|
|
|
21,038
|
|
|
89,886
|
|
|
75,217
|
|
||||
Sunosi
|
987
|
|
|
—
|
|
|
987
|
|
|
—
|
|
||||
Other
|
4,481
|
|
|
9,597
|
|
|
13,325
|
|
|
34,676
|
|
||||
Product sales, net
|
532,321
|
|
|
465,197
|
|
|
1,559,075
|
|
|
1,402,139
|
|
||||
Royalties and contract revenues
|
5,381
|
|
|
4,176
|
|
|
20,946
|
|
|
12,326
|
|
||||
Total revenues
|
$
|
537,702
|
|
|
$
|
469,373
|
|
|
$
|
1,580,021
|
|
|
$
|
1,414,465
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
United States
|
$
|
492,366
|
|
|
$
|
429,729
|
|
|
$
|
1,436,160
|
|
|
$
|
1,290,775
|
|
Europe
|
35,037
|
|
|
30,816
|
|
|
106,956
|
|
|
94,165
|
|
||||
All other
|
10,299
|
|
|
8,828
|
|
|
36,905
|
|
|
29,525
|
|
||||
Total revenues
|
$
|
537,702
|
|
|
$
|
469,373
|
|
|
$
|
1,580,021
|
|
|
$
|
1,414,465
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Express Scripts
|
79
|
%
|
|
76
|
%
|
|
76
|
%
|
|
73
|
%
|
McKesson
|
12
|
%
|
|
15
|
%
|
|
14
|
%
|
|
18
|
%
|
|
Contract Liabilities
|
||
Balance as of December 31, 2018
|
$
|
14,995
|
|
Amount recognized within royalties and contract revenues
|
(4,234
|
)
|
|
Balance as of September 30, 2019
|
$
|
10,761
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Selling, general and administrative
|
$
|
20,302
|
|
|
$
|
18,978
|
|
|
$
|
61,357
|
|
|
$
|
57,012
|
|
Research and development
|
6,498
|
|
|
4,600
|
|
|
17,917
|
|
|
13,684
|
|
||||
Cost of product sales
|
1,985
|
|
|
1,525
|
|
|
5,352
|
|
|
5,022
|
|
||||
Total share-based compensation expense, pre-tax
|
28,785
|
|
|
25,103
|
|
|
84,626
|
|
|
75,718
|
|
||||
Income tax benefit from share-based compensation expense
|
(4,106
|
)
|
|
(3,552
|
)
|
|
(12,246
|
)
|
|
(12,066
|
)
|
||||
Total share-based compensation expense, net of tax
|
$
|
24,679
|
|
|
$
|
21,551
|
|
|
$
|
72,380
|
|
|
$
|
63,652
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Shares underlying options granted (in thousands)
|
198
|
|
|
117
|
|
|
1,597
|
|
|
1,349
|
|
||||
Grant date fair value
|
$
|
40.62
|
|
|
$
|
53.93
|
|
|
$
|
42.32
|
|
|
$
|
46.95
|
|
Black-Scholes option pricing model assumption information:
|
|
|
|
|
|
|
|
||||||||
Volatility
|
33
|
%
|
|
32
|
%
|
|
32
|
%
|
|
35
|
%
|
||||
Expected term (years)
|
4.5
|
|
|
4.5
|
|
|
4.5
|
|
|
4.5
|
|
||||
Range of risk-free rates
|
1.5-1.7%
|
|
|
2.7-2.8%
|
|
|
1.5-2.5%
|
|
|
2.2-2.8%
|
|
||||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
RSUs granted (in thousands)
|
80
|
|
|
71
|
|
|
642
|
|
|
564
|
|
||||
Grant date fair value
|
$
|
135.90
|
|
|
$
|
174.73
|
|
|
$
|
138.50
|
|
|
$
|
145.59
|
|
•
|
Sunosi® (solriamfetol), our newest lead marketed product launched in July 2019 and approved in the U.S. to improve wakefulness in adult patients with excessive daytime sleepiness, or EDS, associated with narcolepsy or obstructive sleep apnea, or OSA. We are also seeking approval for Sunosi in Europe and submitted a marketing authorization application, or MAA, to the European Medicines Agency, or EMA, in the fourth quarter of 2018;
|
•
|
Xyrem® (sodium oxybate) oral solution, the only product approved by the U.S. Food and Drug Administration, or FDA, and marketed in the U.S. for the treatment of both cataplexy and EDS in both adult and pediatric patients with narcolepsy;
|
•
|
Defitelio® (defibrotide sodium), a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio® (defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy;
|
•
|
Erwinaze® (asparaginase Erwinia chrysanthemi), a treatment approved in the U.S. 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
|
•
|
Vyxeos® (daunorubicin and cytarabine) liposome for injection, a product approved in the U.S. and in Europe (where it is marketed as Vyxeos® liposomal 44 mg/100 mg powder for concentrate for solution for infusion) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia, or AML, or AML with myelodysplasia-related changes.
|
•
|
Strong financial execution through growth in sales of our current lead marketed products;
|
•
|
Building a diversified product portfolio and development pipeline through a combination of our internal research and development efforts and obtaining rights to clinically meaningful and differentiated on- or near-market products and early- to late-stage product candidates through acquisitions, collaborations, licensing arrangements, partnerships and venture investments; and
|
•
|
Maximizing the value of our products and product candidates by continuing to implement our comprehensive global development plans, including through generating additional clinical data and seeking regulatory approval for new indications.
|
•
|
In July 2019, we announced that we are pursuing development activities for Sunosi for the potential treatment of EDS in patients with major depressive disorder;
|
•
|
In August 2019, we announced that, based on the results of a Phase 1 clinical trial, we plan to commence a single-arm, pivotal Phase 2/3 clinical trial of JZP-458, a recombinant Erwinia asparaginase product candidate, for the potential treatment of ALL and lymphoblastic lymphoma, or LBL, by the end of 2019. In October 2019, the FDA granted Fast Track designation to JZP-458 for the treatment of ALL/LBL; and
|
•
|
In October 2019, we announced enrollment of the first patient in an exploratory Phase 2 clinical trial evaluating the ability of defibrotide to prevent neurotoxicity in patients with relapsed or refractory diffuse large B-cell lymphoma receiving chimeric antigen receptor T-cell, or CAR T-cell, therapy.
|
Product Candidates
|
Description
|
Submitted for Regulatory Approval
|
|
Sunosi in the European Union, or EU
|
EDS in OSA and EDS in narcolepsy
|
Phase 3
|
|
JZP-258 (oxybate; 92% sodium reduction)
|
Cataplexy and EDS in narcolepsy
|
JZP-258 (oxybate; 92% sodium reduction)
|
Idiopathic hypersomnia
|
Phase 2b
|
|
JZP-385 (CX-8998)
|
Essential tremor (planned study)
|
Preclinical
|
|
Oxybate once-nightly formulation
|
Narcolepsy
|
Product Candidates
|
Description
|
Phase 3
|
|
Defitelio
|
Prevention of VOD in high-risk patients following HSCT
|
Vyxeos
|
AML or high-risk myelodysplastic syndrome, or MDS (AML19 and AML 18) (cooperative group study)
|
Vyxeos
|
Newly diagnosed adults with standard- and high-risk AML (cooperative group study)
|
Vyxeos
|
Newly diagnosed pediatric patients (planned Children’s Oncology Group cooperative group study)
|
Phase 2/3
|
|
JZP-458 (recombinant Erwinia asparaginase)
|
ALL/LBL
|
Phase 2
|
|
Defitelio
|
Prevention of acute Graft versus Host Disease following allogeneic HSCT
|
Defitelio
|
Prevention of CAR T-cell therapy-associated neurotoxicity
|
Vyxeos + venetoclax
|
De novo or relapsed/refractory, or R/R, AML (MD Anderson Cancer Center, or MD Anderson, collaboration study)
|
Vyxeos
|
High-risk MDS (European Myelodysplastic Syndromes Cooperative Group cooperative group study)
|
Vyxeos
|
R/R AML (Children’s Oncology Group cooperative group study)
|
Vyxeos
|
Newly diagnosed older adults with high-risk AML (planned cooperative group study)
|
Vyxeos + venetoclax
|
High-risk AML (planned cooperative group study)
|
Phase 1
|
|
Vyxeos + gemtuzumab
|
R/R AML or hypomethylating agent failure MDS (MD Anderson collaboration study)
|
Vyxeos + venetoclax
|
Low intensity therapy for first-line, unfit AML (Phase 1b study)
|
Vyxeos + various targeted agents
|
First-line, fit AML (planned Phase 1b study)
|
Vyxeos
|
Low intensity dosing for higher risk MDS (MD Anderson collaboration study)
|
IMGN632
|
CD123+ hematological malignancies (Jazz opt-in opportunity with ImmunoGen, Inc.)
|
IMGN632 +/- venetoclax/azacitidine
|
CD123+ AML (Jazz opt-in opportunity with ImmunoGen, Inc.; Phase 1b/2 study)
|
Preclinical
|
|
CombiPlex
|
Solid tumors candidate
|
CombiPlex
|
Hematology/oncology exploratory activities
|
JZP-341 (long-acting Erwinia asparaginase)
|
ALL and other hematological malignancies (collaboration with Pfenex, Inc., or Pfenex)
|
Recombinant pegaspargase
|
Hematological malignancies (Jazz opt-in opportunity with Pfenex)
|
Defitelio
|
Exploratory activities
|
Exosome NRAS candidate
|
Hematological malignancies (collaboration with Codiak Biosciences, Inc., or Codiak)
|
Exosome STAT3 candidate
|
Hematological malignancies (collaboration with Codiak)
|
Exosome-based candidates
|
Solid tumors/hematological malignancies (collaboration with Codiak)
|
Pan-RAF inhibitor program
|
RAF and RAS mutant tumors (acquired from Redx, which is continuing development)
|
|
Three Months Ended
September 30, |
|
Increase/
|
|
Nine Months Ended
September 30, |
|
Increase/
|
||||||||||||||
|
2019
|
|
2018
|
|
(Decrease)
|
|
2019
|
|
2018
|
|
(Decrease)
|
||||||||||
Product sales, net
|
$
|
532,321
|
|
|
$
|
465,197
|
|
|
14
|
%
|
|
$
|
1,559,075
|
|
|
$
|
1,402,139
|
|
|
11
|
%
|
Royalties and contract revenues
|
5,381
|
|
|
4,176
|
|
|
29
|
%
|
|
20,946
|
|
|
12,326
|
|
|
70
|
%
|
||||
Cost of product sales (excluding amortization of intangible assets)
|
31,400
|
|
|
26,574
|
|
|
18
|
%
|
|
92,582
|
|
|
95,207
|
|
|
(3
|
)%
|
||||
Selling, general and administrative
|
178,706
|
|
|
155,873
|
|
|
15
|
%
|
|
522,667
|
|
|
521,665
|
|
|
—
|
%
|
||||
Research and development
|
79,855
|
|
|
51,160
|
|
|
56
|
%
|
|
202,344
|
|
|
169,959
|
|
|
19
|
%
|
||||
Intangible asset amortization
|
62,863
|
|
|
46,989
|
|
|
34
|
%
|
|
181,324
|
|
|
154,955
|
|
|
17
|
%
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
N/A(1)
|
|
|
—
|
|
|
42,896
|
|
|
N/A(1)
|
|
||||
Acquired in-process research and development
|
51,775
|
|
|
—
|
|
|
N/A(1)
|
|
|
109,975
|
|
|
—
|
|
|
N/A(1)
|
|
||||
Interest expense, net
|
17,861
|
|
|
18,920
|
|
|
(6
|
)%
|
|
54,017
|
|
|
59,171
|
|
|
(9
|
)%
|
||||
Foreign exchange loss
|
1,033
|
|
|
756
|
|
|
37
|
%
|
|
3,577
|
|
|
5,181
|
|
|
(31
|
)%
|
||||
Loss on extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
N/A(1)
|
|
|
—
|
|
|
1,425
|
|
|
N/A(1)
|
|
||||
Income tax provision (benefit)
|
10,903
|
|
|
19,348
|
|
|
N/A(1)
|
|
|
(38,631
|
)
|
|
75,018
|
|
|
N/A(1)
|
|
||||
Equity in loss of investees
|
1,030
|
|
|
437
|
|
|
136
|
%
|
|
2,791
|
|
|
1,360
|
|
|
105
|
%
|
(1)
|
Comparison to prior period not meaningful.
|
|
Three Months Ended
September 30, |
|
Increase/
|
|
Nine Months Ended
September 30, |
|
Increase/
|
||||||||||||||
|
2019
|
|
2018
|
|
(Decrease)
|
|
2019
|
|
2018
|
|
(Decrease)
|
||||||||||
Xyrem
|
$
|
425,644
|
|
|
$
|
357,251
|
|
|
19
|
%
|
|
$
|
1,207,173
|
|
|
$
|
1,030,036
|
|
|
17
|
%
|
Erwinaze/Erwinase
|
34,024
|
|
|
41,134
|
|
|
(17
|
)%
|
|
122,545
|
|
|
150,474
|
|
|
(19
|
)%
|
||||
Defitelio/defibrotide
|
37,604
|
|
|
36,177
|
|
|
4
|
%
|
|
125,159
|
|
|
111,736
|
|
|
12
|
%
|
||||
Vyxeos
|
29,581
|
|
|
21,038
|
|
|
41
|
%
|
|
89,886
|
|
|
75,217
|
|
|
20
|
%
|
||||
Sunosi
|
987
|
|
|
—
|
|
|
N/A(1)
|
|
|
987
|
|
|
—
|
|
|
N/A(1)
|
|
||||
Other
|
4,481
|
|
|
9,597
|
|
|
(53
|
)%
|
|
13,325
|
|
|
34,676
|
|
|
(62
|
)%
|
||||
Product sales, net
|
532,321
|
|
|
465,197
|
|
|
14
|
%
|
|
1,559,075
|
|
|
1,402,139
|
|
|
11
|
%
|
||||
Royalties and contract revenues
|
5,381
|
|
|
4,176
|
|
|
29
|
%
|
|
20,946
|
|
|
12,326
|
|
|
70
|
%
|
||||
Total revenues
|
$
|
537,702
|
|
|
$
|
469,373
|
|
|
15
|
%
|
|
$
|
1,580,021
|
|
|
$
|
1,414,465
|
|
|
12
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Clinical studies and outside services
|
$
|
33,753
|
|
|
$
|
26,501
|
|
|
$
|
97,018
|
|
|
$
|
86,889
|
|
Personnel expenses
|
24,506
|
|
|
17,340
|
|
|
66,671
|
|
|
52,588
|
|
||||
Milestone expense
|
11,000
|
|
|
—
|
|
|
11,000
|
|
|
11,000
|
|
||||
Other
|
10,596
|
|
|
7,319
|
|
|
27,655
|
|
|
19,482
|
|
||||
Total
|
$
|
79,855
|
|
|
$
|
51,160
|
|
|
$
|
202,344
|
|
|
$
|
169,959
|
|
|
Nine Months Ended
September 30, |
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
$
|
688,603
|
|
|
$
|
580,808
|
|
Net cash provided by (used in) investing activities
|
3,753
|
|
|
(434,479
|
)
|
||
Net cash used in financing activities
|
(205,965
|
)
|
|
(32,674
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
(838
|
)
|
|
(672
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
485,553
|
|
|
$
|
112,983
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1A.
|
Risk Factors
|
•
|
the introduction of new products in the U.S. market that compete with, or otherwise disrupt the market for, Xyrem in the treatment of cataplexy and/or EDS in narcolepsy, such as pitolisant, which was approved by FDA in August 2019 for the treatment of EDS in adult patients with narcolepsy, and our recently-launched product, Sunosi® (solriamfetol);
|
•
|
the introduction of a generic version of Xyrem in the U.S. market before the entry dates specified in our settlements with the abbreviated new drug application, or ANDA, filers or on terms that are different from those contemplated by the settlement agreements;
|
•
|
increased pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third party payors, including pressure to agree to new or additional discounts, rebates or restrictive pricing terms for Xyrem;
|
•
|
changes in healthcare laws and policy, including changes in requirements for patient assistance programs, rebates, reimbursement and coverage by federal healthcare programs, and changes resulting from increased scrutiny on pharmaceutical pricing and risk evaluation and mitigation strategy, or REMS, programs by government entities;
|
•
|
changes to or uncertainties around our Xyrem REMS, or any failure to comply with our REMS obligations to the satisfaction of the FDA;
|
•
|
challenges to our intellectual property around Xyrem, including the possibility of new ANDA or new drug application, or NDA, filers or new post-grant patent review proceedings;
|
•
|
operational disruptions at the Xyrem central pharmacy;
|
•
|
any supply or manufacturing problems, including any problems with our sole source Xyrem active pharmaceutical ingredient, or API, provider;
|
•
|
continued acceptance of Xyrem by physicians and patients, including as a result of negative publicity that surfaces from time to time; and
|
•
|
changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem.
|
•
|
the limited population of patients with ALL, and the incidence of hypersensitivity reactions to E. coli-derived asparaginase within that population;
|
•
|
the development and/or approval of new asparaginase treatments or treatment protocols for ALL that may not include asparaginase-containing regimens and prescribers’ use of alternate methods to address hypersensitivity reactions;
|
•
|
the failure to obtain regulatory approval from the FDA or UK Medicines and Healthcare Products Regulatory Agency, or MHRA, to release batches of Erwinaze requiring batch-specific approval due to quality and manufacturing issues;
|
•
|
difficulties with obtaining and maintaining favorable pricing and reimbursement arrangements;
|
•
|
potential competition from future biosimilar products;
|
•
|
PBL’s ability to meet the manufacturing post-marketing commitments imposed by the FDA in connection with its approval of our biologics license application, or BLA; and
|
•
|
any failure to comply with obligations under our agreement with PBL resulting in PBL claiming an uncured material breach.
|
•
|
the continued acceptance of Defitelio in the U.S., the EU and other countries by hospital pharmacy and therapeutics committees and the continued availability of favorable pricing and adequate coverage and reimbursement by government programs and third party payors;
|
•
|
the limited experience of, and need to educate, physicians in recognizing, diagnosing and treating VOD, particularly in adults;
|
•
|
the possibility that physicians recognizing VOD symptoms may not initiate or may delay initiation of treatment while waiting for those symptoms to improve, or may terminate treatment before the end of the recommended dosing schedule;
|
•
|
our ability to successfully maintain or grow sales of Defitelio in Europe and other non-U.S. countries, including our ability to obtain marketing approval in new countries;
|
•
|
delays or problems in the supply or manufacture of the product;
|
•
|
the limited size of the population of VOD patients who are indicated for treatment with Defitelio (particularly if changes in HSCT treatment protocols reduce the incidence of VOD diagnosis and demand for Defitelio);
|
•
|
our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA and by the European Commission, or EC, in connection with its marketing authorization granted “under exceptional circumstances”; and
|
•
|
our ability to maintain favorable pricing and reimbursement approvals across Europe, particularly in countries that represent significant markets.
|
•
|
our ability to differentiate Vyxeos from other liposomal chemotherapies and generically available chemotherapy combinations with which physicians and treatment centers are more familiar;
|
•
|
the acceptance of Vyxeos in the U.S., the EU and other countries by hospital pharmacy and therapeutics committees and the availability of favorable pricing and adequate coverage and reimbursement by government programs and third party payors;
|
•
|
delays or problems in the supply or manufacture of the product, including the ability of the third parties upon which we rely to manufacture Vyxeos and its APIs to manufacture sufficient quantities in accordance with applicable specifications;
|
•
|
the increasing complexity of the AML landscape requiring changes in patient identification and treatment selection, including diagnostic tests and monitoring that clinicians may find challenging to incorporate;
|
•
|
the use of new and novel compounds in AML that are either used off-label or are only approved for use in combination with other agents and that have not been tested in combination with Vyxeos;
|
•
|
the limited size of the population of high-risk AML patients who may potentially be indicated for treatment with Vyxeos, particularly given the ongoing clinical trials by other companies with the same patient population; and
|
•
|
our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA and by the EC in connection with its marketing authorization.
|
•
|
our ability to successfully launch and grow sales of Sunosi in the U.S. and, if approved, in the EU;
|
•
|
our ability to obtain marketing approval, successfully launch and grow sales of Sunosi in other non-U.S. countries;
|
•
|
the availability of adequate formulary positions and pricing and adequate coverage and reimbursement by third party payors, including government programs, including the impact of any delays in coverage decisions by payors;
|
•
|
restrictions on permitted promotional activities based on any additional limitations on the labeling for the product that may be required by the FDA in the future and any such limitations that may be required by the EC or other regulatory authority on any approved labeling;
|
•
|
market acceptance of Sunosi;
|
•
|
delays or problems in the supply or manufacture of Sunosi; and
|
•
|
our ability to satisfy the FDA’s post-marketing requirements and other post-marketing requirements or commitments, if any, imposed by the EC in connection with its potential marketing authorization.
|
•
|
the clinical indications for which a product is approved and any restrictions placed upon the product in connection with its approval, such as a REMS, patient registry requirements or labeling restrictions;
|
•
|
the prevalence of the disease or condition for which the product is approved and its diagnosis;
|
•
|
the severity of side effects;
|
•
|
acceptance by physicians and patients of each product as a safe and effective treatment;
|
•
|
availability of sufficient product inventory to meet demand, particularly with respect to Erwinaze;
|
•
|
physicians’ decisions relating to treatment practices based on availability of product, particularly with respect to Erwinaze;
|
•
|
perceived advantages over alternative treatments;
|
•
|
relative convenience and ease of administration;
|
•
|
with respect to Xyrem, 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; and
|
•
|
the availability of financial or other assistance for patients who are uninsured or underinsured.
|
•
|
we or a collaboration partner are unable to obtain and maintain adequate funding to complete the development of, obtain regulatory approval for and commercialize an acquired product candidate;
|
•
|
we and our collaboration partners are unable to agree on our respective contractual rights or other disputes arise between us and our collaboration partners;
|
•
|
our collaborations with third parties are terminated or allowed to expire;
|
•
|
a product candidate proves not to be safe or effective in later clinical trials or its development is otherwise discontinued by us or a collaboration partner;
|
•
|
a product fails to reach its forecasted commercial potential as a result of pricing pressures or for any other reason;
|
•
|
we experience negative publicity regarding actual or potential future price increases for that product or otherwise; or
|
•
|
the integration of a product or product candidate gives rise to unforeseen difficulties and expenditures.
|
•
|
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.
|
•
|
difficulty identifying or enrolling eligible patients, often based on the number of clinical trials, particularly in hematology and oncology, with enrollment criteria targeting the same patient population;
|
•
|
difficulty identifying a clinical development pathway, including viable indications and appropriate clinical trial protocol design, particularly where there is no applicable regulatory precedent;
|
•
|
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, known as an ethics committee 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’ requirements, commonly referred to as good clinical practices;
|
•
|
unforeseen safety issues;
|
•
|
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.
|
•
|
our patent applications, or those of our licensors or partners, may not result in issued patents;
|
•
|
others may independently develop similar or therapeutically equivalent products without infringing our patents, or those of our licensors, such as products that are not covered by the claims of our patents, or for which we do not have adequate exclusive rights under our license agreements;
|
•
|
our issued patents, or those of our licensors or partners, may be held invalid or unenforceable as a result of legal challenges by third parties or may be vulnerable to legal challenges as a result of changes in applicable law;
|
•
|
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 those of our licensors or partners;
|
•
|
competitors may manufacture products in countries where we have not applied for patent protection or that have a different scope of patent protection or that do not respect our patents; or
|
•
|
others may be issued patents that prevent the sale of our products or require licensing and the payment of significant fees or royalties.
|
•
|
the diverse regulatory, financial and legal requirements in the countries where we are located or do business, including those related to data security and the use of, or access to, commercial and personal information, taxation, trade laws, including tariffs, export quotas, custom duties or other trade restrictions, and any changes to those requirements;
|
•
|
challenges inherent in efficiently managing employees in diverse geographies, including the need to adapt systems, policies, benefits and compliance programs to differing labor and employment law and other regulations, as well as maintaining positive interactions with our unionized employees;
|
•
|
costs of, and liabilities for, our international operations, products or product candidates; and
|
•
|
fluctuations in currency rates.
|
•
|
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 the Exchangeable Senior 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 competition for Xyrem or our other products;
|
•
|
the cost of acquiring and/or in-licensing any new products and product candidates;
|
•
|
the costs of our commercial operations, including the costs related to the launch and commercialization of new products;
|
•
|
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;
|
•
|
the costs of integration activities related to any future strategic transactions we may engage in; and
|
•
|
the costs arising from 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 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.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
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, 2019
|
46,900
|
|
|
$
|
138.13
|
|
|
46,900
|
|
|
$
|
201,567,632
|
|
August 1 - August 31, 2019
|
53,500
|
|
|
$
|
134.94
|
|
|
53,500
|
|
|
$
|
194,349,529
|
|
September 1 - September 30, 2019
|
48,670
|
|
|
$
|
129.43
|
|
|
48,670
|
|
|
$
|
188,051,191
|
|
Total
|
149,070
|
|
|
$
|
134.14
|
|
|
149,070
|
|
|
|
(1)
|
This column includes ordinary shares that we reacquired in satisfaction of the exercise price of employee stock options upon exercise, but does not include ordinary shares that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting of restricted stock units.
|
(2)
|
Average price paid per ordinary share includes brokerage commissions.
|
(3)
|
The ordinary shares reported in this column above were purchased pursuant to our publicly announced share repurchase program. In November 2016, we announced that our board of directors authorized the use of up to $300 million to repurchase our ordinary shares. In November and December 2018, our board of directors increased the existing share repurchase program authorization by $320.0 million and $400.0 million, respectively, thereby increasing the total amount authorized for repurchase to $1.02 billion. In October 2019, our board of directors authorized the additional repurchase of shares having an aggregate purchase price of up to $500.0 million, exclusive of any brokerage commissions. This authorization has no expiration date.
|
(4)
|
The dollar amount shown represents, as of the end of each fiscal month, the approximate dollar value of ordinary shares that may yet be purchased under our publicly announced share repurchase program, exclusive of any brokerage commissions. The timing and amount of repurchases will depend on a variety of factors, including the price of our ordinary shares, alternative investment opportunities, restrictions under our credit agreement, corporate and regulatory requirements and market conditions, and may be modified, suspended or otherwise discontinued at any time without prior notice.
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description of Document
|
2.1
|
|
2.2
|
|
2.3
|
|
2.4
|
|
2.5
|
|
2.6†
|
|
2.7†
|
2.8
|
|
2.9
|
|
3.1
|
|
4.1
|
|
4.2A
|
|
4.2B
|
|
4.3A
|
|
4.3B
|
|
10.1+
|
|
10.2+
|
|
10.3+
|
|
10.4+
|
|
10.5+
|
|
10.6+
|
|
31.1
|
|
32.1*
|
|
101.INS
|
XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
+
|
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 certification attached as Exhibit 32.1 accompanies 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, Chief Executive Officer and Director
(Duly Authorized Officer, Principal Executive Officer and Interim Principal Financial Officer)
|
|
/s/ Patricia Carr
|
Patricia Carr
|
Vice President, Finance
(Principal Accounting Officer)
|
1.
|
POSITION
|
2.
|
COMMENCEMENT DATE
|
3.
|
PLACE OF WORK
|
4.
|
HOURS OF WORK
|
5.
|
REPORTING STRUCTURE
|
6.
|
SALARY
|
6.1.
|
Your initial salary will be €200,000 per annum. This will be paid to you monthly in arrears on the last day of each month by credit transfer directly to your bank account. Your salary will be subject to annual review each year on the anniversary of the date of this letter.
|
6.2.
|
All payments to you will be subject to deductions of tax, PRSI, Universal Social Charge and any other deductions required by law or provided for in this letter. You will be notified each month by the Company of the amount of your gross and net remuneration and of the nature and amount of all deductions.
|
6.3.
|
For the purposes of the National Minimum Wage Act, 2000, the pay reference period shall be a month. In accordance with section 23 of the Act, you may request from the Company a written statement of your average hourly rate of pay for any pay reference period (other than a current pay reference period) falling within the twelve month period immediately preceding the request.
|
7.
|
SIGNING BONUS
|
7.1.
|
You will be entitled to a one time signing bonus of €16,000 to be paid in coordination with the first possible regular payroll processing, subject to the usual deductions of tax, PRSI, Universal Social Charge and any other deductions required by law or provided for in this letter.
|
8.
|
BONUS
|
9.
|
EQUITY
|
10.
|
EXPENSES
|
11.
|
HOLIDAYS
|
12.
|
BENEFIT SCHEMES
|
13.
|
DUTIES
|
14.
|
PERIOD OF EMPLOYMENT
|
15.
|
PAYMENT IN LIEU OF NOTICE/ GARDEN LEAVE
|
15.1.
|
pay you in lieu of notice the amount of your entitlement to salary in respect of such notice period; or
|
15.2.
|
require you to cease performing or exercising during some or all of the remainder of any notice period some or all of the powers, authorities and discretions delegated to you in your employment and/or to cease attending your place of work during such period.
|
16.
|
TERMINATION
|
16.1.
|
are guilty of any material breach or non-observance of the provisions contained in this letter;
|
16.2.
|
are guilty of any serious misconduct in the discharge of the duties of your employment or in connection with or affecting the business of the Company;
|
16.3.
|
commit any serious act of dishonesty or repeated acts of dishonesty;
|
16.4.
|
become of unsound mind; or
|
16.5.
|
are convicted of any offence (other than minor traffic offences or any other offence which in the opinion of the Board does not affect your position with the Company).
|
17.
|
NORMAL RETIREMENT AGE
|
18.
|
ILLNESS
|
19.
|
DISCIPLINARY RULES AND PROCEDURE
|
19.1.
|
You will conduct yourself with propriety at all times and with due regard for the Company and each of its associated companies and the clients and employees of each such company.
|
19.2.
|
In the event that your conduct or performance falls short of the standards required by the Company or the Board in any respect, (other than cases of misconduct) you will receive at first instance, a verbal warning, followed, if necessary in the event of a repetition, by a written warning which, in appropriate circumstances, may be deemed to be a final written warning. In the event of further breach of conduct or poor performance, and following due investigation during which you will be afforded an opportunity to make whatever representations you consider appropriate, your employment may be terminated by the Company, with or without notice as is deemed appropriate. Where appropriate, because of the gravity of your conduct or performance, the Company reserves the right to commence this procedure at any stage.
|
19.3.
|
In order to investigate a complaint against you, the Company may suspend you on full pay for as long as may be necessary to carry out an investigation and hold a disciplinary hearing.
|
20.
|
CONFIDENTIALITY
|
20.1.
|
You will not, except as authorised or required by your duties, reveal to any person, persons or company any information of a confidential or proprietary nature, including any trade secrets, secret or confidential operations, processes or dealings or any information concerning the organisation, business, finances, transactions or affairs of the Company, its subsidiary or associated companies or their existing or potential customers which may come to your knowledge during the period of your employment with the Company (“Confidential Information”). You will keep all Confidential Information entrusted to you completely secret and will not use or attempt to use any Confidential Information in any manner which may injure or cause loss either directly or indirectly to the Company or any of its subsidiary or associated companies or their existing or potential customers or its or their business or businesses, or may be likely so to do. This restriction will continue to apply after the termination of your employment without limit in point of time but will cease to apply to information or knowledge which may reasonably be said to have come into the public domain other than by reason of breach of the provisions of this letter.
|
20.2.
|
You will not during the term of your employment with the Company make otherwise than for the benefit of the Company any notes or memoranda relating to any matter within the scope of the business of the Company, its subsidiary or associated companies or their existing or potential customers or concerning any of the dealings or affairs of any such company nor will you either during the term of your employment with the Company or afterwards use or permit to be used any such notes or memoranda otherwise than for the benefit of the Company, it being the intention of the parties that all such notes or memoranda made by you will be the property of the Company and left at its offices upon the termination of your employment with the Company.
|
21.
|
PROPRIETARY RIGHTS
|
21.1.
|
In this Clause 21, “IP” means all intellectual property rights of whatever nature, including copyright (present and future), moral rights, patents, trade marks, design rights and database rights (whether or not any of these is registered and including any applications for registration of any such rights), know-how, Confidential Information and trade secrets and all rights or forms of protection of a similar nature or having similar effect to any of these which may exist anywhere in the world.
|
21.2.
|
You will immediately disclose to the Company any discovery or invention or process or improvement in procedure made or discovered by you (whether or not in conjunction with any other person or persons) while in the employment of the Company in connection with or in any way affecting or relating to the business of the Company, its subsidiary or associated companies or capable of being used or adapted for use therein or in connection therewith (“Inventions”) will forthwith be disclosed to the Company. All Inventions will belong solely to the Company or such other person, persons or company as the Company may nominate for the purpose. Any IP developed in whole or in part by you in connection with your employment with the Company will immediately vest in the Company (or a nominee of the Company where the Company requires) absolutely.
|
21.3.
|
If and whenever required so to do (whether during or after the termination of your employment) you will without charge and at the expense of the Company or its nominee apply or join in applying for letters patent or other form of protection for any IP referred to in this Clause 21 and execute all instruments and do all things considered necessary in the absolute discretion of the Company in relation to the said IP including vesting all right and title to such IP when obtained in the Company (or its nominee) as sole beneficial owner, or in such other person as the Company may require.
|
21.4.
|
You irrevocably appoint the Company to be your attorney in your name and on your behalf to execute and do any such instruments or things and generally to use your name for the purpose of giving to the Company (or its nominee) the full benefit of the provisions of this Clause 21. A certificate in writing signed by any executive or the Secretary of the Company that any instrument or act falls within the authority conferred in this Clause 21.4 will be conclusive evidence that such is the case in favour of a third party.
|
21.5.
|
To the extent that you cannot assign any IP to the Company (or its nominee), it is agreed that any such right (including, where applicable, any moral right, such as a right of paternity or integrity) will be waived as against the Company. You may not under any circumstances exercise any IP against the Company or any of its subsidiary or associated companies or any nominee of any of them.
|
22.
|
RESTRICTIVE COVENANTS
|
22.1.
|
You may not during the period of your employment with the Company, without prior written consent of the Company, engage, whether directly or indirectly, in any business or employment which is similar to or competitive with the business of the Company or its subsidiary or associated companies or which may in the Company’s opinion impair your ability to act at all times in the best interest of the Company.
|
22.2.
|
You undertake that for a period of 12 months after the date of the termination of your employment, in the Republic of Ireland, you will not, directly or indirectly, be employed, engaged, concerned or interested, in any business directly competing with the products sold by the Company or its subsidiary or associated companies at that time, whether on your own account or in partnership or as an employee, director or manager for any other person.
|
22.3.
|
You also undertake that for a period of 12 months after the termination of your employment, you will not, in competition with the Company or its subsidiary or associated companies, solicit or entice or endeavour to solicit or entice away from the Company any person who was at any time in the twelve months prior to the termination of your employment with the Company employed or engaged by the Company or its subsidiary or associated companies and who, by means of such employment, is or is likely to be in possession of confidential information relating to the Company or its subsidiary or associated companies.
|
22.4.
|
You acknowledge and agree that all of the restrictions contained in this letter are reasonable and necessary to protect the interests of the Company and its subsidiary and associated companies and you agree that the Company may seek equitable remedies to enforce them in addition to any other legal remedies it has.
|
22.5.
|
If any provision in this Clause 22 is deemed to be, or becomes invalid, illegal, void or unenforceable under applicable laws, such provision will be deemed amended to conform to applicable laws so as to be valid and enforceable (including, by way of example, by restricting the area, duration and/or scope of the covenants in to such area, duration and/or scope as would be held reasonable), or if it cannot be so amended without materially altering the intention of the parties, it will be deleted, but the validity, legality and enforceability of the remaining provisions of this letter shall not be impaired or affected in any way.
|
23.
|
DATA PROTECTION ACTS 1988 AND 2003
|
23.1.
|
You hereby acknowledge that during the course of your employment with the Company, the Company will keep personal data and sensitive personal data (e.g. doctor’s certificates or medical reports) relating to you on computer and in manual files/paper files. You hereby acknowledge and agree that the Company is permitted to hold and process personal information about you as part of its personnel and other business records and may use such information in the course of the Company’s business. You further agree that the Company may disclose such information to third parties in the event that such disclosure is in the Company’s view required by the proper conduct of the Company’s business. This clause applies to information held, used or disclosed in any medium.
|
23.2.
|
You acknowledge and give your consent and authorisation to the Company’s monitoring of its communication and electronic equipment where it has a reasonable suspicion of inappropriate use including, without limitation, the Company’s telephone, facsimile, and internet and e-mail systems, and information stored on the Company’s telephone equipment (including floppy disks that are the property of the Company).
|
24.
|
HEALTH & SAFETY
|
24.1.
|
The Company takes seriously its obligations regarding the safety, health and welfare of its employees and in that regard your attention is drawn to the Company safety statement (which is available for viewing on the intranet). By signing this letter, you agree to take reasonable care of your own safety and health and that of any other persons who may be affected by your acts or admissions while at work. You also agree to cooperate with the Company and any other person to enable compliance with any provision of the Safety, Health and Welfare at Work Acts 1989 and 2005 and any Regulation made thereunder.
|
25.
|
MISCELLANEOUS PROVISIONS
|
25.1.
|
Notices. Any notice under this letter will be given in writing and will be deemed to have been duly given if delivered personally to the addressee or the duly authorised agent of the addressee or sent by prepaid registered post to the last known address of the party to whom such notice is given. Any such notice will be deemed to have been duly given at the time of delivery if delivered personally, or two working days after posting if sent by prepaid registered post.
|
25.2.
|
Entire Agreement. This letter is in substitution for all previous agreements and undertakings (if any) either written or verbal between the Company and you, and all such agreements and undertakings will be deemed to have been terminated by mutual consent as from the date of your execution of this letter.
|
25.3.
|
Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of Ireland, and shall be subject to the exclusive jurisdiction of the Irish courts.
|
25.4.
|
The information contained in this letter constitutes a written statement of particulars of your employment with the Company in accordance with the requirements of section 3 of the Terms of Employment Act 1994.
|
1.
|
Covered Termination: The Executive will be eligible for the severance benefits (the “Severance Benefits”) set forth in this Amendment in the event of a Covered Termination which is effective on or within twelve (12) months following a Change in Control, subject to the requirements set forth herein.
|
2.
|
Severance Benefits: The Severance Benefits will consist of a cash severance payment and payments for continued health care insurance coverage, as follows:
|
3.
|
Certain Definitions:
|
(i)
|
the Executive’s unauthorised use or disclosure of the confidential information or trade secrets of the Company or its Affiliates which use or disclosure causes material harm to the Company or an Affiliate;
|
(ii)
|
the Executive’s material breach of any written agreement between the Executive and the Company or an Affiliate, or the Executive’s material violation of any statutory duty owed to the Company or an Affiliate, in either case which remains uncured for ten (10) business days after receiving written notification of the breach or violation from the Board or its designee;
|
(iii)
|
the Executive’s material failure to comply with the written policies or rules of the Company or an Affiliate which remains uncured for ten (10) business days after receiving written notification of the breach from the Board or its designee;
|
(iv)
|
the Executive’s conviction of, or plea of “guilty” or “no contest” to, any crime involving fraud, dishonesty, or moral turpitude under the
|
(v)
|
the Executive’s gross misconduct, including but not limited to an attempted or actual commission of, participation or cooperation in, fraud or act of dishonesty against the Company or an Affiliate;
|
(vi)
|
the Executive’s continuing failure to perform assigned duties after receiving written notification of the failure from the Board or its designee;
|
(vii)
|
the Executive’s failure to reasonably cooperate in good faith with a governmental or internal investigation of the Company, or any of its Affiliates, directors, officers, or employees, if the Board or its designee has requested the Executive’s cooperation; or
|
(viii)
|
any action of Executive warranting summary dismissal or termination without prior notice under Executive’s Employment Contract or such other employment agreement of Executive as in effect on the Covered Termination or under applicable employment laws.
|
i.
|
one or more reductions in Executive’s Basic Salary that results in a total reduction in Executive’s Basic Salary, as in effect immediately prior to the Change in Control or any higher Basic Salary in effect following the Change in Control, by more than ten percent (10%);
|
ii.
|
a relocation of Executive’s principal place of employment that increases Executive’s one-way commute by more than thirty-five (35) miles;
|
iii.
|
a substantial reduction in Executive’s authority, duties, or responsibilities (and not simply a change in reporting relationships) as in effect immediately prior to the effective date of the Change in Control; provided that, if (i) Executive continues to hold the same position but the size of Executive’s employing entity (or the business unit to which Executive is assigned) has decreased significantly or (ii) neither the Company nor the Employer continues to be a publicly traded corporation, Executive’s authority, duties and responsibilities will be considered to be substantially reduced; or
|
iv.
|
a reduction in the Executive’s title.
|
4.
|
Additional Terms: The following additional terms shall apply:
|
JAZZ PHARMACEUTICALS IRELAND LTD.
|
EXECUTIVE
|
|
/s/ Shawn Mindus
|
|
/s/ Patricia Carr
|
Shawn Mindus
Director
|
|
Patricia Carr
Vice President, Finance
|
Date: 4-May-2016
|
|
Date: 12 May 2016
|
Sincerely,
|
|
JAZZ PHARMACEUTICALS PLC
|
|
|
|
/s/ Heather P. McGaughey
|
|
Heather McGaughey
Senior Vice President, Human Resources
|
|
|
|
REVIEWED, UNDERSTOOD AND AGREED:
|
|
|
|
/s/ Patricia Carr
|
|
Patricia Carr
Vice President, Finance
|
|
|
|
Date: 12 May 2016
|
|
1.
|
Duties and Responsibilities. Your initial assignment will be as SVP, General Counsel, reporting to me. This offer is for a full time position, located at Jazz Pharmaceuticals’ offices in Philadelphia. The position may require you to travel from time to time to other locations as may be 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.
|
Salary; Annual Bonus; Signing Bonus. Your initial annual base salary will be $510,000 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, subject to the terms and conditions of the cash bonus plan. Bonuses are not guaranteed, and 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. In this role, you will be eligible for an annual incentive bonus with a target currently set at 45% of your annual base salary, prorated for 2019 in accordance with your start date. In addition, Jazz Pharmaceuticals will pay you a signing bonus of $125,000, less all required withholdings, paid to you in two equal installments. The first payment of $62,500 is payable on the first regular pay date following your employment start date, and the
|
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 you will be a participant in the Company’s Amended and Restated Executive Change in Control and Severance Benefit Plan.
|
4.
|
Equity. Your offer includes a grant of options to purchase 30,000 Jazz Pharmaceuticals plc ordinary shares and a grant of 12,000 restricted stock units (RSUs) giving you a right to receive Jazz Pharmaceuticals plc ordinary shares at a future date, subject to approval by the Compensation Committee, the terms and conditions of the Jazz Pharmaceuticals plc 2011 Equity Incentive Plan, and the terms and conditions of the applicable award agreements, which will be provided to you as soon as practicable after the grant date. Subject to your continued employment on each vesting date, the options will vest 1/4th on the first annual anniversary of your start date and 1/48th of the total granted per month thereafter, and the RSUs will vest 1/4th annually over four years. The options will have an exercise price that equals the fair market value of Jazz Pharmaceuticals plc ordinary shares on the date of grant. The RSUs will have no exercise price. The options and RSUs will be granted on the second trading day following the filing date of the Company’s next quarterly or annual report filed with the Securities and Exchange Commission following your start date in accordance with the Company’s Equity Incentive Grant Policy.
|
5.
|
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 that you sign Jazz Pharmaceuticals’ standard form of “Employee Confidential Information and Inventions Agreement.” We understand that you are likely to have signed similar agreements with prior employers, and wish to impress upon you that Jazz Pharmaceuticals does not want to receive the confidential or proprietary information of others, and will support you in respecting your lawful obligations to prior employers. By accepting this offer, you are representing to Jazz Pharmaceuticals that your performance of your duties will not violate any agreements you may have with, or trade secrets of, any third parties. You agree that, during your employment with Jazz Pharmaceuticals, you will not engage in any business activity that competes with Jazz Pharmaceuticals, and you will notify your supervisor if you are considering accepting outside work.
|
6.
|
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.
|
7.
|
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”.
|
8.
|
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
|
9.
|
Complete Offer and Agreement. This letter contains our complete understanding and agreement regarding the terms of your employment by Jazz Pharmaceuticals. 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 a writing signed by you and President 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.
|
10.
|
Start Date; Acceptance of Offer. We hope that you will accept this offer promptly, and begin your full-time employment at Jazz Pharmaceuticals by 5 August 2019. 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 5 July 2019.
|
11.
|
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.
|
Signature:
|
|
/s/ Neena M. Patil
|
Date:
|
|
5 July 2019
|
|
|
|
|
|
|
My start date will be
|
|
July 29, 2019* **
|
|
|
* pending confirmation of transition plan with current employer
|
|
|
** in office start date of 9 September 2019
|
If the Participant is at the time of the Covered Termination a:
|
|
Applicable Percentage:
|
|
Vice President
|
|
100
|
%
|
Senior Vice President, Executive Vice President, or above (but not Chief Executive Officer, Executive Chairman or President)
|
|
150
|
%
|
Chief Executive Officer, Executive Chairman or President
|
|
200
|
%
|
|
|
|
|
EXECUTIVE
|
|||
|
|
||
Name:
|
|
|
|
|
|
||
Date:
|
|
|
|
|
|
|
EXECUTIVE
|
|||
|
|
||
Name:
|
|
|
|
|
|
||
Date:
|
|
|
|
|
|
|
EXECUTIVE
|
|||
|
|
||
Name:
|
|
|
|
|
|
||
Date:
|
|
|
JAZZ PHARMACEUTICALS, INC.
|
|
By:
|
/s/ Heidi Manna
|
|
Heidi Manna
Chief Human Resources Officer
|
Exhibit A – Release Agreement
|
Exhibit B – Employee Confidential Information and Inventions Agreement
|
REVIEWED, UNDERSTOOD, AND AGREED:
|
|
/s/ Mike Miller
|
Michael P. Miller
|
|
02-Nov 2019
|
Date
|
|
|
Michael P. Miller
|
|
|
|
Date:
|
|
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 5, 2019
|
By:
|
/s/ Bruce C. Cozadd
|
|
|
Bruce C. Cozadd
Chairman, Chief Executive Officer and Director
(Principal Executive Officer and
Interim Principal Financial Officer)
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019, 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, Chief Executive Officer and Director (Principal Executive Officer and
Interim Principal 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.
|