Jazz Pharmaceuticals plc (JAZZ)

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Jazz Pharmaceuticals plc (JAZZ)

Lazard Capital Markets Healthcare Conference Call

November 14, 2012 08:00 ET


Bruce Cozadd - Chairman and Chief Executive Officer


Bill Tanner - Lazard Capital Markets


Bill Tanner - Lazard Capital Markets

Okay. Good morning. I am Bill Tanner, one of the biopharma analysts here at Lazard Capital Markets. I'd like to welcome everybody to day 2 of the 9th Annual Healthcare Conference. Hopefully, it's been helpful for you thus far and it will be over the balance of the day. Very pleased to have Jazz present our favorite idea has been for sometime a couple of years ago coming out of the conference stock was around $15 or thereabout, so obviously the execution of the company as strong as it's been. It's been somewhat reflected in the stock performance.

So, presenting for Jazz is Bruce Cozadd, who is the Chairman and the CEO, also want to acknowledge Bill Craumer who is with the Investor Relation Corporate Communications team. So, I think you will – you can know the story, it’s a great story if you don't know I think you will certainly see the appeal that we find in. So, Bruce thanks very much for participating and look forward to your comments.

Bruce Cozadd - Chairman and Chief Executive Officer

Okay, thanks Bill and thanks to Lazard for the invitation to present today. We certainly appreciate Bill's steadfast reporting of all good and bad events at Jazz over time. I think he has really kept up the speed on the key drivers of the story.

I am going to do an abbreviated presentation this morning to leave time for some Q&A. I think Bill may have some questions for me as may some of you. So, I am going to skip some slides as I go through. I will be making forward-looking statements during the presentation including, but not limited to our 2012 guidance as I am sure all of you know actual results may differ or subject to risk factors that are detailed in our SEC filings, including our 10-Q filed last week.

I will refer during the presentation some non-GAAP measures including adjusted net income and certain other adjusted items. As always, we do encourage you to look at GAAP numbers too, and we do include a full reconciliation of all numbers we present to GAAP in our presentation, which is available on our website.

We are a specialty pharmaceutical company. We think ultimately we succeed by helping patients and we are very focused on some small patient populations that we think we can significantly help with the unique drugs we sell. We have a highly efficient U.S. product platform. As you can see if you look at the bottom of this slide, our key sales forces in the United States are relatively small. Our largest sales force is just under 80 sales reps targets the narcolepsy population, sleep specialists. We also have a pediatric oncology sales force of 20 and a severe pain sales force of about 30.

So, as I talk through the potential of the products in the slides to come, one thing to remember is that we can very efficiently commercialize these products through a relatively small spend on the SG&A side. If I start with the top line, you can see here we have experienced significant revenue growth and we are certainly expecting 2012 to be a significant year with guided revenues of $575 million to $585 million. But you can also see on the right hand side that we have a little more diversification of revenues than we did last year when Xyrem accounted for virtually all of our revenues. Xyrem, Erwinaze and Prialt are three core franchises do comprise the vast majority of our revenues. And I'll point out that the slide on the right is pro forma. In other words, we have treated these products as though we sold all of them from January 1st. Of course, we have actually only sold Prialt since mid-January and Erwinaze since mid-June. The closing dates of the two acquisitions that brought us those products.

If we move from the top line for the bottom line, I think it's important to note that more than half of the revenues I showed you on the last slide are projected to flow all the way through to adjusted after-tax net income. Now, we have presented a number this year on a continuing operations basis. That's because before the end of the third quarter, we had announced we would be divesting our women's health business. That divestiture did close last month for a purchase price approaching $100 million. And so these numbers now strip that out for the balance of the full year, so we’re presenting an apples to apples as if we had not have women’s health at any point during the year. Our bottom line, EPS as you can see here is guided to $4.65 to $4.75 for the full year.

So, that gives you a sense for our top line and our bottom, let me walk you through our strategy now. We think it’s fairly simple and it’s been unchanged for the last couple of years. The first part of this strategy is to focus on our existing franchise to optimize the value of the products we do have lead by Xyrem which continues, it’s very nice growth. The second part of this strategy is to continue to add products to our portfolio through selective business development activities acquiring products and or companies. And we do think we’ll have the opportunity to do that moving forward. The third piece of this strategy is to invest in research and development activities that are good fit with our commercial strategy and we believe will provide a high return on investment.

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