Jazz Pharmaceuticals plc (JAZZ) September 9, 2026 Conference Transcript

Thank you for joining us. My name is Mohit Bansal. I'm one of the biotech and pharma analysts here at Wells Fargo and I'm joined by Team Jazz today. Music, please. So I'm joined by Sam Pierce. She's the European Chief Commercial Officer and John Blue, the head IR of the company. Thank you very much for joining us today.

Thank you for having us very much, Mohit. And just a quick word to note that Sam and I will be making some forward-looking statements today. So please do refer to the risk factors in our securities filings. And if we do reference guidance, we're referencing guidance that we updated most recently in our last earnings update in early August. And any reference to non-GAAP measures are also reconciled in those recent earnings updates.

Awesome. Thank you, John. So, Sam, let's just talk about, let's just start with the great things the sales and marketing team has achieved in this year. I mean, you have raised the guidance last quarter. Talk a little bit about the company, the setup, and what do you think is going right with the company right now?

Yeah, thank you. Well, I mean, I think I'm first and foremost delighted with the way the teams are executing on the opportunities that we have across our entire portfolio at the moment. I think we've put together a run of really good commercial results recently, most recently, obviously, our second quarter earnings where, you know, we delivered our best ever quarter with $1.2 billion of revenue, and that represented 16% growth. And I think what's really great about the results that we're seeing now is that that growth is coming right across our portfolio. It's not isolated to one particular brand, but we're seeing, you know, really good growth right across all of our key brands, double-digit growth from all of our key brands. I think the business has got really good, strong foundations. I mean, Zywave has proven itself to be a really durable, resilient product, continuing to deliver, you know, excellent growth this quarter. And now, of course, what we're also seeing is us really executing on some of the other launch opportunities that we've had recently. Most recently, obviously, Madezo. Madezo was launched just about a year ago, really delivering exceptionally well. and we also had the launch of Zepzelka in the first line maintenance market which also delivered really fabulous growth last quarter. So I think as a team we're proving our ability to really execute on these opportunities and I think as a result of that and when you look at some of the new opportunities that we have coming which I'm sure we'll talk about we did as you mentioned have the confidence to raise our guidance for the full year. And as we look ahead we're very excited about Zihira and the potential of Zihira. Obviously now we have the first line metastatic GEA indication and obviously the data that we've seen there, the unprecedented overall survival benefit, you know, we feel increasingly confident that Zihira represents a new standard of care and we're excited about executing that in the GEA indication but then expanding our investment into other areas of opportunity for Zyheera. You know, and we've got those exciting development plans that we can touch on as well in R&D, across breast cancer, colorectal cancer, non-small cell lung cancer. And on the webcast, when we talked about the GE indication, we talked about, you know, the peak potential of Zyheera now increasing to between $3 to $5 billion. So I think an awful lot for us to be excited about with Zyheera. a lot also for us excited to be about for epilepsy as well and continuing the growth trajectory there you know with with our label indications we do continue to see good growth opportunity but we're also making some targeted investments in expanding the reach of Epidiolex to other patients with epilepsy so I think the business is in good shape and I think we're executing on the the strategy that Rene set out at J.P. Morgan at the beginning of this year really well.

Got it. This is amazing. So XyWave has surprised us all in terms of three years ago we were modeling a decline for XyWave and we have not seen that yet. So can you paint the picture for us in the marketplace? Like how between XyRAM, authorized generic and generics now on the market, how it is impacting the volume price, and then you have IH as well. So there are many complications there, but can you help us paint a picture which is helping you here?

You know, as we entered this year, I think there were question marks. You know, how resilient and durable would ZyWave be in the face of high-sodium generics coming into the market? I think we've answered that question to a large part as we sit in the middle of the year. You know, we haven't really seen any material impacts from those generics coming into the market. The demand remains really strong. I mean, you saw in the second quarter of the year the net patient ads, 525 net patient ads. So, you know, we're continuing to add new patients to Zywave. I think our teams have done a really great job really communicating the differential benefits of Zywave. Low-sodium oxabate continues to resonate strongly. You know, we know that the majority of patients, 80% or more patients with narcolepsy and IH have comorbidities, cardiovascular and cardiometabolic comorbidities. So offering them a low sodium option continues to be really, really important. So as we sit in the middle of the year, you know, I think we feel increasingly confident about the durability of SciWave. Obviously, there are new entrants coming into the market as well, you know, orexins. but from everything that we understand about this market and the feedback that we're having from health care providers you know we do believe that Oxabate and Zywave in particular will continue to play a really important part of treatment for narcolepsy and IH patients.

Got it. So durability of the franchise is still a little bit of question even before our actions come along so between like the how much growth in IH market is still there because like most of the competition is on narcolepsy side not so much on IH side even with erexins it is a subset of narcolepsy for now not the entire narcolepsy either so what are the puts and takes for this growth to be durable or this franchise to be durable for next few years here yes um you know so uh we have some new entrants uh with erexins and as you mentioned uh you know they'll be entering the market with uh in the nt1 indication which is um you know, less than half of the overall narcolepsy space.

You know, irrespective of that, I think, you know, obviously the orexins do represent a new potent daytime alerting agent and oxibates act on the kind of disrupted nighttime sleep. So looking at the science behind this, you know, you can certainly see how these two drugs could be complementary. We'll have to see how that plays out in practice, of course, with payers. But we are very confident that Zywave will continue to have a place in treatment. And from what we understand and the way healthcare providers are thinking about this is that, you know, they will not be considering, from what we understand, that the stable base of Zywave patients will be switched away from Zywave. What we may see is that it takes longer for patients to get to Zywave if they're trying the orexin first. but we don't see this business being dramatically disrupted in a significant way.

Got it, very helpful. And then like how much growth is left in IH here?

Yeah so I mean there are estimates that say the overall prevalent patient population is very very large maybe similar to narcolepsy maybe a hundred thousand patients.

Some doctors even say it is not even a rare disease basically.

Well, yes, exactly. Diagnosed patients are around about 37,000. And we see treated patients maybe 9,000. So there's still significant opportunity for Zywave to grow into the full potential opportunity within the IH segment. And even with potential new agents coming into the market, we would probably see the market continue to grow quite significantly.

Got it. Very helpful. moving to epi dialects I mean even that franchise delivered a strong volume growth in the quarter now like again like same same way can you help us understand where you are finding this new growth and then also I mean this market has like the growth in last few years was a little bit slower so like what are you seeing now and then how much of this growth is sustainable going forward.

Yeah, really healthy growth in the second quarter. $292 million, 16% revenue growth, 14% volume growth. So we're really very pleased to see that. Epidiolex, when it was launched, it was launched as a pediatric drug, and we've seen really good, strong penetration in that segment. More recently, we've been focused on bringing Epidiolex to adult patients, and there's a very sizable opportunity there in the adult patient segment. That segment is more fragmented than the paediatric segment but that's where we are seeing quite a significant amount of our growth and there continues to remain significant headroom for us to grow there. In addition, we've been investing quite a bit in ensuring that patients can stay on treatment for longer. So we have a Jazz Cares support, patient support around that to onboard patients onto Jazz Cares and really support them to make sure that they can get the optimal duration. In addition, we mentioned on our call that we had submitted an NDA for the novel capsule formulation. Again, that formulation is going to be particularly beneficial for adults because this is a weight-based drug. so adults can end up taking quite a large volume of the oral solution which is sesame oil based that can limit the uptake in the adult segment with the capsule formulation we believe that addresses that that issue and so we do expect the capsule formulation to expand the overall patient pool that will be taking Epidiolex. Looking ahead more strategically we've made some really important investments in some clinical development programs to expand the use of Epidiolex into, we've got a phase 3 DEE study ongoing, a phase 2-3 study in juvenile myoclonic epilepsy, an additional study in adult LGS, as well as an earlier study in focal onset seizures. So when we recognised that we had a longer runway with Epidiolex, when we did the ANDA settlements, you know, out to the late 2030s, it really did open up the opportunity for us to make these additional investments and you know we feel very optimistic about the ability for us to really continue to demonstrate good strong growth momentum for Epidalex over the longer term.

Got it, really makes sense. So now moving to the the most anticipated launch of the year Zaheera and in GEA so early days so far but I mean with this first line launch I mean the label that you wanted and all that how how should we think about the launch curve here the product is already on the market so doctors know about this and all that you have i mean all the infrastructure in place but talk a little bit about like how should we think about the launch here and are there any you know uh bottlenecks in terms of like some some check boxes that need to be taken before it takes off like is there anything like that yeah yeah we're very excited

obviously about the GEA opportunity for Zyhera. We're excited about the label that we have. You know, the fact that we see that unprecedented overall survival benefit more than two years for both the triplet and the doublet regimen. And the fact that with the triplet, you know, that triplet regimen can be used irrespective of PD-L1 status. So, you know, this really is a fabulous opportunity for us to make a meaningful difference for these patients. You know, I think the fact that we've been out there in the market with Zyhera, with the BTC indication, is very, very helpful for our launch uptake. We sized our sales teams with the GEA launch in mind, so they've already been out there developing the relationships. Physicians, there's a high degree of overlap, 90% overlap of prescribers, So many of them will have had experience with Zyhera already. This drug is going to be, you know, it's important. It's going to be important for us to make a quick start, not only in the academic centers, but also in those community centers as well. And I think the fact that we do have the permanent J code in place already, then we should see we're not anticipating a lot of payer friction. we anticipate that patient access will be very much there from the beginning and therefore our ambition will be to really drive uptake rapidly and get to peak sales as quickly as we possibly can really just reflecting the fantastic data that we have and the fact that this product is going to make a very, very significant impact for patients with this devastating diagnosis.

Is it a largely Medicare patient population or is it a mix?

Yes, it's more of a mix.

I don't know whether we've got those numbers to hand exactly.

But yeah, it's a significant commercial opportunity in this space.

And then I had a question about OS Intrim and then we have already seen, not seen the full data, but congrats on the success of both doublet and triplet now. When can we expect to see the detailed data from the OS, for the doublet as well? So you are impressed with it, but again, the detailed data, then we can see.

You're asking about the top line readout of the doublet and OS, yeah. So we reported that we hit that, and you will expect to see it at a future medical meeting, but we haven't shared which one.

Okay, got it, got it, understood. So have you gone into details about the $3 to $5 billion, how much of this is like in each individual indications versus like because is it just GEA or is it like it's like even breast cancer you see a higher opportunity there?

Yeah, so, you know, a few years ago when we initially looked at the potential, as I hear, we did talk about it being a $2 billion plus opportunity. I think now, with the data in hand and with the clinical development plan that we've initiated, we'll feel confident to raise that peak revenue expectation to $3 billion to $5 billion. Previously, when we talked about the $2 billion, that was including the BTC opportunity, the first-line GA opportunity, as well as the metastatic breast cancer and the pan-tumor. Today, we're also now including our expectations within colorectal cancer and non-small cell lung cancer, as well as early breast cancer. So together, you know, with the data that we have and we see, you know, the unprecedented survival benefit in GEA and just thinking what that can mean for other HER2 expressing tumours, we feel confident to increase the the peak revenue to the three to five billion dollar range that we spoke about.

And correct me if I'm wrong John I mean you have a basket trial also going on in multiple cancer. A Pantumor trial that's correct. Is there any thought on timelines there like when could we see data there?

No it's enrolling and rolling nicely but we haven't provided readout timing specifically.

Got it. That'll be interesting trial to see when the data come out. Awesome. I also want to pick up on Modeso a little bit I feel like you are already exceeding your expectation that you set out like five million dollars but in second line alone you are at a two hundred million dollar plus one rate at this point so are you saturated with two second line or like like it was five hundred if I'm understanding correctly it was second line plus first line right so like where is the next leg of growth there and what are what are people underestimating Yeah, we're very, very pleased with the execution behind the Midezo launch.

It's about a year now since we launched. It was last August. Q2, $48 million. So as you say, we're already annualizing at $200 million, with more than 600 patients having been treated with Midezo. So that does enable, it kind of reinforces our belief around the $500 million peak sales opportunity in the US. that does include first line as well so you know that's what we do we do continue to believe that we can grow Mordezo with the label that we have today and there's still the opportunity for us to improve testing rates in this space and also improve the timeliness with which patients are referred to academic centres of excellence so there's still work for us to do there but we're excited about the action study that will read out in the first half of 2027 and that gives the opportunity for patients to receive MADEZO immediately after radiotherapy as opposed to waiting until those patients have progressed and that will mean I think more patients being eligible because in that time period unfortunately some patients may no longer be eligible as well as improving the duration of treatment for patients on MADEZO so you know that inflection point we're excited about and we believe that's going to be an important to get to the $500 million peak.

And have you exhausted the market in the second line yet?

No, I think there are still, we're still seeing growth there. You know, we're still, you know, enrolling patients onto treatment and getting them converted onto active treatment. And as I mentioned, you know, there is still the opportunity for us to improve testing rates. NCCN recently approved liquid biopsy in this space, so that will help because there are some patients that it's it's difficult to do a definitive you know biopsy physical biopsy so there are areas for us to work on that will ensure more and more patients can can benefit from this treatment.

Got it, very helpful. So talk about Zebzelka as well a little bit I mean so now you have the first line maintenance label as well so how how how should we think about the the the net effect because you know as you go more into first line and then you say the second line will decline but again the duration will help in the first line so help us understand what like the net growth how should we see the Zepzel come from going forward at this point yes and we have been seeing over time that second line business taper down as we experience increased competition in that second line segment

for a while now I mean it's almost a year since we launched in the first line maintenance segment and since that time our focus has been you know 100% commercially on first line that's where we believe patients will get the most benefit from Zepsalka with longer duration of treatment and you know in combination with with atizolizumab so our focus has been there the launch has been very successful around 30 to 40 percent of our overall revenue in the second quarter was coming from the first line maintenance segment so we will continue to focus on growing that part of our business and at the same time we do anticipate seeing the second line business taper away obviously as we look ahead you know the first line segment will also become a little bit more competitive with the entrance of new competitors in that space. But we do believe Zepzelka offers something uniquely different for patients and it's particularly appreciated in the community setting, you know, where they want something that is kind of easier to use without the monitoring etc. So we will continue to focus our promotional efforts there.

Got it, very helpful. then let's just talk about the active acquisition as well a little bit here so can you give us some color on like what gives you confidence that confidence in the 1230 assets and and where do you see the opportunity for this product in the rare epilepsy population basically right so like it's complimentary for sure with video at the franchise but what attracted you towards this asset here yeah well we're very excited about this acquisition i mean i think when renee described our strategy at jp morgan at the beginning of the year when we talked about our

rare disease focus and really focusing on finding opportunities in our areas of expertise of which epilepsy is absolutely one of them but also looking for opportunities that kind of address a really significant unmet medical need where we can make a meaningful difference in that rare disease space then Actio falls you know very much in that area and of course we're excited about it not only obviously we've done the due diligence around what we think this drug can do for patients but obviously we're able to leverage there our epilepsy expertise as well as leverage our rare disease expertise and of course there is significant commercial synergies as we think about bringing this product to market in the future so yeah extremely excited I think it's exactly what we were talking about when we you know talked about a rare disease strategy but no just add maybe Moet that that the clinical data that we did see as we reviewed the due diligence for the The transaction was very exciting to us.

We saw meaningful improvements in the patients who were receiving this drug. So we're very excited about the potential for it to have a transformative impact for patients who are suffering from a devastating disease. So as we get through the closing of the transaction with Actio, the JAS team will step in and drive the program forward and then look for opportunities down the road to present additional data at medical conferences helpful I mean you have also talked about investing in the commercial infrastructure for Actio as well so like what kind of synergies you have with Epidialyx here versus like what versus building up something new with this as well and we believe there'll be very significant commercial synergies in the space you know we've built real expertise in this

area we have the number one kind of branded anti-seizure medication in Epidiolex and this new opportunity obviously is for a different segment of patients the KCNT1 epilepsy but you know we will be it will be something that has the same core point with pediatric epileptologists so you know the overlaps are are very significant we haven't really got into you know whether what additional commercial investments we might want to make but for sure there are very significant commercial synergies got it very very helpful then I mean obviously we used to have a lot more questions for jazz on

BD side not as much now now that you have the pipeline is really vibrant but as a customary question so how is the company thinking about further BD transactions this year, next year, and what is the core principle behind, or core thought process behind, and if you do any BD, what would you be looking at?

Yeah, it's really a focus on rare disease. Sam described some of those guiding principles that Renee outlined at the beginning of the So looking at those areas of rare disease where we have that existing competency in epilepsy and sleep and oncology, and if you look over the past 12 to 18 months, that's exactly exactly where you've seen us do business development. You saw us bring in the Medeso asset with the acquisition of Chimerix. You saw us bring in San Iona, to acquire San Iona and some early epilepsy opportunities. You've seen us acquire Abcelera, do a deal with Abcelera in the oncology space and now most recently with Actio in the epilepsy space. So I think you should look for JAS to continue to be active in business development, focused in those rare areas, and looking outside of our current core competencies in rare disease, we're also looking there. I think if we are to look in rare outside the existing areas of core competency, we're probably less likely to go very early. We're more likely to be looking sort of at proof of concept or later, and if we're looking in the areas where we have the existing expertise, we're a little more wide open. We're open to doing earlier transactions and also looking closer to to commercial but you know we've got a very strong balance sheet and a very strong team in place running business development and and we're very focused on finding you know more more and more and we're very disciplined so look for more from us going forward you are a massive company oncology as well at this point right so so so they have two core competencies at this point one One question, Sam, I get a lot is between generic oxybates versus orexins, which one do you think is the bigger, like which one, which competitor is the bigger competitor

for you right now? Between the generic oxybates versus orexins.

Orexins, yeah. Very different prospects. I mean, I think as we looked at the beginning of this year to the entry of the generics, I think we felt quite confident in our differentiation. I mean, I think, you know, low sodium oxabate is is a very significant and important differentiating feature versus the generics. So, you know, and that played out in reality. I mean, that's what we're seeing now is that, you know, physicians are reluctant to want to put their patients onto a high sodium generic when they have a low sodium available. I think with the rexins, it's a different question. You know, it's more of a clinical question around, you know, how can we optimize treatment for these patients that, you know, for whom the condition is very debilitating? I think, you know, there is the opportunity for us to think about these two treatments as complementary, as we talked about before. I think there's still a lot for us to understand about how that will play out. We see in the data that these are potent daytime alerting agents, but also that there are question marks around, you know, the dose, the half-life, you know, insomnia. and we also know that when patients get good quality nighttime sleep then that has a positive impact on their daytime performance so you know it's it's a difficult question to answer i think the two competitors are you know quite quite different propositions but i i think overall what i would say is that we feel confident that zywave will continue to be an important treatment for patients with narcolepsy and idiopathic hypersomnia.

Got it. Understood. One last question for both of you. So fast forward one year. I hope you are here at Wells Fargo 2027 conference. At that conference, what would make you look back at the year and say it was a great year for us?

Yes. Well, I mean, I'm responsible for commercials, so obviously I'm going to be very focused on continuing to drive of the momentum that we've seen over the last few quarters over a kind of sustained period but i think beyond that obviously we're going to be looking to the way that we've executed the gea launch i think this is such an important launch uh for jazz it's such an important launch uh for patients um there's a strong promise with zihira and i think our ability to demonstrate that not only does the data show that zihira is the new her to agent of choice but we can actually execute on that and bring that to life for patients in the real world so you know a year from now yeah I definitely want to be looking back and seeing that we've delivered a standout launch and we've realized the potential that this asset offers us in GA and that will just give us even more confidence to do the same in other HER2 expressing cancers.

Yeah and I'd add two things probably the continued breadth of the execution I think if we're sitting here next year and continue to see the strength we're seeing across our franchises. I think that's been a real area of strength for Jazz in 2026 thus far. And then continued innovation. I think we're seeing more and more innovation from the company, both from our own programs that we're starting to put into the clinic and some of these assets that we're bringing on board through business development. So I think you're going to just continue to see more innovation layer up throughout the pipeline.

Awesome. On that high note, thank you very much for joining us today and all the best. Thanks for having us.

Thank you for having us.