Jazz Pharmaceuticals plc

Good day, and thank you for standing by. Welcome to Jazz Pharmaceuticals' 2025 Second Quarter Earnings Conference Call. At this time, all participants are in a 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jack Spinks, Executive Director of Investor Relations.

Thank you, Operator, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its second 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, Rene Gallat, President and Chief Operating Officer, and recently announced Chief Executive Officer, effective August 11th, Robbie Annone, Executive Vice President, Global Head of R&D and Chief Medical Officer, and Phil Johnson, Executive Vice President and 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 uncertainty that could cause actual events, performance, and results to differ materially from those contained in those 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 fiscal quarter ended June 30th, 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 Investors section of our website. I'll now turn the call over to Bruce. Thanks, Jack. Good afternoon, everyone. Thank you for joining us today to discuss Jazz's second quarter 2025 results. Starting on slide five, I'd like to congratulate Renee on her unanimous selection by the Jazz Board of Directors as President and CEO. I'm confident Renee is the right leader to build on Jazz's momentum and serve as a catalyst in driving long-term growth. After working with Renee closely for more than five years, I've seen firsthand that she has the right skill set and experience to further drive innovations. while nurturing the culture of purpose and patient impact that is at the center of everything we do at Jazz. Since co-founding Jazz in 2003, I've had the extraordinary privilege of leading the company through its growth and significant diversification that has transformed the business into the fully integrated biopharma company it is today. I'll continue serving as chairman of the board of directors, providing strategic guidance, and look forward to seeing Jazz continue delivering for patients employees, and shareholders. Now, turning to slide six, Jazz continues to demonstrate considerable progress across commercial, R&D, and corporate development. We remain confident in the strength of our diversified portfolio and excited about the potential for future growth as we prepare for the anticipated approval of Dordavacrom and approval of Zebzelka in an earlier line of treatment. We're approaching a significant milestone for Dordavacrone with the upcoming FDA PDUFA target action date of August 18th. We added Dordavacrone to our pipeline through the Chimerix acquisition we closed in April, enhancing our presence in rare oncology. Given its patent protection into 2037, with potential to receive patent term extension and the opportunity for expanded use in the frontline setting, We view Dordaviprone as a meaningful and durable revenue opportunity for JADS. In addition, we have the right capabilities in place to deliver a successful commercial launch and are positioned to initiate key activities immediately upon receiving FDA approval. We remain excited about bringing this first-in-class therapy to patients with H3K27M mutant diffuse glioma who currently have very limited treatment options. Additionally, on the regulatory front, I'm pleased that Zyhera was recently granted conditional marketing authorization by the European Commission for Advanced HER2-Positive Biliary Tract Cancer, or BTC, and we look forward to the upcoming October 7th PDUF target action date for Zebselka in first-line maintenance for extensive-stage small-cell lung cancer. Turning to our commercial business, in the second quarter of 2025, we generated over a billion dollars in total revenue across our portfolio, led by our neuroscience assets. ZyWave grew 13% year over year, with robust net patient ads seen across both narcolepsy and idiopathic hypersomnia, or IH. ZyWave remains the only low-sodium oxidate, the number one branded treatment for narcolepsy as measured by revenue, and the only FDA-approved therapy to treat IH. Epidiolex continues to have strong underlying demand, and we remain confident in its blockbuster potential. While our oncology portfolio is facing near-term headwinds, we remain confident in the outlook for growth driven by multiple near-term catalysts, including the upcoming Dordavacrone-Pedufa for the treatment of recurrent H3K27M mutant diffuse glioma, Zepzelkis potential move into first-line maintenance in extensive stage small cell lung cancer, and the top-line data readout from Xanidatamab's Phase III first-line gastroesophageal adenocarcinoma, or GEA, trial expected late in the fourth quarter of 2025. Turning to our pipeline, at the ASCO annual meeting in June, we presented potentially practice-changing Phase III data for Zepzelka and updated Phase II data, including long-term survival, for Xanidatamab, which demonstrated unprecedented advances in their respective tumor types. Our Xanidatamab clinical development program continues to progress well and enroll patients across our numerous ongoing registrational trials. Additionally, we initiated a new Phase II trial in neoadjuvant and adjuvant HER2-positive breast cancer. With the first half of the year complete, we've revised our financial guidance, including a modest reduction in the midpoint of our revenue guidance, while reductions in SG&A, R&D, and effective tax rate guidance support raising the lower end of our ANI and EPS guide. We generated robust operating cash flow in the first half of the year and remain confident in the overall strength of the business. In summary, we're focused on execution and delivering innovative therapies for patients and their families. Our diversified portfolio, robust pipeline, and disciplined approach to capital allocation position us well for sustainable long-term growth. I'll now turn the call over to Renee to discuss our commercial performance after which Rob will cover our R&D pipeline. Phil will then provide a financial overview and discuss our updated guidance. And after that, we'll open the call to Q&A. Renee?

Thanks, Bruce. I'm thrilled to be stepping into the CEO role to build upon Jazz's incredible success and transformation over the last several years. I'd like to thank the board for their trust and confidence in me and Bruce for his dedicated leadership of Jazz over the past two decades. I believe this company has immense potential and I look forward to continuing the important efforts underway and working with our team to drive greater value for our patients and shareholders. I know there may be questions about potential changes to Jazz's future direction. Right now, my focus is on ensuring a smooth transition into the CEO role. As we shape our next phase of growth, I plan to listen and gather insights from a broad range of internal and external voices And as decisions are made, they will be shared broadly. In the meantime, I appreciate your patience and support, and I look forward to engaging on this topic in the future. Now, I'll begin on slide eight to discuss the progress of our commercial portfolio. Starting with our sleep therapeutic area, total sleep revenue, which includes Zyraib and Zyraim net product sales plus royalties from high-sodium oxibate authorized generics, or AGs, was $505 million in the second quarter of 2025. ZyWave delivered another strong quarter with net product sales increasing 13% year-over-year to approximately $415 million. As the only low-sodium-oxibate therapy, the benefits of ZyWave in reducing sodium intake and individualized dosing continue to resonate with patients and HCPs. This is reflected by the approximately 625 net patient ads across both narcolepsy and IH exiting the second quarter. We continue to focus on strong execution and enabling as many patients as possible to benefit from low sodium thigh waves. Our field teams are generating strong demand with medical science liaisons and a suite of patient services like field nurse educators, working in an integrated fashion to educate HCPs and help patients from their initial diagnosis through titration of ZyWave. We've been particularly pleased with the continued momentum in IH, where we had approximately 400 net patient ads this quarter. Our consumer targeted digital and media campaigns are performing well and building disease awareness and patient education. These initiatives, coupled with our ongoing HCP education around proper diagnosis and identifying appropriate patients who can benefit from ZyWave, are contributing meaningfully to growth in IH, where ZyWave is the only FDA-approved therapy. We were pleased with our robust medical presence at the APSS annual meeting in June, with 24 total presentations, including 19 posters and five oral presentations. These included results from the Phase IV open-label Xylo trial, showing that a switch from high-sodium oxidate to the same dose of low-sodium oxidate was associated with clinically meaningful reductions in blood pressure. Additionally, two presentations from the DUET trial evaluating sleep architecture demonstrated the effectiveness of ZyWave on improvements in sleep quality among patients with IH or narcolepsy. These data presentations continue to strengthen the clinical evidence supporting Zyway's differentiated therapeutic value. Moving to slide nine, underlying demand for Epidiolex remained strong, with second quarter net product sales of approximately $252 million, representing a 2% increase compared to the same quarter in 2024. Year-over-year revenue growth was impacted by a number of factors, including U.S. inventory dynamics. As noted on a prior call, we experienced an earlier than expected build of inventory in the second quarter of 2024, which negatively impacts our current year-over-year growth rate. Based on typical seasonality, we anticipate a gradual build of inventory throughout the second half of this year. Our Epidiolex field teams in the U.S. and Europe are executing well. focusing on the product's unique differentiation, including the robust body of evidence supporting both seizure and non-seizure benefits. The adult segment and long-term care facilities continue to be a focus of growth for Epidiolex. LGS has historically been underdiagnosed in adult patients due to the evolution of symptoms over time. However, the refractory epilepsy screening tool for LGS is helping some providers to more readily identify adult patients living with LGS. With our ongoing momentum, we continue to expect Epidiolex to reach blockbuster status this year. Moving to oncology on slide 10. Rylase net product sales were approximately $101 million in the second quarter of 2025, a decrease of 7% year over year. Updates to Children's Oncology Group pediatric ALL treatment protocol that impacted the timing of asparaginase administration. which were first recommended a year ago, have been broadly adopted. Although claims data indicate that pediatric asparaginase use as a class remains below pre-protocol implementation levels, Rylase use in pediatric ALL patients relative to the asparaginase class as a whole has remained broadly stable. We are focused on continuing efforts to ensure switching to Rylase at the first sign of hypersensitivity reaction and expanding our presence in the adolescent and young adult market. We view these as the greatest opportunities for Riley's growth. On slide 11, Zepselka net product sales for the second quarter of 2025 were approximately $75 million, a decrease of 8% year over year. While we have seen increased competition in the second line small cell lung cancer setting, Zepselka continues to be a highly prescribed treatment for patients. Of note, the adoption of immunotherapy in first-line limited-stage small-cell lung cancer is improving PFS and delaying the progression of patients into the second-line setting, thereby reducing the number of patients available for second-line treatment. Importantly, we believe the Inforte data presented at ASCO will set a new treatment standard for extensive-stage small-cell lung cancer patients in the first-line maintenance setting. Our SNDA has been granted priority review with the PDUFA target action date of October 7, 2025, and we have submitted the data for potential inclusion in NCCN guidelines, which is generally a path for broader uptake and reimbursement. This potential to move into first-line maintenance therapy represents an important opportunity to enable patients to benefit from ZEPS-ELCA earlier in their treatment and represents an opportunity to redefine the treatment paradigm in first-line extensive stage small cell lung cancer. Moving to slide 12 in Zyhera, we recognized approximately $6 million of net product sales in the second quarter of 2025, which given the patient population in BTC, is aligned to our expectations at this early stage of launch. We are receiving feedback from oncologists that continues to confirm the real-world clinical profile at benefit matches what was observed in clinical trials. We're pleased with this positive feedback as HCPs gain experience and confidence with prescribing Zyhera. As we look ahead to GEA, we would anticipate rapid NCCN guideline inclusion if data are positive and strong clinical adoption following potential regulatory approval. We believe ZANI DataMap has the potential to be the HER2-targeted agent of choice Finally, we were pleased the European Commission granted conditional marketing authorization for Second Line HER2-positive BTC in June, and we are initiating the rolling launch across Europe. I'll now turn it over to Rob for an update on our pipeline and upcoming milestones. Rob?

Thank you, Renee. Starting on slide 14, we have an exciting pipeline and are making substantial progress on key programs. with additional milestones expected this year. In oncology, we were pleased the FDA granted priority review of our SMDA for ZipCelco with a PDUFA target action date of October 7th for maintenance therapy in first-line extensive stage small cell lung cancer for patients who have not progressed during induction chemotherapy. The submission was based on the compelling Phase III and IV-te data presented at ASCO. We believe these results are practice-changing, and we have submitted the data for potential inclusion in NCCM guidelines. Regarding our Phase III first-line Horizon GEA standard data map trial, given that we're now in early August, we do not expect to announce top line data in the third quarter. Based on the current event projections, we do continue to expect we will announce top line data late in the fourth quarter of 2025, consistent with our prior disclosure of the second half of 2025. We are also excited to highlight the recently initiated phase two trial studying XanaDataMath as neoadjuvant and adjuvant therapy in breast cancer. This trial aims to reduce the burden on patients with early breast cancer, increase pathologic complete response rates, improve long-term outcomes, and reduce overall toxicity. The randomized open-label trial will assess the PAS-CR rate of neoadjuvant xanadatumab and taxane with or without carboplatin versus a regimen containing a taxane, carboplatin, and trastuzumab and pertuzumab. Following surgery, patients with a PAS-CR will continue on xanadatumab, and those without a PAS-CR will receive TDM1 as adjuvant therapy and will be followed for event-free survival. Turning to our Xanadatamab development program on slide 15, the ongoing clinical trials continue to progress and we're expanding the program with the new trial in neoadjuvant and adjuvant breast cancer. The phase three Empower BC303 trial evaluating Xanadatamab plus physician's choice of chemotherapy versus Trastuzumab plus physician's choice of chemotherapy in metastatic breast cancer patients who are intolerant to or have progressed on TDXD treatment, continues to progress well with enrollment and strong interest from sites. Our first-line confirmatory BTC trial also continues to advance, as does the Phase II pan-tumor trial. Moving to slide 16, we were pleased to close the Chimerix transaction in April and welcome our new colleagues to JAS. We look forward to the upcoming BDUFA target action date of August 18th for duradiprofen, 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, and the opportunity to bring hope to patients who currently have no approved drug therapy. The confirmatory action trial in the frontline setting is ongoing, and enrollment remains on track. We are continuing to assess timelines for the trial and will provide an update as appropriate. Our current focus is on the NDA for duradapiprone and potentially bringing this therapy to patients as soon as possible. This represents exactly the kind of transformative innovation we strive to deliver for patients with JAS. We intend to host an investor webcast to discuss the commercial launch of Durdaviprone following approval. Now turning to slide 17, I'll highlight the encouraging data we presented at ASCO this year that support my confidence in our pipeline. In results from the Phase III and IV-T trial, which have been published in the Lancet, Zypselka in combination with atezolizumab demonstrated a reduced risk of disease progression or death from the time of randomization by 46%, and the risk of death by 27% compared to atezolizumab alone. In addition, the treatment duration for patients receiving Zypselka plus atezolizumab was twice as long as the atezolizumab harm. with a median maintenance treatment duration of 4.2 months versus 2.1 months respectively. The combination was generally well tolerated with no new safety signals identified. We were also highly encouraged by results from the long-term Phase II GEA trial of Xanadatamab, which showed a remarkable 36.5-month median overall survival after four years of follow-up, consensually confirmed HER2-positive first-line patients with GEA. These promising results provide additional confidence as we await the Phase III Horizon GEA readout anticipated late in the fourth quarter of this year. An oral presentation of the safety and efficacy of Dordavacrone from an integrated analysis showed promise in shrinking tumors in both adults and pediatric patients with an encouraging disease control rate. The results were in line with earlier studies, and side effects were generally mild. Now I will turn the call over to Phil for a financial update. Phil?

Thanks, Rob. I'll start on slide 19 with our top-line results. 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 second quarter of 2025, we generated $1.05 billion in total revenues. This represents an increase of 2% over last year's quarter and was driven by robust ZyWave growth of 13%. As Renee mentioned, net patient ads were particularly strong providing great momentum as we move into the second half of the year. Epidiolex growth moderated to 2% this quarter, driven by several factors, including year-over-year inventory dynamics in the U.S., as Renee mentioned earlier. Despite inventory dynamics, we continue to be pleased with the demand we're seeing for Epidiolex. In total, our oncology products decreased 1% compared to the second quarter of 2024, as lower sales of Rylase and Zepselka were largely offset by higher sales of Zahira, Defitalio, and Vixios. Looking forward, we remain optimistic and confident in the future of our oncology franchise and are ready to successfully execute on the rolling launch of Zahira for BTC in Europe and the potential near-term launches of Gordaviprone and recurrent H3K27M mutant diffuse glioma and of Zebselka in the first-line maintenance setting for small cell lung cancer. In addition, we look forward to the upcoming Phase III first-line GEA readout for ZanyDataMap. Adjusted net loss for the second quarter of this year was $505 million. This loss was entirely driven by the $905 million non-tax-deductible acquired IPR&D charge from the Chimerix acquisition. We continue to generate significant cash, recording $519 million of operating cash flow in the first half of the year. and even after the acquisition of Chimerix and payments to settle certain of the Zyra Manitrust claims we announced last quarter, our balance sheet is strong with $1.7 billion in cash and investments at quarter end. With that context, let's move to our revised 2025 financial guidance. You'll see on slide 20 that we've narrowed our 2025 revenue guidance by lowering the top end of the range, resulting in 4% growth at the midpoint. This change reflects our assessment halfway through the year that revenue is largely tracking to our expectations, with some potential upsides being less likely. Turning to slide 21, we've reduced both SG&A and R&D guidance ranges primarily because of our efforts to prioritize spend for our highest impact initiatives and to enhance operational efficiency. In addition, we've incorporated refined estimates of ongoing Chimerics costs. You'll note that our revised SG&A and R&D guidance ranges do contemplate higher spending in the second half of the year than in the first half of the year. This uplift is primarily driven by the inclusion of Chimerics expenses for the full period, including the ramp of launch activities for Gordaviprine. We're also increasing support for ZyHira and Zevcelka, making targeted investments behind ZyWave and Epidiolex, and are accelerating activity across several ZeniDataMap clinical trials. Looking at the second half of the year, I'd like to make a detailed comment that may help with your modeling, as well as a higher level comment on how we're positioned. As you develop your expectations for sales of our U.S. oncology products, please note that we'll have 14 shipping weeks in the third quarter and 13 shipping weeks in the fourth quarter. Year-on-year growth rates will be affected by the fact that we had the opposite pattern last year, with 13 shipping weeks in the third quarter and 14 shipping weeks in the fourth quarter. Hopefully, this information will minimize any surprises based on the calendar. Stepping up to a higher level, in the back half of the year, we have several commercial catalysts that position us for growth. Our disciplined approach to capital allocation ensures we're investing strategically in our high-priority R&D programs and our lead commercial products. Our strong balance sheet and cash flow enables us to engage in value-creating corporate development, as we did with Chimerix. We're confident this focused execution of our strategy can drive long-term growth and we look forward to realizing the significant opportunities ahead. I'll now turn the call back to Bruce for closing remarks. I'll conclude our prepared remarks on slide 23. We remain well positioned to deliver shareholder value as we head into the second half of 2025. We continue to focus on optimizing our commercial execution advancing key development programs, and maintaining our commitment to patients who depend on our medicines. I'm pleased with the robust net patient ads exiting the quarter for ZyWave, the only low sodium oxidate, and continue to anticipate Epidiolex will reach blockbuster status this year. As our oncology portfolio overcomes near-term headwinds, we expect a return to growth driven by new opportunities. We look forward to our two upcoming PDUFAs, one for Gordaviprone this month and one for Zepzelka in October, as well as the top-line readout of the Phase III Horizon GEA clinical trial expected late in the fourth quarter of 2025. Again, I'd like to congratulate Renee and thank our talented employees for their dedication and commitment to innovating to transform the lives of patients and their families. That concludes our prepared remarks. I'd now like to turn the call over to the operator to open the line for Q&A.

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Also, we're only allowing one question. Please stand by while we compile the Q&A roster. Our first question comes from Jason Gerberry at Bank of America. Your line is open.

Hey, guys. Thanks for taking my questions, and congrats, Renee and Bruce. It's been awesome working with you. Going to miss you. So my question is, you know, what's driving the strength of ZyWave and IH, specifically the patient ads look like they're sustainable and going up. And just kind of curious if I can get your perspective on the sustainability of that rate of patient ads into next year. Thanks.

Rene, you want to jump in on that? While we're waiting for Rene to figure out how to get off mute, unless somebody else can hear, I'll just say, Jason, it's been a pleasure working with everyone over the past many years. The Jazz has been a public company since Excuse me, 2007. And for a couple of you out there on the buy side and the sell side, I'd probably go back 30 years. So it's been a real pleasure getting to know you all. And I will be watching Jazz's forward progress as all of you will under Renee's leadership. Well, with that, Renee, over to you.

Yeah, can you hear me now?

Yes, we can.

Okay, great. Sorry, I'm not sure what happened there. So thanks, Jason. We're really pleased with the growth that we saw in the quarter with ZyWave, both a narcolepsy and an idiopathic hypersomnia. In terms of IH, we do see that as being an area where we see the most opportunity for growth as ZyWave is the only FDA-approved therapy. So in terms of What's driving the growth? We have seen some really strong execution across our field teams and our investments. Our consumer-targeted digital and media campaigns are performing really well. We have invested quite a bit in building disease awareness and patient education because this, of course, is an area where, in the past, if you haven't had an approved therapy, there's not necessarily a large incentive to go through the process of getting diagnosed. And then I would say also our field nurse educator program is particularly helpful with IH patients. When you think about starting oxovate therapy, there is greater persistence once you have titrated up to an efficacious dose. The field nurse educators assist with this. And in particular, with this community of IH being less familiar with OxyBait therapy as compared to narcolepsy, that's been another really helpful service that we've been providing to patients and is helping our persistence and overall growth.

Thank you.

Our next question comes from Jess Vi at JPMorgan.

Hey guys, good afternoon. Thanks for taking my question and congrats to Renee on the new role and to Bruce on retirement. I wanted to ask about Zannie for the phase three trial coming up. If I recall, JAWS's top line updates have historically been more qualitative in nature with numbers to follow later. Is that how we should think about the Zannie top line or could there be potential for any numbers this time around? And if the update is more qualitative, can we expect to hear comments on both ZANI arms?

So, Jess, I'll jump in first and then see if Rob wants to add anything. You know, typically we've tried to give important top line results in terms of have we hit or not a primary endpoint or, you know, certain pre-specified secondary endpoints if we think they're germane and important. while preserving our ability to publish and present at major conferences by not sharing all the information. You know, we often try to give qualitative commentary that helps people understand the clinical meaningfulness of results in other ways. So, you know, we're not trying to leave people completely in the dark, but it's rare that we go all the way to, you know, full statistics. We're also, of course, often unblinding results and sharing them fairly quickly at the top line. while continued analysis goes on at a very detailed level as we, you know, prepare for regulatory filings and otherwise. Rob, anything you want to add?

I think that was great, Bruce. And I would just say our recent experience with Inforte is probably a good example where we not only said stat sig, but we commented on both endpoints, PFS and LS, and gave some color around it being clinically meaningful and practice changing.

Thank you. Our next question comes from David Asalam at Piper Sandler.

Thanks. So I had a question on ZipCelca. I know you've talked about the competitive headwinds here. Your competitor on its call did cite growing traction of tarlatanab in the community setting. And so I'm just wondering out loud, you know, with that in mind, Do you see continued headwinds for Zabzalka and Second Line? And at what point do you start to see perhaps stabilization with the label expansion? And when do you think we'll have better visibility into a return to growth for Zabzalka? Thank you.

Yeah, Renee, you want to take that?

Sure, I'm happy to jump in. Can you hear me? Yep. Okay, perfect. So, thanks for the question, David, and certainly we have commented on a couple of different dynamics impacting our sales of Zepselka, one being the increased competition in the second line, the tarlatan map. Now, these impacts were in line with our expectations. However, it is having an impact on our overall positioning in the second line. And then, of course, we've also said that we've seen increased adoption of IO in the treatment of first line limited stage small cell lung cancer. This is the impact of the adriatic regimen, and that's delaying progression of some of those first line limited stage patients from the first line into the second line. And we can see this trend in claims data. Importantly, we're really looking forward to the potential approval in first-line maintenance for extensive stage based on the M4T study data that Rob was just mentioning. So, we have our PDUFA date on October 7th. We have already submitted for potential inclusion in the NCCN treatment guidelines. We do expect this data to be practice-changing, and we do expect, as we look at that first-line population to have a larger group of patients. And we have talked about the duration of therapy also being longer there. So that's really what we're focused on.

Thank you. Our next question comes from Adria Newkirk at Goldman Sachs.

Good afternoon. Thanks for taking the question. Maybe as a follow-up to a prior one, For Rob, when you think about the sustainability of ZioAIDS growth profile on the forward, is there anything you're looking to understand from the upcoming orexin data presentations at WorldSleep to better inform how you think orexin agonists and oxidates will coexist in the rare hypersomnia space?

Thanks for the question. I mean, certainly we've only seen limited data, and so I am eager to see as much data as possible, not only in terms of daytime efficacy measurements, but the overall safety and tolerability profile. And very, very interested in understanding impact on nighttime sleep. As we know, alerting agents often can disrupt nighttime sleep, which is really the root cause of narcolepsy. Narcolepsy patients have substantially disrupted nighttime sleep. For example, on average, about 80 awakenings a night with not as much deep sleep, not as much... deep sleep or total sleep time. So the impact on nighttime sleep where ZyWave has its main impact and results in benefits during the day is going to be important. So we continue to think about these two mechanisms as potentially being complementary.

Our next question comes from Akash Tiwari at Jefferies.

Hey, thanks so much. Rob, you mentioned that for the top line press release for Verizon GA, you could give commentary on whether the PFS would be clinically meaningful and practice changing. Can you kind of prospectively identify what that would look like for Zannie in that indication? And then maybe, Renee, you know, I had asked Bruce this maybe a year ago, when you think about core and non-core parts of Jazz, and, you know, I think Bruce had alluded, there could be parts of Jazz that are non-core to the business going forward. You guys have such an esoteric myth of products. How would you define what is core and non-core within the jazz portfolio? Thank you.

Thanks for the question. I would say it's always hard to give a specific number to say. If we observe this, we think it'll be practice changing. But this field certainly has evolved over the last 10 to 20 years. And you can look at examples of how clinical trials have resulted in change in practice, whether that be from the TOGA trial to establish Receptin, through the Jacob trial, and then more recently Keynote 811, where Keynote 811 had about a two-month median PFS difference and about a four-month overall survival difference. So I think the benchmarks are out there. We're very encouraged by the two frontline phase two trials that have been conducted, one recently published at ASCO. Danny plus chemo with a median overall survival of 36 and a half months, very encouraging, but strong response, duration of response in PFS as well. And those data were very comparable to the other trial where tizolizumab was added, and you saw, in some respects, incrementally better results as well.

Yeah, and I'm happy to jump in on the second question, Akash. So, yeah, I appreciate that you are thinking about core and non-core parts of Jazz. And I do think at times what people miss is at the core of our business, the vast majority of our products are essentially rare disease or orphan disease products. And so, while on the surface, they may not always look like they fit together, but the underlying capabilities that are required to identify patients to be able to partner with, interact with patient advocacy groups to understand patient needs, to be able to target and engage with physicians in some of the field execution capabilities. Those are actually quite similar across a number of our products. Now, I would also say when you look at Jazz over time, There have been a number of businesses, products that we have decided to divest because they did not necessarily fit into the core business that we were looking to to drive growth and where we felt we could invest to continue to bring forward. I would say Sanosi is a good example of that. Even though it was a product within sleep, it no longer fit the type of business model that we were focusing on going forward. So, as I'm stepping into the new role, I will be looking at where's the best place for us to be investing. As I mentioned, I do intend to spend time listening, talking to both internal and external parties to better inform the direction that we go forward. But we are in an excellent position today with roughly $4 billion of top line revenue, healthy cash flows, and multiple products to be able to invest in, both in the commercial and pipeline front, as well as continued appetite for corporate and business development.

Our next question comes from David Wang at Douche Bank.

Hi there. Congrats on the quarter end. Thank you for taking my question. So maybe one on Epidiolex. I wanted to ask about what underlies the confidence there that that product will reach blockbuster status this year, and are there any potential headwinds that may be related to seasonality that could impede those growth expectations? And then on the Oxibate franchise, could you just refresh us about potential entry of multi-source Oxibate generics near term and how that might impact the business. Thank you.

Sure. I'm happy to jump in on both of those. So with respect to Epidiolex, this is a product that we do remain confident in in terms of reaching blockbuster status this year and ongoing growth. It's also a product that does tend to see seasonality that impacts inventory and as a result can impact our growth when you're comparing quarter over quarter. And the second quarter is an excellent example of that. We saw strong underlying demand growth. But we also saw atypical inventory build last year. Typically, we see inventory build in the second half. It burns off in the first quarter, sometimes into the second quarter. But last year, we saw that inventory build start in the second quarter, which therefore, as a result, not seeing that same dynamic in the second quarter of this year, means it negatively impacted our growth rate. We do expect to see a gradual build of inventory in the second half of this year. And the overall growth when you look between 2024 and 2025 doesn't actually need to be very high in order to reach blockbuster status. But given the strong underlying demand that we see, we feel highly confident that we'll achieve that at a minimum. With respect to your second question.

Yeah, timing of multi-source generics.

Yeah, sorry, thank you. With respect to the timing of multi-source generics, they have the ability to enter on December 31st of this year. Of course, HCMA has the ability with notification to us to enter at any time. They have had that ability over the last roughly year and a half, as well as the ability to extend the, continue in the AG agreement through the end of 2027. So, if a generic enters onto the market at the end of this year, they will need to have their own REMS to be able to support their product. And we continue as a result to really focus on the differentiation of Zywave as the only low-sodium oxibate on the market as the number one treatment within narcolepsy, the number one branded treatment, as well as the only product available at approved for IH. So I think, Phil, you wanted to jump in and add something as well?

Yeah, and up in dialects real quick, just in terms of the growth that's required, as Renee mentioned, you know, we finished last year with $972 million in global revenue. effectively need less than 3% growth to get past $1 billion. We did grow 5% in the first half of the year this year. And as you'll see in the queue where we have some disclosures on volume growth for certain products, volume growth continued to be robust at 6%. So some of these inventory things will fluctuate from period to period. As Renee mentioned, we're really pleased with the underlying demand that we're seeing for the product.

Our next question comes from Amy Fadia at Needham. Good evening.

Thanks for taking my question. Congratulations to Renee on your new role and to Bruce in your retirement. I'm sure you'll be missed. My question is a follow-up on the ZANI GEA trial. Given that you've increased the enrollment of the study somewhere in early 2024, do you think you'll have data that'll be mature enough for you to have a look on OS, or would you need to wait for the next interim look there? And, you know, what is the bar for showing a trend towards OS benefit? Is it simply a hazard ratio under one or something more specific? And then just with regards to the disclosure that we can expect in the fourth quarter with regards to Arm C, how much of an improvement would you need to see versus, you know, Arm A or B to indicate that? adding tizolizumab is sort of incremental for PDR1 patients. Thank you.

Thanks, Ami, for the questions. So as a reminder, we have three planned overall survival analyses. The first is timed for when we do the one and final PFS analysis. Certainly, it doesn't have the full maturity that we'll have even at the second, but certainly the final. However, the additional time, as you point out, in getting to the PFS endpoint certainly improves the power in OS relative to what we might have had a year ago. So it improves our chances, so to speak. And your next question was, you know, how much of a trend is needed on OS? You know, I think it depends ultimately on the totality of the data. You know, we certainly don't get into that kind of specific discussions with health authorities, et cetera. But, you know, depending on the magnitude of effect of PFS, I think it will all be considered together. There's a fair amount of precedence in this space in terms of approvals. Of course, the TOGA regimen and Herceptin showed an overall survival benefit, and Keytruda had an initial approval, accelerated approval on response rate, and then full approval on PFS before having mature OS data. So I think there is a certain amount of precedent in this space to go by. And then lastly, you asked the question of, you know, what is the incremental benefit that you need to observe in RMC? versus B in order for that to be approvable. And, you know, again, I think it's a totality of the data question. Certainly, it needs to be contributing meaningfully, and the overall benefit-risk, you know, needs to be favorable.

As a reminder, for every person, make sure you limit your question to just one question. Our next question comes from Joseph Tone at TD Cohen.

Hi there, good afternoon, and thank you for taking my question and adding congrats to both Renee and Bruce. Maybe when we talk about the frontline GEA data, this has been, you know, pushed a little bit, and even though it's in the current guidance, it sounds like it's going to be later in the fourth quarter, I guess. Can you talk a little bit about your confidence that, you know, the data will come this year, and also maybe your confidence that the Control Arm A is performing similarly to to prior studies, and then maybe just a little bit of an attack on what would that subsequent OS analysis be? Thank you.

Yeah. So, you know, I would just say we remain blinded overall to the data, but as we get further along in the study and more mature, the assessments around when maturity will come have greater precision. So we have greater confidence in our projections around that, and, you know, that has led to a refinement there. Could you clarify again the last part of the question that you asked?

Yeah, I guess just the confidence that the control arm is performing is similar to prior studies, and then you indicated that there's several OS analyses, and the first one comes with a mature PFS. I guess when is the next one after the mature PFS? When would you expect that to be available?

Sure. So, again, this is an area that's a disease setting that's been very, very well studied. And if you look at TOGA, Jacob, and then Keynote 811, you know, the control arm has performed, you know, in a fairly narrow band. And I think it's reasonable to expect in the modern era that the control arm would be similar to the keynote 811 results. We're blinded to the data, so we can't say for sure how the control arm is performing, But I think that Herceptin and chemotherapy is performed pretty consistently across studies. And so that makes it easier for planning purposes. We haven't given, you know, details on exactly how much maturity we would have, for example, on the second interim analysis. But what we have said in the past is when we increase the sample size from approximately 700 to approximately 900, it allowed us to sort of roughly maintain what had been, you know, the timing form, what had been planned for a final OS analysis while adding a later analysis to be the final and to be better powered.

Our next question comes from June Lee at Truist Securities.

Hey, thanks for the updates and for taking our questions. You have a very strong momentum in the narcolepsy franchise, but Takeda is planning to submit an NDA for their rex and agonist for NT1. And Axon is also planning to submit an NDA for their NT1 narcolepsy drug in 4Q. So how much impact, if any, do you think that Takeda and Axon's drug could have on your current momentum in the narcolepsy franchise, given the potential differences in the VA scheduling? And where are you with your orexin agonist 441? Thank you.

Rene, you want to take the first part on potential impact of product entry, and then Rob, any update on 441?

Sure, happy to do that. So, I would say I'll let Rob comment on some of the mechanisms, but we continue to believe in general that oxybates will be complementary to orexins. And then when we lay out the differentiation of ZyWave with both low sodium being the only low sodium oxybate on the market and flexible dosing, we see that HCPs and patients alike continue to choose the low sodium based on the underlying cardiovascular conditions that often exist and the propensity to develop cardiovascular conditions on high sodium oxibates. And I would say also when you think about other mechanisms be it wake-promoting agents or stimulants, we simply have not seen a meaningful impact with any of those launches on our ZyWave momentum. So again, we would think of these as being largely complementary. When you think about the studies that we ran for ZyWave, we saw a large number of patients coming in on a background of wake-promoting agents and still improved meaningfully with ZyWave. Rob?

Yeah, I mean, I'd love to add that we have very, very extensive and robust data, not only with ZyWave, but in the Oxibate field in general, and many, many years of patient experience showing that when administered at night, and of course it's washed out by the time patients wake up in the morning, there's a very significant and clinically meaningful impact on nighttime sleep, improving key parameters like total sleep time, reducing awakenings after sleep onset dramatically, improving deep sleep, consolidating REM sleep. And that improvement in what's essentially the underlying root cause of the daytime symptoms translates then into more wakefulness and less cataplexy during the day. Certainly what we've seen of erections is that they are potent daytime alerting agents. What we haven't seen is orexins improving meaningfully nighttime sleep. The little data that are in the literature show some consolidation of REM sleep, but really no impact on total sleep or deep sleep. And we haven't seen a lot of data around that first part of the night where residual exposure to orexins might actually be disrupting sleep. And that's partly why we think that these mechanisms are likely to be complementary. I would mention that at APSS, we recently published more PSG data, both in narcolepsy and IH, again establishing the value of ZyWave for improving nighttime sleep. And then with regard to our own program, As we mentioned, we are already dosing in a small cohort of NT1 patients to evaluate whether JCP441 could progress beyond this stage, depending on the therapeutic index that's observed, and we continue to pursue a backup program that's in the preclinical space.

Our next question comes from Ash Verma at UBS.

Hi, thanks for taking my question, and congrats on your retirement, Bruce. I wanted to ask a more bigger picture question on your journey. So I know you've made pretty massive strides in terms of diversifying the business, but in terms of the stock, there was a pretty significant outperformance from inception, but it's been range-bound for the last, let's say, 10 plus years. So from your perspective, what do you think drove that disconnect? And then, Rene, any learnings you can share? take from this experience and how you think you can maximize the shareholder return as a CEO?

Yeah, Ash, thanks for the question. You know, I would say the diversification of our business has been important to have multiple growth drivers, not only the strong continued performance of our sleep business, but the growth in Epidiolex now with its clearer long-term runway. as well as, you know, exciting developments in the oncology portfolio as we've continued to add new drugs and expand the opportunity for drugs we do have, you know, with a lot of excitement in particular around ZanyDataMap. A place we've begun to be more active, again, is corporate development. We've always said that's part of our strategy. You know, we had a bit of a pause after doing the larger GW transaction as we delevered. But that's a clear priority for us, as you saw with the Chimerix transaction earlier this year, which hopefully leads to near-term launch and a really nice return for us. So we've been trying to make that strategic shift over a number of years. It's been quite dramatic, going from 75% of our revenues being dependent on one product, which is now a very, very small percentage of our revenues to having these multiple drivers. So I think we've set the company up well as a platform to continue to grow. And I'll let Renee talk about where we go from here.

Yeah, thanks, Bruce. And I think at this point in time, it might be a bit premature, Ash, to go into a lot of detail. I'm thrilled to be stepping in where the company is today with respect to the strength of the balance sheet, the revenues we're generating. We have multiple approvals ahead, a very meaningful pipeline readout coming in GEA, and a workforce that is highly engaged and passionate about what we do. So I do believe there is really meaningful value to unlock here, and I look forward to working with the team to be able to accomplish that. So stay tuned.

Our next question comes from Sean Lemon and Morgan Stanley.

Hey, this is Mike Riad on for Sean. Thank you for taking our questions. I'd also like to extend our congratulations to both Bruce and to Renee. For JZP441, is there a likelihood to get the Phase 1B results this year in NT1, or is that more of a first half 26 event? Thanks so much.

We haven't given specific timing on that. All we've said is that it's a relatively small study. We think in, you know, 10 patients or fewer, we can get a read on the therapeutic index, and it is an open-label trial, so patients are enrolling, and as soon as we have meaningful information, you know, we'll provide an update.

Our next question comes from Mohit Banzal at Wells Fargo.

Great. Thank you very much for taking my question. Congrats, Bruce, on the retirement, and Renee, very well-deserved promotion. Looking forward to continuing working with you all. So my question is regarding and MSN. And I think last quarter you talked about being important for . What about other products? Do you see any impact on products like Epidiolex and all of them? And given your portfolio of rare disease drugs, do you think the MSN recent chatter around MSN being impacting the Medicaid pricing, could have an impact on these drugs as well. Thank you.

Yeah, Mohit, thanks for the questions. So maybe starting with tariffs, as we had talked on prior call, we do have the opportunity to produce our Oxibate products here in the U.S. with a supplier that has more than ample capacity that's available to us to serve all of our U.S. needs. And we also have a U.S. CMO that does the drug product for Riley's or for, yes, Riley's as well. So I would say in terms of the exposure we've got to tariffs, similar to what we said in the past with steps we've taken to mitigate that risk, there really is no exposure to either the existing or some of the ones that are pretended to be coming here in the near future to our 2025 results. And we have a decent amount of coverage for nearly all of our products in terms of U.S. inventory already here locally in the states to cover a decent portion of our 2026 needs as well. Beyond that, we'll continue to look for ways to go ahead and mitigate that exposure, which could include working with additional third parties here in the U.S. for other manufacturing. So we'll continue to keep you updated there. On MFN, it really is obviously the sort of topic of the last few days here. A lot still is unclear about scope, timeline, operational mechanisms of how the administration may pursue MFN drug pricing, what may happen legally in terms of challenges to proposals that could be coming. So I'd say at this point it is premature to speculate on what's going to happen specifically and therefore put some kind of quantification of our exposure. I would say we do have exposure because we do have U.S. government business and ex-U.S. prices are typically lower than U.S. prices. And some of the products that would have a larger exposure for us based on their proportion of government business would include, for example, Rylades and Epidiolex. Again, much more to come here, I'm sure, in the coming weeks and months. And we'll keep you appraised as we have something more specific to be able to say based on concrete proposals. Absolutely, thanks.

Our next question comes from Gary Nachman at Raymond James.

Thanks. Bruce, best of luck to you, and my congrats as well, Renee. So, on Dardaviprone, what's your confidence level in the accelerated approval at the BDUFA on August 18th? How have your conversations been going with FDA, if that's all been on track? And I know you'll have a webcast after, but high level, How are you thinking about that opportunity and how quickly it could ramp up in that subset of glioma patients? And can you just roll this into the current oncology sales infrastructure? Thanks.

Yeah, maybe in the interest of time since we're getting short, I'll just say, Gary, you know, we've been in conversations with FDA, and we know what the PDUFA target action date is, and we hope to have an FDA decision very soon. Renee, maybe I'll let you comment a little bit on the opportunity. I'll just say we're really excited about the opportunity to bring this therapy to patients and think there's a real nice opportunity to make a difference for a lot of patients.

Yeah, absolutely. Happy to make a few comments. I mean, first, we are incredibly excited about this potential approval and making this medicine available. This has been a I would say true labor of love for our colleagues at Chimerics and we look forward to bringing it to market. We do believe the product will be predominantly administered in academic settings of excellence. So, we do think largely a more concentrated call point and as a result, we are looking at a relatively small but dedicated group to be able to augment our internal footprint, ensure we have sufficient focus on the launch, but also do so in a highly concentrated way. And I would say we're also excited about this patent portfolio that goes out well into the late 2030s, 2037, with the potential to receive patent term extension. So we also believe this is a durable, long-lived product. More to come, though, with respect to our launch meeting.

Our last question comes from Mark Goodman at Lyric.

Hi, good afternoon. Thank you for taking our question. This is Basma on for Mark. Could you please provide a quick color on the launch, on the BTC performance, the second half, the data in BTC in the second half of the year? And also, we just have a quick question on IP dialects. Can you remind us if you did collect cognitive data in the different DEEs, such as LGS and DS and DRIVE? That's it for us. Thank you.

I think in light of the limited remaining time, we'll just answer the first question, which, Renee, maybe will come to you on the BTC launch.

Sure. So I would say keep in mind that BTC represents a very small patient population, and as we've said, while this is very important for us to make this medicine available for patients, we do expect the revenue contribution to be modest. We don't provide guidance by product, so I'm not going to give specific expectations for the second half, but I would say what we're hearing from HCPs is they're really pleased to have the product available. They're having a positive experience with the drug. And for us, we're really looking forward to seeing the GEA data late in the fourth quarter.

This concludes the question and answer session. I would now like to turn it back to Bruce Kozad for closing remarks.

All right. Thank you, operator. And I'd like to close today's call by recognizing our JAWS colleagues for their efforts and thank our partners and shareholders for their continued confidence and support. And as I said earlier in the call, it's been a pleasure working with many of you for a few years, a lot of years, a decade, two decades, or three decades, depending on who I'm talking to. And you're in very good hands with the Continuing Jazz team. So good afternoon, everyone.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.