Axsome Therapeutics, Inc.

Hello and thank you for standing by. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the Jazz Pharmaceuticals first quarter 2025 webcast conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, Simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We kindly ask that you limit yourself to one question for today's call. Thank you. I would now like to turn the call over to Executive Director of Investor Relations, Jeff MacDonald. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Today, JASP Pharmaceuticals reported its first quarter 2025 financial results. The slide presentation accompanying this webcast is available on the investor section of our website. Investors should also refer to the press release we issued earlier today that is available on our website. On the call today are Bruce Kozad, Chairman and Chief Executive Officer, Renee Golov, President and Chief Operating Officer, Rob Yannone, Executive Vice President, Global Head of R&D and Chief Medical Officer, and Phil Johnson, Chief Financial Officer. On slide two, I'd like to remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, growth potential and anticipated development, regulatory and commercial milestones and goals, which involve risks and uncertainties that could cause actual events, performance, and results to differ materially from those contained in these forward-looking statements. We encourage you to review the statements contained in today's press release in our slide deck and the risks and uncertainties described under the caption risk factors in our annual report on Form 10-K for the fiscal year ended December 31st, 2024, and our subsequent filings with the SEC, including our quarterly report on Form 10-Q for the financial quarter ended March 31, 2025, which identifies certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today's webcast. We undertake no duty or obligation to update our forward-looking statements. As noted on slide three, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the investor section of our website. I'll now turn the call over to Bruce.

Thanks, Jeff. Good afternoon, everyone. Thank you for joining us today to discuss Jazz's first quarter 2025 results. I'll start on slide five. JAS started the year with strong momentum following a productive 2024, and we're pleased with the meaningful progress we've made across the business in the first quarter of 2025. Our focus on execution and operational excellence resulted in solid commercial performance led by Epidiolex and ZyWave, and significant progress across our R&D pipeline. We submitted a supplemental new drug application, or SNDA, to expand Zepzelka into first-line maintenance in extensive stage small cell lung cancer and received a positive CHMP opinion recommending the marketing authorization for Zanidatamab and advanced HER2-positive biliary tract cancer, or BTC, in the European Union. In addition, the acquisition of Chimerix has further strengthened our presence in rare oncology. On the commercial front, we generated $898 million in total revenues across our portfolio. Our neuroscience portfolio had a strong start to the year, with ZyWave growing 9% year over year, remaining the number one branded treatment for narcolepsy as measured by revenue, and the only therapy approved to treat idiopathic hypersomnia, or IH. We saw strong epidiolex demand as revenues increased 10% year over year, and we remain confident in its blockbuster potential. While we experience near-term headwinds with certain oncology products, our oncology portfolio is poised for growth with three potential regulatory approvals in the coming months, including Dordaviprone, Zepzelka expansion into first-line maintenance therapy in the U.S., and Xanidatamab advanced BTC in Europe. Moving to R&D, we're advancing promising opportunities in our pipeline. The Horizon GEA01 Phase III trial evaluating Xanidatamab in first-line gastroesophageal adenocarcinoma, or GEA, remains on track to read out in the second half of this year. We continue to progress other key Xanidatamab clinical trials, including the Phase III Empower BC303 trial in breast cancer. We're looking forward to sharing important data on Zepzelka, Xanidatamab, and Dordavacrone at ASCO in June. We added Dordaviprone to our pipelines through the Chimerix acquisition, which closed in April, enhancing our presence in rare oncology and bringing a near-term commercial opportunity to help patients with limited treatment options. Given its patent protection into 2037 with possible extensions and the potential for expanded use in the frontline setting, we view Dordaviprone as a meaningful and durable revenue opportunity for Jazz. We are well positioned with respect to the impact of potential tariffs and have maintained financial flexibility supported by our strong balance sheet and cash flow. We remain confident in our top line revenue guidance and have updated our financial guidance to include the recent Chimerix acquisition and litigation settlement charges. I'll now turn the call over to Renee to discuss our commercial performance, after which Rob will cover our R&D pipeline. Bill will then provide a financial overview and discuss our updated guidance. And after that, we will open the call to Q&A. Renee?

Thanks, Bruce. I'll begin on slide seven to discuss the continued progress of our commercial portfolio, starting with our sleep therapeutic area. I'm pleased to report total revenue for sleep, which includes ZyWave and ZyRum net product sales, plus royalties from high sodium oxidate authorized generics, or AGs, was approximately $431 million in the first quarter of 2025. ZyWave net product sales were approximately $345 million in the first quarter, an increase of 9% year over year. As a reminder, we typically see seasonality in our sleep revenue due to reauthorizations at the beginning of each year. Despite the expected seasonality, ZyWave had a robust quarter of patient ads driven by strong execution from the field teams, and we continue to be excited about the direction of our sleep portfolio. There were approximately 14,600 active ZyWave patients exiting the first quarter, representing an increase of approximately 450 net patient ads compared to the fourth quarter of 2024, comprised of 125 narcolepsy patients and 325 IH patients. Narcolepsy patient ads consisted predominantly of OxyBate-naive patients along with patients transitioning from high sodium oxibates. Our efforts to educate on the importance of reducing sodium intake and the increased risk of cardiovascular comorbidities among narcolepsy patients continue to resonate with HCPs and with patients. We see the most opportunity for patient growth from the IH market, where Zywaid is the first and only FDA-approved therapy. As we continue to build this market, disease education on the benefits of using a nighttime therapy to address sleep inertia and symptoms like brain fog and excessive daytime sleepiness for IH remains important to drive prescribing. We've launched consumer targeted digital and media campaigns to increase disease awareness, coupled with promotion and medical education to HCPs. These campaigns are performing well contributing to the growth of the IH market, and we continue to enhance our field effectiveness to optimize our impact for patients. Turning to slide eight in Epidiolex, Epidiolex had net product sales of approximately $218 million in the first quarter, a 10% increase year over year. Growth was primarily driven by underlying demand and, to a lesser extent, favorable U.S. payer mix, partially offset by U.S. inventory burn. Exiting the first quarter, inventory was lower than we would typically see at this time of the year. Our Epidiolex commercial and medical teams have been executing well, with key drivers of demand growth in the U.S., including continued data generation on the benefits of Epidiolex beyond seizure control, expanded reach to adult patients and long-term care facilities, along with broad quality access and the nurse navigator program. We're pleased with the growth of Epidiolex and expect it to reach blockbuster status in 2025. Moving to oncology on slide nine. Rylase net product sales were approximately $94 million in the first quarter of 2025, a decrease of 8% year over year. As we previously noted, Rylase sales have been impacted by the update to Children's Oncology Group, or COG, pediatric treatment protocols for acute lymphoblastic leukemia made in mid-2024. Based on feedback from KOLs about their expected use of asparaginase, we continue to see the impact to Rylase as temporary, with revenue normalizing during the second quarter of 2025. We are making steady progress in the adolescent and young adult market and continue to place Cephselka back on a growth trajectory. Moving to slide 11 and our ongoing Zahara launch. In December of last year, FDA approved Zahara, the first and only dual HER2-targeted bispecific antibody approved for HER2-positive second-line BTC in the U.S. We recognized approximately $2 million in net product sales in the first quarter of 2025. While it's early in launch, recession from HCPs has been positive. We are hearing initial customer experiences are aligned with the clinical profile we observed in clinical trials. As a reminder, BTC is a rare disease with a limited number of patients, and we expect revenue contribution to be modest from this rare cancer. We expect this initial launch in second-line HER2-positive BTC will help us. HER2-targeted therapy has a significant benefit for patients. In addition, the BTC approval helps healthcare professionals gain meaningful experience with SIHERA prior to its potential indication in GEA. I will now turn it over to Rob for an update on our pipeline and upcoming milestones. Rob?

Thanks, Renee. I'll begin on slide 13. I'm excited about our pipeline and the significant progress we have made on key programs with additional milestones expected this year. Looking first at oncology, we completed the submission of an SMDA to FDA to expand the ZYPSELCA label to include maintenance therapy in first-line extensive stage small cell lung cancer for patients who have not progressed during induction chemotherapy. The submission is based on statistically significant and clinically meaningful progression-free survival, or PFS, and overall survival, or OS data, from the Phase III and IV-T trial of ZipCelka in combination with atezolizumab compared to atezolizumab alone. The results have the potential to be practice-changing, and we look forward to showcasing the data in an oral presentation at ASCO on Monday, June 2nd. Presentation in a peer-reviewed form also enables us to submit the data for potential inclusion in NCCN guidelines and compendia listing. We also remain on track for top-line readout of PFS data from the Horizon GEA 01 trial in the second half of this year. The first interim analysis of OS will also occur at this time. We are encouraged by the positive results from two independent Phase II trials of Xanadatamab and first-line GEA that demonstrated increased median PFS, duration of response, and confirmed objective response rates. If the phase three trial findings are positive, we expect the data will support registration based on potentially clinically meaningful PFS and supportive OS data. Three data map presentations have been accepted at ASCO, including updated overall survival data from the phase two first-line GEA trial. In addition, there will be an oral presentation on the safety and efficacy of durdaviprone. Turning to neuroscience, we recently initiated our planned phase 1B trial to evaluate the efficacy, safety, tolerability, and pharmacokinetics of JZP441 in participants with type 1 narcolepsy. And with respect to our Epidiolex trial in Japan, we are continuing to collect long-term safety data, which was included in the trial design. for 26 and 52-week analyses. We observed numeric improvements in both the primary and several secondary endpoints, and we remain on track to meet with the Japanese health authorities in mid-2025. As outlined on slide 14, standard data map has proven to be a unique, differentiated, and highly effective dual-targeted HER2 therapy. Xanadatamab provides opportunities across multiple HER2-positive solid tumors and represents a global opportunity for JAS in multiple markets. Following the FDA approval of Xanadatamab in second line BTC last year, the CHMP recently adopted a positive opinion recommending the marketing authorization of Xanadatamab for the treatment of adults with previously treated, unresectable, locally advanced through metastatic HER2-positive BTC. We look forward to the European Commission's decision and for the opportunity to bring a new treatment option to patients in Europe if approved. We have also completed recruitment for our Phase III trial evaluating Xanadatamab and first-line GEA and expect top-line PFS data later this year. The overall development program for Xanadatamab includes multiple registration-enabling trials, including pivotal trials in first-line BTC, first-line GEA, advanced breast cancer, and in a pan-tumor basket trial, focused on areas where we believe Xani has the potential to emerge as the preferred HER2-targeted therapy. This comprehensive development program underscores our confidence in XanaDataMAP's potential. Turning to slide 15. We're also very excited that the Chimerix transaction has been completed and thrilled to welcome our new colleagues to JASP. Our team is now engaged and working toward the shared goal of delivering durdaviprone to patients. Durdaviprone is a groundbreaking first-in-class small molecule in development for H3K27M mutant diffuse glioma, a rare high-grade brain tumor that most commonly affects children and young adults. There are currently no approved drug therapies for these patients, and the median overall survival from diagnosis is approximately only one year. Multiple clinical studies have demonstrated durdaviprone's benefit in patients with recurrent H3K27M mutant diffuse glioma, both as monotherapy and in combination with other treatment approaches, including radiation. with a consistently favorable safety profile. The FDA has accepted an NDA for duodaviprone, seeking accelerated approval for treatment of H3K27M mutant diffuse glioma in adult and pediatric patients with progressive disease following prior therapy. The application has been granted priority review and assigned a PDUFA target action date of August 18th of this year. Based on communication with the FDA to date, we do not expect the agency to hold an Oncology Drug Advisory Committee meeting in connection with the review of the NDA. Beyond the recurrent disease setting, zurdaviprone is being studied in the ongoing Phase III action trial, evaluating its use in newly diagnosed H3K27M mutant diffuse glioma patients following radiation treatment. This trial has the potential to confirm the clinical benefit of duodaviprone in recurrent H3K27M mutant diffuse glioma and potentially extend this treatment option into the frontline setting. We believe that duodaviprone has the potential to transform the standard of care for this underserved patient population with very limited treatment options. Now I will turn the call over to Phil or financial update. Bill?

Thanks, Rob. I'll start with our top line results on slide 17. As a reminder, our full financial results are available in our press release, which is available today, and in our 10Q, which will be filed tomorrow morning. In the first quarter of 2025, we recorded $898 million in total revenue. I'll note our first quarter revenues have historically been affected by several factors, including reauthorizations and inventory built in the latter part of the prior year, which typically burns off in the first half of the following year. As Renee mentioned, for Epidiolex, we saw more of this burn in the first quarter of this year. Despite these factors, ZyWave and Epidiolex revenues grew 9% and 10% year-over-year, respectively. Our oncology product experienced a decline relative to the first quarter of 2024. In part, this was driven by having one fewer shipping week in the first quarter of 2025 compared to the first quarter of 2024. In addition, the decline was primarily driven by our two largest oncology products, Zepselca and Rylase. As Renee noted earlier, we believe we have line of sight into our assumption of growth for these products in the coming quarters. As I will highlight on the next slide, we are affirming our total revenue guidance for 2025 based on our conviction and the strength of our overall commercial portfolio. Adjusted net income and earnings per share in the first quarter of this year were impacted by a charge related to certain Xyrem antitrust litigation settlements. This $172 million charge to SG&A in the first quarter reduced our adjusted net income by $146 million, and our GAAP and non-GAAP EPS by $2.38 per share and $2.34 per share respectively. Before discussing our updated 2025 financial guidance, I'd like to comment on tariffs. Now, I'm sure we'll have several questions on this topic during the Q&A session, so I'll limit my commentary to the most essential items. I'll start with the tariffs already enacted on China, Mexico, and Canada, as well as the general 10% tariff levied more broadly. For 2025, We anticipate no direct financial impact from these tariffs and currently expect any indirect impact resulting in inflation on goods we purchase can be managed within our existing internal budgets and external guidance. We won't speculate on the potential impact of future tariffs on pharmaceutical products imported into the U.S. at some hypothetical rate. As you expect, we've evaluated various scenarios and are positioned to comment in a timely manner if and when such tariffs are enacted. We have sufficient inventory in the U.S. to serve all or nearly all of our 2025 needs for each of our products. Consequently, we expect that any impact for 2025 financials would be de minimis, if any, and unlikely to affect our guidance. With that context, let's move to our updated 2025 financial guidance. Now, at first glance, the updates may seem complex. In reality, there are three drivers for the updates, and I think you'll find they're pretty straightforward. Those three drivers are the Chimerix acquisition, certain Xyro-Amanda Trust litigation settlements, and slightly revised expectations for full-year R&D expense. The Chimerix acquisition affects guidance in three ways. First, it will be accounted for as an asset acquisition. Consequently, we'll recognize a non-tax deductible required IPR&D charge that we estimate will be between $870 and $900 million. will recognize Chimerix's results from operations from the date of close to the end of the year. At a high level, this includes a non-material amount of revenue and cost of sales, as well as roughly $50 million in SG&A expenses and roughly $60 million in R&D expenses. Third, our interest expense and interest income expectations have been adjusted to reflect the timing of the net outlay for Chimerix, which was approximately $890 million as well as the continued investment in Chimerix's operations over the remainder of the year. Moving to the Xyron antitrust litigation settlements, our 2025 guidance has been updated to reflect the tax deductible charge of $172 million that we recognized in our SG&A expenses in the first quarter. Finally, excluding Chimerix, our guidance has been adjusted to reflect a slightly lower R&D expense, roughly $20 million in aggregate, in our existing JAWS portfolio, driven primarily by the successful early conclusion of two Phase IV ZYWAVE studies. Moving on to the slides that illustrate the specific provisions to our guidance, you'll see on slide 18 that we are affirming our full-year 2025 revenue guidance. Our guidance range remains $4.15 to $4.4 billion, which represents 5% year-over-year growth at the midpoint. This is driven by our confidence in both the neuroscience and oncology portfolios. DyeWave continues to grow with impressive new patient ads and expansion of the IH market. We continue to expect that the dialects will reach blockbuster status in 2025 and anticipate RILO's revenues will normalize during the second quarter of 2025. We also believe that Silco's potential expansion into first-line maintenance therapy will provide more patients the ability to receive treatment for a longer duration. Turning to slide 19, our non-GAAP adjusted SG&A guidance range for $1.25 to $1.31 billion has been updated to $1.47 to $1.53 billion. The revised range reflects the $172 million pre-tax charge for this quarter associated with certain Xyra antitrust litigation settlements and the addition of Chimerics. Our non-GAAP-adjusted R&D guidance range of $720 to $770 million has also been updated to $760 to $110 million. This change is driven primarily by additional investment in ongoing clinical programs for dordavipram, partially offset by the slight reduction in the spend on the JABS portfolio I mentioned earlier. On the bottom line, we expect adjusted net income to be $250 to $350 million for the full year of 2025. The updated ANI guidance reflects the cumulative effect of all the items I described earlier. We're in a sound financial position with healthy cash flow generation, over $400 million in the first quarter, and we have several near-term commercial opportunities and a particularly important upcoming data readout. We continue to believe that a disciplined approach to capital allocation, including prioritized spend on our ongoing R&D programs and to lead commercial products, as well as corporate development, will drive long-term shareholder value. I'll now turn the call back to Bruce for closing remarks. I'll conclude our prepared remarks on slide 21. We had a strong start to 2025 with continued focus on commercial execution led by growth of ZyWave and Epidiolex and the ongoing launch of ZyHara. In addition, we were pleased to close the Chimerics transaction and welcome our new colleagues as we worked together to prepare for the potential launch of Dordavacrom. Corporate development remains key to our strategy, and the Chimerix transaction is representative of our ability to identify and execute transactions that are strong strategic fits. Cordava-prone is a potential near-term commercial opportunity with an efficient commercial call point and durable revenue stream. Our R&D pipeline continues to advance, with the top-line PFS readout from our Phase III GEA trial of ZanyDataMap expected in the second half of 2025 the near-term PDUFA date of Dordavapro in August, and the recent submission of the Zepselka FNBA. Our financial position, balance sheet, and cash flow generation remain strong, supported by our focus on operational excellence and strategic capital allocation. We remain well positioned to continue delivering innovative therapies that transform the lives of patients and their families. That concludes our prepared remarks. I would now like to turn the call over to the operator to open the line for Q&A.

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We kindly ask that you limit yourself to one question for today's call. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jason Gerberry of Bank of America. Please go ahead.

Hey, guys. Thanks for taking my question. And so I'm going to respect Phil's comment about not asking to speculate on tariffs. But what I'm going to ask is about your supply chain and specifically Zywave. So you have a U.S. CDMO. And so I'm just curious if you can speak to Zywave is not a very high volume product. So I'm just curious to the extent that You know, if need be, in 2026, you could, you know, fully supply the product from your U.S. CDMO. And if you can comment if your API can be sourced in the U.S., that's if you've got a fully U.S.-supplied product for the U.S. market. Thanks.

Jason, thanks for the question, and I appreciate your being respectful of the prior comments as well. We can comment on what we can't. So you're correct. We do have a U.S. supplier for Oxibate, including ZyWave. That supplier does have enough capacity that we can access to fully meet our U.S. needs. And certainly, if tariffs are coming into play, it would be a very effective option for us to mitigate that exposure. And there's no particular issues that I would note with regard to API and having that subject to tariff. Operator, go to the next caller, please.

Your next question comes from Jessica Phi with JPMorgan. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking my question. So, following up on the first question, maybe thinking beyond Oxabate, can you talk about Jazz's manufacturing footprint, including sources of API and, you know, any other possible mitigation strategies or contingency plans? to neutralize any potential impact of bioform or tariffs if they're implemented?

Maybe I'll ask Renee to take the first part of that, which is just factually where we do our manufacturing, and then, Phil, if you want to add anything more on tariffs, jump in.

Sure, Bruce, and thanks for the question, Jeff. So, with respect to where we manufacture ZyWave and ZyREM, Phil mentioned we do have a CMO in the US. We also have a facility in Athlone, Ireland, and so we do have a level of flexibility there. With respect to Epidiolex, we have a facility in the UK where we produce that product, and we have the capability to also develop other products at that plant. And then some of our other smaller products on the oncology side are manufactured in different locations. And Depotilio is in Villaguardia, Italy. Vixios is manufactured by Symtra. And then Rylase is manufactured in Denmark. So we do have quite a lot of manufacturing in Europe. In terms of our capabilities and what options we have going forward, obviously making changes to our manufacturing sources is something that we don't take lightly. It does take a period of time, but we do have a level of flexibility, as we've mentioned, today with our OXIV-8 products, and we'll continue to evaluate both backup options, and other sources of manufacturing. Phil?

Yeah, no, it's a great summary, and as you'd expect, Jess, this has been subject of quite a bit of work across a cross-functional team since sort of late last year, early this year, and there certainly are opportunities for us to work with CMOs here in the U.S. to further reduce the exposure to JAZ beyond those that we're currently working with. To date, the primary way that we've buffered impact would be through having sufficient inventory in market here in the U.S. to cover all or nearly all of our U.S. needs at this point for 2025 for each of our products. We'll continue with that strategy. Then, obviously, depending upon if and when tariffs come into effect, what geographies they would impact and what rate, we may have some protection from inventory for 2026 as well. Turn it back to the operator for the next question, please.

Your next question comes from David Amsalam with Piper Sandler. Please go ahead.

I actually wanted to ask a question about Zepzelka and competition from Indeltra. I know it's having an impact, and the label expansion is certainly not lost on me. But I guess my question here is, you know, how should we think about Zepzelka over time in terms of its trajectory? Do you anticipate that first-line contribution will overwhelm the pressure in the second-line setting? And then also, how are you thinking about the expansion of Indelta itself, bearing in mind that Amgen has a pretty comprehensive development program in small cell lung in terms of earlier lines of therapy. So how are you thinking about Zepzelka overall as a growth product going forward? Thanks.

Yeah, I'm happy to jump in and take that one. So as we think about Zepzelka, we did have some dynamics impacting the first quarter. As we look forward, though, to your point on Zepzelka returning to growth, Even with competition and some delayed progression of first line limited stage patients coming into the second line, Zepzelka in the second line still remains the leading treatment as measured by market share. Importantly, we do look forward to both sharing our data at ASCO on the first line and Forte trial, where we showed STATSIG and clinically meaningful PFS and OS study of first line extensive stage maintenance patients. And so this is something we look forward to presenting at ASCO and then rapidly submitting that data for potential inclusion in NCCN treatment guidelines. We do expect this data to be practice changing and therefore going into the first line, we look to a larger patient population to treat in the extensive stage patients, but also longer treatment duration. So we do expect this to contribute to future growth of the brand. And we would also expect patients that didn't receive Cephselka in first line to have the opportunity to receive it in the second line. And then, Rob, do you want to take the question with respect to the views of Tarlatimab going forward from a clinical perspective?

Yeah, again, Jess, I think you covered it very well, Renee. With our new data and ultimately adoption into NCCN and in the label as first line, You know, that affords us a larger population for a longer duration of therapy. Trilatomab is not approved in that setting. And it would be quite a while before a new trial would read out there. So I think that's the, you know, as a new standard of care, I think that's the key that extensive stage patients who don't progress after induction, as you said, should become the standard of care to get Subzelka. And then for patients who don't receive it in front line, Subtelka, you know, has data to show that it's an effective second line therapy.

Your next question comes from Mark Goodman with Learing Partners. Please go ahead.

Bill, your comments about tariffs not impacting 2025 I assume have to do with the fact that you have inventory that you've just built up in the U.S. and so you don't have to worry about it. But is it a fair question to ask what would be the impact for a full year just on an annual basis if you did have all that inventory built up? Like what would we be talking about here as far as the numbers?

Yeah, Mark, I appreciate the question. Sort of in this theoretical realm of what might happen in the future, it depends obviously on what kind of rates being put in, what kind of geographies are affected. So we're not commenting at this point in time on those hypotheticals. I would say, again, depending on when tariffs would go into effect, if they are, we could get some coverage from inventory as we're getting effectively this year. And then we also have the ability for our Oxibate products to use U.S. source to effectively mitigate that exposure. Beyond that, the main tools available to us would be things like looking to work with other third-party manufacturers here in the U.S. to further reduce the impact. But I feel very good about the position that we're in currently, obviously closely monitoring the situation, and we'll take actions as needed.

Your next question comes from Andrea Newkirk of Goldman Sachs. Please go ahead.

Hi, all. This is Talani on for Andrea. Thanks for taking our questions today. Would you want to understand a little bit better, why does the Chimerics acquisition make sense for Jazz, and what do you find most compelling about the Dordaviprone commercial opportunity? And related to that, how are you thinking about additional BD activities going forward? Thank you.

So maybe I'll jump in at the total company acquisition level, and then Renee or Rob, if you want to add anything on Dordaviprone in particular, you can. You know, we've been, I think, pretty clear about our corporate development strategy for some time now as a major pillar of how we invest capital to create value for shareholders in addition to what we do in our investments in our commercial portfolio and in our R&D efforts. And we've been clear that our priorities include finding products that would represent, you know, a real advance where there's unmet medical need. in a serious condition that aligns with our capabilities, that has an efficient commercial call point so that we don't need to do, you know, a massive buildup of commercial expense that have long durability. And we really feel that Chimerix on all fronts was a perfect fit for us, matches well with what we do well, particularly in oncology. near-term launch, again, efficient and more confident fills a serious unmet need.

Rob, you want to jump in?

Yeah, I'd love to. You know, the treatment for diffuse glioma hasn't changed since I trained as a pediatric oncologist 25 years ago. Patients get debulking surgery. which is never curative, and then radiation therapy. And that's essentially it prior to Dordaviprone and prior to the discovery that H3K27N mutations occurred and were a driver for oncogenesis in this setting. It's been shown now with Dordaviprone that for patients with this mutation, the therapy is effective. We're really impressed with Not only the efficacy, but also the safety profile in a disease setting, as they indicated, has an ongoing very high unmet need and without many other prospects, unfortunately.

Your next question comes from Annabel Samimi of Stifle. Please go ahead. Hi.

Thanks for taking my question. So for RILAs, I understand. obviously that the protocols have changed for the pediatric indication that delays treatment. But what can we expect for pickup in AYA? It's been, I guess, quite a little bit of time that you've been trying to drive growth in that area. And when do you think we can get some critical mass there and some momentum to return Riley's back to growth?

Renee? Okay.

Yeah, thanks for the question there. With respect to the AYA segment, it really does take time to drive education with adult treaters to use asparaginase and Rylase. These are treaters that often have a different protocol that they're following. And so, we were certainly pleased last year with the updated results from the protocol that created the gap in asparaginase treatment because although it created a delay in when asparaginase is dosed and it has led to some of the challenges that we've had with revenues, we feel very confident that it is demonstrating the importance of asparaginase due treatment, and it's also resulted in much higher overall survival, which is good news for patients. So we are having some momentum and success with respect to the AYA segment. It does take a little bit more time than what we see in pediatrics, where we've had pretty much universal adoption, but there has been some delay in getting back to that continued use Importantly, as we've said before, there is no change to the total doses of asparaginase with the new protocol that is in place. And so we expect we will be getting back to normalization in the second quarter and can continue to focus on the growth in AYA.

Maybe before we go to the next caller, I can just add something real quick. Annabelle, if you think about our oncology performance, particularly year over year, here in the first quarter, I think it's important to keep in mind what I mentioned about there being one fewer shipping week effectively in the first quarter of this year. Obviously, it's hard to know, you know, when you have an additional week, are you getting that at an average rate higher or lower, but just on pure math, missing one out of 13 is 7.7% or roughly 8% of the opportunity. So certainly there was an impact on the year-over-year growth, just given the fact that we had one fewer shipping day. So keep that in mind as you think about the trends and what you're seeing. Go to the next caller, please.

Your next question comes from Akash Tiwari with Jefferies. Please go ahead.

Hey, this is Amy. Thanks so much for taking our question. Just one for Horizon GEA. Would love to get your expectations on the control arm performance and what gives you confidence that TRAS chemo isn't outperforming what was shown with Keynote 811. Thanks so much.

Rob?

Yeah, so as you know, there's been quite a bit of experience in this first-line HER2-positive GEA setting from the original TOGA trial that was the basis for the approval of Herceptin through the Jacob trial and then more recently Keynote 811. And across those studies, the control arm of trastuzumab chemotherapy has performed pretty consistently with a median PFS between, I think, about 6.9 months up to a high of about 8.1 months in the more modern era. So through these three phase three trials, I think it gives us a pretty good idea of what to expect from the control arm. and we planned accordingly. We continue to have confidence in Xanadatimab's ability here. As you know, there have been two Phase IIs published showing very promising results, Xanikimo with a median PFS of 15.2 months. That's the last publication in Xanikimo Tizolizumab with a median PFS of 16.7 months. And at ASCO this year, we will update For the first time, the overall survival data was anti-chemo. Prior to this, the median wasn't estimatable based on the maturity level. We look forward to presenting those data as well.

Your next question comes from Joseph Thome with TD Cowan. Please go ahead.

Good afternoon. Thank you for taking my question. On Dordaviprone, I think Chemerics paused enrollment in the Phase 3 study ahead of the acquisition. So kind of just curious if that has restarted and if you anticipate making any changes to the Phase 3 trial in the first-line patients. And maybe relatedly, obviously a lot of shakeups at the FDA. I guess what kind of data points can you provide to make sure that everything is on track with the upcoming PDUFA day, especially given Chemerics did do a little bit of a 180 on the submission? Thank you. Rob?

Yeah, I'm happy to take those. So with regard to the FDA, so far the review is going exactly as we'd expect. No surprises there and no indication that we would be off of our PDUFA date of August 18th. The first part of your question was related pausing enrollment in the ongoing confirmatory frontline trial. And just to clarify, that was posed only in the U.S. And, you know, there we were anticipating an approval and availability of drug, and therefore, we want to avoid the problem of patients enrolling and then crossing over from the control arm to get through Dabaprom by prescription, which could confound the overall survival results. As you mentioned, While the trial isn't rolling very well, we would have time potentially to make changes to the analysis plan. You know, we haven't announced any of those changes, but certainly we'll look at that carefully to be sure that that trial is well powered to deliver the results not only in a timely fashion, but that would be most informative.

Your next question comes from Gregory Renza. with RBC Capital Markets. Please go ahead.

Hey, good evening, guys. Thanks for taking my question. My question is just on the Oxibates. And as Renee, you were articulating just some effectiveness on the campaign and how those are performing well. I just wanted to give you an opportunity to elaborate a little bit about what you're seeing what the direct impacts are from the campaigns that have led to your reassurance about the contribution and the growth of the IH market. Thanks so much.

Thanks for the question. So we are seeing beneficial response to the campaigns. We're seeing, as we are building in particular the idiopathic hypersomnia market, we are seeing our disease education and continued interactions with physicians helping them to better identify idiopathic hypersomnia. It also helps patients to better understand this condition for which there has not been a lot of disease awareness in the past because without an approved medication, there's not a lot of incentive to actually diagnose someone with idiopathic hypersomnia. So not only have we had good success with the digital and media campaigns that I mentioned, but we've continued to sharpen our execution in the field. We have continued to grow new prescribers. We've had great success with our field nurse educator program. And we've had another, sorry, a number of other initiatives that are proving effective and really give us confidence in the growth If you look at where we ended this quarter, this first quarter of 2025, and compare that to where we were a year ago, stepping out of the first quarter of 2024, looking at the patient ads, we've seen an increase of 5%. And that is in a mature market with competition, which is really great progress. Then with idiopathic hypersomnia, we've had an increase of 39%. looking at the progress over the last 12 months. So, we're really excited about the continued momentum that we have. Certainly, we have seasonality each year in the first quarter, but still executing really well in this area.

Your next question comes from Joel Beattie with Baird. Please go ahead.

Hi. Thanks for taking the question. Can you discuss a little bit more about where it could fit in the treatment algorithm initially upon approval, and then also when could the first results come from the action trial that might affect how it's used? Rob?

Yes, so we expect, based on the submission that we've made, we expect the initial accelerated approval to be in the recurrent setting. The action trial, as you know, is treating in the frontline setting after patients received the bulking surgery and radiation therapy, and that will give us an opportunity to expand to the frontline. We haven't given specific dates on when that would read out, but we have said it's enrolling to plan.

Your next question comes from Amy Fadea with Needham. Please go ahead.

Thanks for taking my question. Can you provide us with an update on JCP 441, where you are with the NT1 study and when we might get an update on that? And then just more broadly, touching upon the comments previously around business development, have your priorities changed or evolved in the last couple of months as we've seen market change and if you could sort of comment on what types of assets whether it's by the therapeutic area or the stage of development you'd be focused on as you think about adding something inorganically thank you i'm just going to remind people try to limit it to one question but on this one maybe rob you could talk about 441 and then phil if you want to jump in on corporate development priorities

Yeah, we have initiated the 441 trial, which I'll remind you is intended to be in a small number, approximately 10 patients with NT1. And we expect to look at those data as they come in, but we haven't given any specific guidance on, you know, when we would share information on those data just as yet.

Yeah, and Tommy on... I'm sorry, the second part of the question. So for corporate development, priorities are unchanged. We continue to look at corporate development as a very important way for us to go ahead and reach more patients over time, create value for shareholders. We finished the first quarter in a really strong financial position with $2.6 billion in cash investments, $430 million in operating cash flow in a quarter. So even after the payment of roughly $890 million net to acquire Chimerix, we're in a really strong position to continue to invest in our future. We do look across the various therapeutic areas that we're currently in, as well as selectively at other rare orphan diseases where we can deploy our capabilities to create value. We do look at both licensing, like we did very successfully with the licensing deal with Zymworks that's brought us, obviously, Zyhera. And then, obviously, for acquisitions like we've done, we've been very successful looking forward to the upcoming PDUFA and then, hopefully, launch right thereafter of Dordaviprone. So we continue to be active in looking at opportunities, see a number of them we think that would make sense for us across our various therapeutic areas. And I would expect to see us continue to be active in this area. I would say on the margin, The uncertainty that's created by some of the tariff and other policy discussions does not change fundamentally what we're looking to do, but probably the margin means that we'll want to take a slightly more conservative capital structure stance, maybe keeping a bit more cash than we might otherwise, and maybe not fully using all of the potential debt capacity that we have, but still able to use a significant portion of that. to advance our corporate development efforts. So I hope that gives you some context. If we can go to the next caller, please.

Your next question comes from Ashwani Verma of UBS. Please go ahead.

Hi. Yeah, thanks for taking my question. I just wanted to clarify, like, so when you, I think you mentioned that one less week of ordering. Is that for a handful of products, or which product is it for, or is it across the business?

Yes, that would have been across our US oncology business and common for the various products there. Renee, anything you want to add?

No, that's correct.

Your next question comes from Moet Banzel with Wells Fargo. Please go ahead.

Thank you for taking my question. I have a question for you, Rob. So, in our conversation with some breast cancer doctors, the interesting takeaway was that it is not a form of confusion that an HER2 would become first-line agent for all the to positive patients, likely part of it is safety and comfort with the Cleopatra regimen. So the question is, do you see a potential for Zanyi to be the first line as well? And what kind of trials you may have to do there? Because Cleopatra is a really long regimen here. Thank you.

Sure. Well, I mean, I would just reinforce our primary strategy. which is to position after in HER2 because of the data we've generated showing activity of ZAN, you know, very promising activity after just about any prior and even multiple different HER2 agents, you know, including standard frontline therapy, which is for septum, progena, and chemo in HER2, TDM1, tucatinib, et cetera. So, positioning it after in HER2, which is currently second line and likely to move to frontline for, I would say, a great majority of patients in this disease setting is really very And there won't be any other HER2 therapies that will have been evaluated in that particular setting. Remember, these patients tend to go on to get multiple lines of therapy. You're right that there would be a few, there would be some patients who may not tolerate an HER2 or would have some preexisting condition that would prevent them from. And I think in those cases, patient who's either progressed on or intolerant to an HER2 could move on to Xanadatumab based on the 303 trial. You know, if and HER2, you know, is ultimately approved in the frontline setting, I do think it will be the great majority of patients who get it, you know, based on the strong efficacy.

Your next question comes from Sean Lalman of Morgan Stanley. Please go ahead.

Hi, this is Mike Riadon for Shawn Laman. Thank you for taking our question. For ZyWave, in narcolepsy, are you able to provide a more granular breakout for patients with mutoxibate versus high sodium switches? And then in IH, how are you thinking about ZyWave's value proposition with potential for a competitive threat there from the mice? Thank you.

Rene?

Yeah, so with respect to the narcolepsy ads, we have seen primarily ads in the quarter coming from new to OxyBait patients. And I think that does speak to what we're now starting to see, which is a bit of an expansion to the market given that this is a more mature product. We've been really pleased. with what we're seeing in terms of both field execution, the appreciation of low sodium to physicians, and also to patients, and that's really resonating. It's clear that HCPs and patients are prioritizing long-term health benefits of low sodium, as well as the dosing flexibility that ZyWave offers. So we do see switching to or shifting over to IH We do see IH as the area where there's the most opportunity to drive growth. With respect to any future potential competition in IH from Lumerize, I would say, again, ZyWave is the only low-sodium option. And we do know from the data that we have been able to generate we know that narcolepsy and IH patients are at increased risk for cardiovascular comorbidities relative to the general population. And so, we do continue to see all high-sodium oxovate patients as potential ZyWave patients. And keep in mind that within our label for ZyWave for idiopathic hypersomnia, there is flexible dosing. That indication is twice nightly or once nightly depending on what the physician and the patient choose to pursue in terms of their therapy. So we feel we're quite well positioned with respect to narcolepsy and idiopathic hypersomnia.

I will also just jump in and point out that, you know, for those of you that saw the court decision today, Given that our IP has been found to be valid, that Avidel has admitted to infringing it, we still don't see, even after today's ruling, a viable path for Avidel to commercialize Bloomerize and IH before the expiration of the relevant patent in 2036. So I totally agree with everything Renee said in terms of potential competitive positioning and differences between the product, but it's There's, you know, there's some room to go before we actually do have competition in IH.

Your next question comes from Gary Nachman with Raymond James. Please go ahead.

Thanks, and good afternoon. So, frizzite here in BTC, understanding it's a small indication, how is the ramp going? How rapid is the penetration? And what's the anecdotal feedback on how the drug is performing? And have there been any challenges with access and how you're helping facilitate that? And then if GEA ends up being positive in first line as a bigger market, would you consider changes to pricing at all? And also how your promotional efforts would change for that indication versus BTC? Thanks.

Yeah, thanks for the question. So we had our first patients treated in December shortly after launch for BTC, and the reception has been quite positive. HCPs are glad to have Zyhera available to treat patients. Just as a reminder, BTC is a very small patient population, 3,000 patients in the U.S. in first line and second line. And therefore, we do expect revenues from this first indication, as we've stated, to be quite modest. In terms of access, we haven't really had any issues. What we're in the process of doing is ensuring we've spent quite a lot of time in these first few months ensuring that we have agreements of the necessary logistics in place community and academic centers to be able to get access to the product rapidly, and certainly the efficacy supporting this approval is something that they're excited to be able to bring to patients. When we look at GEA, we're excited to be able to read out that study in the second half. With that data and with publication of that data, we would intend to go rapidly towards, again, trying to get NCCN guidelines in place similar to what we intend to do relative to Sub-Celta. Of course, we would not promote without having an approval, but having the product on NCCN guidelines will enable use for that indication should physicians choose to do so. I think with respect to pricing, we're in a good position. We typically will comment on pricing when we have a launch slash approval. So stay tuned, but we think given the benefit that we are seeing in efficacy, we'll be in a good position where we are today.

Your next question comes from Charles Duncan with Cantor Fitzgerald. Please go ahead.

On for Charles. Thank you for taking our questions. So you reiterated confidence in Epidiolex reaching blockbuster status in 2025. Can you speak about any catalysts or what market dynamics underpin that expectation? And also, can you talk about any meanings of the U.S. or in off-label usage that could contribute to this trajectory?

Thank you. Yeah, Renee?

Yeah, I didn't hear the full question, but what I understood was wanting to understand the trajectory.

Yeah, I can jump in on the first part, Renee, and just say, you know, our confidence that it remains on track for blockbuster status is in part driven by it's already, you know, it's already at that run rate and has been continuing to grow. as you saw with the 10% first quarter over first quarter growth. Renee, you can comment on where growth can be coming from, but we're very solidly on track.

Yeah, thanks, Bruce. The call had cut out for me. So we are quite confident in where we're going with respect to the future. Epidiolex is a highly differentiated product within the ASM landscape. have a robust body of evidence supporting that both on the seizure side as well as the non-seizure benefits. And that data continues to resonate with physicians and caregivers, in particular on the non-seizure benefits side, cognition, behavior, emotional, and social function. And also, the broad spectrum efficacy and well-characterized safety profile enables physicians to have Epidiolex combined well with other agents, which is particularly important in this area given polypharmacy. While we do not promote off-label, we do see the product used across a number of different epilepsy subtypes across the underlying seizures for which we've shown efficacy. And then in terms of additional growth, we're having great momentum in the adult and long-term care setting. We have a new screening tool that we've put into, that we've launched an additional initiative to help identify LGS. For example, in previously undiagnosed patients in the adult setting, our access has been high quality and continues to improve. And then also with respect to our nurse navigator program, we're seeing strong persistency and seeing that even become stronger with respect to the nurse navigator program helping to guide patients through starting therapy. So all of those elements give us confidence in the overall growth. And of course, the durability we've talked about having settled with our ANDA filers, we think we're in an excellent position there as well.

Your final question comes from Julie with Truist Securities. Please go ahead.

Thanks for squeezing me in. For the Horizon GEA, are you able to comment on the ratio of patients who are PD-1 positives? I mean, is the ratio closer to what we saw in Keynote 811 or closer to your Phase 1, 2, Xanny, plus chemo, plus Tisley study? Thank you.

I don't have that information, and I just would remind you that You know, how you characterize positive depends a little bit on which assay you're using, et cetera. So we are measuring it, and we'll have the ability to look at that, you know, post hoc as needed to support regulatory approval.

That will conclude our question and answer session, and I will now turn the call back over to Chairman and Chief Executive Officer Bruce Kozad for closing remarks.

Thank you, operator. Let me just say with Epidiolex and Zywave growth, some upcoming exciting approvals on the oncology side of our business across three different products and GEA data upcoming, there's a lot to look forward to. I'd just like to close today's call by recognizing our Jazz colleagues for their efforts and thanking our partners and shareholders for their continued confidence and support. Thank you all for joining us today.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.