|
|
☒
|
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.
|
||
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|
Item 3.
|
||
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|
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 5.
|
||
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|
|
Item 6.
|
||
|
|
|
Item 1.
|
Financial Statements
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
786,082
|
|
|
$
|
637,344
|
|
Investments
|
910,000
|
|
|
440,000
|
|
||
Accounts receivable, net of allowances
|
351,920
|
|
|
355,987
|
|
||
Inventories
|
92,534
|
|
|
78,608
|
|
||
Prepaid expenses
|
49,109
|
|
|
39,434
|
|
||
Other current assets
|
112,701
|
|
|
78,895
|
|
||
Total current assets
|
2,302,346
|
|
|
1,630,268
|
|
||
Property, plant and equipment, net
|
128,259
|
|
|
131,506
|
|
||
Operating lease assets
|
133,179
|
|
|
139,385
|
|
||
Intangible assets, net
|
2,286,126
|
|
|
2,440,977
|
|
||
Goodwill
|
918,021
|
|
|
920,018
|
|
||
Deferred tax assets, net
|
243,395
|
|
|
221,403
|
|
||
Deferred financing costs
|
6,347
|
|
|
7,426
|
|
||
Other non-current assets
|
48,828
|
|
|
47,914
|
|
||
Total assets
|
$
|
6,066,501
|
|
|
$
|
5,538,897
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
50,043
|
|
|
$
|
45,732
|
|
Accrued liabilities
|
266,918
|
|
|
269,686
|
|
||
Current portion of long-term debt
|
33,387
|
|
|
33,387
|
|
||
Income taxes payable
|
55,979
|
|
|
10,965
|
|
||
Deferred revenue
|
3,633
|
|
|
4,720
|
|
||
Total current liabilities
|
409,960
|
|
|
364,490
|
|
||
Deferred revenue, non-current
|
3,588
|
|
|
4,861
|
|
||
Long-term debt, less current portion
|
2,069,669
|
|
|
1,573,870
|
|
||
Operating lease liabilities, less current portion
|
144,264
|
|
|
151,226
|
|
||
Deferred tax liabilities, net
|
162,376
|
|
|
224,095
|
|
||
Other non-current liabilities
|
134,839
|
|
|
109,374
|
|
||
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
|
2,499,135
|
|
|
2,266,026
|
|
||
Accumulated other comprehensive loss
|
(236,109
|
)
|
|
(223,393
|
)
|
||
Retained earnings
|
878,246
|
|
|
1,067,815
|
|
||
Total shareholders’ equity
|
3,141,805
|
|
|
3,110,981
|
|
||
Total liabilities and shareholders’ equity
|
$
|
6,066,501
|
|
|
$
|
5,538,897
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
558,203
|
|
|
$
|
523,423
|
|
|
$
|
1,088,408
|
|
|
$
|
1,026,754
|
|
Royalties and contract revenues
|
4,233
|
|
|
10,710
|
|
|
8,754
|
|
|
15,565
|
|
||||
Total revenues
|
562,436
|
|
|
534,133
|
|
|
1,097,162
|
|
|
1,042,319
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales (excluding amortization of acquired developed technologies)
|
28,008
|
|
|
27,676
|
|
|
56,665
|
|
|
61,182
|
|
||||
Selling, general and administrative
|
191,406
|
|
|
176,014
|
|
|
399,806
|
|
|
343,961
|
|
||||
Research and development
|
78,922
|
|
|
62,384
|
|
|
165,029
|
|
|
122,489
|
|
||||
Intangible asset amortization
|
62,974
|
|
|
61,576
|
|
|
125,821
|
|
|
118,461
|
|
||||
Acquired in-process research and development
|
3,000
|
|
|
2,200
|
|
|
205,250
|
|
|
58,200
|
|
||||
Impairment charge
|
—
|
|
|
—
|
|
|
136,139
|
|
|
—
|
|
||||
Total operating expenses
|
364,310
|
|
|
329,850
|
|
|
1,088,710
|
|
|
704,293
|
|
||||
Income from operations
|
198,126
|
|
|
204,283
|
|
|
8,452
|
|
|
338,026
|
|
||||
Interest expense, net
|
(26,210
|
)
|
|
(18,234
|
)
|
|
(44,706
|
)
|
|
(36,156
|
)
|
||||
Foreign exchange loss
|
(464
|
)
|
|
(1,933
|
)
|
|
(1,596
|
)
|
|
(2,544
|
)
|
||||
Income (loss) before income tax provision (benefit) and equity in loss of investees
|
171,452
|
|
|
184,116
|
|
|
(37,850
|
)
|
|
299,326
|
|
||||
Income tax provision (benefit)
|
54,754
|
|
|
(78,650
|
)
|
|
3,467
|
|
|
(49,534
|
)
|
||||
Equity in loss of investees
|
1,897
|
|
|
868
|
|
|
1,715
|
|
|
1,761
|
|
||||
Net income (loss)
|
$
|
114,801
|
|
|
$
|
261,898
|
|
|
$
|
(43,032
|
)
|
|
$
|
347,099
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per ordinary share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.07
|
|
|
$
|
4.62
|
|
|
$
|
(0.77
|
)
|
|
$
|
6.09
|
|
Diluted
|
$
|
2.06
|
|
|
$
|
4.56
|
|
|
$
|
(0.77
|
)
|
|
$
|
6.01
|
|
Weighted-average ordinary shares used in per share calculations - basic
|
55,413
|
|
|
56,707
|
|
|
55,684
|
|
|
56,955
|
|
||||
Weighted-average ordinary shares used in per share calculations - diluted
|
55,864
|
|
|
57,427
|
|
|
55,684
|
|
|
57,753
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income (loss)
|
$
|
114,801
|
|
|
$
|
261,898
|
|
|
$
|
(43,032
|
)
|
|
$
|
347,099
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
20,730
|
|
|
13,319
|
|
|
(9,260
|
)
|
|
(7,823
|
)
|
||||
Unrealized gain (loss) on hedging activities, net of income tax provision (benefit) of $85, ($440), ($494) and ($689), respectively
|
597
|
|
|
(3,081
|
)
|
|
(3,456
|
)
|
|
(4,822
|
)
|
||||
Other comprehensive income (loss)
|
21,327
|
|
|
10,238
|
|
|
(12,716
|
)
|
|
(12,645
|
)
|
||||
Total comprehensive income (loss)
|
$
|
136,128
|
|
|
$
|
272,136
|
|
|
$
|
(55,748
|
)
|
|
$
|
334,454
|
|
|
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, 2019
|
56,140
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,266,026
|
|
|
$
|
(223,393
|
)
|
|
$
|
1,067,815
|
|
|
$
|
3,110,981
|
|
Issuance of ordinary shares in conjunction with exercise of share options
|
145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,264
|
|
|
—
|
|
|
—
|
|
|
13,264
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,547
|
)
|
|
—
|
|
|
—
|
|
|
(13,547
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,731
|
|
|
—
|
|
|
—
|
|
|
28,731
|
|
|||||||
Shares repurchased
|
(1,131
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(139,053
|
)
|
|
(139,053
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,043
|
)
|
|
—
|
|
|
(34,043
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(157,833
|
)
|
|
(157,833
|
)
|
|||||||
Balance at March 31, 2020
|
55,368
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,294,474
|
|
|
$
|
(257,436
|
)
|
|
$
|
770,929
|
|
|
$
|
2,808,500
|
|
Issuance of Exchangeable Senior Notes, due 2026
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,260
|
|
|
—
|
|
|
—
|
|
|
176,260
|
|
|||||||
Partial repurchase of Exchangeable Senior Notes, due 2021
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,069
|
)
|
|
—
|
|
|
—
|
|
|
(12,069
|
)
|
|||||||
Issuance of ordinary shares in conjunction with exercise of share options
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,440
|
|
|
—
|
|
|
—
|
|
|
4,440
|
|
|||||||
Issuance of ordinary shares under employee stock purchase plan
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,547
|
|
|
—
|
|
|
—
|
|
|
6,547
|
|
|||||||
Issuance of ordinary shares in conjunction with vesting of restricted stock units
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,116
|
)
|
|
—
|
|
|
—
|
|
|
(1,116
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,599
|
|
|
—
|
|
|
—
|
|
|
30,599
|
|
|||||||
Shares repurchased
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,484
|
)
|
|
(7,484
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,327
|
|
|
—
|
|
|
21,327
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114,801
|
|
|
114,801
|
|
|||||||
Balance at June 30, 2020
|
55,456
|
|
|
$
|
6
|
|
|
4,000
|
|
|
$
|
55
|
|
|
$
|
472
|
|
|
$
|
2,499,135
|
|
|
$
|
(236,109
|
)
|
|
$
|
878,246
|
|
|
$
|
3,141,805
|
|
|
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
|
|
|
Six Months Ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(43,032
|
)
|
|
$
|
347,099
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Intangible asset amortization
|
125,821
|
|
|
118,461
|
|
||
Share-based compensation
|
59,258
|
|
|
55,841
|
|
||
Impairment charge
|
136,139
|
|
|
—
|
|
||
Depreciation
|
9,266
|
|
|
6,894
|
|
||
Acquired in-process research and development
|
205,250
|
|
|
58,200
|
|
||
Deferred tax benefit
|
(82,768
|
)
|
|
(151,347
|
)
|
||
Provision for losses on accounts receivable and inventory
|
4,078
|
|
|
2,403
|
|
||
Loss on extinguishment of debt
|
4,475
|
|
|
—
|
|
||
Amortization of debt discount and deferred financing costs
|
24,793
|
|
|
22,584
|
|
||
Other non-cash transactions
|
3,496
|
|
|
(779
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
3,640
|
|
|
(47,574
|
)
|
||
Inventories
|
(18,826
|
)
|
|
(18,562
|
)
|
||
Prepaid expenses and other current assets
|
(44,853
|
)
|
|
(15,929
|
)
|
||
Other non-current assets
|
1,982
|
|
|
(1,067
|
)
|
||
Operating lease assets
|
6,422
|
|
|
7,399
|
|
||
Accounts payable
|
5,264
|
|
|
(14,096
|
)
|
||
Accrued liabilities
|
(6,972
|
)
|
|
(59,031
|
)
|
||
Income taxes payable
|
45,481
|
|
|
29,050
|
|
||
Deferred revenue
|
(2,360
|
)
|
|
(3,054
|
)
|
||
Other non-current liabilities
|
25,912
|
|
|
14,177
|
|
||
Operating lease liabilities, less current portion
|
(6,978
|
)
|
|
431
|
|
||
Net cash provided by operating activities
|
455,488
|
|
|
351,100
|
|
||
Investing activities
|
|
|
|
||||
Proceeds from maturity of investments
|
565,000
|
|
|
630,000
|
|
||
Purchases of property, plant and equipment
|
(7,520
|
)
|
|
(21,911
|
)
|
||
Acquired in-process research and development
|
(205,250
|
)
|
|
(58,200
|
)
|
||
Acquisition of intangible assets
|
(113,000
|
)
|
|
(25,500
|
)
|
||
Acquisition of investments
|
(1,040,475
|
)
|
|
(360,975
|
)
|
||
Net cash provided by (used in) investing activities
|
(801,245
|
)
|
|
163,414
|
|
||
Financing activities
|
|
|
|
||||
Net proceeds from issuance of Exchangeable Senior Notes, due 2026
|
981,381
|
|
|
—
|
|
||
Proceeds from revolving credit facility
|
500,000
|
|
|
—
|
|
||
Proceeds from employee equity incentive and purchase plans
|
24,251
|
|
|
16,122
|
|
||
Payment of employee withholding taxes related to share-based awards
|
(14,663
|
)
|
|
(14,813
|
)
|
||
Repayments of long-term debt
|
(16,693
|
)
|
|
(16,693
|
)
|
||
Share repurchases
|
(146,537
|
)
|
|
(171,118
|
)
|
||
Payments for partial repurchase of Exchangeable Senior Notes, due 2021
|
(332,888
|
)
|
|
—
|
|
||
Repayments under revolving credit facility
|
(500,000
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
494,851
|
|
|
(186,502
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
(356
|
)
|
|
105
|
|
||
Net increase in cash and cash equivalents
|
148,738
|
|
|
328,117
|
|
||
Cash and cash equivalents, at beginning of period
|
637,344
|
|
|
309,622
|
|
||
Cash and cash equivalents, at end of period
|
$
|
786,082
|
|
|
$
|
637,739
|
|
•
|
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 excessive daytime sleepiness, or EDS, in both adult and pediatric patients with narcolepsy;
|
•
|
Sunosi® (solriamfetol), a product approved by FDA and marketed in the U.S. and in Europe to improve wakefulness in adult patients with EDS associated with narcolepsy or obstructive sleep apnea;
|
•
|
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;
|
•
|
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; and
|
•
|
Zepzelca™ (lurbinectedin), a product approved by FDA in June 2020 and recently launched in the U.S. for the treatment of adult patients with metastatic small cell lung cancer, or SCLC, with disease progression on or after platinum-based chemotherapy.
|
•
|
Strong execution driving sales growth in our core therapy areas through leveraging our leading market position and expertise in sleep and new high growth products in oncology that address significant unmet needs;
|
•
|
Expanding our pipeline with external patient-centric innovation to achieve a balanced portfolio of highly differentiated programs;
|
•
|
Continuing to build a flexible, efficient, and productive development engine for targeted therapeutic conditions to identify and progress early- and mid-stage assets; and
|
•
|
Investing in a scalable operating model and differentiated capabilities to enable successful partnerships and unlock further value through indication expansion and global markets.
|
|
June 30, 2020
|
||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Investments
|
||||||||||||
Cash
|
$
|
470,560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
470,560
|
|
|
$
|
470,560
|
|
|
$
|
—
|
|
Time deposits
|
1,100,000
|
|
|
—
|
|
|
—
|
|
|
1,100,000
|
|
|
190,000
|
|
|
910,000
|
|
||||||
Money market funds
|
125,522
|
|
|
—
|
|
|
—
|
|
|
125,522
|
|
|
125,522
|
|
|
—
|
|
||||||
Totals
|
$
|
1,696,082
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,696,082
|
|
|
$
|
786,082
|
|
|
$
|
910,000
|
|
|
December 31, 2019
|
||||||||||||||||||||||
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Cash and
Cash Equivalents |
|
Investments
|
||||||||||||
Cash
|
$
|
333,172
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
333,172
|
|
|
$
|
333,172
|
|
|
$
|
—
|
|
Time deposits
|
460,000
|
|
|
—
|
|
|
—
|
|
|
460,000
|
|
|
20,000
|
|
|
440,000
|
|
||||||
Money market funds
|
284,172
|
|
|
—
|
|
|
—
|
|
|
284,172
|
|
|
284,172
|
|
|
—
|
|
||||||
Totals
|
$
|
1,077,344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,077,344
|
|
|
$
|
637,344
|
|
|
$
|
440,000
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
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
|
$
|
—
|
|
|
$
|
1,100,000
|
|
|
$
|
1,100,000
|
|
|
$
|
—
|
|
|
$
|
460,000
|
|
|
$
|
460,000
|
|
Money market funds
|
125,522
|
|
|
—
|
|
|
125,522
|
|
|
284,172
|
|
|
—
|
|
|
284,172
|
|
||||||
Foreign exchange forward contracts
|
—
|
|
|
1,454
|
|
|
1,454
|
|
|
—
|
|
|
2,508
|
|
|
2,508
|
|
||||||
Totals
|
$
|
125,522
|
|
|
$
|
1,101,454
|
|
|
$
|
1,226,976
|
|
|
$
|
284,172
|
|
|
$
|
462,508
|
|
|
$
|
746,680
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
5,479
|
|
|
$
|
5,479
|
|
|
$
|
—
|
|
|
$
|
1,515
|
|
|
$
|
1,515
|
|
Foreign exchange forward contracts
|
—
|
|
|
1,765
|
|
|
1,765
|
|
|
—
|
|
|
182
|
|
|
182
|
|
||||||
Totals
|
$
|
—
|
|
|
$
|
7,244
|
|
|
$
|
7,244
|
|
|
$
|
—
|
|
|
$
|
1,697
|
|
|
$
|
1,697
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Interest Rate Contracts:
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Loss recognized in accumulated other comprehensive loss, net of tax
|
$
|
(324
|
)
|
|
$
|
(2,698
|
)
|
|
$
|
(4,524
|
)
|
|
$
|
(4,039
|
)
|
Loss (gain) reclassified from accumulated other comprehensive loss to interest expense, net of tax
|
921
|
|
|
(383
|
)
|
|
1,068
|
|
|
(783
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Foreign Exchange Forward Contracts:
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Gain (loss) recognized in foreign exchange loss
|
$
|
3,533
|
|
|
$
|
121
|
|
|
$
|
(2,606
|
)
|
|
$
|
(3,288
|
)
|
|
June 30, 2020
|
||||||||||
|
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
|
|
$
|
—
|
|
|
Accrued liabilities
|
|
$
|
5,299
|
|
|
|
|
|
|
Other non-current liabilities
|
|
180
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
1,454
|
|
|
Accrued liabilities
|
|
1,765
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
1,454
|
|
|
|
|
$
|
7,244
|
|
|
December 31, 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
|
|
$
|
—
|
|
|
Accrued liabilities
|
|
$
|
855
|
|
|
|
|
|
|
Other non-current liabilities
|
|
660
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
2,508
|
|
|
Accrued liabilities
|
|
182
|
|
||
Total fair value of derivative instruments
|
|
|
$
|
2,508
|
|
|
|
|
$
|
1,697
|
|
|
June 30, 2020
|
||||||||||||||||||||||
|
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
|
$
|
1,454
|
|
|
$
|
—
|
|
|
$
|
1,454
|
|
|
$
|
(1,269
|
)
|
|
$
|
—
|
|
|
$
|
185
|
|
Derivative liabilities
|
(7,244
|
)
|
|
—
|
|
|
(7,244
|
)
|
|
1,269
|
|
|
—
|
|
|
(5,975
|
)
|
|
December 31, 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
|
$
|
2,508
|
|
|
$
|
—
|
|
|
$
|
2,508
|
|
|
$
|
(596
|
)
|
|
$
|
—
|
|
|
$
|
1,912
|
|
Derivative liabilities
|
(1,697
|
)
|
|
—
|
|
|
(1,697
|
)
|
|
596
|
|
|
—
|
|
|
(1,101
|
)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Raw materials
|
$
|
15,856
|
|
|
$
|
13,595
|
|
Work in process
|
42,582
|
|
|
36,658
|
|
||
Finished goods
|
34,096
|
|
|
28,355
|
|
||
Total inventories
|
$
|
92,534
|
|
|
$
|
78,608
|
|
Balance at December 31, 2019
|
$
|
920,018
|
|
Foreign exchange
|
(1,997
|
)
|
|
Balance at June 30, 2020
|
$
|
918,021
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||
|
Remaining
Weighted- Average Useful Life (In years) |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||||||||
Acquired developed technologies
|
12.9
|
|
$
|
3,275,569
|
|
|
$
|
(989,443
|
)
|
|
$
|
2,286,126
|
|
|
$
|
3,166,485
|
|
|
$
|
(864,834
|
)
|
|
$
|
2,301,651
|
|
Manufacturing contracts
|
—
|
|
11,987
|
|
|
(11,987
|
)
|
|
—
|
|
|
12,025
|
|
|
(12,025
|
)
|
|
—
|
|
||||||
Trademarks
|
—
|
|
2,889
|
|
|
(2,889
|
)
|
|
—
|
|
|
2,890
|
|
|
(2,890
|
)
|
|
—
|
|
||||||
Priority review voucher
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,101
|
|
|
(111,101
|
)
|
|
—
|
|
||||||
Total finite-lived intangible assets
|
|
|
3,290,445
|
|
|
(1,004,319
|
)
|
|
2,286,126
|
|
|
3,292,501
|
|
|
(990,850
|
)
|
|
2,301,651
|
|
||||||
Acquired IPR&D assets
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139,326
|
|
|
—
|
|
|
139,326
|
|
||||||
Total intangible assets
|
|
|
$
|
3,290,445
|
|
|
$
|
(1,004,319
|
)
|
|
$
|
2,286,126
|
|
|
$
|
3,431,827
|
|
|
$
|
(990,850
|
)
|
|
$
|
2,440,977
|
|
Year Ending December 31,
|
Estimated
Amortization
Expense
|
||
2020 (remainder)
|
$
|
130,647
|
|
2021
|
215,415
|
|
|
2022
|
170,572
|
|
|
2023
|
170,572
|
|
|
2024
|
170,572
|
|
|
Thereafter
|
1,428,348
|
|
|
Total
|
$
|
2,286,126
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Leasehold improvements
|
$
|
53,348
|
|
|
$
|
52,294
|
|
Land and buildings
|
47,112
|
|
|
47,053
|
|
||
Manufacturing equipment and machinery
|
30,840
|
|
|
28,860
|
|
||
Computer software
|
22,758
|
|
|
25,680
|
|
||
Computer equipment
|
17,747
|
|
|
16,577
|
|
||
Furniture and fixtures
|
11,330
|
|
|
11,152
|
|
||
Construction-in-progress
|
3,393
|
|
|
5,147
|
|
||
Subtotal
|
186,528
|
|
|
186,763
|
|
||
Less accumulated depreciation and amortization
|
(58,269
|
)
|
|
(55,257
|
)
|
||
Property, plant and equipment, net
|
$
|
128,259
|
|
|
$
|
131,506
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Rebates and other sales deductions
|
$
|
122,204
|
|
|
$
|
96,860
|
|
Employee compensation and benefits
|
51,289
|
|
|
80,531
|
|
||
Current portion of operating lease liabilities
|
12,763
|
|
|
12,728
|
|
||
Inventory-related accruals
|
12,364
|
|
|
7,816
|
|
||
Sales returns reserve
|
8,030
|
|
|
3,462
|
|
||
Derivative instrument liabilities
|
7,064
|
|
|
1,037
|
|
||
Consulting and professional services
|
6,221
|
|
|
7,665
|
|
||
Accrued interest
|
6,110
|
|
|
7,540
|
|
||
Royalties
|
6,031
|
|
|
6,931
|
|
||
Selling and marketing accruals
|
3,420
|
|
|
10,946
|
|
||
Accrued collaboration expenses
|
3,161
|
|
|
2,494
|
|
||
Clinical trial accruals
|
2,965
|
|
|
3,141
|
|
||
Accrued construction-in-progress
|
442
|
|
|
3,015
|
|
||
Other
|
24,854
|
|
|
25,520
|
|
||
Total accrued liabilities
|
$
|
266,918
|
|
|
$
|
269,686
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
2021 Notes
|
$
|
242,112
|
|
|
$
|
575,000
|
|
Unamortized discount and debt issuance costs on 2021 Notes
|
(11,560
|
)
|
|
(38,865
|
)
|
||
2021 Notes, net
|
230,552
|
|
|
536,135
|
|
||
|
|
|
|
||||
2024 Notes
|
575,000
|
|
|
575,000
|
|
||
Unamortized discount and debt issuance costs on 2024 Notes
|
(106,840
|
)
|
|
(117,859
|
)
|
||
2024 Notes, net
|
468,160
|
|
|
457,141
|
|
||
|
|
|
|
||||
2026 Notes
|
1,000,000
|
|
|
—
|
|
||
Unamortized discount and debt issuance costs on 2026 Notes
|
(193,498
|
)
|
|
—
|
|
||
2026 Notes, net
|
806,502
|
|
|
—
|
|
||
|
|
|
|
||||
Term loan
|
597,842
|
|
|
613,981
|
|
||
Total debt
|
2,103,056
|
|
|
1,607,257
|
|
||
Less current portion
|
33,387
|
|
|
33,387
|
|
||
Total long-term debt
|
$
|
2,069,669
|
|
|
$
|
1,573,870
|
|
Year Ending December 31,
|
Scheduled Long-Term Debt Maturities
|
||
2020 (remainder)
|
$
|
16,693
|
|
2021
|
275,499
|
|
|
2022
|
33,387
|
|
|
2023
|
517,494
|
|
|
2024
|
575,000
|
|
|
Thereafter
|
1,000,000
|
|
|
Total
|
$
|
2,418,073
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Lease Cost
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Operating lease cost
|
$
|
5,410
|
|
|
$
|
6,056
|
|
|
$
|
10,700
|
|
|
$
|
11,926
|
|
Short-term lease cost
|
890
|
|
|
619
|
|
|
1,760
|
|
|
1,220
|
|
||||
Variable lease cost
|
—
|
|
|
1
|
|
|
1
|
|
|
4
|
|
||||
Sublease income
|
(67
|
)
|
|
(158
|
)
|
|
(224
|
)
|
|
(320
|
)
|
||||
Net lease cost
|
$
|
6,233
|
|
|
$
|
6,518
|
|
|
$
|
12,237
|
|
|
$
|
12,830
|
|
Leases
|
Classification
|
June 30,
2020 |
|
December 31,
2019 |
||||
Assets
|
|
|
|
|
||||
Operating lease assets
|
Operating lease assets
|
$
|
133,179
|
|
|
$
|
139,385
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Current
|
|
|
|
|
||||
Operating lease liabilities
|
Accrued liabilities
|
12,763
|
|
|
12,728
|
|
||
Non-current
|
|
|
|
|
||||
Operating lease liabilities
|
Operating lease liabilities, less current portion
|
144,264
|
|
|
151,226
|
|
||
Total operating lease liabilities
|
|
$
|
157,027
|
|
|
$
|
163,954
|
|
Lease Term and Discount Rate
|
June 30,
2020 |
|
December 31,
2019 |
||
Weighted-average remaining lease term - operating leases (years)
|
9.3
|
|
|
9.7
|
|
Weighted-average discount rate - operating leases
|
5.3
|
%
|
|
5.3
|
%
|
|
Six Months Ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash outflows from operating leases
|
$
|
11,404
|
|
|
$
|
8,240
|
|
Non-cash operating activities:
|
|
|
|
||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1)
|
$
|
533
|
|
|
$
|
152,142
|
|
(1)
|
The June 30, 2019 disclosure includes the balances recognized on January 1, 2019 on adoption of ASU No. 2016-02, Leases.
|
Year Ending December 31,
|
Operating leases
|
||
2020 (remainder)
|
$
|
10,078
|
|
2021
|
21,203
|
|
|
2022
|
21,219
|
|
|
2023
|
21,489
|
|
|
2024
|
23,786
|
|
|
Thereafter
|
104,655
|
|
|
Total lease payments
|
$
|
202,430
|
|
Less imputed interest
|
(45,403
|
)
|
|
Present value of lease liabilities
|
$
|
157,027
|
|
|
Net Unrealized
Gain (Loss) From Hedging Activities |
|
Foreign
Currency Translation Adjustments |
|
Total
Accumulated Other Comprehensive Loss |
||||||
Balance at December 31, 2019
|
$
|
(1,325
|
)
|
|
$
|
(222,068
|
)
|
|
$
|
(223,393
|
)
|
Other comprehensive loss before reclassifications
|
(4,524
|
)
|
|
(9,260
|
)
|
|
(13,784
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
1,068
|
|
|
—
|
|
|
1,068
|
|
|||
Other comprehensive loss, net
|
(3,456
|
)
|
|
(9,260
|
)
|
|
(12,716
|
)
|
|||
Balance at June 30, 2020
|
$
|
(4,781
|
)
|
|
$
|
(231,328
|
)
|
|
$
|
(236,109
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
114,801
|
|
|
$
|
261,898
|
|
|
$
|
(43,032
|
)
|
|
$
|
347,099
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average ordinary shares used in per share calculations - basic
|
55,413
|
|
|
56,707
|
|
|
55,684
|
|
|
56,955
|
|
||||
Dilutive effect of employee equity incentive and purchase plans
|
451
|
|
|
720
|
|
|
—
|
|
|
798
|
|
||||
Weighted-average ordinary shares used in per share calculations - diluted
|
55,864
|
|
|
57,427
|
|
|
55,684
|
|
|
57,753
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per ordinary share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.07
|
|
|
$
|
4.62
|
|
|
$
|
(0.77
|
)
|
|
$
|
6.09
|
|
Diluted
|
$
|
2.06
|
|
|
$
|
4.56
|
|
|
$
|
(0.77
|
)
|
|
$
|
6.01
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Exchangeable Senior Notes
|
6,474
|
|
|
5,504
|
|
|
5,989
|
|
|
5,504
|
|
Options, RSUs and ESPP
|
6,178
|
|
|
5,202
|
|
|
5,895
|
|
|
5,095
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Xyrem
|
$
|
446,808
|
|
|
$
|
413,212
|
|
|
$
|
854,683
|
|
|
$
|
781,529
|
|
Defitelio/defibrotide
|
42,714
|
|
|
46,055
|
|
|
90,146
|
|
|
87,555
|
|
||||
Erwinaze/Erwinase
|
32,683
|
|
|
27,622
|
|
|
70,415
|
|
|
88,521
|
|
||||
Vyxeos
|
26,568
|
|
|
31,362
|
|
|
59,288
|
|
|
60,305
|
|
||||
Sunosi
|
8,578
|
|
|
—
|
|
|
10,502
|
|
|
—
|
|
||||
Other
|
852
|
|
|
5,172
|
|
|
3,374
|
|
|
8,844
|
|
||||
Product sales, net
|
558,203
|
|
|
523,423
|
|
|
1,088,408
|
|
|
1,026,754
|
|
||||
Royalties and contract revenues
|
4,233
|
|
|
10,710
|
|
|
8,754
|
|
|
15,565
|
|
||||
Total revenues
|
$
|
562,436
|
|
|
$
|
534,133
|
|
|
$
|
1,097,162
|
|
|
$
|
1,042,319
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
United States
|
$
|
516,097
|
|
|
$
|
480,932
|
|
|
$
|
994,580
|
|
|
$
|
943,794
|
|
Europe
|
37,895
|
|
|
36,518
|
|
|
79,451
|
|
|
71,919
|
|
||||
All other
|
8,444
|
|
|
16,683
|
|
|
23,131
|
|
|
26,606
|
|
||||
Total revenues
|
$
|
562,436
|
|
|
$
|
534,133
|
|
|
$
|
1,097,162
|
|
|
$
|
1,042,319
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
ESSDS
|
79
|
%
|
|
77
|
%
|
|
78
|
%
|
|
75
|
%
|
McKesson
|
10
|
%
|
|
12
|
%
|
|
11
|
%
|
|
15
|
%
|
|
Contract Liabilities
|
||
Balance as of December 31, 2019
|
$
|
9,581
|
|
Amount recognized within royalties and contract revenues
|
(2,360
|
)
|
|
Balance as of June 30, 2020
|
$
|
7,221
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Selling, general and administrative
|
$
|
21,020
|
|
|
$
|
20,685
|
|
|
$
|
41,616
|
|
|
$
|
41,055
|
|
Research and development
|
7,663
|
|
|
5,896
|
|
|
14,048
|
|
|
11,419
|
|
||||
Cost of product sales
|
1,921
|
|
|
1,708
|
|
|
3,594
|
|
|
3,367
|
|
||||
Total share-based compensation expense, pre-tax
|
30,604
|
|
|
28,289
|
|
|
59,258
|
|
|
55,841
|
|
||||
Income tax benefit from share-based compensation expense
|
(2,924
|
)
|
|
(4,473
|
)
|
|
(6,670
|
)
|
|
(8,140
|
)
|
||||
Total share-based compensation expense, net of tax
|
$
|
27,680
|
|
|
$
|
23,816
|
|
|
$
|
52,588
|
|
|
$
|
47,701
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Shares underlying options granted (in thousands)
|
79
|
|
|
102
|
|
|
644
|
|
|
1,399
|
|
||||
Grant date fair value
|
$
|
33.29
|
|
|
$
|
38.95
|
|
|
$
|
33.61
|
|
|
$
|
42.56
|
|
Black-Scholes option pricing model assumption information:
|
|
|
|
|
|
|
|
||||||||
Volatility
|
36
|
%
|
|
31
|
%
|
|
32
|
%
|
|
32
|
%
|
||||
Expected term (years)
|
4.6
|
|
|
4.5
|
|
|
4.6
|
|
|
4.5
|
|
||||
Range of risk-free rates
|
0.3-0.4%
|
|
|
1.8-2.3%
|
|
|
0.3-1.6%
|
|
|
1.8-2.5%
|
|
||||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
RSUs granted (in thousands)
|
129
|
|
|
42
|
|
|
1,088
|
|
|
561
|
|
||||
Grant date fair value
|
$
|
108.20
|
|
|
$
|
132.73
|
|
|
$
|
113.48
|
|
|
$
|
138.87
|
|
•
|
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 excessive daytime sleepiness, or EDS, in both adult and pediatric patients with narcolepsy;
|
•
|
Sunosi® (solriamfetol), a product approved by FDA and marketed in the U.S. and in Europe to improve wakefulness in adult patients with EDS associated with narcolepsy or obstructive sleep apnea, or OSA;
|
•
|
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;
|
•
|
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; and
|
•
|
Zepzelca™ (lurbinectedin), a product approved by FDA in June 2020 and recently launched in the U.S. for the treatment of adult patients with metastatic small cell lung cancer, or SCLC, with disease progression on or after platinum-based chemotherapy.
|
•
|
Strong execution driving sales growth in our core therapy areas through leveraging our leading market position and expertise in sleep and new high growth products in oncology that address significant unmet needs;
|
•
|
Expanding our pipeline with external patient-centric innovation to achieve a balanced portfolio of highly differentiated programs;
|
•
|
Continuing to build a flexible, efficient, and productive development engine for targeted therapeutic conditions to identify and progress early- and mid-stage assets; and
|
•
|
Investing in a scalable operating model and differentiated capabilities to enable successful partnerships and unlock further value through indication expansion and global markets.
|
Product Candidates
|
Description
|
Phase 3
|
|
Xywav (JZP-258) (oxybate; 92% sodium reduction)
|
Idiopathic hypersomnia
|
Phase 2b
|
|
JZP-385
|
Essential tremor (planned study)
|
Phase 1
|
|
JZP-324
|
Oxybate extended-release formulation
|
Product Candidates
|
Description
|
Phase 3
|
|
Vyxeos
|
AML or high-risk Myelodysplastic Syndrome, or MDS (AML18 and AML19) (cooperative group studies)
|
Newly diagnosed adults with standard- and high-risk AML (AML Study Group cooperative group study)
|
|
Newly diagnosed pediatric patients with AML (Children’s Oncology Group cooperative group study)
|
|
Zepzelca (lurbinectedin)
|
Relapsed SCLC (ATLANTIS) (exclusive U.S. license)
|
Phase 2/3
|
|
JZP-458 (recombinant Erwinia asparaginase)
|
ALL/LBL
|
Phase 2
|
|
Defitelio
|
Prevention of acute Graft versus Host Disease
|
Prevention of CAR T-cell therapy-associated neurotoxicity
|
|
Vyxeos
|
High-risk MDS (European Myelodysplastic Syndromes Cooperative Group cooperative group study)
|
Newly diagnosed older adults with high-risk AML (planned cooperative group study)
|
|
Vyxeos + venetoclax
|
De novo or relapsed/refractory, or R/R, AML (MD Anderson collaboration study)
|
Phase 1
|
|
Vyxeos
|
Low intensity dosing for higher risk MDS (MD Anderson collaboration study)
|
Vyxeos + other approved therapies
|
R/R AML or hypomethylating agent failure MDS (MD Anderson collaboration study)
|
First-line, fit AML (Phase 1b study)
|
|
Low intensity therapy for first-line, unfit AML (Phase 1b study)
|
|
IMGN632
|
R/R CD123+ hematological malignancies (Jazz opt-in opportunity with ImmunoGen, Inc., or ImmunoGen)
|
+/- venetoclax/azacitidine in CD123+ AML (Jazz opt-in opportunity with ImmunoGen; Phase 1b/2 study)
|
|
Preclinical
|
|
CombiPlex
|
Hematology/oncology exploratory activities
|
|
Three Months Ended
June 30, |
|
Increase/
|
|
Six Months Ended
June 30, |
|
Increase/
|
||||||||||||||
|
2020
|
|
2019
|
|
(Decrease)
|
|
2020
|
|
2019
|
|
(Decrease)
|
||||||||||
Product sales, net
|
$
|
558,203
|
|
|
$
|
523,423
|
|
|
7
|
%
|
|
$
|
1,088,408
|
|
|
$
|
1,026,754
|
|
|
6
|
%
|
Royalties and contract revenues
|
4,233
|
|
|
10,710
|
|
|
(60
|
)%
|
|
8,754
|
|
|
15,565
|
|
|
(44
|
)%
|
||||
Cost of product sales (excluding amortization of acquired developed technologies)
|
28,008
|
|
|
27,676
|
|
|
1
|
%
|
|
56,665
|
|
|
61,182
|
|
|
(7
|
)%
|
||||
Selling, general and administrative
|
191,406
|
|
|
176,014
|
|
|
9
|
%
|
|
399,806
|
|
|
343,961
|
|
|
16
|
%
|
||||
Research and development
|
78,922
|
|
|
62,384
|
|
|
27
|
%
|
|
165,029
|
|
|
122,489
|
|
|
35
|
%
|
||||
Intangible asset amortization
|
62,974
|
|
|
61,576
|
|
|
2
|
%
|
|
125,821
|
|
|
118,461
|
|
|
6
|
%
|
||||
Impairment charge
|
—
|
|
|
—
|
|
|
N/A(1)
|
|
|
136,139
|
|
|
—
|
|
|
N/A(1)
|
|
||||
Acquired in-process research and development
|
3,000
|
|
|
2,200
|
|
|
36
|
%
|
|
205,250
|
|
|
58,200
|
|
|
253
|
%
|
||||
Interest expense, net
|
26,210
|
|
|
18,234
|
|
|
44
|
%
|
|
44,706
|
|
|
36,156
|
|
|
24
|
%
|
||||
Foreign exchange loss
|
464
|
|
|
1,933
|
|
|
(76
|
)%
|
|
1,596
|
|
|
2,544
|
|
|
(37
|
)%
|
||||
Income tax provision (benefit)
|
54,754
|
|
|
(78,650
|
)
|
|
N/A(1)
|
|
|
3,467
|
|
|
(49,534
|
)
|
|
N/A(1)
|
|
||||
Equity in loss of investees
|
1,897
|
|
|
868
|
|
|
119
|
%
|
|
1,715
|
|
|
1,761
|
|
|
(3
|
)%
|
(1)
|
Comparison to prior period not meaningful.
|
|
Three Months Ended
June 30, |
|
Increase/
|
|
Six Months Ended
June 30, |
|
Increase/
|
||||||||||||||
|
2020
|
|
2019
|
|
(Decrease)
|
|
2020
|
|
2019
|
|
(Decrease)
|
||||||||||
Xyrem
|
446,808
|
|
|
413,212
|
|
|
8
|
%
|
|
854,683
|
|
|
781,529
|
|
|
9
|
%
|
||||
Defitelio/defibrotide
|
42,714
|
|
|
46,055
|
|
|
(7
|
)%
|
|
90,146
|
|
|
87,555
|
|
|
3
|
%
|
||||
Erwinaze/Erwinase
|
32,683
|
|
|
27,622
|
|
|
18
|
%
|
|
70,415
|
|
|
88,521
|
|
|
(20
|
)%
|
||||
Vyxeos
|
26,568
|
|
|
31,362
|
|
|
(15
|
)%
|
|
59,288
|
|
|
60,305
|
|
|
(2
|
)%
|
||||
Sunosi
|
8,578
|
|
|
—
|
|
|
N/A(1)
|
|
|
10,502
|
|
|
—
|
|
|
N/A(1)
|
|
||||
Other
|
852
|
|
|
5,172
|
|
|
(84
|
)%
|
|
3,374
|
|
|
8,844
|
|
|
(62
|
)%
|
||||
Product sales, net
|
558,203
|
|
|
523,423
|
|
|
7
|
%
|
|
1,088,408
|
|
|
1,026,754
|
|
|
6
|
%
|
||||
Royalties and contract revenues
|
4,233
|
|
|
10,710
|
|
|
(60
|
)%
|
|
8,754
|
|
|
15,565
|
|
|
(44
|
)%
|
||||
Total revenues
|
$
|
562,436
|
|
|
$
|
534,133
|
|
|
5
|
%
|
|
$
|
1,097,162
|
|
|
$
|
1,042,319
|
|
|
5
|
%
|
(1)
|
Comparison to prior period not meaningful.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Clinical studies and outside services
|
$
|
40,145
|
|
|
$
|
33,034
|
|
|
$
|
87,894
|
|
|
$
|
63,265
|
|
Personnel expenses
|
31,146
|
|
|
20,855
|
|
|
57,048
|
|
|
42,165
|
|
||||
Other
|
7,631
|
|
|
8,495
|
|
|
20,087
|
|
|
17,059
|
|
||||
Total
|
$
|
78,922
|
|
|
$
|
62,384
|
|
|
$
|
165,029
|
|
|
$
|
122,489
|
|
|
Six Months Ended
June 30, |
||||||
|
2020
|
|
2019
|
||||
Net cash provided by operating activities
|
$
|
455,488
|
|
|
$
|
351,100
|
|
Net cash provided by (used in) investing activities
|
(801,245
|
)
|
|
163,414
|
|
||
Net cash provided by (used in) financing activities
|
494,851
|
|
|
(186,502
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
(356
|
)
|
|
105
|
|
||
Net increase in cash and cash equivalents
|
$
|
148,738
|
|
|
$
|
328,117
|
|
•
|
An increase in net cash inflow related to changes in operating assets and liabilities primarily driven by the impact of a $58.6 million payment related to a civil settlement agreement with the U.S. Department of Justice and the Office of the Inspector General of the U.S. Department of Health and Human Services in the six months ended June 30, 2019 and the timing of receipts from customers.
|
•
|
$744.5 million net increase in the acquisition of investments, primarily time deposits;
|
•
|
$147.1 million increase in upfront payments for acquired IPR&D primarily driven by the $200.0 million payment under our license agreement with PharmaMar in the six months ended June 30, 2020, compared to the same period in 2019 which included a payment of $56.0 million under our strategic collaboration agreement with Codiak; and
|
•
|
An increase in acquisition of intangible assets primarily related to the $100.0 million milestone payment to PharmaMar on FDA approval of Zepzelca.
|
•
|
An increase of $981.4 million in net proceeds from issuance of 2026 Notes, partially offset by $332.9 million of payments for partial repurchase of 2021 Notes;
|
•
|
A decrease of $24.6 million in share repurchases; and
|
•
|
An increase of $8.1 million in proceeds from employee equity incentive and purchase plans.
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations (1)
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 years
|
||||||||||
Term loan - principal
|
$
|
600,961
|
|
|
$
|
33,387
|
|
|
$
|
567,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan - interest (2)
|
31,093
|
|
|
14,490
|
|
|
16,603
|
|
|
—
|
|
|
—
|
|
|||||
Exchangeable Senior Notes - principal
|
1,817,112
|
|
|
—
|
|
|
242,112
|
|
|
575,000
|
|
|
1,000,000
|
|
|||||
Exchangeable Senior Notes - interest (3)
|
164,382
|
|
|
31,924
|
|
|
59,520
|
|
|
52,938
|
|
|
20,000
|
|
|||||
Revolving credit facility - commitment fee (4)
|
11,900
|
|
|
4,056
|
|
|
7,844
|
|
|
—
|
|
|
—
|
|
|||||
Commitment to equity method investees
|
9,600
|
|
|
7,000
|
|
|
2,600
|
|
|
—
|
|
|
—
|
|
|||||
Purchase and other obligations (5)
|
100,786
|
|
|
71,733
|
|
|
23,320
|
|
|
5,656
|
|
|
77
|
|
|||||
Operating lease obligations (6)
|
202,430
|
|
|
21,391
|
|
|
42,483
|
|
|
42,990
|
|
|
95,566
|
|
|||||
Total
|
$
|
2,938,264
|
|
|
$
|
183,981
|
|
|
$
|
962,056
|
|
|
$
|
676,584
|
|
|
$
|
1,115,643
|
|
(1)
|
This table does not include potential future milestone payments or royalty obligations to third parties under asset purchase, product development, license and other agreements as the timing and likelihood of such milestone payments are not known, and, in the case of royalty obligations, as the amount of such obligations are not estimable. In December 2019, we entered into an exclusive license agreement with PharmaMar, for development and U.S. commercialization of Zepzelca. The agreement became effective in January 2020 and we made an upfront payment of $200.0 million. In June 2020, we made a milestone payment of $100.0 million to PharmaMar following FDA approval of Zepzelca. PharmaMar is also eligible to receive milestone payments totaling up to $700.0 million based on regulatory and commercial milestones. PharmaMar is also eligible to receive incremental tiered royalties on future net sales of Zepzelca ranging from the high teens up to 30 percent. In January 2019, we entered into a strategic collaboration agreement with Codiak for an exclusive, worldwide, royalty-bearing license to develop, manufacture and commercialize potential therapeutic candidates directed at five targets to be developed using Codiak’s engEx™
|
(2)
|
Estimated interest for variable rate debt was calculated based on the interest rates in effect as of June 30, 2020. The interest rate for our term loan borrowing was 1.55% as of June 30, 2020. Interest that is fixed, associated with our interest rate swaps, is calculated based on the fixed interest swap rate as of June 30, 2020.
|
(3)
|
We used the fixed interest rates of 1.875% on the 2021 Notes, 1.50% on the 2024 Notes and 2.00% on the 2026 Notes to estimate interest owed as of June 30, 2020 until the respective final maturity dates of these notes.
|
(4)
|
Our revolving credit facility has a commitment fee payable on the undrawn amount ranging from 0.25% to 0.35% per annum based upon our secured leverage ratio. In the table above, we used a rate of 0.25% and assumed undrawn amounts of $1.6 billion as of June 30, 2020 to estimate commitment fees owed.
|
(5)
|
Consists primarily of noncancelable commitments to our third party manufacturers and to ImmunoGen under our amended collaboration and option agreement.
|
(6)
|
Consists primarily of the minimum lease payments for our office buildings and automobile lease payments for our sales force. Operating expenses associated with our leased office buildings are not included in table above.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1A.
|
Risk Factors
|
•
|
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 and other risks in relation to the benefits of our products;
|
•
|
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 clinical superiority and advantages over alternative treatments;
|
•
|
relative convenience and ease of administration;
|
•
|
with respect to Xyrem and Xywav, physician and patient assessment of the burdens associated with obtaining or maintaining the certifications required under the Xyrem and Xywav 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.
|
•
|
the need to incur substantial debt and/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 integrating acquired products and product candidates into our portfolio;
|
•
|
the difficulties in assimilating employees and corporate cultures;
|
•
|
the failure to retain key managers and other personnel;
|
•
|
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.
|
•
|
direct and indirect impacts of the evolving effects of the COVID-19 pandemic on various aspects and stages of the clinical development process, including the inherent limitations of remote and virtual approaches;
|
•
|
difficulty identifying, recruiting or enrolling eligible patients, often based on the number of clinical trials, particularly in oncology, with enrollment criteria targeting the same patient population;
|
•
|
significant reprioritization and diversion of healthcare resources away from the conduct of clinical trials as a result of the COVID-19 pandemic, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
|
•
|
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;
|
•
|
interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel, quarantines or social distancing protocols imposed or recommended by federal or state governments, employers and others in connection with the COVID-19 pandemic;
|
•
|
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;
|
•
|
failure of our clinical trials and clinical investigators, including contract research organizations or other third parties assisting us with clinical trials, to satisfactorily perform their contractual duties, meet expected deadlines and comply with FDA and other regulatory agencies’ requirements, including good clinical practices;
|
•
|
unforeseen safety issues;
|
•
|
inability to monitor patients adequately during or after treatment;
|
•
|
difficulty monitoring multiple study sites; 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, 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
|
•
|
public health risks, such as the COVID-19 pandemic and potential related effects on supply chain, travel and employee health and availability.
|
•
|
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, investments 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, or our ability to take specified actions to take advantage of certain business opportunities that may be presented to us;
|
•
|
result in dilution to our existing shareholders in the event exchanges of our 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;
|
•
|
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; and
|
•
|
consolidate or merge with or into, or sell substantially all of our assets to, another person.
|
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)
|
||||||
April 1 - April 30, 2020
|
52,500
|
|
|
$
|
105.66
|
|
|
52,500
|
|
|
$
|
433,156,902
|
|
May 1 - May 31, 2020
|
17,500
|
|
|
$
|
110.72
|
|
|
17,500
|
|
|
$
|
431,219,240
|
|
June 1 - June 30, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
431,219,240
|
|
Total
|
70,000
|
|
|
$
|
—
|
|
|
70,000
|
|
|
|
(1)
|
This table does not include ordinary shares that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting and release 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 2018, December 2018, and October 2019, our board of directors increased the existing share repurchase program authorization by $320.0 million, $400.0 million, and $500.0 million respectively thereby increasing the total amount authorized for repurchase to $1.5 billion.
|
(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
|
Director Nominees
|
|
For
|
|
Against
|
|
Abstain
|
|
Broker Non-Votes
|
Bruce C. Cozadd
|
|
41,147,508
|
|
4,233,454
|
|
343,787
|
|
2,447,342
|
Heather Ann McSharry
|
|
43,716,632
|
|
1,988,273
|
|
19,844
|
|
2,447,342
|
Anne O’Riordan
|
|
45,123,421
|
|
582,111
|
|
19,217
|
|
2,447,342
|
Rick E Winningham
|
|
43,477,704
|
|
2,221,356
|
|
25,689
|
|
2,447,342
|
For
|
|
Against
|
|
Abstain
|
|
Broker Non-Votes
|
47,258,687
|
|
900,811
|
|
12,593
|
|
—
|
For
|
|
Against
|
|
Abstain
|
|
Broker Non-Votes
|
40,033,236
|
|
5,669,898
|
|
21,615
|
|
2,447,342
|
For
|
|
Against
|
|
Abstain
|
|
Broker Non-Votes
|
27,736,377
|
|
17,972,113
|
|
16,259
|
|
2,447,342
|
For
|
|
Against
|
|
Abstain
|
|
Broker Non-Votes
|
48,004,256
|
|
96,664
|
|
71,171
|
|
—
|
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
|
4.4A
|
|
4.4B
|
|
10.1+
|
|
10.2†
|
|
10.3+
|
|
31.1
|
|
31.2
|
|
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 and Chief Executive Officer and Director
(Principal Executive Officer)
|
|
/s/ Renée Galá
|
Renée Galá
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
/s/ Patricia Carr
|
Patricia Carr
|
Vice President, Finance
(Principal Accounting Officer)
|
Sincerely,
|
/s/ Dan Swisher
|
Daniel Swisher
|
President & Chief Operating Officer
|
ACCEPTANCE OF EMPLOYMENT OFFER:
|
|||
I hereby accept the offer of employment by Jazz Pharmaceuticals on the terms set forth in this letter:
|
|||
/s/ Kim Sablich
|
|
|
|
Kim Sablich
|
|
|
|
Date:
|
02-May-2020
|
|
1.1
|
“Adverse Drug Experience” shall have the meaning assigned to it in 21 CFR 310.305 and 21 CFR 314.80, as such provision may be amended from time to time.
|
1.2
|
“Affiliate” of an entity shall mean any person or entity controlling, controlled by, or under common control with such entity for so long as such control exists. As used herein, “control” means ownership, directly or indirectly, of at least fifty percent (50%) of the common stock or voting ownership interests of the entity in question.
|
1.3
|
“Applicable Laws” shall mean all federal, state, and local laws and governmental agency regulations and requirements applicable to the Services, including without limitation HIPAA, Medicare and Medicaid laws under Title XVIII and XIX of the Social Security Act, and relevant State and Federal pharmacy licensure requirements and pharmacy regulations.
|
1.4
|
“Average Daily Sales” shall mean the average number of commercial bottles of the Product sold per day over the previous six (6) months, excluding all sales of Product (i) for dispensing to VA, and (ii) to Puerto Rico.
|
1.5
|
“Bridge Benefit” shall mean the Jazz Pharmaceuticals’ sponsored program that provides Product at no cost to eligible patients who are at risk of an interruption in therapy due to a change in the their insurance circumstances.
|
1.6
|
“Certified Pharmacy” shall mean the facility or facilities licensed and operated by ESSDS in compliance with the REMS Program and utilized by ESSDS in connection with the performance of this Agreement.
|
1.7
|
“Confidential Information” shall have the meaning assigned to it in Section 8.2.
|
1.8
|
“Data” shall mean the data specified in a Work Order, including but not limited to physician and patient data and required data elements for the REMS Program Central Database, and such other data as the Parties agree shall be provided by ESSDS to Jazz Pharmaceuticals under this Agreement.
|
1.9
|
“DEA” shall mean the United States Drug Enforcement Administration, or any successor thereto.
|
1.10
|
“Deliverables” shall mean those items to be delivered to Jazz Pharmaceuticals by ESSDS hereunder and as may be specified in a Work Order.
|
1.11
|
“FDA” shall mean the United States Food and Drug Administration or any successor thereto.
|
1.12
|
“Full Time Employee” or “FTE” shall mean a full time ESSDS employee working a forty (40) hour week who is dedicated exclusively to performing Pharmacy Services pursuant to the Agreement or any applicable Work Order.
|
1.13
|
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated pursuant thereto in the United States Code of Federal Regulations (45 CFR Parts 160 and 164).
|
1.14
|
“Information Technology” shall have the meaning assigned to it in Section 8.8 herein.
|
1.15
|
“Inspection” shall have the meaning assigned to it in Section 5.2 herein
|
1.16
|
“Intellectual Property” means any and all patents, trade secrets, inventions, know-how, copyrights, trademarks, service marks and trade dress, applications for the same, and registrations and applications for registration or renewals thereof in the United States and all other nations throughout the world, including without limitation all derivative works, renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter provided by applicable law, regardless of the medium of fixation or means of expression.
|
1.17
|
“Non-PAP Order” shall mean each shipment of Product by ESSDS to any Non-PAP Patient in accordance with this Agreement.
|
1.18
|
“Non-PAP Patient” shall mean any Patient other than a PAP Patient.
|
1.19
|
“Patient Assistance Program” or “PAP” shall mean the Jazz Pharmaceuticals' sponsored program that provides Product at no cost to eligible patients. Jazz Pharmaceuticals has sole discretion over the eligibility criteria and operation of the PAP. “PAP Patient” shall mean a Patient who has been approved as eligible to participate in the PAP.
|
1.20
|
“PAP Order” shall mean each shipment of Product by ESSDS to any PAP Patient in accordance with this Agreement.
|
1.21
|
“Patient” shall mean an individual who has been prescribed the Product.
|
1.22
|
“Patient Data” shall include data about a Patient including information about a Patient’s health, medical insurance claims, and payment information obtained from the Patient or the Patient’s prescribing physician.
|
1.23
|
“Pharmacy Services” shall have the meaning assigned to it in Section 2.1 herein.
|
1.24
|
“Physician Confidential Information” shall mean information pertaining to a physician that is protected from use or disclosure pursuant to applicable law.
|
1.25
|
“Product” shall mean Xyrem® (sodium oxybate) oral solution and dosing kit, and/or the branded version of an oxybate formulation, if approved, filed under NDA 021196.
|
1.26
|
“Product Complaint” shall mean notification relating to product quality, purity, identity, potency, packaging, tampering, and/or quality aspects of the Product.
|
1.27
|
“Records” shall have the meaning assigned to it in Section 7.1 herein.
|
1.28
|
“REMS Documents” shall mean the approved XYREM REMS Documents, including both the XYREM REMS Document and the XYREM REMS Supporting Document, as well as any modifications or successor documents thereto as approved by the FDA.
|
1.29
|
“REMS Pharmacy Services” shall have the meaning assigned to it in Section 2.1 herein.
|
1.30
|
“REMS Program” shall mean the XYREM REMS Program, as approved by the FDA, or any successor entity thereto as approved by FDA, including successor entities including additional oxybate formulations, and as described in the REMS Documents.
|
1.31
|
“REMS Program Items” shall mean materials required in connection with the performance of REMS Pharmacy Services by ESSDS hereunder, including, but not limited to, REMS Program enrollment forms and materials to be distributed to prescribers and patients. REMS Program Items shall not include any Product.
|
1.32
|
“Services” shall mean the Pharmacy Services and REMS Pharmacy Services collectively, as defined in Section 2.1.
|
1.33
|
“Service Level Agreements” or “SLAs” shall mean the service levels required for certain Services in order to support the Product, and are defined in Exhibit D.
|
1.34
|
“SOPs” shall mean the written standard operating procedures of ESSDS, as of the Effective Date, or any others mutually agreed to be the Parties after the Effective Date, which describe the REMS Program-specific operation processes of ESSDS.
|
1.35
|
“Territory” shall mean the United States of America, including its territories where ESSDS is allowed to legally distribute and ship the Product.
|
1.36
|
“Trademarks” shall mean the Jazz Pharmaceuticals trademarks set forth in Exhibit B.
|
1.37
|
“Veteran’s Administration” or “VA” shall mean the U.S. Department of Veteran’s Affairs, which provides a prescription benefit to VA healthcare system enrollees.
|
1.38
|
“VA FSS” shall mean the Veteran’s Administration Federal Supply Schedule pricing contract provided to Jazz Pharmaceuticals for the Product.
|
1.39
|
“Voucher Program Services” shall mean those voucher program services set forth in any applicable Work Order.
|
1.40
|
“WAC” shall mean the current wholesale acquisition cost of Product as provided by Jazz Pharmaceuticals. WAC does not include discounts, rebates or chargebacks. WAC may not be the actual acquisition cost.
|
1.41
|
“Work Order” shall have the meaning assigned to it in Section 2.1.
|
1.42
|
“Work Instructions” or “WIs” shall mean written work instructions of ESSDS, as of the Effective Date, or any others mutually agreed to by the Parties after the Effective Date, which provide detailed descriptions of the performance of certain tasks at ESSDS specifically required for Product.
|
If to ESSDS:
|
|
|
|
|
Express Scripts, Inc.
c/o Express Scripts Specialty Distribution Services, Inc.
One Express Way,
St. Louis, MO 63121
Attn: Legal Department
|
|
|
|
with a copy to:
|
|
Express Scripts Specialty Distribution Services, Inc.
One Express Way,
St. Louis, MO 63121
Attn: General Manager
|
|
|
|
If to Jazz Pharmaceuticals:
|
|
|
|
|
Jazz Pharmaceuticals, Inc.
Attention: Legal Department
3170 Porter Drive
Palo Alto, CA 94304
Email: Jazz_Notices@jazzpharma.com
|
|
|
|
AGREED TO:
|
|
AGREED TO:
|
|
|
|
Jazz Pharmaceuticals, Inc.
|
|
Express Scripts Specialty Distribution Services, Inc.
|
|
|
|
|
|
|
/s/ Debra S. Feldman
|
|
/s/ Joshua B. Parker
|
Name: Debra S. Feldman
|
|
Name: Joshua B. Parker
|
|
|
|
Title: VP, Pharmacovigilance
|
|
Title: VP
|
|
|
|
Date: 25-Jun-2020
|
|
Date: 06/23/2020 | 2:52 PM CDT
|
|
|
|
|
|
|
/s/ Ernie Ross
|
|
Approved as to Legal Form
|
Name: Ernie Ross
|
|
RPM for JD
|
|
|
6-23-20
|
Title: VP, U.S. Market Access
|
|
Legal Dept.
|
|
|
|
Date: 25-Jun-2020
|
|
|
|
|
|
A.
|
SCOPE OF SERVICES
|
B.
|
PROGRAM FEES and PASS THROUGH EXPENSES
|
Accepted and Agreed:
|
|
|
EXPRESS SCRIPTS SPECIALTY DISTRIBUTION SERVICES, INC.
|
|
JAZZ PHARMACEUTICALS, INC.
|
|
|
|
By: ___________________________
|
|
By: ___________________________
|
Signature: ______________________
|
|
Signature: ______________________
|
Title: __________________________
|
|
Title: __________________________
|
Date: __________________________
|
|
Date: __________________________
|
Function
|
Activity
|
Measurement
|
Service Level Commitment
|
Operations
|
Inbound Calls to the Call Center across all departments
|
Average Speed to Answer (ASA)
|
Monthly1 ASA ≤ 40 Seconds for RPH; ≤ 30 Seconds for PSC, RN and Reimbursement
|
Operations
|
Inbound Calls to the Call Center across all departments
|
Inbound call Service Level (SL)
|
80% of all inbound calls are answered in ≤ 20 seconds Monthly1
|
Operations
|
Inbound Calls to the Call Center across all departments
|
Maximum wait time
|
≥ 99% of all inbound calls will be answered in less than 5 minutes unless caller is proactively offered an automated, or manual, option to receive a returned call without losing his/her place in queue
|
Operations
|
Inbound Calls to the Call Center
|
Inbound Call Abandon Rate
|
≤ 4% abandon rate Monthly1
|
Customer Experience
|
Patient Feedback among patients who received shipment
|
Patient Satisfaction Percentage2
|
Greater than or equal to 90% Monthly1
|
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: August 4, 2020
|
By:
|
/s/ Bruce C. Cozadd
|
|
|
Bruce C. Cozadd
Chairman and Chief Executive Officer and Director
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Jazz Pharmaceuticals public limited company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date: August 4, 2020
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By:
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/s/ Renée Galá
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Renée Galá
Executive Vice President and Chief Financial Officer
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1.
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The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020, 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
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2.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Bruce C. Cozadd
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Bruce C. Cozadd
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Chairman and Chief Executive Officer and Director
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/s/ Renée Galá
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Renée Galá
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Executive Vice President and Chief Financial Officer
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(1)
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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.
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