Jazz Pharmaceuticals plc

Good day, and thank you for standing by. Welcome to the Jazz Pharmaceuticals 2025 Third 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. We ask that all analysts please limit themselves to one question. 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, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its third quarter 2025 financial results. The slide presentation accompanying this webcast is available on the Investors section of our website. Investors should also refer to the press release and the quarterly report on Form 10-Q that we issued earlier today. Both are available on our website and filed with the SEC. On the call today are Rene Gala, President and Chief Executive Officer, Sam Pierce, Executive Vice President and Chief Commercial Officer, 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, which involve risks and uncertainties that could cause actual events, performance, and results differ materially from those contained in these forward-looking statements. We encourage you to review these risks and uncertainties described in today's press release and under the caption Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2024, and our subsequent filings with the SEC, including our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2025, which identifies certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today's webcast. We undertake no duty or obligation to update our forward-looking statements. As noted on slide three, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the investor section of our website. I'll now turn the call over to Renee.

Thanks, Jack. Good afternoon, everyone, and thank you for joining us to discuss Jazz's third quarter 2025 results. I'm delighted to be speaking with you today as Jazz's CEO. The past three months have been energizing and productive. We delivered two FDA approvals that underscore Jazz's ability to bring highly differentiated therapies to patients with serious unmet needs. These milestones reflect the strength of our execution, dedication of our teams, and our continued momentum to drive sustainable growth and meaningful value for our patients and our shareholders. Beginning on slide five, the results of the quarter reflect that momentum. Starting with commercial, we achieved our highest ever revenue quarter, over $1.1 billion, driven by robust growth from ZyWave, Epidiolex, and the early successful launch of Medeso, the first and only drug treatment for recurrent H3K27M mutant diffused midline glioma, an ultra-rare and aggressive brain tumor. Approval of Medeso followed the acquisition of Chimerix earlier this year, reinforcing our ability to strengthen our portfolio through corporate development. We also secured FDA approval for Zepselca in combination with Etuzaluzumab as a first-line maintenance therapy for extensive stage small cell lung cancer. Both therapies are now included in NCCN guidelines, reflecting the meaningful advancements these therapies bring to patients. Moving on to our pipeline, we look forward to sharing the highly anticipated top-line results from the Phase III Xanidatamab Horizon Trial in gastroesophageal adenocarcinoma, or GEA, later this quarter. In addition, we strengthen our early-stage epilepsy pipeline through a global licensing agreement with Saniona. This agreement provides JAS with worldwide rights to develop and commercialize SAM 2355, a promising preclinical candidate designed to overcome the limitations of non-selective KD7 targeting compounds. On the financial front, we remain strongly positioned to invest in the key growth drivers of our business. We narrowed our 2025 revenue guidance to a range of 4.175 to $4.275 billion. reflecting increased confidence in our outlook at this point in the year. In addition, we were pleased to have reached settlement agreements across the entirety of the Xyrem antitrust litigation and the litigation with Avidel. With these matters behind us, we can focus squarely on executing our strategy, maximizing our impact for patients, and creating meaningful value for our shareholders. Finally, we're thrilled to welcome Dr. Ted Love to our board of directors. Ted's extensive leadership in the biopharmaceutical industry and track record of driving scientific innovation, commercial success, and shareholder value will complement the capabilities of our existing board and deepen our commitment to innovating for patients. In summary, we delivered a highly productive third quarter with record revenues, FDA approval and rapid launch of Medeso, completion of the Santa Yona licensing agreement, and in October, litigation settlements and first-line maintenance combination approval for Zepselka, all of which position us for a strong close of the year. I'll now turn the call over to Sam to discuss our commercial performance, after which Rob will cover our R&D pipeline, Phil will provide a financial update, and after that, we'll open the call to Q&A. Sam?

Thank you, Rene. I'm looking forward to sharing the progress of our growing and increasingly diversified commercial portfolio today. Starting on slide seven, during the third quarter, we continued to build on the positive momentum we've seen across our sleep portfolio this year. Total revenue from our sleep therapeutic area, which includes ZyWave, ZyRen, anti-sodium oxibate authorized generic royalty, was $520 million. DyeWave net product sales grew 11% year-over-year to $431 million. We're pleased with the strong execution of our field teams, which drove an increase of 450 net patient ads exiting the third quarter, with 125 net patient ads from Narcolepsy and 325 from IH. Our field team's efforts have been bolstered by our disease awareness digital campaigns that have now been expanded to include narcolepsy in addition to IH. Our field nurse educator program continues to drive positive impact for patients starting therapy. This program enables new thyroid patients to interact in person with a registered nurse. to receive education on titrating and optimizing their oxibate therapy, and have been effective in helping patients remain on treatment. The health benefits of reducing sodium intake continue to resonate with HCPs and patients, solidifying Zywave's position in the market as the only oxibate that provides a significant and clinically meaningful reduction of sodium. In August, the American Heart Association and American College of Cardiology published a 2025 high blood pressure guideline, which recommends daily sodium intake should not exceed 2,300 milligrams per day. For patients predisposed to high blood pressure, The daily intake of sodium should be less than 1,500 milligrams per day, a level which is exceeded by the recommended daily dose of all high-sodium oxibate treatment options. These recommendations are supported by the recently published ZYLO study that showed switching to low-sodium ZYWave from high-sodium oxibate was associated with a clinically meaningful reduction in blood pressure. These guidelines, alongside the Xylo data, reinforce our belief that every patient taking an oxidate to treat narcolepsy or IH should have the opportunity to benefit from XyWave. We carry very strong momentum with low-sodium XyWave into 2026, which is a year that brings the potential entry of one or more generic versions of our high-sodium XyRAMs. As a reminder, generics of Xyram are able to enter the market early next year. The revenue impact to JAWS will depend on which companies enter the market, how many may enter, and how these products will be priced. We therefore recognize that the availability of generics could result in payer actions that cause some level of destruction to ZyWave revenue. However, even in a market with generic competitors, ZyWave offers a differentiated profile. And we will partner with payers to ensure that patients continue to have strong access to ZyWave, the only low-sodium oxidate on the market, and the only FDA-approved treatment for IH. Moving to slide eight in the epidioleps. Net product sales were $303 million, resulting in a 20% increase compared to the third quarter of 2024. We continue to see healthy underlying demand for Epidiolex with 10% volume growth in the quarter. Revenue this quarter also benefited from the release of reserves following refinements of certain accrual rates here in the US. We are seeing the same benefit from the robust body of real-world evidence supporting both seizure and non-seizure benefits of Epidiolex with new data from the EpiCom study expected at the AES annual meeting next month. In addition, the Nurse Navigator program has driven a meaningful improvement in persistency amongst Epidiolex patients enrolled in the program. Given our solid year-to-date performance, we remain confident that Epidiolex will reach blockbuster status this year. Moving to oncology on slide 9, for the third quarter of 2025, Rylase net product sales were $100 million, representing a 1% increase compared to the third quarter of 2024. Whilst overall asparaginase use has declined following implementation of updated pediatric protocols, the use of Rylase within the asparaginase class for pediatric treatment has remained stable. Our efforts continue to be focused on ensuring optimal use of Rylase in the pediatric setting, ensuring patients are switched to Rylase at the first sign of a hypersensitivity reaction, and increasing Rylase use in the adolescent and young adult population. On slide 10, net product sales for Zepzelka for the third quarter of 2025 were approximately $79 million, a decrease of 8% year-over-year due to continued competitive dynamics in the second-line setting. We were pleased to have received FDA approval for the combination of Zepzelka plus Tocentric, expanding Zepzelka's indication into first-line maintenance therapy for extensive-stage small-cell lung cancer. Data from the phase three and fourth day trial demonstrated a statistically significant improvement in overall survival for Zepzelka in combination with Dicentric, reducing the risk of death by 27% compared to the Dicentric-only arm of the trial. We believe these data are practice-changing, and we are excited about the opportunity to help improve patient outcomes. We currently have the right team and capabilities in place to deliver a successful launch of Zepvelka in this new indication. Turning to slide 11, Medezo became commercially available less than two weeks after receiving accelerated approval, generating $11 million in net product sales during the third quarter of 2025. We were pleased to receive early inclusion into the NCCM guidelines as a preferred treatment for both adult and pediatric use. Given the very high unmet need, exceptionally high awareness of MEDASO and strong patient advocacy support, we've seen rapid uptake in this early phase of the launch, with more than 200 patients having received MEDASO at the end of the third quarter. The majority of these patients were new patients with a smaller proportion transitioning from the early access program. We're hearing positive early feedback amongst physicians. Our comprehensive launch plan includes direct engagement with about 3,000 healthcare providers with an additional 7,000 targeted to non-personal promotion, focusing primarily on academic centers of excellence where these complex cases are treated. We've implemented robust patient access and support services through our exclusive distribution partnership with Onco360. These investments were made to ensure patients can access treatment quickly and easily, and we're pleased with the strong payer access thus far. The launch of MEDASO highlights JAS's proven ability to advance rare disease and oncology programs through regulatory approval and commercial launch. I'll now turn it over to Rob for an update on our pipeline and upcoming milestones. Rob?

Thank you, Sam. Slide 13 provides an overview of the key clinical programs in our diversified pipeline, including the comprehensive clinical development program that is underway for ZanaDataMap. There are multiple ongoing registrational trials for Xanadatamab, including the confirmatory first-line BTC trial, the Horizon GEA-01 trial and first-line GEA, and the advanced breast cancer trial evaluating Xanadatamab's efficacy following treatment with TDXD. In addition, we have earlier trials like the DISCOVER PAN206 Pantumar Trial, and the Neoadjuvant Adjuvant Breast Cancer Trial. These trials are progressing well with significant interest from sites, and we look forward to sharing an update on potential timelines for these trials as appropriate. Regarding our confirmatory Phase III action trial of durdaviprone and newly diagnosed H3K27M mutant diffuse glioma, We are in active dialogue with the FDA regarding potential updates to the trial. Pending regulatory alignment, our intent is to increase the sample size to power the trial for a primary endpoint of overall survival, which we view as the most appropriate endpoint for this confirmatory trial. Based on these proposed updates, we currently estimate an interim analysis of the overall survival could occur in late 2026 or early 2027. The trial is active at more than 95 international sites and remains on track with more than 50% of patients enrolled. Moving to slide 14, our next major catalyst is the top-line readout of the Phase III Sanitatum at Horizon GEA-01 trial. As we announced today and after alignment with FDA, we have updated the intent to treat patient population for PFS to now include the fully enrolled patient population, increasing the PFS cohort from the targeted 714 to 920 patients, which is the actual number of enrolled patients as detailed on clinicaltrials.gov. As a reminder, we previously took the opportunity to expand the patient population for the overall survival analysis by expanding the sample size for that endpoint. With progression events, accruing more slowly than anticipated, combined with the study being fully enrolled with sufficient follow-up on enrolled patients, we aligned with the FDA to conduct the PFS analysis on the entire randomized patient population. Following this change, we continue to have robust powering to show a benefit for PFS, and we remain highly confident that we will announce top-line results later this year, consistent with our prior guidance. With that, I will turn the call over to Phil for a financial update.

Phil? Thanks, Rob. I'll start on slide 16 with our top line financial results. As a reminder, our full financial results are available in our press release and in our 10Q. During the third quarter of 2025, we generated $1.126 billion in total revenues. This represents an increase of 7% compared to the third quarter of 2024. Epidiolex grew 20%, and Zywave grew 11% compared to the third quarter of last year. And continued strong performance of these products positions us well for the rest of 2025 and beyond. In total, revenue from our oncology products increased 1% compared to the third quarter of 2024. This modest increase was driven primarily by the inclusion of Modeso and Zyhera, partially offset by lower sales of Depotelio and Zypselka. Adjusted net income, or ANI, for the third quarter of this year was $501 million. ANI was affected by several items that you'll see outlined in our press release and 10-Q, including the recognition of deferred tax assets related to the Chimerix acquisition, charges related to litigation settlements, and the Santa Yona licensing agreement. Cumulatively, these items increased our third quarter non-GAAP adjusted EPS by 66 cents per share. We continue to generate robust cash flow with nearly $1 billion recorded for the first nine months of 2025. And our balance sheet remains strong with $2 billion in cash and investments at quarter end. Turning to slide 17 in guidance, revenues tracking to our expectations. So with just one quarter left in the year, we're narrowing our full year revenue guidance to $4.175 to $4.275 billion. We've also made several adjustments to our non-revenue guidance. In terms of ongoing run rate, we've reflected lower litigation costs in our revised SG&A guidance, as well as continued portfolio optimization and prioritization in our reduced R&D guidance range. In addition, we've also incorporated the additional antitrust as well as AVIDEL litigation settlements into our revised SG&A guidance, have included the additional IPR&D charge from the Staniona deal, and have reflected the Chimerix income tax benefit I mentioned earlier. To help as you refine your models, I'd like to reiterate a point I made on last quarter's call. In the fourth quarter, we'll have 13 shipping weeks for our US oncology products. While this is a normal number of shipping weeks, it is one less week than we had in the third quarter of this year, as well as in the fourth quarter of last year. Finally, I'll close by providing a shout out to our internal teams who played a key role both in our acquisition of Chimerix and in the licensing of Saniyona's potentially best-in-class KV7 molecule. These transactions have strengthened our oncology and epilepsy portfolios, and we remain focused on improving Jazz's growth outlook by investing in external innovation. I'm confident that in the months and quarters ahead, we'll leverage our strong financial position to execute value-creating deals that benefit patients and shareholders. With that, I'll turn the call back to Renee for closing remarks.

Thank you, Phil. I'll conclude our prepared remarks on slide 19. JAWS's third quarter results underscore the strength of our diversified portfolio and the exceptional execution of our team. We've delivered meaningful progress across our commercial portfolio, including the launches of Medeso and Zepselka, and we'll continue to focus on ensuring our therapies reach more patients quickly. Looking ahead, we remain on track to share top line results from the phase three GEA trial of zanidatamab later this quarter, an important milestone for JAS and for patients facing this aggressive cancer. Our focus on strong execution and disciplined capital allocation, combined with the momentum we've built, position us to deliver meaningful value to shareholders. 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 the 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. As a reminder, we ask that all analysts please limit themselves to one question. Please stand by while we compile the Q&A roster.

Our first question comes from the line of Mark Goodman.

Your line is now open.

Rob, you mentioned the KB7 is potential best in class. Can you talk about How is that best in class? And on the EpidioList, can you guys just quantify what that benefit was to gross to net? Thanks.

We believe the KB7... Go ahead, Rob. Thanks. Thanks, Renee. We believe the KB7 that is in development after the Saniyona deal is best in class because of the specificity for KB7.2 and KB7.3. differentiated from other molecules which have broader activity. And the broader activity tends to give off-target toxicity without adding to the efficacy. So we think we're in a precedented validated mechanism that's potentially very impactful, but with higher specificity that will potentially allow us to hit the relevant targets harder and stay off of the targets that are causing unwanted side effects.

And I'll just jump in on the Epidiolex question, Mark. It's Sam here. Yeah, so for Epidiolex this quarter, it was a good quarter, as you saw, $303 million, 20% revenue growth. Important, I think, for us to highlight that we saw 10% volume growth this quarter. So, you know, a good, healthy double-digit volume growth. The revenue in the quarter was boosted not only by the volume growth, but also by the refinement of certain accrual rates here in the U.S. that gave us an impact in that third quarter. And we don't expect that to have a very material impact on future quarters.

So you don't want to quantify it?

Mark, this is Phil. I'd say it's the majority of that remaining difference between the 10% volume growth and the 20% revenue growth, but it's not all of it.

Thank you.

Sure.

Thank you so much. Our next question comes from the line of Jessica Fay with JP Morgan. Your line is now open.

Hey guys, good afternoon. Thanks for taking my question. You mentioned that 2026 brings the generic entry of one or more generic Xyrems. Can you just elaborate on how you're thinking about the potential for other filers to enter in 2026 and is your base case that there is at least one ANDA entrant? And then if you'll indulge me, I am so curious, the change to the population being used for the PFS analysis for the Horizon GEA trial. Can you just walk through the potential benefits of using the ITT population for the PFS analysis in addition to OS? It just seems like you're already well-powered for PFS, so curious kind of what brought that about. Thank you.

Rob, why don't we start with the second question, and then we can turn to Sam.

Sure, and thanks for the question, Jess. So, as a reminder, When we first took the study over from ZymeWorks, we knew we wanted to increase the sample size to ensure adequate power for overall survival, even though the study was clearly well-powered with the 714 for PFS. At the time, given our assumptions around how the PFS events would roll in, we thought there would be a big gap between the time that we were ready to read out PFS on 714 versus having enough maturity on the fully enrolled sample size. So over the course of time, the PFS events came in more slowly than we had predicted, as you know, and the trial enrolled very briskly. So we found ourselves in a situation where we actually have enough maturity on the full sample size, and so it only makes sense to look at all the patients enrolled, you know, rather than a subset. We checked that with health authorities, the FDA, and they were aligned with that approach.

And just coming, Jess, to your question around ZyWave, as you know and as a reminder, generics are able to enter into the market from the beginning of next year. At this stage, You know, we don't know the number of generics that would enter, when they might enter, or the price at which they will enter the market. So there are some unknowns there. But the availability of generics could result in payer actions that cause some disruption to Zywave revenue. We are going to continue to partner with payers to ensure that patients have access to low sodium Zywave. We believe that's important. And we believe that, of course, Zywave continues to offer a really differentiated proposition to patients being the only low sodium oxibate in the market and the only FDA approved treatment for IH. So, yeah, that's how we're currently viewing 2026. Of course, still some things that we need to see how they'll play out in practice.

Thank you so much. Our next question comes from the line of Andrea Newkirk with Goldman Sachs. Your line is now open.

Hi, everyone. Thanks so much for taking the question. Sam, maybe I can follow up on Jess's question there. Just as you think about potential generic entrants outside of maybe these negotiations with payers, are there any other strategies you might be willing to contemplate to defend against the competitive threat that might arise to the sleep franchise.

Yes, thank you for the question, Andrea. You know, we've been focused now, as you can see, that we've had very, very strong momentum with Zywave through the course of this year with 11% growth. And we continue to add net patient ads each quarter. We've got the highest number of active patients on treatment now. So we're carrying really strong momentum into the market. And the things that we've been doing are going to be as relevant in 2026 as they are in 2025. The execution of our field teams has been very strong. The differentiation that we've been communicating to HCPs has really resonated well. Even in a changing environment in 2026, Zywave is going to be the only low-sodium oxibate on the market. We believe that that's still a really important differentiating proposition for customers and for patients. And we're going to continue to invest in ensuring that that differentiation is understood. I think the AHA guidelines, which just reinforce the importance of having a low sodium option, as well as our xylo data, which shows the impact of switching from a high sodium oxibate to a low sodium oxibate. These are all really very important differentiating features, and we'll continue to communicate those to HCPs as we enter 2026.

And just to add on to that, while this is not a direct strategy relative to defend against impacts, I will say just noting that we did report in our 10-Q that we entered into an amendment with HCMA And that amendment to our agreement extends the agreement by two years. We do recognize that a portion of the narcolepsy market does continue to choose high sodium oxovate by providing more therapeutic options. We think that's a good thing for patients. And so, of course, our royalties on the sale of authorized generics by HICMA provide us the opportunity to continue to participate in that market. We've extended the agreement by two years. Our royalty rates are the same through the end of 2025 and then subject to specific reductions. Of course, HCMA does maintain a right to launch a generic. If they do so, they no longer have access to our authorized generic or our REMS. But as part of this, we also gain termination rights that we did not have previously, which allows us to better manage our business. So that's another element of of our business that we think makes sense for Jazz and is important to understand.

Thank you so much.

Our next question comes from the line of Akash Tewari with Jefferies. Your line is now open.

Hey, thanks so much. So, we've seen some increasingly unpredictable interactions with biotechs and the FDA recently. How confident is your team that the FDA is okay with Horizon GEA having no U.S. patients in the trial? And was that discussed when you updated the PFS analysis with the agency recently? Thank you.

Rob, you want to jump in on that one?

Yeah, happy to, and thanks for the question, Akash. So, you know, we've had multiple interactions with FDA and other health authorities. And we're aligned on the overall design. There was a clear rationale for not accruing patients from the US, you know, with the approval of Keytruda would have been a confounding factor. But the FDA is really focused on it's not so much whether patients are being enrolled from the US, but whether the enrolled patient population is representative of patients in the US in terms of disease characteristics that the trial design is well controlled, using a control that's relevant to U.S. patients, and that the trial conduct, including supportive care, is in line with typical supportive care, so that overall the results would be applicable to the U.S. population. And so we've had this discussion with FDA over multiple interactions, and I'm comfortable that it's not an issue for us.

All right. Thank you so much.

Our next question comes from the line of Jason Gerberry with B of A or Bank of America. Your line is now open.

Hey, guys. Thanks for taking my question. Just another follow-up on the Oxibate generics next year. I would assume by now, like November, I remember around this time, 3Q, ahead of Avidel coming the subsequent year, you guys had a line of sight on being a parity access as an oxovate. I'm just wondering why that is. Maybe you don't have a line of sight. Would it be your base case that to get ZyWave, you're going to have to step through a generic with most insurers? And then I'd love to get your thoughts just on emerging orexin data in narcolepsy type 2. I think NT1, the data and profile is pretty reasonably well understood, but I think we are seeing less of a treatment effect size in NT2, and I'm just kind of curious how you think about the value proposition of that as a potential competitive threat to ZioWave as well. Thanks.

Thanks for the question, Jason. Why don't you hop in on the first one, Sam, and then, Rob, you can cover the second.

Yes, thank you. Thanks for the question, Jason. Yeah, so far there has been no material change to our engagement with payers. We continue to engage with them as we normally would do on 2026. We don't have a line of sight into exactly how 2026 will play out. We know that generics are able to enter the market, but we don't know yet how many there will be when they might enter and what the precise pricing conditions will be. And all of that obviously will have a bearing on the year ahead of us. Of course, you know, we do expect that to have an impact on Zyrem revenue, but the materiality of impact as I wave, you know, will depend on all of those factors yet to be determined.

Again, happy to answer the question related to NT2. So, first of all, not a surprise that NT1 is more sensitive than NT2 or IH would be given what we know about the underlying biology. And I'm also not surprised to see that as data emerged that, you know, we're learning still. It's fairly early days and still learning, you know, what we'll have, which compound will have the best in class profile. you know, how to dose, what half-life is maybe most optimal, and ultimately the benefit of erection agonists relative to other options such as oxibates and ZyWave. And I think all of the data that are emerging, you know, continue to reinforce our position that ZyWave, OxyBait, ZyWave being the safest of all OxyBaits given the low sodium, is really the only way to address the disruption and the abnormalities in nighttime sleep, which are the root cause of NT1, NT2, and idiopathic hypersomnia. Some of the data that we published on ZyWave and world sleep recently, I think, highlighted that, the benefit of ZyWave in terms of improving those sleep parameters, which appear not to be improved. when you look at total sleep or deep sleep, which is important not to be improved based on the available data that we have on orexin agonists. In fact, orexin agonists, especially depending on the half-life, can cause insomnia and disrupt sleep. So we continue to think that while orexin agonists are very potent weight-promoting agents for daytime symptoms, that the combination could be very powerful. It's always been the case for OxyBates that patients sometimes take weight-promoting agents during the day, and we think that that will continue to be the case and that erections will be another option there. But as data roll out, it continues to reinforce the value of ZyWave for patients who are benefiting.

Thank you so much.

As a reminder, everyone, we ask that all analysts please limit themselves to one question. Please stand by while we compile the Q&A roster. Our next question comes from the line of Amy Fadia with Needham & Company. Your line is now open.

Hi, good afternoon. Thanks for taking my question. Maybe just a broader one. You know, how have your business development priorities between CNS and oncology evolved with some recent successes that you've had on the oncology side, the GEA data around the corner, but also looking a little bit ahead, the changing landscape in the sleep space. So how are you thinking about sort of where your priorities might be? Thank you for the question.

So first and foremost, we are highly focused on where we believe we can have a meaningful impact for patients, and whether that is within oncology, neuroscience, or neuro-oncology, that's where our primary focus is. Rob, do you want to comment further?

Sure. You know, as we highlighted in our prepared comments, we're certainly very excited about some of the near-term readouts. The fact that we now have approval and frontline Small cell lung cancer, completely changed paradigm, and a new standard of care for those patients who are in desperate need of new therapies. Approval of durdaviprone, first drug therapy approved, and high-grade gliomas already having a huge impact and a very high on that need. And then, you know, thanadatumab approved in BTC, and a lot of anticipation and excitement around the potential in GEA and beyond. you know, certainly excited about our oncology franchise, but also a lot of promise on the CNS side as well with Epidiolex evolving into the critically important drug that it is and our capabilities around epilepsy enabling us to do deals like Saniyona and to develop other pipeline agents that we have that haven't necessarily disclosed the specifics of, but continue to make us excited about areas such as epilepsy as well.

Thank you so much. Our next question comes from the line of Mohit Bunsell with Wells Fargo. Your line is now open.

Great. Thank you very much for taking my question. I would love if you could comment on how should we think about the authorized generic royalties for next year? When would you know that HCMA has opted in or opted out at this point, given that we are in November at this point? What should be our base case? Thank you.

Sure, Mohit. I'm happy to go ahead and take the questions, Phil. So at this point, our assumption is that we will have the AG provided by HICMA during 2026. The royalties, as Renee mentioned, sort of stay at their current rate here this year and then will be subject to step downs. We're not providing the specific percentages that will be applied. Other than this, it continues to be a meaningful royalty back to JAS and a potential meaningful revenue stream for us moving forward.

Thank you.

Thank you so much. Our next question comes from the line of David Amsellon with Piper Sandler. Your line is now open.

Thanks. I wanted to come back to ZyWave. David Miller- And dynamics in 2026 with Zyrem generics in the market. So you made some comments about access shoring up access. So should we take that to mean that you're going to be making some concessions on Zywave pricing. In other words, you will see some David Miller- Degradation potentially in net realized price for Zywave and sort of a cost of and continuing to have access and preventing switching away from ZyWeb. Is that a reasonable way to think about it, or is it just too early to go there? Thanks.

Yeah, this is Renee. I'll jump in on that one. I would say going into the year, we are feeling good about our current position. But I would emphasize some of the comments that Sam made previously that With the availability of generics, there could be additional actions that take place that could cause some disruption, and it really does depend on how the market evolves. We have a very high focus on ensuring that we have access, and that is strong access. Sam talked about where we are today with little to no step through in order to get access To ZyWave, we have focused on the clear differentiation of the product. So I would say more to come as we get into 2026. We have not provided guidance for 26 yet, nor do we typically provide guidance by product. But I would say based on where we sit today and we're poised to enter 2026, we're feeling good about the position that we're in.

Thank you so much.

Our next question comes from the line of Annabelle Samimi with Stifle. Your line is now open.

Hi, great. Thanks for taking my question. I'm going to shift gears to oncology. I'm wondering, for Modazo, that seems like it was a great start. Is this a bolus? Does it include stocking? And what can we expect for the cadence of uptake in the coming quarters? How familiar are docs with this treatment? And I guess in the same way for the new approval or expanded label for Zypselka, I realize that it's probably too early, but the data has been out for some time now. Has there been any contribution yet in the first-line setting? And what can we expect on the cadence for approval, post-approval there with the compendia inclusion and the fact that it was already an available drug? Thanks.

I'll start and then hand it over to Sam to cover Medesa. So why don't I just start with Zepzelka, which is it's pretty early given that we just received the actual approval. So we're excited about the reaction we're hearing from physicians. They're obviously already very comfortable in using Zepzelka in the second line, but too early to tell how much use is happening in the first line. With respect to the day, so little to no stocking, that's not really how our distribution works, but super excited about this on the back of a successful corporate development transaction, Sam.

Yeah, I'll just add to that, Renee, in relation to Medezo. We're obviously really pleased with the launch so far, I think $11 million in the first quarter, you know, following FDA approval in August. And obviously we received the NCCN guidance in pediatrics and adults as well. There has been, I think, really three factors that I'd like to kind of highlight. First of all, obviously, the very, very significant unmet need. We've had very strong HCP inpatient engagement. You had a question around awareness. Awareness of the product is exceptionally high, and we're seeing that in the rapid uptake. We have a really experienced team behind this product dedicated to Medezo. And I think they're doing a terrific job. And access has been really, really very strong. We've got a very good partnership with our specialist distributor who are supporting patients to get onto treatment rapidly. In terms of, we did see, we had about 200, just over 200 patients by the end of the third quarter. Some of those did come from the expanded access program, but more than 60% of them were new patients, so new to Medezo. And that's how we would continue now. And that's the outlook for the forthcoming quarters is these patients will all be new to Medezo. And we're seeing a steady uptick there. So confident launch and really just reinforces our belief in this product as a potentially $500 million plus peak in the US.

Thank you so much. Our next question comes from the line of Brian Gorkney with Bayer. Your line is now open.

Thank you for taking my question. Maybe for Rob on the GEA readout, now at a sample size of 920, can you just review, are there four separate comparative analyses here that or B versus A, C versus A for OS and PFS, and how to think about powering across them and the alpha split, and is there any hierarchy to the analysis?

Yeah, I mean, while there were some early publications that detailed the specifics, you know, since Jazz took on the trial, as is our usual, we don't get into the nitty-gritty of the statistics, but I would say that We do have the opportunity at this point to look at both PFS and an interim on overall survival. And I would say a silver lining of the PFS events coming in a little more slowly as we probably have more maturity on overall survival than we might have had under protocol assumptions. And yes, there is the opportunity to make the comparisons between both of the experimental arms and the control arm. Having said that, we think we're very, very well-powered for PFS. Obviously, the trials at 918 is powered for overall survival, and that sometimes even makes it, you know, somewhat, quote, overpowered for PFS. So we think we're well-powered for PFS, and we have a well-timed first of three interim analyses for us.

Great. Thank you. Thank you so much.

Our next question comes from the line of David Hong, which is Dolce Bank. Your line is now open.

Hi. Thanks for taking my question. I just wanted to ask, I guess, another one on Horizon GEA. Can you just help us, I guess, maybe set expectations for the level of disclosure you would have in the top line data Would we see things like subgroups broken out by PD-L1 expression status? And once the data in hand, is your expectation to approach the FDA and be able to receive a full approval on this data? Thanks.

Yeah, thanks for the question. So, on the latter part of it, yes, we do expect this would, as a randomized controlled trial with a primary PFS endpoint and supportive Overall survival, if we see a large enough benefit in PFS and we see meaningful support from OS, it should bring full approval. To remind you, the primary experimental question here is really, is XANA data map superior to Herceptin, which we think we have lots of data to support that it would be. That's the primary comparison. And then, you know, between harms B and A, And then in RMC, we have the opportunity to see if the addition of a PD-1 inhibitor, specifically tizolizumab, adds to the benefit. We certainly will be measuring PD-L1 as a subgroup. Those subgroups aren't powered in any way, but we have an opportunity to look across subgroups. But the primary question is xenodatamab versus Herceptin. And then to your question of what would we be disclosing, You know, we'll try to be as transparent as possible, as I think we were with the recent Inforte data release where we indicated, you know, stat-sig clinically meaningful and tried to provide some color around that. We want to be careful about disclosing specific data in a press release ahead of a peer-reviewed publication because sometimes that can, you know, compromise our ability to published at a high-impact Congress and in a high-impact peer-reviewed journal, which then supports, of course, submission to NCC guidelines, et cetera.

Thank you so much for that. Our next question comes from the line of Ash Verma with UBS. Your line is now open.

Hi, yeah, thanks for taking our question. Rob, just on the GEA study, if you can comment on this. So I think you said when you adopted from Zyme the study, you wanted to change just the powering assumption for OS. Is the PFS powering assumption still the same that Zyme had? What I mean is the 95% for the HR of 0.65 for ARM-C and the 80% for 0.73 for ARM-B. Yeah, thanks for the question.

Yeah, I mean, what I wanted to point out is that when we did the deal, we knew that the study, and of course, I'm works did as well, that the study was underpowered for OS. You know, it was for a three-arm study. It had a similar sample size to Keynote 811, which had only two arms. So we knew we wanted to increase the sample size to better support power for overall survival and give us an opportunity to have two interim analyses before the final and third overall survival. At that time, we felt that PFS was well-powered even with 714 patients, you know, under the specific protocol assumption. So, you know, with the full sample size, we continue to think that it's very well-powered for PFS. I do acknowledge that there was a publication from ZymeWorks that detailed some specifics of the statistics, but we haven't commented since then on specific details of the stats. But just to reinforce that very, very comfortable with the powering around PFS, and now we have, I think, a more robust opportunity for overall survival, including even, you know, the first two interim analyses before we have a final one.

Thank you so much. Our next question comes from the line of Joseph Tony with TD Cohen. Your line is now open.

Hi there. Good evening, and thank you for taking my question. Maybe one on the KV7 acquisition. Can you talk a little bit about where you are going to be looking at developing these therapies? Obviously, two competitors are reasonably ahead in the focal onset seizure space, but we've also seen companies look at ALS and pain. So is there any more room left in focal onset seizures, or are you even looking to look elsewhere where maybe you have a little bit more of a timeline advantage? Thank you.

Yeah, we haven't detailed or disclosed our full development ambitions for that program yet, and we are certainly thinking through that as we bring it forward to the IND stage. I think what's critical, though, is what motivated us to do this particular partnership is that we feel it has the potential to be meaningfully best in class in a category where I feel there is substantial scientific and clinical proof of concept around the target. But what we do know is that when you hit KB7 broadly, you not only get efficacy, but you see unwanted tolerability issues, which have been observed in the clinic. And we think that we've been able to parse them out around the subtypes so that this particular molecule being specific for KB7.2 and 0.3, we think has the potential to be much more on target for producing maximal efficacy, and avoiding KV7.4 and 7.5, which don't contribute meaningfully to efficacy and contribute to some of the tolerability issues that have been observed. So in short, we think we have best-in-class opportunity across certainly focal onset seizures, but in other areas where it would be relevant as well.

Thank you so much.

Our next question comes from the line of Asim Rana with Truist Securities. Your line is now open.

Congrats on the quarter and thanks for taking the questions. This is an awesome one for June. Just a couple from us. Where are you exactly with your Erex and Magnus JZP441? I know it's an open label. Just curious when we can expect an update. And as a follow-up, Olyxacaltamide recently reported positive top line data in the central tremor.

Is there any interest in reviving Cetacaltamide? Thank you. Rob, do you want to jump in?

Sure. I'm happy to. So, no new news yet on JZP441. We are enrolling a small NT1 trial. And, you know, we're seeing data emerge, nothing to disclose yet at the moment. But I would say we also have a backup program that we continue to pursue. Again, we think that the mechanism is of importance, has the potential to be a meaningful daytime alerting agent and very complimentary to Sidewaves. So we continue to be interested in that area. You know, in terms of the recent announcement by Praxis around CAF3 and essential tremor, you know, we read what you did. I still have some questions around what the data actually show, given that the IDMC initially, you know, called the trial futile. So it'd be very, it'll be ultimately interesting to see what data they have and what we can learn from that. You know, from our own study, we felt that the data just didn't support progressing that program relative to the other, you know, really meaningful opportunities that we have in our pipeline.

Thank you so much.

Our next question comes from the line of Sean Laman with Morgan Stanley. Your line is now open.

Hi, this is Michael Riad on for Sean Laman. Thank you for taking our questions. I wanted to drill down on some of your prior commentary. The desire wave results from Duet at WorldSleep seem really compelling. Can you help to contextualize the restoration of sleep architecture versus wake promotion with erections? Are they, like, more of an accelerant instead of a competitor? And if so, would you ever think about getting, like, the results from Duet formally into the label? And are the results from Duet sufficient in that regard? Thanks so much.

Yeah, thanks for the question, because I do agree that they are meaningful results. You know, we had prior data on the effect of Oxibate at night, and we do think that ZyWave is really the only You know, oxibates are the only drug that really address the root cause of narcolepsy and idiopathic hypersomnia. And Zyway, of course, is the safest, best option to do that, given that it's a low-sodium oxibate. But again, it reinforces that for patients like NT1 patients or even NT2 and idiopathic hypersomnia, where nighttime sleep is severely disrupted. If you take narcolepsy patients, for example, they might have over 80, on average, 80 awakenings a night. And, you know, very, let's say, disrupted or less N3 or deep sleep than a typical patient. And when you give ZyWave, as the study showed, you meaningfully improve that. And that results in improved daytime symptoms, both wakefulness as well as cataplexy. So we think it's critical to address the underlying root cause of the disease with any therapy in these hypersomnia. And some patients certainly will benefit from additional weight promoting agents during the day. We just haven't seen that with any of the other weight promoting agents and erections included. You know, the only data I've seen so far suggests that there may actually be insomnia and that may be worse. with drugs that have a longer half-life, that just don't wash out in time for the evening. Even the PSG data, which hasn't really been fully shared, suggests that there's not improvement in key parameters such as total sleep time or deep sleep. And it's concerning that the insomnia may be actually resulting in worsening sleep in that first part of the night, at least. And so, again, we continue to think that it's an important new mechanism in hypersomnia, but ideally will be used in combination with ZyWave, certainly for those patients who are finding meaningful benefit already from ZyWave. As to whether this could ultimately end up in the label, we certainly think that it's important information for prescribers to have, and that's why we published it. You know, I won't comment on necessarily where we are in terms of discussions with FDA on label changes related to it.

Thank you so much. Our next question comes from the line of Gary Nachman with Raymond James. Your line is now open.

Hey, everyone. This is Dennis Resnick, officer at Gary Nachman. Thanks for taking our question. Just on Zannie, assuming a positive GEA readout, how would you be thinking about pricing that scenario relative to what it currently is for BTC? Thanks so much.

Yeah, when we, this is Renee, when we priced Zannie for BTC, we were already looking at the GEA market and keeping that broader opportunity in mind. So I would not expect to have a different price as we are launching GEA. And I think with that, that was our last question. So I'd like to close today's call by thanking all our JAWS colleagues for their efforts, all of our partners and stakeholders for their continued confidence and their support. Thank you all for joining us.

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