Jazz Pharmaceuticals plc

Good day, and welcome to the fourth quarter 2021 Jazz Pharmaceuticals earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then one on your touchtone telephone. If anyone should require assistance during the call, please press star then zero to reach an operator. As a reminder, this call may be recorded. I would like to turn the call over to Andrea Flynn, Head of Investor Relations. You may begin.

Thank you, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its fourth quarter and full year 2021 financial results. The slide presentation accompanying this webcast is available on the Investors section of our website. Investors may also refer to the press release we issued earlier today, which is also posted to our website. On the call today are Bruce Kozad, Chairman and Chief Executive Officer, Renee Galah, Executive Vice President and Chief Financial Officer, Dan Swisher, President, and Rob Yannone, Executive Vice President, Global Head of R&D. Kim Sablich, Executive Vice President and General Manager, North America, will join the team for Q&A. On slide two, I'll remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, including expectations related to Vision 2025 and our guidance for 2022, growth potential, and anticipated development and commercialization 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 in our latest SEC disclosure document, which identify 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. Turning to slide three on this webcast, we'll discuss non-GAAP financial measures. Reconciliations of GAAP to non-GAAP financial measures are included in today's press release and in the slide presentation available on the investor section of our website. I'll now turn the call over to Bruce.

Thanks, Andrea. Good afternoon, everyone, and thank you for joining us today. I'll start on slide five. 2021 was a transformative year for Jazz. with strong performance and consistent execution. In the fourth quarter and throughout 2021, we made substantial progress across commercial, R&D, and corporate development, continuing our evolution to a diversified, innovative, global biopharmaceutical company. Beginning with our overall 2021 financial performance, for the first time, we exceeded $3 billion in annual revenue, delivering top-line performance at the upper end of our guidance range, and recorded nearly $1 billion of adjusted net income on a non-GAAP basis. Renee will discuss our financial results in more detail later in the call. Our exceptional top-line results were driven by strong commercial execution across our portfolio. We met our ambitious target of five key launches in 2020 and 2021. Two of those launches, Rileys, and ZyWave Indiopathic Hypersomnia, or IH, are therapies that Jazz advanced from concept to commercialization. Coupled with the addition of Epidiolex to our commercial portfolio through the GW Pharmaceuticals acquisition, we have significantly diversified our revenue and are on track to meet our goal of at least 65% of net product sales in 2022 coming from newly approved or acquired products. On the regulatory side, we secured FDA approval for Rylase for the treatment of ALL and ZyWave NIH in June and August 2021, respectively. We also received orphan drug exclusivity from FDA for ZyWave for narcolepsy in June, with FDA citing the clinical benefits of ZyWave as a lower sodium oxibate therapy compared to Zyrum. Subsequently, we received orphan drug exclusivity for ZyWave NIH. In addition, in January of this year, we submitted the SBLA for Rylase to support an updated dosing regimen in the U.S. In concert with delivering strong commercial results and achieving important regulatory milestones, we continue to advance our R&D pipeline, which now comprises 18 novel candidates being studied in 36 active clinical trials. On the neuroscience side, we initiated two important clinical programs in 2021, beginning Phase II trials for suvacaltamide or JZP385 in essential tremor and for JZP150 in post-traumatic stress disorder. We also initiated the third Phase III nabiximols clinical trial in multiple sclerosis-related spasticity. And as part of our ongoing growth in oncology, we have a robust development effort for Zepzelka, headlined by the initiation of a Phase III trial in collaboration with our partner, Roche, evaluating Zepzelka in combination with Ticentric as maintenance therapy in first-line extensive-stage small cell lung cancer. A noteworthy milestone in 2021 that contributed to our growth was the acquisition of GW Pharmaceuticals. The integration of GW has proceeded exceptionally well, and as I've noted in the past, there is a superb cultural fit between the Jazz and GW teams. The acquisition is proving to be highly complementary to our existing commercial portfolio and has added the industry-leading GW cannabinoid platform to our R&D pipeline. Just as important, we're thrilled that many talented and experienced members of the GW team are in leadership positions across our combined enterprise. These accomplishments, all of which were underpinned by strategic allocation of capital and strong cash flow, have set the stage for an exciting year ahead. We continue to be laser focused on executing our strategy to build a high-value portfolio of differentiated commercial and clinical stage therapies that deliver sustainable growth and enhanced value, At the JPMorgan Healthcare Conference this January, we introduced Vision 2025, which included commercial, pipeline, and operational components. On slide six, we've called out several upcoming value drivers that we believe will enable us to deliver on this vision. For commercial, we are focused on execution across our neuroscience and oncology portfolios, including maintaining the strong momentum of our ZyWave, ZebZelka, and Rylase launches, as well as continuing the growth of Epidiolex in the U.S. and global markets. With respect to our pipeline, we are advancing multiple mid- and late-stage programs and anticipate the first clinical data from our DeMiximals program in the first half of this year. And we will continue to focus on operational excellence, including advancing our goal of of achieving less than three and a half times net leverage by the end of 2022. Turning to slide seven, Vision 2025 will frame our business for the next several years as we strive to bring new and innovative therapies to patients in critical need. As I noted, there are three core components to our vision, commercial, pipeline, and operational excellence. First, commercial. After achieving over $3 billion in revenue in 2021, we're positioned to grow revenue to $5 billion in 2025. We expect to generate revenue from current products as well as realized contributions from pipeline candidates that we expect to advance to market and products that we may acquire through strategic corporate development transactions. The $5 billion also includes anticipated organic sales growth of existing products in our commercial portfolio, as well as indication and geographic expansion. Second, our pipeline. In 2021, our R&D organization advanced key programs addressing significant patient needs in neuroscience and oncology. With a solid foundation in place, we believe we will deliver at least five novel product approvals in areas of critical unmet need and significant market opportunity by the end of the decade. In addition to legacy compounds in our pipeline, we're excited about promising assets emerging from the GW cannabinoid platform, and we are continuing to evaluate and pursue novel neuroscience and oncology programs through potential corporate development opportunities. Finally, operational excellence. Our 2021 adjusted operating margin was 43%, and we plan to improve our adjusted operating margin by five percentage points from 2021 to 2025, delivering more of our top line through to the bottom line. Our track record of strong execution and accomplishments gives us confidence in our ability to achieve Vision 2025. And our 2022 guidance, which Renee will cover shortly, is in line with this vision. I'll now turn the call over to Dan for an overview of our commercial performance after which Rob will share an update on progress of our R&D programs. Renee will provide a financial overview, and then we'll open the call to Q&A. Dan?

Thanks, Bruce. Well, I'm excited to share the continued progress across our commercial portfolio. So starting with neuroscience, we continue to build momentum in our Oxibate franchise, as highlighted on slide 9. This includes market-leading adoption of Zywave and Narcolepsy, and the commercial launch of ZyWave and IH in November 2021, enabling us to deliver this important therapy to another patient population with significant need. Average active OxyVe patients increased to approximately 16,200 in the fourth quarter, an approximate 6% increase compared to the same period last year. With the introduction of ZyWave and narcolepsy in late 2020, We meaningfully advance patient care with a lower sodium oxibate product and are pleased with its exceptional adoption. We remain focused on educating physicians and narcolepsy patients across a lifelong burden of high sodium intake in this patient population who live with an increased risk of cardiovascular comorbidities. The benefits of lowering sodium intake are resonating strongly with patients and prescribers and we exited the year with approximately 6,650 active ZyWave patients with narcolepsy. Our commercial launch of ZyWave for adults with IH began in November 1, 2021, and we're excited to bring the first and only FDA-approved IH treatment to patients. We've been encouraged by the positive early launch momentum and feedback we've received from prescribers and the IH community. Based on the reports from the field, prescribers have been impressed with the profile of this medicine. Healthcare providers are excited to have a treatment option that addresses IH and not just its symptoms. Importantly, prescribers have also been pleased with the initial coverage and access of ZyWave for their IH patients. ZyWave and Narcolepsy currently has approximately 90% of commercial lives coverage. We anticipate that ZyWave and IH will have similar coverage to narcolepsy and expect this to occur in a similar or faster timeframe. While payers continue to update their policies to include IH, we're encouraged to see a higher percentage of commercial claims approved than originally anticipated during this phase of launch. Exiting the quarter, there were approximately 250 active ZyWave patients with IH. While still early in the IH launch, we're pleased with the positive feedback from both healthcare professionals and patients. Unlike the recent launch in narcolepsy, where there was a significant number of OxyBait-experienced patients transitioning over to ZyWave, we expect that the cadence of new patient starts in IH to be more in line with a rare disease launch where there have been previously no approved therapies. IH represents a significant growth driver for ZyWave. Our initial focus is on driving awareness and adoption among existing OxyBait prescribers and the approximately 37,000 people diagnosed with IH that are actively seeking healthcare. Expanding the market beyond diagnosed IH patients who are actively seeking treatment provides us with a longer-term growth opportunity as we estimate that the total diagnosed IH patient population is likely close to the diagnosed narcolepsy market, which is approximately 70,000 to 80,000 patients. Turning to slide 10, in Epidiolex, we saw 35 percent revenue growth in the fourth quarter compared to the same period in 2020 on a pro forma basis. In the fourth quarter, Epidiolex net product sales benefited from a temporary increase in specialty pharmacy inventory levels. Excluding this inventory effect, we were pleased that revenue increased 10% on a sequential basis in fourth quarter versus third quarter 2021, with growth in both the US and international markets. 2021 was the first full year of the COVID-19 pandemic. which has changed how our industry engages with customers and how HCPs engage with their patients. Despite the challenges of this new environment, we were able to achieve robust full-year revenue growth of 29% compared to 2020 on a pro forma basis. In the U.S., where we have seen access to customers impacted by surges of COVID-19, our non-personal promotion continues to have a high level of engagement. We've adjusted our commercial initiatives to adapt to a new normal that includes more hybrid and virtual engagement with healthcare providers. In addition to strong revenue growth, we continue to add new prescribers and grow Epidiolex's active prescriber base. We expect that as new prescribers gain experience and understanding of the therapeutic benefits of Epidiolex, and broaden its use within their practices, this will contribute to continued adoption. As underlying growth drivers continue to build momentum, we remain confident in this medicine's blockbuster potential. I also want to highlight that we continue to strengthen the IP durability of Epidiolex. In December, a new patent was issued covering the composition of the botanically-derived CBD preparation used in Epidiolex and the treatment of indicated disorders using that CBD preparation. This pattern, now listed in the US FDA Orange Book, extends through 2039. We are also continuing to make significant progress in Europe. During the third quarter, we successfully launched Epidiolex in Italy, Spain, and Switzerland, with our most recent launch in Ireland in January of this year. In addition, we expect to launch in France later this year, pending final pricing, reimbursement, and access discussions, at which point Epidiolex would be launched and reimbursed in all five major European markets. Overall, we continue to be excited about the future growth potential of Epidiolex as a significant contributor to both our top line in 2022 and Vision 2025. Even as we navigate the challenges of the pandemic, we're encouraged by the steady growth and positive customer feedback for the brand. We remain confident we can achieve Blockbuster's status as the standard of care in treatment-resistant epilepsies. The increasing use of Epidiolex earlier in the treatment algorithm and positive experiences in real-world settings are based on its unique mechanism of action, efficacy, and safety profile, and ability to be combined with other therapies. So now moving to oncology and starting with ZebZelka on slide 11, we are continuing to see strong demand for ZebZelka with net revenue for the fourth quarter of 64.8 million, 21% growth compared to the same period in 2020. We have established ZebZelka as the treatment of choice in second line small cell lung cancer and have a robust development plan in place to evaluate additional patients who can benefit from this therapy, which Rob will cover in more depth. Within our current indication of second-line small cell lung cancer, we see opportunities for growth, with Zefzelka continuing to displace topotecan and immuno-oncology products being used as monotherapy. We also see potential among patients being re-challenged with platinum-based chemotherapies or receiving other chemotherapy regimens. Findings from the pivotal ZEBZELCA trial support use in this setting, and our ongoing Phase IV trial will provide additional clinical data on ZEBZELCA in this patient population. Turning to slide 12, we launched Rylase, our recombinant berwinia asparaginase therapy, in July 2021. Fourth quarter net product sales, which was the first full quarter on the market, were $65 million. we continue to receive encouraging feedback from customers with commentary on the ease of both ordering and dose preparation, as well as our suite of support services. As we discussed previously, there was a notable uptick in Rylase orders beginning in September as remaining supply of Erwin Ace was depleted. Fourth quarter 21 revenues showed strong performance for Rylase, reflecting increased brand awareness among customers and its position in the market as the only therapy available to patients in the U.S. who have a hypersensitivity reaction to E. coli-derived asparaginase. We also saw an initial buildup of inventory, which is typical for new products. We're very pleased with the launch to date, expect a strong performance in 2022, and we're excited to evolve our launch messaging based on the potential label updates to Monday, Wednesday, Friday dosing, which Rob will cover in more detail. So in summary, our team delivered strong results in 2021, driven by successful launches and execution across our commercial portfolio. Now I'll turn the call over to Rob to discuss our R&D successes in 2021, near-term pipeline opportunities, and anticipated milestones for 2022. Rob? Thanks, Dan.

On slide 14, we've detailed the mid and late stage clinical programs in our pipeline. On today's call, I'm going to recap a few key accomplishments in 2021 and then focus on 2022 milestones. It was a very productive year for our R&D organization. We received two FDA approvals for Rylase in ALL and ZyWave in IH, both of which we brought from concept to approval. We initiated multiple clinical trials, including Phase II trials for suvacaltamide, or JZP385, an essential tremor, and for JZP150 for post-traumatic stress disorder. Both of these compounds were acquired through corporate development efforts, and our team is excited to build upon the existing clinical data for these promising therapies. In addition, the acquisition of GW Pharmaceuticals has added a number of clinical and preclinical programs to our pipeline, the industry-leading GW cannabinoid platform, and talented professionals with deep expertise in drug development in the cannabinoid space. The integration between Jazz and GW R&D organizations has progressed even better than we could have predicted, and our combined group has many exciting program milestones ahead of us in 2022 and beyond. We are also advancing a robust development effort for ZipCelca. Three separate trials were initiated in 2021, a phase three trial supported by Jazz and our partner Roche to evaluate ZipCelca in combination with Dicentric in first line extensive stage small cell lung cancer, a confirmatory phase three trial in second line small cell lung cancer being run by our partner PharmaMar, and our own post-marketing observational trial and second-line small cell lung cancer that Dan noted earlier. In addition, earlier this year, we have initiated our Phase II BASCA trial, evaluating Cipselka as monotherapy in several solid tumor types. One area of particular focus for our team is the treatment of movement disorders, where there is a significant unmet need and potential to deliver new therapies. Our Nebiximol programs now has three active trials focused on multiple sclerosis-related spasticity. Spasticity, which occurs in up to 84% of MS patients, is a major issue with limited treatment options. Despite the critical need, no new oral antispasticity medicines have been approved in the US in the last 20 years. We expect data from our first trial in the first half of 2022. This trial, which is smaller and shorter relative to two others, is assessing change in muscle tone using elements of the modified Ashworth scale. If results from this trial are positive, there is the potential for a regulatory submission in the US later this year. We expect data from two additional trials, which have larger sample sizes, to read out in late 2022 and early 2023. As Dan mentioned earlier, we also have submitted an SBLA for Rylase to update our label to an intramuscular Monday, Wednesday, Friday dosing schedule, with patients receiving 25 milligrams per meter squared on Monday and Wednesday and 50 milligrams per meter squared on Friday. This schedule, which is more in line with current clinical practice to avoid weekend dosing, allows patients to maintain a clinically meaningful level of serum asparaginase activity through the entire duration of treatment. Currently, the labeled dosing schedule is every 48 hours to 25 milligrams per meter squared. Similar to the review of our original BLA, the S-BLA will be reviewed under the real-time oncology review process. We're also planning another regulatory application to FDA to support intravenous administration later this year, as well as an application in Europe for both IV and IM administration in mid-2022. Now I will pass the call off to Renee for a financial update. Renee?

Thanks, Rob. I'll begin on slide 16. We have made significant strides in transforming our business throughout 2021, and we finished the year with positive momentum entering 2022. As Bruce noted, we achieved the top end of our 2021 total revenue guidance, as well as our neuroscience and oncology guidance. Our total 2021 revenues of $3.1 billion represented growth of 31% compared to 2020. This included neuroscience and oncology revenues of $2.3 billion and $734 million, respectively, with both franchises delivering more than 30% growth compared to 2020. Turning to operating expense, our 2021 adjusted SG&A expense was 36% of total revenues, which reflects a three percentage point increase from 2020, driven by strategic investments across multiple product launches. 2021 adjusted R&D expense increased to 15% of revenues, reflecting the initiation of multiple mid- and late-stage clinical trials and the addition of the GW pipeline and cannabinoid platform. Through our strategic investments in commercial launches, pipeline expansion, and transformative M&A, we are demonstrating our ability to generate significant revenue while remaining disciplined in our approach to capital allocation. This focus on both the top and bottom line drove nearly a billion dollars in full-year adjusted net income with ANI and adjusted EPS growth of 41 and 30% respectively compared to 2020. Turning to slide 17, our strong performance in 2021 positions us for continued growth in 2022. On the top line, our total revenue guidance range for 2022 is $3.46 to $3.66 billion. This represents approximately 15% year over year growth at the midpoint, driven by both our neuroscience and oncology franchises. For neuroscience, our net sales guidance is $2.56 to $2.76 billion, representing growth of 14% at the midpoint compared to 2021. Our guidance reflects conviction in the opportunity for further Epidiolex growth and confidence in the durability of our OxyV8 franchise. Our oncology net guidance is $840 to $920 million, representing growth of 20% at the midpoint compared to 2021. Our oncology franchise continues to grow towards being a billion-dollar-plus business aligned to our Vision 2025, and we're excited to have rapidly established Sepsilca as the second-line small-cell lung cancer treatment of choice and by the significant demand for Rylase, both of which demonstrate our commercial execution capabilities. Turning to OPEX, on a non-GAAP basis, Our SG&A guidance is $1.12 to $1.19 billion, or approximately 32% of revenue at our midpoints. And our R&D guidance is $560 to $600 million, approximately 16% of revenue at our midpoints. Our expense guidance reflects continued focus on driving sustainable revenue growth, advancing our pipeline, and optimizing our operations. I would note our guidance does not include any new corporate or business development transactions. However, we do expect to be active in this area across 2022. We are projecting 2022 non-GAAP adjusted net income of $1.13 to $1.2 billion, which represents a 17% increase at the midpoint compared to 2021. reflecting our continued focus on delivering improved bottom line growth and our commitment to operational excellence. With multiple important product launches underway and gaining momentum, we feel confident in our ability to effectively scale our operations and improve our adjusted operating margin driving towards our Vision 2025 target of achieving a five percentage point improvement from 2021 to 2025. I'd like to note several important assumptions underlying our guidance. First, with respect to our neuroscience guidance and Xyrem authorized generics, the first AG launch is slated for January 1st, 2023, or earlier under certain circumstances. Given the continued strong launch of ZYWave, which has the direct effect of reducing ZYREM sales, our guidance assumes the potential for AG entry in the second half of 2022. We do not anticipate AG entry before the second half of 2022. Even accounting for AG entry and other future potential OXYV8 competition, We continue to expect CyWave to be the OxyBait therapy of choice in 2023. As a reminder, HICMA is the first AG allowed onto the market, and they are volume unlimited. The following HICMA royalty components are relevant to our neuroscience guidance. During the first six months of the AG term, the AG royalty rate paid to Jazz is tiered and wide-ranging. starting at 10% and going to 90% based on the total volume of AG units sold as a percentage of total oxovate units, with that total volume referring to Zywave, Zyrem, and Zyrem AGs. During the second six-month period, the royalty rate to Jazz would become fixed at a rate where we and HCMA each have substantial economics regardless of the AG volume. Should the AG term be extended beyond one year, the HCMA royalty rate paid to JAWS will then increase considerably to a higher fixed rate in the high double digits for the remaining four years of the AG period. With respect to our EPS guidance, It is important to note that beginning in 2022, under the new accounting standard for convertible debt, we will include the full approximately 9 million shares underlying our convertible debt instruments as part of our share count for calculating EPS. This accounting change results in dilution of approximately $2 per share in our 2022 adjusted EPS guidance. Adjusting our 2021 results for this accounting change implies 2022 growth of 14% in our non-GAAP adjusted EPS at the midpoint. Turning to slide 18, our strong cash flow and disciplined capital allocation are enabling us to strategically invest in our business to drive sustainable growth and enhanced value. as well as deliver on our near-term financial objectives. We have significantly advanced our revenue diversification with 59% of net product sales in the fourth quarter generated from products launched or acquired since 2019. And we are on track to meet our diversification target of 65% in 2022. In just eight months following the close of the GW acquisition, we reduced our non-GAAP net leverage ratio by nearly a full turn to approximately 4.1 times at the end of 2021, keeping us on track to achieve our stated target of being below 3.5 times by the end of this year. In summary, we delivered strong financial results in 2021 and expect significant growth on the top and bottom line in 2022, positioning us well to deliver our Vision 2025 targets. I'd now like to turn the call back to Bruce.

Thanks, Renee. I'll conclude our prepared remarks on slide 20. 2021 was a year of transformation and execution. We achieved double-digit revenue growth, expanded our pipeline and expertise, and executed key transactions to grow our business and capabilities, most notably the acquisition of GW Pharmaceuticals. And with FDA approval of Rylase and Zywave for IH, we achieved our ambitious goal of five key launches in two years. Our commercial teams demonstrated strong performance on the launches of Zywave for narcolepsy and Zebzelka, and we expect that successful execution will continue with the launches of Rylase and Zywave for IH. The addition of Epidiolex to our commercial portfolio provides us with the opportunity to deliver an important therapy to patients with refractory epilepsies. Our R&D organization continues to deliver and is expanding its capabilities. Trials for multiple important products are underway, and we are planning to initiate additional mid- and late-stage clinical trials over the next 12 months. Looking forward, we have a clear roadmap with Vision 2025. We are optimistic about the year ahead, and we're focused on delivering across the business. We're excited about our future, and I look forward to updating you on our progress as we advance. That concludes our prepared remarks. I'd now like to turn the call over to the operator to open the line for Q&A.

If you'd like to ask a question, please press star then 1. If your question hasn't answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Ken Cacciatore with Cohen & Company. Your line is open.

Hey, Bruce and team. Congratulations on all the progress. I just want to ask about ZyWave and IH. Our recent clinical and survey work indicates that they believe ZyWave and IH could be as big as Zyrone and narcolepsy. So wondering if you could share even a little bit more of your internal data And your expectations, I know you categorized the markets as the same size, but wondering kind of your hopes for the eventual potential for ZyWave. And then, Dan, you mentioned that ZyWave NIH could look like an orphan launch. Can you put a little bit more granularity in that, if you could, as we try to frame out the next few years? Thanks so much.

Yeah, Ken, thanks for the questions. And maybe I'll just start and remind people that, There are a couple similarities as we think about ZyWave for narcolepsy and ZyWave for idiopathic hypersomnia. The first is to remember that both of these are really debilitating sleep disorders. These are very life-altering conditions, high level of disability, and patients are really motivated to find effective treatments that reduce their symptoms and improve their ability to function. So need is high in both cases. The second thing I'd remind you in terms of a similarity is we've seen excellent efficacy of the agent in both these conditions. Our phase three data were very strong in terms of the benefit provided to patients. So, you know, we start with those similarities. As for the specific size of the opportunity in front of us and where we get that data, maybe I'll ask Kim to comment on that. Kim?

Sure, yeah, so I'll start by saying that, you know, since the launch that began back in November, we're very encouraged by the positive feedback from our prescribers and the IH community at large, and we really are seeing momentum continuing to build, you know, based on reports from the field. Prescribers have been very impressed with the profile of the medicine, especially excited to have a treatment option with a positive and compelling clinical trial results. that address, as Dan said, the full IH condition and not just one or two of its symptoms. In terms of the opportunity, we've been communicating that we are at the outset focusing our launch on our existing sleep call universe of approximately 30,007 adult patients who have been diagnosed with IH and are actively seeking healthcare. But longer term, we do estimate that based on claims data that the total diagnosed IH patient population is likely to be closer to the size of the diagnosed narcolepsy market, which is about 70,000 to 80,000 patients. So this approval for us is a significant milestone for Jazz. As our OxyBait franchise continues to be a pillar of Jazz's value, we are feeling already that we're starting to see successful execution of a market-leading launch in xylem narcolepsy and that we're going to continue to build on it here with brand recognition as we launch IH in the marketplace throughout the rest of this year.

Dan? And Ken, this is, yes, sorry, Bruce. Yeah, Ken, just to go on the Orkland side, it's Yeah, it's kind of similar to Xyrem coming into narcolepsy. We're building a new market. It's the first and only approved therapy in NIH. And so while the patients are diagnosed, the cadence is to get them familiar with ZyWave, get them into the REM system, dose them up to an efficacious dose. So there's not this pool of existing OxyBait-experienced patients that we can immediately convert over. So You know, we're encouraged by the high level of awareness, as Kim is saying, and the experiences we're seeing to date. And, you know, look forward to build on that cadence in coming quarters.

Thanks so much.

Our next question comes from Jessica Five with JP Morgan. Your line is open.

Hey, guys. Good afternoon. Thanks for taking my question. It looks like Riley has came in well above our expectation this quarter. How should we think about the trajectory of that product off of the 4Q run rate?

Yeah, Jess, thanks for the question. You know, we were really pleased with how Riley's performed in its first full calendar year, full calendar quarter on the market and, you know, sort of made good on our thesis that the docs who treat these pediatric ALL patients were, you know, desperate to have a reliable treatment option that would always be there when they ordered it. So maybe I can let Kim comment a little bit on the early launch trajectory and our thoughts on the fourth quarter results.

Sure. So 2021 revenues, I'll say, reflect both the strong demand that we saw for Rileys in the marketplace as well as some initial inventory build as part of the launch, which is, you know, typical for new products. But we believe our strong performance really reflects increased brand awareness among our customers and appreciation for the strong product profile and really recognition that Rylase is the only therapy available following the depletion of Erwin A's supply. You know, feedback from clinicians has been quite positive and revolves around both the high quality and reliable supply of Rylase. And we've received, you know, positive reports on the ease of ordering and dose preparation for Rylades. So overall, we're very pleased with the launch to date. And, you know, I'll say that our commercial strategy does account for and is prepared, you know, for a competitive market. But overall, we believe Rylades represents a clinically significant advance as the only recombinant erwinia asparaginase manufactured product that maintains a clinically meaningful level of asparaginase activity throughout through the entire duration of treatment, and we think customers are really starting to recognize and appreciate that.

Yeah, Rob, you just might want to comment on where we're going, too, because we're not done with our strategy on Rylase.

Yeah, happy to, Bruce. So as you know, our indication now, which was based on an ongoing trial, is for every 48 hours of Rylase. And so we also evaluated – regimen that allows for Monday, Wednesday, Friday IM dosing, where we give twice as much on Friday to ensure optimal coverage through that three-day weekend with the 50 milligrams per meter squared on a Friday. We've submitted that as an SPLA to the FDA, and we were granted real-time oncology review, which is underway. We'll follow that with... IV data as a supplement in the U.S., but also in Europe and with IM and IV as well.

Our next question comes from Akash Tiwari with Jefferies. Your line is open.

Hey, guys. If we assume that Epidiolex contributes the same percent of sales for your neurofranchise as it did in 2022 as it did in 2021, We get implied sales of about $700 million or only about 5% growth year-over-year from a pro-former perspective. That said, for you to hit your 2025 guidance, it looks like Nero needs to grow at an 11% CAGR. So, can you comment on what Epidiolex growth looks like post-2022 and what would drive an inflection in Epidiolex growth long-term? Additionally, can you comment if GW ended up being accretive in 2022 as previously guided? Thank you.

Yeah, so let me start with the first piece of that, and then, Renee, maybe you can jump in on EPS accretion. You know, we were really pleased with how Epidiolex performed in the fourth quarter, you know, up even factoring out the higher inventories at the pharmacy level, up 10% sequentially fourth quarter over third quarter, and, you know, looking at annual growth on a pro-form basis as if we had reported a full year of Epidiolex sales still up So we're excited about Epidiolex's continued growth, both in the U.S. market, but remember we're also continuing to roll it out in more markets ex-U.S. And even where we have rolled it out, we're still early in that launch process with excellent pricing and reimbursement. So, you know, we haven't given a specific breakdown yet. further breakdown of what we expect in each of the upcoming years, but we see a substantial continued growth opportunity with Epidiolex. Renee?

Yeah, thanks, Bruce. So, yes, we did state that we expected the GW transaction to be accretive in the first full calendar year, so 2022, and substantially accretive thereafter. We do, with our 2022 guidance continue to expect the GW transaction to be accretive in 2022. I'll also note, however, as I stated in the prepared remarks, that we do have an accounting change that has the impact of increasing our underlying shares used in EPS in 2022 by approximately 9 million shares. And that's the shares that are underpinning our convertibles, as I explained in the call.

Our next question comes from Mark Goodman with SVB Lyric. Your line is open.

Yeah. Bruce, can you talk about this new Epidiolex patent, how you think we should view this patent? And then just A follow-up on the Riley's question, should we be thinking that this is the new run rate? You said that there was some inventory build in the quarter. Can you help us understand how much inventory was in there so we can understand what a real kind of underlying demand quarter was and how we should think about the run rate there? Thanks.

Yeah, Mark, thanks for the question. On the patent, this is a patent on composition of botanically derived CBD and its use in treating certain disorders, meaning those that are in our label and has a different expiration date from prior patents listed in the Orange Book, this one going out to 2039. I'll remind you, this is part of a significant IP estate established over time that we believe is relevant to thinking about the durability of of Epidiolex. So very pleased that that patent issued at the tail end of 2021 and was included in the Orange Book earlier this year. So, you know, one more piece of the puzzle around why we're confident that Epidiolex is a durable asset. And then on Rileys, you know, I'll just say that we don't really know what the true run rate for this erwinia-derived asparaginase can be, because we've always been supply-constrained in the past, right? Before the launch of Rylase, we did not have access to stable supply of the agent, and clinicians in some cases adjusted their practice to try to minimize use or save available product for patients most in need. Ideal use of the product would be at a higher level. And, you know, people are just adjusting to the fact that Riley's is now available, that it's a more modern manufactured product with high quality, with, you know, substantial supply available. I'm not surprised to see that there's, you know, some buildup as people want to stock Riley's and have it immediately available. That's a luxury they've not had in the past couple of years. But we're also excited to expand use over time now as people get used to the fact that they can use it in all appropriate patients rather than trying to delay use by premedication or other means. And then, you know, Rob talked about obviously trying to get to more ideal dosing with Monday, Wednesday, Friday, giving an IV option as well, and then also submitting in Europe. So we go back to having more of a worldwide product, which is just today a U.S. opportunity for us. So, you know, lots of progress ahead of us. Could not be more pleased with the initial response, but we just don't have a basis mark for a more accurate view of what that run rate will be.

Our next question comes from Jeff Hong with Morgan Stanley. Your line is open. Our next question comes from Jeff Hong with Morgan Stanley. Your line is open. If your telephone is muted, please unmute. Our next question comes from Jason Gerberry with Bank of America. Your line is open.

Hey, guys. Thanks for taking my questions. Bruce, just a request, if you could put that HICMA settlement structure in a slide in future earnings calls, that would be great, just so we have the schematic updated. So my questions are, is Oxibate growing in 2022? And then, you know, on Epidiolex, this IP update, I guess your thoughts on whether we'll get a patent challenge this year, just in terms of ear to the ground, whether someone has the capability of filing. And my understanding, is this the patent that includes compositions with trace amounts of THC, which showed in monkeys, I think, a benefit versus synthetic or synthetic cannabidiol? I believe that that might have some synergism with the FDA guidance requirements for generic. Thanks.

Yeah, so Jason, thanks for the suggestion on the royalty structure. On Oxivate, you know, we're continuing to grow Oxivate use. We see it in narcolepsy. Obviously, IH is brand new, just weeks into that launch in terms of our fourth quarter results. So we do expect substantial growth during the year. You know, as we said in our guidance, we've made room in our guidance for an assumed second half launch of an authorized generic. And while we do have economics in that, we don't have 100% economics in that as we do the current Xyrem products. So, you know, it's growth in the whole market, but not with complete revenue pull through to Jazz. And so that's what you're seeing in how we think about that going forward. In terms of Epidiolex, I think we gave the patent number. If we didn't, we can give it. So you can look up that patent and see everything that's included there. But we do believe there's relevance to the entire composition of that product, which is largely but not completely cannabidiol. And in terms of potential challenge, you know, there's the opportunity for people to step in and submit as early as later this year. Whether that will happen, we don't know. It could. But, of course, again, we feel confident that we've got good protection of that product.

Okay. Thank you.

Our next question comes from Amy Sajo with Needham. Your line is open.

Hi, good afternoon. Thanks for taking my question. I had one main and one follow-up. Just with regards to Zyvae, the pathokypersomia, we saw about 250 patients on that indication in the fourth quarter. Is that a precedent for the type of cadence you expect in terms of new patient ads in the upcoming quarters? How should we think about that? And then secondly, just with regards to Riley's, can you give us some color on whether you saw utilization beyond pediatrics into, you know, teenagers or young adults? Thank you.

Yeah, so on ZyWave IH, I'll just remind you we're super early in that launch, right? This launch happened just in November. There's never been a drug marketed in idiopathic hypersomnia. So for us to predict exactly what the cadence of new patient ads quarter by quarter will be after only a couple months is probably a little bit premature. Again, we're super excited about the size of the opportunity, the effectiveness of the drug, the early reaction we're hearing, the ability to get the drug paid for, which has been excellent, the fact that we're calling on largely the same prescribers for narcolepsy and idiopathic hypersomnia. So we've got our work to do to continue to educate physicians and patients about about the availability of this new and effective treatment, but too early to be predicting, you know, a particular ramp. In terms of RILAs and utilization, you know, beyond pediatric, let me ask Kim if she has any information she'd like to share there.

No, we don't have any data specifically, you know, by age or patient type, you know, just really the overall positive feedback in the marketplace. And, you know, the notion that we are seeing some customers start to utilize second line asparaginase and go to Rylase faster than they had when the market was supply constrained.

Yeah, and I'll just remind people that one of the great things about the approval of Rylase is we can get back to promoting the appropriate use of this product, which in our mind certainly includes all the pediatric patients who are experiencing a hypersensitivity response to E. coli-derived asparaginase, but also include adolescent and young adult patients as well. We turned off our promotional efforts for several years because we didn't believe it would be ethical to try to create demand that we couldn't supply. So we have that opportunity now to go out and remind people of the data that you see when you do use an asparaginates containing regimen, kind of a pediatric-inspired regimen for the AYA patients. We can also, you know, make sure people understand silent inactivation where you're creating an antibody response that may be inactivating the very enzyme you're counting on for efficacy. And then over time, you know, as we pursue an ex-U.S. registration strategy, again, to broaden into markets where Irwinase was never commercialized because of lack of adequate supply. So we really do believe there's an opportunity going forward to increase that utilization, but as Kim says, we don't have specific data on what we saw in the fourth quarter.

Our next question comes from Ronnie Gow with Bernstein. Your line is open.

Good morning, good afternoon. Thank you for taking my question. Two if I don't mind. First, speaking up with that 250 initial patient on idiopathic hypostomnia, I wanted you to share with us kind of like a couple of numbers around that. First, how many of those 250 were actually in the clinical trial program? And on the other hand, given how long it takes for patients to get on the drug, roughly how many patients have you had at the end of the year that in the pipeline of trying to get those patients on the drug, just so we could get a better feel for the early adoption. And separately, oxibid and the pedal explosive price increases in the end of the year, kind of what percentage of that price increase do you expect to realize as a net, given the rebate structures? Thank you.

Ronnie, I was co-processing. Remind me which product you were talking about at the end of that question with price increase?

Oxibid of Epidiolex?

Yeah. Okay. So on the first, you know, somebody from the team jumped in. If we know how many patients came out of the clinical trial, I'm not sure I've heard that that was a significant contributor to our early adoption. We're not going to give, you know, more data today. Ronnie, than we've already given in terms of patients on drug at the end of the year. You know, we sometimes have patients starting the process of enrolling in the REMS. You know, we don't sort of count those as patients until we know they actually get a shipment of drug. Not everyone that starts the process for the REMS ends up getting a shipment of drugs, so not sure that would be accurate information. And on realized price increase, you know, our gross price increase does not flow all the way down in the net sales given that we've contracted particularly in recent years around Oxibate, but we do receive some bottom line benefit. I think historically we've said it's a meaningful percentage, but, you know, certainly don't assume that we realize all of the gross price increase.

Our next question comes from Balaji Prasad with Barclays. Your line is open.

All right, thank you, and congratulations. A couple of questions for me. Firstly, on Epidiolex, you had called out the challenges with the patient visits in the previous quarter. Can you give an update on current clinic dynamics as to what you're seeing with respect to visits in Q1, Q2 until now? And secondly, on Epidiolex itself, there seems to be a decision from the Texas court with the Canopy versus GW litigation and the court has tossed Canopy's litigation. So does this settle all existing legal challenges or is there anything else we're not aware of? Thanks.

Dan, you want to talk about what we're seeing in terms of visits on the pediatric epilepsy side?

Yeah, I don't have the exact numbers, and there's definitely been some continued impact on, well, definitely our customer engagement side of things, but also certain offices, as any of us saw with Omicron, you know, folks were getting infected and were out of service and the offices were temporarily closed even in locations where they typically have been open. I think the good news is it does seem to be it peaks early and comes down rapidly. And so our expectation for the rest of the year is fairly optimistic and that patients will be flowing back into the offices at a more normal cadence. I think the one exception is, you know, again, the vaccination rates for children under five. And, you know, with our therapy, we have a number of patients who are under five. You know, currently the vaccines are not available. And for those that are between five and 11, they're getting vaccinated, but it's still at a slower percentage than or at a lower percentage than the regular population. But again, the trends are going in the right direction.

And then on the litigation side, we were pleased with where the court came out on the final judgment in the litigation with Canopy. They do have the right to appeal that, but we're certainly pleased with where we stand. And I'm not sure if there's some other litigation you're particularly interested in, but we have had other litigation. It's not been something we've been significantly concerned about. And that remains the case.

Our next question comes from Annabelle Samimi with Stifel. Your line is open.

Hi. Thanks for taking my question. Just going back to ethics dialects and hoping to get a little bit more color there. So, obviously, custom win this quarter, 10%, I guess, excluding the inventory. And I know that you mentioned that there's still some COVID headwind, but can you maybe talk about where you're seeing the most penetration? Is it in primarily the new indications? Is it new patients? Or is it persistence of treatment? We have heard from KOLs that the persistence is not as high. So can you tell us what work you're doing there in terms of that persistence as well as where the new patients are coming from? Thanks.

Yeah, Annabelle, that's the new information to me. We continue to be exceptionally pleased with what we're seeing in terms of persistence, and we think it's one of the hallmarks of this drug when we talk to KOLs about how they use it, remembering that most of these patients are going to be treated with multiple agents in combination. And one of the things we've noted before and we believe still remains the case is that you'll often see epidiolex added into a treatment regimen and that if they want to sub anything out later as they add new agents, they tend to hang on to the epidiolex. At the AES meeting in Chicago in early December, there was data presented that really went out to multiple years of continued and in some cases increasing efficacy over time of the agents. So I'd be surprised to hear data that goes in the other direction. Kim or Dan, does one of you want to jump in on where we're seeing growth in terms of indications?

Yeah, sure. I'll basically say that the growth, we believe, is coming from everywhere. We're not sharing specific penetration numbers, but we do continue to see room for growth across all of our indications, particularly see the greatest growth opportunity in the two largest indications, LGS and TSC, which is still early in the launch phase. And this is a well-tolerated treatment with high persistency, as Bruce said. It can be added, you know, in a polypharmacy setting. It's important to remember that on average, you know, treatment-resistant patients are on three anti-seizure medications. So, you know, overall we are seeing that our customer base is getting more and more comfortable with Epidiolex, and as they're doing so and getting experience with it, They're moving it up earlier in the treatment regimen, and we're pleased to see that that prescriber base continues to grow, and those new prescribers, again, will start to gain more comfort with the product and use it more broadly and earlier. So, you know, overall, we remain very confident that we can achieve blockbuster status and really become a standard of care in treatment-resistant epilepsies.

Yeah, thanks, Kim. And just as a reminder, outside the U.S., we're earlier in sort of the launch cycle, but importantly in the second half, we had additional launches going on in Spain, Italy, Switzerland, Ireland this quarter, and continued penetration now in four of the five major countries with France anticipated in 2022. And with the value proposition that is in front of epidiolex in those markets. We've achieved greater than 70% of the U.S. WAC in those reimbursed markets. So that's also, you know, adding growth and tailwind as we go into 22.

Rob, anything you'd like to add in terms of how treaters are looking at this drug based on what you're hearing?

You referred to AES, Bruce, and certainly... Yeah, correct. Yeah, I mean... We spent a lot of time with docs who are very familiar with this drug, have been using it, and my impression was yours, that not only do they see it as highly effective, but as you say, well-tolerated and, you know, very sticky. Patients are staying with it. So that's certainly what we continue to hear from a medical affairs perspective.

Our next question comes from Gary Nachman with BMO Capital Markets. Your line is open.

Thanks. So Zywave was at about 43% conversion of the Oxibate franchise in the fourth quarter. How much do you see that conversion accelerating over this year, and how much are you trying to manage that conversion, if at all, you know, when considering the trigger for the AG sometime in the second half of this year? And then specifically for IH, what initiatives are you taking to increase diagnosis and improve awareness? And, you know, will you be doing that as aggressive as you've been with narcolepsy? Thank you.

Yeah, maybe I'll take the first part of that, Gary, and then ask Kim to talk about, you know, efforts around increasing diagnosis in IH and when it might be appropriate for us to invest significantly in that. You know, on the first part of your question, you refer to conversion, and I'll just remind you that, you know, our growth in ZyWave comes from multiple sources. It certainly does come largely from existing Xyrem or OxyBate-experienced patients moving over to this newer agent with the 92% reduction in sodium with, you know, the safety benefit that FDA highlighted in the in the orphan drug exclusivity decision. But we're also seeing brand new patients, you know, narcolepsy patients who may never have been on oxibate. We're seeing narcolepsy patients who may have not been on oxibate historically, even though they had a diagnosis because they were concerned about that high sodium load. And now on top of that, we're seeing IH patients as well. So you know, I'd hesitate to just call it conversion because it's really multi-component. To the second part of your question around that, you know, we are not managing that at all. We would like as many patients to be benefiting from what we believe is a better, safer product in ZyWave as possible. So, you know, we know that takes time. We've been very pleased with how The rollout in narcolepsy has progressed in just over a year on the market now to see how far we've come. But, you know, we want as many patients to get that benefit as soon as possible and in no way are holding back on that. Kim, you want to talk about how we're thinking about our efforts in IH?

Yeah, sure. Sure. So to your question about whether we're focusing on increased diagnosis, the answer is right now no, because as we talked about earlier, there's a substantial population of already diagnosed patients out there, specifically 37,000 patients that have a formal diagnosis of idiopathic hypersomnia. And not only that, that we can see through claims data that in the last year they've been actively engaging with with the healthcare system. So the market is there. Many of these patients have currently taken or have tried products, traditional stimulants and weight-promoting agents or antidepressants off-label, and we hear back from the patients and the healthcare providers that's just not meeting their need, and there's still a tremendous unmet need for greater relief for these patients. So the market is there, so we're out there really educating more about the product profile, and if anything, just trying to help HCPs become more confident in their diagnosis and to, you know, identify those patients that are diagnosed and that would benefit from, you know, a try with Zyway for idiopathic hypersomnia.

Our next question comes from David M. Sellem with Piper Sandler. Your line is open.

Thanks. So just a couple. On Epidiolex, can you talk about the extent of off-label usage? You know, in our KOL conversation, it's clearly happening. How much of that is, you know, a factor in the overall growth trajectory of the product in the United States. That's number one. And then number two is on IH. I apologize if I missed this, but can you talk to the kinds of patients who are getting on therapy? I know it's early days. Are these patients mainly have been exposed to modafinil and or stimulants, or are they newly diagnosed treatment naive patients? Is there a mix? If you could talk to that, that would be helpful. Thank you.

Yeah, maybe, David, I'll have Rob take both of these. On the epidiolex side, again, just talking about how the drug is being used based on our understanding. And then on the idiopathic hypersomnia side, you know, super early in the launch, and I'm not sure we've got that granular data, but we can certainly refer back to what we saw in clinical trials in terms of, you know, what patients have tried other agents and how often we think they've already tried modafinil or other stimulants. So, Rob?

Yes, so starting with Epidiolex, you know, the indications is across syndromes. But practitioners, neurologists treat seizure types. And what is, I think, notable about Epidiolex is the activity across different seizure types within those syndromes. And so it's viewed as being broadly active across a number of different major types of seizures that occur. And so certainly, while we wouldn't promote off-label, that information is available for prescribers. With regard to IH in the clinical trial, the majority of patients came in on daytime wake promoting agents, and despite that, had severity scores sufficient for trial enrollment and whether or not they were on daytime alerting agents derived benefit from ZyWave.

And I'll say even for patients who are not today on some of the stimulants or daytime weight promoting agents, many of them have tried them in the past. with limited success and so sometimes have stopped trying those agents.

Our next question comes from Nevan Tai with Citi. Your line is open.

Hi, good afternoon. Just a clarification on Epidiolex outside of the U.S. Do you expect the launch in France in the second half? And do you expect to launch in other key European markets? And then a second one on BD. From your comments, can we expect bolt-ons this year and potentially more substantial BD once you reach the 3.5 leverage target? Thank you.

Yeah, Dan, maybe you could start with Epidiolex XUS, and then Rene, if you could jump in on the second question.

Yeah, on the sort of launch in France, we're just saying in 2022, and we're in active dialogue with the French authorities, but it really depends on the cadence of how that goes through, and it's much more important for us to land the right price, because you only have one chance to have a launch price there in France, so But we're confident that we will get to a price and get to a launch in 2022. Importantly, there's 34 countries where we have approval, only 13 launches to date. France would be the last major of the European countries, but there's plenty of smaller countries that can add up and provide meaningful growth. And we've got active development plans and thoughts toward Asia-Pac like Japan that could provide meaningful growth in the future.

Yeah, and this is Renee. I'll chime in and just adding here to the second part of your question on corporate development. So as I had mentioned in our prepared remarks, we do expect to be active on the corporate and business development side across 2022. We're actively looking to augment the pipeline to continue to expand our opportunities there within neuroscience, across sleep, Also now with essential tremor studies and PTSD and, of course, a market-leading position in epilepsy seeds, this is all of interest to us. And then also on the oncology side, looking at thoracic oncology, additional opportunities in solid tumors, and areas that would align with future commercial activities and our R&D expertise are all areas of interest. So I would expect us to be active probably on the smaller side throughout 2022. You could think about size being anything along the lines of a SpringWorks or RedEx type of transaction on the smaller side, or even something slightly larger, like what we executed for Zipselka with PharmaMar, which was a couple hundred million dollars up front and a great way for us to convert cash into a revenue-generating asset. and clearly an important product. We are focused from a capital allocation standpoint on deleveraging this year, in addition to supporting our ongoing launches, expanding the pipeline. So we do expect and we're well positioned to meet our state and net leverage targeted getting below three and a half times, but we would expect to also be active in corp dev. And then beyond that, I think we have great optionality as we enter 2023 and beyond. Our business generates a significant amount of cash flow, and we demonstrated our ability to both lever up to be able to execute the GW transaction, but also we've demonstrated the ability to quickly de-lever following that transaction, as well as integrate their operations rapidly and effectively.

And our last question comes from Greg Frazier with Truist Securities. Your line is open.

Good afternoon, folks. Thanks for taking the question. On ZyteWave for IH, what have been the early trends in terms of the mix between once-nightly and twice-nightly dosing, if you have data on that? And where would you expect the average dose per patient to normalize at over time? Thank you.

Yeah, I would say, Greg, in answer to that, we haven't seen anything since launch that would tell us – anything different from what we saw in our clinical trials in terms of once-nightly and twice-nightly dosing or on what dose people end up with. So maybe I could ask Rob to jump in and just remind people what we did see on that. I'll steal the thunder on the second half, which is to say we saw essentially the same nightly dosing, very slightly lower in idiopathic hypersomnia than we see in narcolepsy.

Yeah, that's right, Bruce. So by and large, it's very similar overall total dosing to narcolepsy, and the great majority of patients on the clinical trial ended up on twice nightly. You know, with idiopathic hypersomnia, which might be a little different than narcolepsy, some of the patients on the clinical trial were started once nightly, titrated up, and as they derived benefit from the drug, were then in a better position to take that and benefit from that second dose. And so even those who were starting on once nightly tended to transition over to twice nightly.

At this time, I'd like to turn the call back over to Bruce Kozet for any closing remarks.

All right, thanks, Operator, and thanks, everyone, for joining us. You know, I couldn't be happier with our strong fourth quarter and year, revenue up 31%, ANI up 41% year over year, with guidance for this year that contemplates, you know, 15% midpoint revenue growth, ANI about 17%, and I think really puts us right on track to achieve Vision 2025. So let me close today's call by recognizing all of our JAWS colleagues for their tenacity, dedication, and creativity in successfully delivering these new therapeutic options to patients. And I also want to thank our partners and shareholders for their continued confidence and support. We look forward to updating you on our progress this year as we drive toward our 2022 guidance and Vision 2025. Thank you all for joining us, and stay well.

This concludes the program. You may now disconnect.