Jazz Pharmaceuticals plc

Good day, and thank you for standing by. Welcome to the Jazz Pharmaceuticals' 2026 first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised, that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, John Ballou, Head of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone.

Today, Jazz Pharmaceuticals reported its first quarter 2026 financial results. The slide presentation accompanying this webcast is available on the investor section of our website, along with a press release and quarterly report on Form 10Q for the first quarter ended March 31st, 2026. On the call today are Renee Galla, President and Chief Executive Officer, Sam Pearce, Chief Commercial Officer, Robbie Annone, Global Head of R&D and Chief Medical Officer, and Phil Johnson, Chief Financial Officer. On slide two, I'd like to remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, growth potential and anticipated development, regulatory and commercial milestones, 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, 2025. 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, John. Good afternoon, everyone, and thank you for joining today's conference call. Building on our record year in 2025, we are pleased to share our results from an exceptionally strong first quarter led by commercial execution across our highly differentiated products for sleep, epilepsy, and cancers. This resulted in our highest ever first quarter total revenues of $1.1 billion, reflecting more than 19% year-over-year growth, driven by the outstanding performance of Zywave, Epidiolex, Medeso, and Zepzelka. Our commercial teams generated double-digit growth across all our promoted brands and saw strong contributions from our ongoing launches. This performance reflects the discipline and consistent efforts of our team, working with clarity and purpose to support the physicians and patients we serve. In addition to our impressive commercial performance to start the year, we are urgently advancing the development of ZANI data map for patients with HER2-positive first-line locally advanced or metastatic GEA, where the unmet medical need remains significant. The FDA recently accepted our SBLA for Zyhera under real-time oncology review, and granted priority review with the PDUCA date of August 25th, 2026. We are ready to launch Zyhera in GEA as soon as we receive FDA approval, and we expect Zyhera will become the HER2 targeted therapy of choice for HER2 positive first-line GEA patients, given the magnitude of benefits seen across both experimental arms when compared to the trastuzumab control arm. In R&D, we continue to make progress across our pipeline with multiple ongoing registrations anti-datamab trials, early stage trials evaluating oncology assets, and the early development of neuroscience and epilepsy assets. The year is also off to an excellent operational start with cash flow of over $400 million in the first quarter and non-GAAP adjusted EPS of $6.34. Our financial strength and disciplined capital allocation enable us to invest in the continued growth of our commercial portfolio and pipeline, while also positioning us to execute on business development opportunities that fit our strategic focus in rare disease. With that, I'll turn the call over to Sam to share more details on our commercial performance.

Thank you, Renee. Our commercial team delivered strong results across Jazz's portfolio. with momentum from our 2025 launches and coordinated execution continuing into 2026. I'll begin on slide seven with sleep. ZyWave net product sales increased 18% to $408 million in the first quarter of 2026, compared to the same period in 2025. As expected, HCPs and patients continue to drive demand for safer low sodium ZyWave and we saw strong new patient growth with approximately 425 net patient adds. There are now approximately 16,600 active patients taking ZyWave, which remains the number one branded treatment for narcolepsy based on product revenues and the only FDA approved treatment for idiopathic hypersomnia. Our field teams continue to expand both the IH and narcolepsy markets by educating HCPs on the importance of addressing the full spectrum of daytime and nighttime symptoms. These efforts are complemented by digital and media campaigns to increase disease awareness and support patient education. Our JazzCare support services, including field-based nurse educators, support patients from initiation through titration and across the long-term treatment journey. These services remain important differentiators for JAB. Moving to slide eight, an Epidiolex. Epidiolex net product sales increased 15% to $250 million in the first quarter of 2026, driven by strong underlying demand and 16% volume growth during the quarter. Expanding our reach in the adult patient population and specifically in the long-term care setting, remains a key focus and an important near-term growth opportunity. Our nurse navigator program continues to have a meaningful impact on improving patient persistency, and expanding utilization of this resource remains a priority for 2026. Finally, as part of our commitment to bring Epidiolex to appropriate patients in Japan, we have partnered with Nippon Zoki, a Japanese company with deep expertise in CNS disorders. Jazz remains the sponsor of the clinical trial, and Nippon Zoki will lead regulatory, distribution, and commercial activities in Japan. Turning to our oncology portfolio, starting with Zahira on slide nine. In the first quarter of 2026, Zahira generated net product sales of $13 million. Feedback from biliary tract cancer physicians continues to be positive with real-world experience consistent with the clinical profile observed in our trials. We are also continuing to expand into new community-based accounts beyond academic centers, increasing awareness of Zaheerah in BTC, and building readiness ahead of a potential launch in GEA. As a reminder, there is a substantial customer overlap across our solid tumor footprint, including approximately 90% overlap between BTC and GEA accounts. We believe this positions as well to accelerate uptake in GEA following its anticipated approval and launch on or before the August 25th PDUFA date. Once approved, our existing cross-functional team will be positioned to reach target customers and support rapid adoption of this practice-changing regimen for GEA patients. Turning to slide 10 and our GEA launch preparations, physicians are expressing excitement and interest in the potential use of Zaheera in GEA. It has been more than 15 years since a new first-line HER2-targeted agent became available for patients with metastatic gastric cancer. Given the unprecedented median overall survival data of more than two years, we believe Zyhera has the potential to become the preferred HER2-directed therapy and foundational backbone for treating HER2-positive first-line metastatic GEA. The addition of tizoluzumab further improved survival outcomes in both PD-L1-positive and PD-L1-negative patients consistent with Zahira's unique mechanism of action that generates an innate immune response in the tumor. Zahira already benefits from an established permanent J-code through its FDA approval in second-line HER2-positive BTC, which we expect will simplify reimbursement in GEA and reduce the administrative burden for providers. In addition, the compelling outcomes from the Horizon GEA trial support our expectations for favorable payer access. Finally, our comprehensive JazzCare support services, together with Zaheer's established availability across customers' preferred distribution channels, position us to enable seamless patient access at launch. Turning to slide 11 and Medevo. Medezo generated $41 million in net product sales in the first quarter of 2026. This strong early performance following its launch in August 2025 reflects the significant unmet need in H3K27M mutant diffuse midline glioma, high awareness driven by advocacy groups, and the value physicians see for patients. Approximately 500 patients have been treated with Medevo since launch through the end of the first quarter. Our highly experienced neuro-oncology field teams, including medical and access colleagues, continue to support the launch. The teams remain focused on expanding reach in community settings, whilst maintaining a well-supported presence in academic centers of excellence. Robust patient-centric support services and payer coverage continue to underpin launch momentum, and support appropriate access for patients. Moving to slide 12 and Zepzelka. In the first quarter of 2026, Zepzelka net product sales increased 60% to $101 million compared to the same period in 2025. Growth in the first quarter was primarily driven by strong uptake in the frontline maintenance setting, following FDA approval of sepsilca in combination with Ticentric in October of last year. Given the strength of the In Forte clinical data and the opportunity to improve both progression-free survival and overall survival for patients with extensive stage small cell lung cancer, healthcare providers are rapidly adopting the Zepzelka combination in the first-line maintenance setting. As a result, this new indication is driving the product's strong performance. Our commercial initiatives will continue to be focused on first-line maintenance, reflecting our ongoing commitment to this priority. For the rest of 2026, first-line maintenance adoption is expected to grow, with second-line use decreasing due to competition and fewer Zepzelka-naive patients available for treatment. Overall, we are satisfied with the impressive commercial performance achieved across our portfolio in the first quarter and remain focused on maintaining this momentum throughout the year. With that, I'll now turn the call over to Rob to provide an update on our pipeline. Rob?

Thanks, Anne. I'll start on slide 14. This is an exciting time at Jazz. In addition to our outstanding commercial execution, we are also preparing to bring Xanadatamab to HER2-positive first-line metastatic GEA patients. The data from the Horizon GEA trial definitively demonstrated that Xanadatamab offers improved outcomes on all efficacy measures compared to Trastuzumab. and should be the new HER2-targeted agent of choice. The data also showed tizolizumab further improved survival outcomes in both PD-L1 positive and PD-L1 negative patients. The benefit, regardless of PD-L1 status, may be driven by zanidatumab's unique mechanism of action, known as biparotopic binding. This enables zanidatumab to cross-link neighboring HER2 receptors, leading to receptor clustering, which blocks HER2 growth signaling and also triggers the complement cascade. Xanadatamab's ability to uniquely and broadly activate the innate immune system may in part explain the additional efficacy observed when tizolizumab was added to Xanadatamab, even in PD-L1 negative tumors. The triplet arm of Xanadatamab, tizolizumab, and chemotherapy demonstrated improved overall survival with a remarkable median OS of 26.4 months, representing a meaningful improvement of more than six months median OS compared to prior studies in HER2-positive patients who have a poor prognosis in the metastatic setting. Among patients who had an objective response, the median duration of response was 20.7 months. Again, this benefit was observed irrespective of tumor PD-L1 status. To put this into context, in the Keynote 811 trial, the duration of response for trastuzumab and pembrolizumab plus chemotherapy was 11.3 months. We are moving quickly to bring Xanadatumab to HER2-positive first-line metastatic GEA patients. Following the oral presentation at ASCO GI in January, we submitted the data for potential inclusion in NCCN guidelines. We're pleased that the manuscript has been accepted for publication by a top-tier medical journal and plan to submit the peer-reviewed manuscript to NCCN once it has been published. Our supplemental BLA for Xanadatamab has received priority review. with a PDUFA date of August 25th, 2026. We are actively engaged with the FDA in the review process, and we expect potential approval and launch of Xanadatamab and GEA on or before the PDUFA date. Turning to slide 15 in our pipeline, we have multiple clinical trials across our pipeline from early stage to registrational trials. We look forward to sharing data from some of these ongoing trials at the upcoming ASCO meeting in early June with a number of presentations on lorinectadine and Xanadatamab. The second planned interim analysis for overall survival of the Xanadatamab and chemotherapy arm of the Horizon GEA trial is still expected mid-year. At the time of top-line readout, this arm showed a clinically meaningful effect on overall survival with a strong trend towards statistical significance compared to the control arm. The next pivotal phase three trial for Xanadatamab is in metastatic breast cancer patients who have progressed on or are intolerant to and HER2, and trial enrollment is progressing well. We continue to expect to complete enrollment in the EMPOWER trial in the first half of 2027 with top line data anticipated in late 2027 or early 2028. Other earlier stage trials continue to progress across new indications, including a potentially registrational pan tumor basket trial and a neoadjuvant adjuvant breast cancer trial. Looking ahead to later this year or early 2027, we anticipate the ongoing phase three action trial will have an interim overall survival readout. This trial is designed to confirm the benefit of MODESO and support regulatory approval as frontline therapy directly following radiation instead of waiting for signs of tumor progression before treating with MODESO. We are working with dedicated focus to both realize the full potential of our near-term opportunities and to rapidly progress our pipeline. Our in-house research and development efforts are underway, and we look forward to sharing updates on those and further pipeline progress in the future. Now I will turn the call over to Phil for a financial update.

Phil? Thanks, Rob. I'll start with high-level comments on our non-GAAP-adjusted P&L, as shown on slide 17. Please note that our full financial results are available in today's press release and 10Q. The outstanding execution of our field-based teams was reflected in record first quarter revenue of $1.07 billion, driven by 45% growth in our oncology portfolio, 18% growth in ZyWave, and 15% growth in Epidiolex. Strong underlying performance drove the vast majority of our revenue growth. I do want to point out two smaller items that also contributed to growth this quarter. First, we had the normal 13 shipping weeks for our U.S. oncology product this quarter, while in last year's quarter, we had 12 shipping weeks. This contributed about two percentage points to our worldwide revenue growth rate. Second, the significant devaluation of the U.S. dollar led foreign exchange to contribute about one and a half percentage points to our worldwide revenue growth. Moving down to P&L, our non-GAAP-adjusted gross margin declined slightly year-on-year, primarily due to higher sales of products carrying royalties, namely Zepzelka and Medeso. Non-GAAP-adjusted SG&A expense decreased by about $164 million. You may recall that in last year's quarter, we recognized litigation settlement expenses of $172 million. Excluding these expenses, SG&A increased by $8 million, driven by the inclusion of Medeso expenses. Non-GAAP-adjusted R&D expenses increased by $13 million, primarily due to the inclusion of Medeso clinical trial expenses and higher compensation-related expenses. Our non-GAAP-adjusted effective tax rate this quarter was slightly lower than our full-year 2026 guidance due to excess tax benefits from share-based compensation, while our shares outstanding for the quarter reflect the accounting effect of our higher share price on our convertible notes and employee stock plans. At the bottom line, we post very robust non-GAAP adjusted EPS of $6.34. Supported by our strong start to the year, we are reaffirming our full year 2026 revenue and expense guidance, including total revenue guidance of $4.25 to $4.5 billion. Total revenue guidance for 2026 includes the assumptions you see on slide 18. As a reminder, we assume competitive dynamics in our sleep business will increase in the second half of the year, including high-sodium generics gaining volume and one or more daytime weight-promoting agents potentially entering the narcolepsy market. We also expect to see a decline in the Xyrem and high-sodium authorized as generic revenues as generic high-sodium oxidates build their volumes over the course of 2026. And as Sam mentioned earlier, we expect a decline in second-line use of Zepselka. Our Q1 performance and focus on disciplined capital allocation position us well to achieve our 2026 guidance. Moving to slide 19, our balance sheet remains strong. We continue to generate significant cash from our business, recording $408 million of cash from operations in the first quarter of the year. We ended the first quarter with $2.9 billion in cash and investments. Our overall financial position and robust operating cash flow provides significant flexibility to invest in value-driving commercial and R&D programs, as well as in promising corporate development opportunities to support our rare disease strategy. I will now turn the call back to Renee for closing remarks.

Thank you, Phil. I'll conclude our prepared remarks on slide 21. The first quarter of 2026 builds on the successes we achieved in 2025. Our focused commercial execution led to more than 19% growth in the first quarter. And based on these results, we are on track to achieve our 2026 financial guidance. We look forward to several upcoming catalysts, including the second interim analysis of overall survival from the Horizon GEA trial mid-year. Top-line readout for overall survival for the confirmatory action trial from ADESO is expected at the end of this year or early next year. And the top-line readout from the trial evaluating zanidatamab in late-stage breast cancer post-NHR2 treatment is expected in late 27 or early 2028. We continue to build upon our proven scientific expertise and capabilities to make a meaningful impact for patients. Supported by our strong financial position, you should expect to see us invest in our commercial brands and pipeline and business development to broaden our portfolio in key strategic focus areas of sleep, epilepsy, and oncology, in addition to other areas of rare disease. I'd like to thank all our Jazz colleagues for their efforts and dedication to making a difference in the patient's lives that led to an exceptional first quarter. We are relentlessly focused on continuing to execute and deliver life-changing medicines to patients. 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. As a reminder, if you would like to ask a question, please press star 11 on your telephone. We also ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question today will be coming from the line of, just say, of JP Morgan. Please go ahead.

Hey guys, good afternoon. Thanks for taking my question. Question on Zany Datamab for breast cancer. So if we assume Zany beats her septum in breast cancer and gets approved one day for use in the post and HER2 setting, how do you expect physicians to make decisions about how to sequence agents in the context of, you know, a lack of data for other products posted in HER2, among other things. Thank you.

I'm happy to address that, Jess. This is Rob. You know, we became very interested in this space based on good advice from many key experts in the field. And the fundamental issue is that once in HER2 moves to frontline, There's very little data about which HER2 agent to select as subsequent therapy. So the trial that we're running, 303, will be the first time that we definitively, in a randomized setting, evaluate Sanadatamab versus what would be considered a standard of care. So we expect to be out ahead with important data that will inform decisions about whether to use Sanadatamab or other HER2 agents in that space.

Thank you. One moment for the next question. And the next question is coming from the line of Joseph Rome of TD Cowan. Your line is open.

Hi there. Good afternoon. Congrats on the quarter, and thank you for taking my question. Um, maybe 1 on, um, do you have any updated thoughts on sort of the size of this patient population? I think historically it was thought that it was maybe 2 or 3000, but it says, like, something already hitting 500 patients. So any thoughts on that total opportunity? Just given the strength of that launch and maybe a follow up if I can on an M and a. Kind of what's your latest thinking in terms of where you'd like to go? Obviously, we've seen a lot of activity in the past few weeks in different areas. Kind of what's the sweet spot in terms of size and area of focus for Jazz moving forward? Thank you.

Yes, hi. Sam here. I'm happy to take the question on Medezo to start with. Yeah, we're extremely pleased with the launch so far. $41 million in Q1 really gives us a lot of confidence around achieving that $500 million peak opportunity in the U.S. And as you mentioned, we've had 500 patients treated since launch. And I think that just reflects the very high unmet need that we see in this space. Overall survival from diagnosis is just one year. So this product has had a meaningful impact and it's supported by high awareness from physicians and obviously very strong patient advocacy support as well. In terms of the size of the patient population, I think our best estimates are aligned to what you mentioned there. And over time, of course, we'll continue to evaluate that. But we do see potential upsides in duration of treatment as well as the size of the population. What we've seen so far is that patients are staying on treatment for longer than we initially anticipated. We'll have to wait for this cohort of patients to really mature before we get a really good handle on whether the duration of treatment exceeds that that we saw in the trial, which was around about 10 months. But, you know, extremely happy with the start. I think our teams have done an excellent job really, you know, executing this launch well in such an important area of medical need.

And Joe, this is Renee. I'll jump in on BD. So we are highly engaged on the BD front and I do expect us to have deals announced over the course of this year. We do have a clear strategy that is focused on expanding our presence in rare disease, in particular where we believe there's a significant unmet need. So strengthening our current areas of epilepsy, sleep, and rare oncology, also expanding into new areas of rare disease, areas where we think we can leverage our capabilities and our footprint to continue to scale our business while driving further growth and profitability. In terms of the deal types, we, it really depends on the asset and the transaction at hand, but we are looking at licensing, structured deals, also outright M&A. I think the key here to being successful in BD is identifying value or risk that others don't see, and then staying myopically focused on execution, as we did with the Chimerix launch, the Chimerix acquisition and subsequent Medeso launch. And we have very strong momentum now with the new CBO, Chief Business Officer, on board as of January 1. Importantly, we are well positioned to execute. Phil mentioned we have a strong financial position, $2.9 billion in cash and cash equivalents on the balance sheet, strong cash flow. And while M&A has picked up, we do believe there is still a lot of substrate that is actionable and well aligned with our strategic priorities.

Thank you. One moment for the next question. Our next question will be coming from the line of Leo Temeshev of RBC. Please go ahead.

Hey, guys. Thanks for taking my question. I wanted to stay with, you mentioned epilepsy. I just wanted to touch on that. You've been making a lot of investments in that area, both with Epidiolex, with the Sononia asset. You also have JCP-047, and now you mentioned Epidiolex. potentially looking at BD there as well. So I guess I'm just curious, you know, how you're thinking about that area, you know, to what extent it's a continued focus and how you think about either synergies or risk of cannibalization across sort of many different assets there. Thanks.

Yeah, thanks for the question. This is Renee. I would say this is definitely an area of focus for us. There continues to be significant unmet need across the epilepsy space, you see a strong amount of polypharmacy here with respect to multiple medications generally on board, in particular when we're looking at serious refractory epilepsies. We think with the position that we have with Epidiolex being the number one branded product and having the very long durability out to the very late 2030s, it gives us greater opportunity to continue to build around that franchise, to build scale. I'm thrilled to see additional opportunities for patients with the strong data that we've been seeing come out with a number of companies in whether that's on the proof of concept side starting to go into registrational studies or work that's happening early in pipelines. As we think about ourselves, we think there is plenty of room and need, unmet need for patients to continue to see new mechanisms explored, and new options for patients. So we do think there's still plenty of substrate, a great opportunity for us as a leader in epilepsy. You will note last quarter we said we were advancing the first molecule coming out of our labs that was not just a formulation but an innovative target novel mechanism coming out of our lab that went into patients in the epilepsy space. So we will continue to invest here, and we're excited about the opportunities.

Thank you. One moment for the next question. Our next question is coming from the line of Annabel Samia of FIFO. Your line is open.

Hi, thanks for taking my question. Just want to circle up on Modazo again. Obviously, it's been exceedingly promising since the outset, and you have a potential to move into first-line treatment. I guess my question is, how should we think about the potential move into first-line treatment? Does this significantly expand the market? Should we think about this like we think about Zepselka moving into first-line and how it significantly inflected growth? I guess I'm trying to understand the magnitude given that most patients who are in first line progress to second line. Is it only about duration or is there a population opportunity there?

Yes. Hi, Annabel.

I'm happy to take that. Yes, I think there's two factors when we consider the action study and what that will do for Medazo and for improving the treatment for patients. Some patients don't make it to second line, so of course there are more patients available. to be treated. But having the opportunity to get Medazo to patients before they progress will mean that the duration of treatment should be longer if they can use it straight after radiation. So those two things I think will contribute to us achieving the $500 million peak potential, which does incorporate an assumption that we will have that first-line label. Rob, anything more to add on that?

I mean, you covered it well at this point out that sometimes it's hard to judge progression in these patients. And then, as you point out, once it's clinically apparent, in addition to imaging, the patients may rapidly progress and not benefit from second line therapy. So the opportunity to to start Modeso right after the radiation therapy really does potentially add a significant benefit to patients and ultimately Thank you.

One moment for the next question. And our next question is coming from the line of Mark Goodman of LERIC. Please go ahead.

Sam, can you talk about Epidiolex OUS? I heard Phil talk about the FX impact, but those numbers couldn't have just been FX. Something is doing pretty well there. So maybe just talk, was there any particular country? Was there any buy-in? Anything unusual there? And maybe you could just comment on Riley's as well, which happened to have a really good quarter. And what was happening there? Thanks.

Yes, thanks for the question, Mark. Yes, it's great to see the performance outside of the U.S. for Epidiolex, very strong growth indeed. Around about two-thirds of that, I believe, was volume, and there was about a third due to FX and some growth-to-net benefits from places like the U.K. with a VPag adjustment that happened there. And I think really this is just down to terrific execution by our teams. As you know, Epidiolex was launched a little bit later in Europe, so there's still quite some opportunity to continue to penetrate in the pediatric segment, but of course also in that adult segment, which is a focus for both the US and the ex-US business. And then your other question around Rylase. Yes, Rylase. Rylase, yeah.

Yep.

Rylase delivered a strong quarter, $104 million, which was 10% revenue growth. But that was comparing to quite a low Q1-25. So, you know, I think the performance that we've seen in this quarter is in line with the prior quarters that we've seen, other than the Q1, which was a low point. What we've seen with Rylase is... You know, the COG impact that started in 24 has been fully realized now. And our focus continues to be on making sure that patients, appropriate patients, can receive Rylase, that they're switched at the first sign of a hypersensitivity reaction, and the opportunity to continue growth in AYA. But I think that $100 million per quarter for Rylase is a good kind of stable base for us currently.

Thank you. One moment for the next question. And the next question is coming from the line of Edster Durot of Barclays. Please go ahead.

Hi, this is Jordan Becker. I'm for . Thanks for taking my question and congrats on the impressive quarter. You know, maybe just one, if we could expand on any second half dynamics for, you know, oxidates now with a full quarter in the rear view. Maybe if you could provide some more color on any potential competitive pressure from Lumres specifically. And then on that, maybe any perceived pressure to IH growth down the line. if LUMRIZ is approved in IH.

Yes, I'm happy to take that question on Zywave. Yeah, we're very pleased with the continued momentum for Zywave, $408 million this quarter, 18% revenue growth and a really healthy 12% volume growth. We continue to see really good patient ads, 425 net patient ads in the quarter, most of them continuing to come from Zywave. IH 300 net patient ads for IH, which is consistent with what we've seen in prior quarters. So we finished the quarter with 16,600 active patients. And when we look ahead to the outlook for Zyway for the remainder of the year, obviously we're very pleased with the momentum that we're taking into the second quarter. We still have continued strong payer coverage, more than 90% commercial lives covered. Nothing has changed around the nature of our ViWave business in the first quarter of this year, and our 2026 full-year guidance does include assumptions that generics will build volumes in the second half of the year, as well as the potential for the entry of new weight-promoting agents entering the market in the second half of the year in the NT1 narcolepsy segments. But we believe ZyWave will continue to have a really important place in therapy. We've invested in some really meaningful evidence generation, ZYLO and the DUET studies, which show the importance of having a low sodium option. And as you mentioned, it's the only option approved for IH. And the DUET study, which shows just how effective ZyWave is as a nighttime agent. And we believe those two benefits will continue to resonate strongly with physicians and patients, of course.

Thank you. One moment for the next question. Our next question is coming from the line of Brian Sorkney of Beard.

Please go ahead.

Hey guys, thanks for taking the question. This is Charlie on for Brian. I was just wondering if you could give us a sense of the size of the opportunity for Epidiolex in the adult and long-term care setting, and maybe some more color on the initiatives you're taking there with the new formulation, as well as would be curious to hear, will you be sharing any data from the Phase 1b and focal onset? when you get that and do you have any idea in terms of timing there as well as what your expectations are for the setting for Epidiolex. Thanks.

I'm happy to take the first part of your question in relation to the adult segment and then I'll hand over to Rob to talk about the study. Yeah, we're very happy with the performance of Epidiolex in the first quarter of this year, $250 million, 15% revenue growth and 16% volume growth. As you probably recall, Epidiolex was launched initially very much as a pediatric drug and we've seen really good penetration in that segment, a leading agent obviously for pediatric patients. One area that we do continue to see opportunities in is in that adult segment, particularly in long-term care facilities. So we've made some specific investments there with a dedicated team focusing on those facilities. And we've also invested in a diagnostic tool, RestLGS tool, because we know that adult patients with LGS often go undiagnosed So we've supported physicians to help ensure that those patients can get a definitive diagnosis and benefit from Epidiolex. In addition to that, one of the hallmarks of Epidiolex is the very long persistency that we see, but we do see an opportunity to drive that even further. We know that patients that are enrolled onto our Jazz Cares program, which also gets the support of a nurse navigator, they do stay on treatment longer, so we've got a particularly focused effort now on ensuring that as many patients as possible can benefit from our Jazz Cares suite of services, and we believe that will drive even longer durations of treatment for Epidiolex. In addition to that, we're making quite significant investments in evidence generation. We have the EPICOM study in TSC and the BECOME survey, which has been focused on adults, which really just underlines the The benefit that Epidiolex has, not just for the control of seizures, but also for controlling some of the non-seizure symptoms that these patients experience as well. And that's one of the very significant differentiating benefits of Epidiolex. So overall, we're very encouraged by the momentum that we have with Epidiolex, but also really see a lot of long-term potential to continue to grow Epidiolex into the future, particularly in that adult segment.

Thanks for the question on the focal onset seizure study. We're super excited about it. There's a lot of interest from epileptologists to more formally evaluate epidiolex in this setting. As you know, doctors and treaters think about epilepsy in terms of types of seizures, and we have lots of data showing activity of epidiolex across really every type of seizure with some preliminary evidence in focal onset seizures as well. This is an evidence generation study to go deeper into this particular population, and we would intend to publish this as soon as we have data available to do so. We haven't given any specifics on that yet. After a little more time lapses and we get a good sense of the enrollment rate, we may be able to update further.

Thank you. One moment for the next question. Our next question is coming from the line of David Asselin of Piper Sander. Your line is open.

Hey, thanks. So I have a long-term competitive landscape question on your oxibate business. So your competitor has valoxibate, the sodium once nightly, or potential no sodium once nightly, product that's in development. To the extent that reaches the market, can you talk about how that could impact your Zywave business, both in terms of narcolepsy and the IH setting? And just in general, how are you planning to respond competitively to overall a more crowded landscape? The obvious is, of course, with the erections, but also next generation oxidate products as well. Thanks.

And maybe I can step in on that, and then I'll ask Rob to comment on how we're viewing orexins. So I would first point to the fact that ZyWave has been competing for the last two years with a number of high sodium options on the market. And over that time, we have not only built a strong group of patients that are relatively persistent in terms of their use of Oxibate, the specific relief and flexibility that they receive from ZyWave, and also being the only option available for IH. We've done a lot of work in the market in terms of disease awareness. One of the areas that we've invested quite a lot in that Sam has spoken to earlier is the patient support services. I think that is highly differentiating for JAWS in terms of the extent of our services and the way that we have deployed those. And so we will continue to ensure that the unique differentiating benefits of ZyWave as well as our various support services are well understood in the market. I would also note that we do from a patent perspective have a lot of confidence in our overall patent estate. So when you're thinking about the various programs that are out there that may be looking for a 505 sort of path. From that perspective, we do have robust patents that include many orange book listed patents out to 2033 and 37, and then an orange book listed IH patent out to 2041. But maybe I'll also invite Rob to comment with respect to erections coming into the market and our view there.

Yeah. We've been following erections carefully, and our conclusion is that it's likely to be complementary to ZyWave. As Sam mentioned, alluding to the duet study, we have significant data showing that the root cause in hypersomnia, such as narcolepsy type 1 and 2, as well as IH, is really disrupted nighttime sleep. And oxobates are the only therapy that can address the disrupted nighttime sleep directly. And Zywave, of course, the only low sodium formulation that we believe is safest for patients who are at a high risk for cardiovascular outcomes. Certainly, the erections are showing to be potent daytime alerting agents. There's some preliminary data showing, though, that you can have insomnia, especially with the longer half-life formulations. And the limited PSG data that are out there suggests that certainly not improving disrupted nighttime sleep and may actually on the first half of the night be impacting it negatively with the reports of insomnia. So we continue to think that this important space to follow. We have an orexin. in development still, but we think ultimately this is going to be complementary design ways.

Thank you. One moment for the next question. Our next question is coming from the line of Mohit Bansal of Wells Fargo. Please go ahead.

Great. Thank you very much for the question, and congrats on all the progress. ask about Zabselka IP here. I see a few new orange book listed patents here in 2025. So they go all the way to 2040. So how should we think about the life of Zabselka beyond 2029? That's a comp of matter patent at this point. Thank you.

Yeah, thanks, Mohit. This is Renee. So, we do have a strong patent estate for Zepselka, and as you noted, we do have multiple patents that extend out to 2040. We're also pursuing multiple new patents with the Patent Office that would also extend out to that timeframe with additional applications, whether that be combo therapies, formulations, or methods of treatment. We have also, stepping back and speaking to the and of filers that we've disclosed, we have filed suit against all five and of filers. And as a result of filing that suit, a stay of approval is in effect. for up to the 30 months as is imposed by the FDA. And so while we're not going to speak broadly to active litigation, we do feel that we have a strong patent estate. And as we have more clarity and information on that, we will be certain to share that.

Thank you. One moment for the next question. Our next question is coming from the line of Jason Gerberry of Bank of America Securities. Please go ahead.

Hey, guys. Thanks for taking my questions. Just one, Phil. On ZyWave, apologies if I missed this, but at the beginning of the year, I think you guided to flat to mid-single-digit growth for ZyWave, given the growth of nearly 20% in one queue. Just wondering if we should be assuming that we're coming in towards closer to the high end of that number, or were there some one-time dynamics in the 1Q number to call out? And how should we think about data pricing for U.S. and any MFN-related considerations? Thanks.

Sure. Thanks for the question, Jason. On ZyWave, in the U.S., really pleased, as Sam mentioned, with the great execution of our field-based team. In terms of sort of underlying growth, We had volume growth of about 12% here in the first quarter. There was a bit of additional pickup coming from that price, primarily gross to net favorability with both mix of business and then patients successfully transitioning more quickly than in the past back onto their insurance in that first quarter reauthorization period. So that is something that is more of a first quarter phenomenon. We wouldn't expect to see that kind of net price pickup quarter on quarter as we get into Qs two through four, but definitely pleased with ZyWave performance in the first quarter. Sets us up nicely. We're achieving the full year guidance. I'd say that also applies to this total revenue guidance as well, not just ZyWave. And then for the MFN, Zannie, Right now, the MFN considerations, as you know, are a bit uncertain. We've got some sort of conflicting input out there. Certainly, Globe and Guard are as proposed to use a basket of ex-U.S. countries to provide reference pricing for the U.S., so we'll certainly be taking that into account as we look at the strategy for getting Zahira to patients outside of the U.S., which is certainly a priority of ours, but one that we will need to take account of the current situation here in the U.S. as we move forward. I'm not sure, Sam, if you'd like to add any of your thoughts from a commercial perspective or, Renee, more from a corporate strategic perspective.

Yeah, I think you've covered it nicely, Phil. Okay, great.

Lisa, next caller, please.

Thank you. And our next question will come from the line of Amy Fadia of Needham and Company. Please go ahead.

Hi, good afternoon. Thanks for taking my question. I had a follow-up on the comments related to the Oxibate franchise, particularly Zyve. I think at the beginning of the year, you talked about anticipating the potential for some additional headwinds, either on pricing side or just, you know, in terms of access with the entry of generics, maybe if you could sort of talk about some of the dynamics around, you know, whether you're seeing any pushback on the use of Zyvae, particularly narcolepsy, and how do you see the utilization of narcolepsy evolve, you know, with more generics kind of on the market? And then just on the MEDESO action trial, Can you sort of talk about what, you know, which interim OS analysis will be done by the time you have the data readout in late 2026, early 2027, and just sort of your confidence around the timeline of that readout? Thank you.

I'm happy to take the question relating to Zywave. Yes, of course, we've seen two multi-source generics enter the market in Q1. As yet, we haven't seen any impact on Zywave's business so far. As I mentioned previously, we continue to have strong payer coverage supporting the use of Zywave. So nothing really has changed in the nature of our business for Zywave. But of course, it is still early days for the generics in the market. We do anticipate that as their volume grows through the course of the year, then we may start to see some actions taken by payers that may include utilization management. We don't know yet, but we're very confident that ZyWave offers a really important and differentiating option for patients, being the only low-sodium option, the only product approved for IH. And, of course, it has already demonstrated how effective it is as a nighttime agent and the impact that has on daytime symptoms. So we've obviously carried strong momentum throughout the last 12 months and into this year, and we're in a strong position as we go into Q2. Maybe I'll hand over to Rob for the question on Medazo.

Rob, I'll go ahead, Sam, and just add one thing real quickly as we think about what we're seeing with ZioWave before we go on to Rob for Medazo. You know, certainly the dynamics are a bit unusual in the first quarter given reauthorization, but I do think we're seeing continued support by patients and physicians of the unique benefit that ZioWave offers. from looking at the net patient ads. I think Lumerize net patient ads were announced roughly 100 ads this quarter, like the 100 last quarter. Our numbers just in narcolepsy have been larger than that in each of those two quarters. Again, I think underscoring this unique benefit that only ZyWave can offer and the safety advantage it confers being valued by patients as well as physicians. So we're in a great, great position from that perspective as well as we think about the back part of the year and how things could play out. Rob?

Yeah, so, I mean, the action trial is an OS-based endpoint, and there's one interim analysis and then a final analysis. The projections we gave are based on our current understanding of the events because it is an event-driven trial, and certainly if the events slow over time, that could change, but we'll update as appropriate as time goes on.

Thank you. One moment for the next question. And our next question is coming from the line of David Hoag of Deutsche Bank. Please go ahead.

Thanks for taking my question. So I first wanted to ask on the timing of a potential NCCN guideline incorporation for ZANI and GEA. Do you have any sense of, you know, relatively when that might occur? versus the produce the date and how important is a category one recommendation to drive uptake. And then in breast cancer for Zannie, I wanted to get a sense of how you're thinking about the opportunity size in the different settings. So obviously you're looking at post and HER2, but I think you're also looking at neoadjuvant and adjuvant. And so it's just curious as to your thoughts on, you know, size of the opportunity in those various settings.

Great. On the NCCN guidelines, you know, we proactively submitted the abstract data because it was available. We will certainly update NCCN with the full manuscript as soon as that's available. And we hope that gives them everything they need to make a prompt decision on that and adoption, which we expect. Certainly, we think the data speak for itself. I mean, head-to-head against Herceptin, Zanidatumab definitively wins. Clear that Tizolizumab is adding and there's likely to be a synergy between Zani and Tizolizumab as demonstrated by the activity in the PD-L1 negative subset. And so we think those data speak for themselves and that should be reflected in NCCA.

Just to finish off the remainder of that question there. Yeah, I mean, NCCN guidelines, inclusion, obviously important. We think that the data supports a category one inclusion. If it comes before the launch, then that will open up access ahead of launch. regulatory approval. Of course, we don't promote that ahead of regulatory approval, but certainly that will make it easier for physicians to provide access to their patients. And yes, the breast cancer opportunity, obviously very significant, significantly larger than either the BTC opportunity or the GEA opportunity with many more patients that can potentially benefit from Zanidatamab. So we're excited, obviously, about that for the long-term potential for Zyera.

Thank you. And that does conclude today's Q&A session. I would like to turn the call over to Renee Galla, CEO for Closed Remarks. Please go ahead.

Thanks, Operator. I'd like to close today's call by thanking all our partners and stakeholders for their continued confidence and support. We look forward to sharing further updates on the potential approval of vanity data map in GEA and additional meaningful progress with you over the remainder of the year. So thank you for joining us and have a great day.

This concludes today's program. Thank you all for joining. You may now disconnect.