Q4 2019 Earnings Call

Unknown Executive: We will open the call to questions. I will now turn the call over to Kathy Luttrell, Head of Investor Relations at Jazz Pharmaceuticals.

On an introduction from a company we will open the call to questions I would not similarly cost withdraw head of Investor Relations at jazz Pharmaceuticals.

Kathy Luttrell: Thank you, Kevin, and thanks to those of you joining our investor call. Today, we reported our fourth quarter and full year 2019 financial results and provided financial guidance for 2020. The press release and the slide presentation accompanying this call are available in the investor section of our website. On the call today are Bruce Cozadd, CEO; Dan Swisher, President; and Rob Iannone, Executive Vice President, R&D. Joining for the Q&A session are Mike Miller, Executive Vice President, U.S. Commercial; Jed Black, Senior Vice President, Sleep and Neuroscience; Phil Jochelson, our Sleep and Neuroscience Therapeutic Head, Ann Borgman, our Hematology and Oncology Therapeutic Head, and Sean Mendes, our Senior Vice President, Financial Planning, Analysis, and Strategy.

Thank you, Kevin and thanks to those of you joining our investor call today, we reported our fourth quarter and full year 2019 financial resolved and provided financial guidance for 2020, the press release and the slide presentation accompanying this call are available in the Investor section of our website.

The call today, our Bruce Cozadd CEO, Dan Swisher precedent.

And Rob your known executive Vice President R&D, joining for the QNX session, Our Mike Miller Executive Vice President U.S. commercial jet Black Senior Vice President sleep in neuroscience fill jochumsen, our sweep in neuroscience therapeutic had.

On board men are hematology and oncology therapeutic had an Sean minda, our senior Vice President financial planning analysis and strategy I'd like to remind you that some of the statements. We will make on this call relate to future events and performance rather than historical facts and our forward looking examples of forward looking statements include.

Kathy Luttrell: I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and are forward-looking. Examples of forward-looking statements include those related to our future financial and operating results, including 2020 financial guidance and goals, future growth and growth strategy, product launches, sales, and volumes, supply challenges, regulatory activities, ongoing and future clinical trials, and other product development activities and corporate development efforts. These forward-looking statements involve risks and uncertainties that could cause actual events, performance, and results to differ materially. They are identified and described in today's press release, in the accompanying slide presentation, and under risk factors in our Form 10-Q for the quarter ended September 30, 2019, and our Form 10-K for the year ended December 31, 2019, which we will file shortly. We undertake no duty or obligation to update our forward-looking statements.

It is related to our future financial and operating results, including 2020 financial guidance and goals future growth and growth strategy product launches sales in volumes supply challenges regulatory activities ongoing and future clinical trials and other product development activities and corporate development effort.

These forward looking statements involve risks and uncertainties that could cause actual events performance and results to differ materially fair identified and described in today's press release in the accompanying slide presentation and under risk factors in our form 10-Q for the quarter ended September Thirtyth 29 team and our.

Form 10-K for the year ended December 31st 2019, which we will file shortly we undertake no duty or obligation to update or forward looking statements on this call. We discuss non-GAAP financial measures. We believe these measures are helpful in understanding our past financial performance and potential future results.

Kathy Luttrell: On this call, we discuss non-GAAP financial measures. We believe these measures are helpful in understanding our past financial performance and potential future results. These measures are not meant to be considered in isolation or as a substitute for comparable reported GAAP measures. Reconciliation of GAAP to non-GAAP financial measures discussed on this call is included in today's press release and slide presentation available on our website. I'll now turn the call over to Bruce.

These measures are not meant to be considered in isolation or as a substitute for comparable reported GAAP measures reconciliation of GAAP to non-GAAP financial measures discussed on this call are included in today's press release and slide presentation available on our website I'll now turn the call over temporary.

Bruce C. Cozadd: Good afternoon, everyone, and thank you for joining us. As a global biopharmaceutical company with approximately 1,600 employees, we're successfully executing our long-term growth strategy and are pleased with the substantial progress we made in 2019, including two product approvals and two launches, as well as the achievement of key R&D objectives. Through four announced transactions, we bolstered our R&D pipeline with multiple new medicines from early to late stage development, broadening our hematology and oncology therapeutic area into solid tumors and our sleep and neuroscience therapeutic area into movement disorders. With a strong financial position, including record revenues and adjusted net income exceeding $900 million in 2019, we are well positioned for continued growth. Supporting our growing business while executing on our key strategic objectives, including multiple product launches and further expansion and diversification of our portfolio, remains a critical priority. Now, I'll provide an update on our key sleep and neuroscience programs. In the fourth quarter, we saw demand for Cenosi continue to rise.

Good afternoon, everyone and thank you for joining us as a global biopharmaceutical company with approximately 1600 employees were successfully executing our long term growth strategy and are pleased with the substantial progress we've made in 2019, including two product approvals and two launches as well as the achievement.

The key R&D objectives through four announced transactions, we bolstered our R&D pipeline with multiple new medicines from early to late stage development broadening our hematology and oncology therapeutic area into solid tumors and our sleep in neuroscience therapeutic area into movement disorders.

With a strong financial position, including record revenues and adjusted net income is exceeding $900 million and 29 team, we're well positioned for continued growth.

Supporting our growing business, while executing on our key strategic objectives, including multiple product launches and further expansion and diversification of our portfolio remains a critical priority.

Now I'll provide an update on our key sleep in neuro science programs.

In the fourth quarter, we saw demand for so no see continued arise we had more than 2200 unique prescribers and more than 13000 cumulative scripts through year end.

Unknown Executive: We had more than 2,200 unique prescribers and more than 13,000 cumulative scripts through year-end. Scripts for the treatment of excessive daytime sleepiness in OSA were 60% of total Cynosi scripts at year-end, compared to 50% early in the launch. This increase is encouraging, as our 2020 focus is to expand our outreach beyond narcolepsy prescribers and to educate and establish relationships with healthcare providers who manage OSA patients. Additionally, we are very pleased with the strong coverage we have obtained for CENOSI. CENOSI is on the Express Script.

Scripts for the treatment of excessive daytime sleepiness in Oh, let's say, we're 60% of total sonos. He scripts at year end compared to 50% early in the launch. This increase is encouraging as our 2020 focus is to expand our outreach beyond narcolepsy prescribers and to educate and establish relationship.

With health care providers, who manage Oh, let's say patients.

Additionally, we were very pleased with the strong coverage we've obtained for Sanofi. So no. She is on the express scripts signal Cvs Caremark and Prime therapeutics preferred tier two formularies with more than 70% of commercially insured patients having access to coverage for Sanofi.

Unknown Executive: Cigna, CVS Caremark, and Prime Therapeutics preferred Tier 2 formularies with more than 70% of commercially insured patients having access to coverage for cyanosis. In January, the European Commission approved Finoci to improve wakefulness and reduce EDS in adults with narcolepsy or OSA. Currently, there are no other EU-approved therapies for the treatment of EDS and OSA.

In January the European Commission approved so no see to improve wakefulness and reduce C. D S and adults with narcolepsy or Oh I say currently there are no. Other E U approved therapies for the treatment of videos to know whats say.

Unknown Executive: There are approximately 4 million diagnosed OSA patients in Germany, France, Italy, Spain, and the United Kingdom, of which 1 million experience EDS and are potentially eligible for treatment with cyanosis. We look forward to bringing this important treatment option to patients in this region. We expect to begin our rolling launch in Germany mid-year, followed by launches in France and the UK in early 2021 after pricing and reimbursement negotiations conclude. We have begun medical education activities in Germany, the UK, and France. Salesforce recruitment will occur in the first half of the year.

There are approximately 4 million diagnosed I will say patients in Germany, France, Italy, Spain, and the United Kingdom of which 1 million experienced mds and or potentially eligible for treatment with Sanofi.

We look forward to bringing this important treatment option to patients in this region. We expect to begin our rolling launch in Germany mid year, followed by launches in France, and the UK in early 2021 after pricing and reimbursement negotiations conclude we have begun medical education activities in Germany UK in France.

Salesforce recruitment will occur in the first half of the year.

Unknown Executive: Our successful JCP 258 clinical development program culminated in the submission of an NDA last month, together with the redemption of our priority review voucher, and we look forward to an FDA decision as early as the third quarter. We developed JCP-258 as a safer and lifelong treatment option for patients, reducing sodium by 92% compared to xyrem. This represents a reduction of between a gram and a gram and a half of sodium that an oxidate patient would otherwise receive per night, depending on the dose. There is broad scientific consensus that reducing sodium consumption by this amount is associated with clinically meaningful reductions in blood pressure and cardiovascular disease risk.

Our successful JCP to 58 clinical development program culminated in the submission of in India last month together with the redemption of our priority review Boucher and we look forward to an F.D.A. decision as early as third quarter.

We developed JCP to 58, as a safer and lifelong treatment option for patients, reducing sodium by 92% compared to xyrem.

This represents a reduction of between a gram and a gram and a half sodium but an oxybate patient would otherwise receive per night, depending on the dose there is broad scientific consensus that reducing sodium consumption by this amount is associated with clinically meaningful reductions in blood pressure.

Testicular disease risk.

Bruce C. Cozadd: Based on our Phase 3 studies, VIRM patients were able to immediately transition to JCP8 at an equivalent dose, and most patients maintained that dose. Additionally, we believe there is a market growth opportunity for JCP-258 in patients currently not prescribed Xyrem due to sodium and cardiometabolic considerations. It is a high priority for us to bring this clinically meaningful improvement to patients, and our goal is to launch JCP258 as early as the fourth quarter following REMS implementation. Now, on to Xyrem. Xyrem had an exceptional year. For the fourth quarter of 2019, Xyrem bottle volume growth was 5%, and for full year 2019, it was 5.5% compared to the same periods in 2018. We also continue to see an increasing number of patients on therapy, with the average number of active Xyrem patients at 14,950, up 4.5% over the prior year.

Based on our phase three studies Xyrem patients were able to immediately transition to JCP.

It had an equivalent dose and most patients maintain that dose.

Additionally, we believe there is a market growth opportunity for JCP to 58 in patients currently not prescribed xyrem due to sodium in cardio metabolic considerations.

It is a high priority for us to bring this clinically meaningful improvement to patients and our goal is to launch JCB to 58 as early as the fourth quarter following Rems implementation.

Now on desirable Xyrem had an exceptional year for fourth quarter 2019, Xyrem bottle volume growth was 5% and for full year 2019 was 5.5% compared to the same periods in 2018.

We also continue to see an increasing number of patients on therapy with the average number of active xyrem patients at 14950 up 4.5% over the prior year.

Bruce C. Cozadd: In addition to the efforts of our expanded Xyrem and Sanosi sales force, we will continue to focus on narcolepsy disease awareness to grow this market. I'll now turn the call over to Dan to update you on key HEMOC operational activities. Then Rob will provide an update on our development programs, and I'll wrap up with an update on our financial performance.

In addition to the efforts of our expanded Xyrem Sonobuoy sales force, we will continue to focus on narcolepsy disease awareness to grow this market.

I'll now turn the call over to Dan to update you on key Haemobank operational activities.

Then Rob will provide an update on or development programs and I'll wrap up with an update on our finance garments.

Daniel N. Swisher: Thanks, Bruce. Collectively, our hematology and oncology products delivered revenue growth of 11% in 2019 versus 2018. We are looking forward to continued global growth in 2020, both within our current portfolio and with the addition of lerbanectadine for relapsed small cell lung cancer in the United States. Also, we're pleased to announce the appointment of Samantha Pearce as Senior Vice President of Europe, Rest of World, effective March 2

Thanks Bruce.

Collectively our hematology and oncology products delivered revenue growth of 11% in 2019 versus 2018.

We are looking forward to continued global growth in 2020.

Both within our current portfolio and with the addition of 11 acted then for relapse small cell lung cancer and the United States.

Also we're pleased to announce the appointment of Samantha Pearce as senior Vice President of Europe rest of World effective March 2nd.

Daniel N. Swisher: Sam comes to us from Celgene, where she served in multiple global senior management roles, most recently as Vice President and General Manager for International Markets. So, starting with Vixios, in the fourth quarter, worldwide sales benefited from strong performance in Europe, as our European team is making progress in increasing awareness of Vixios and its very strong efficacy profile. In the United States, we continue our efforts to reach new physicians and broaden adoption, particularly among community accounts. We have plans in place to expand promotion and distribution to a broader set of community accounts to ensure that every patient has access to Vixios regardless of whether they are treated in the hospital or outpatient at a local community practice. So now on to the definicion.

Sam comes to us from Celgene, where over the last 10 years. She served in multiple global senior management roles.

As recently as Vice President and General manager for International markets.

So starting with Vyxeos in the fourth quarter worldwide sales benefited from strong performance in Europe as our European team is making progress and increasing awareness of Vyxeos and it's very strong efficacy profile.

In the United States, we continue our efforts to reach new physicians and broaden the adoption, particularly among community accounts, we have plans to place in place to expand promotion and distribution to a broader set of community accounts to ensure that every patient has access to vyxeos.

Most of US they are treated in hospital or outpatient at a local community practice.

So now onto the Defitelio, we are pleased with a solid global performance for Defitelio in the fourth quarter.

Daniel N. Swisher: We are pleased with a solid global performance for defitilio in the fourth quarter and for the year 2019 as a whole. The recent launch of defitilio in Japan is going very well, with positive feedback from physicians and our partner, Nippon Shinyaku. Our 2020 initiatives are focused on educational and promotional efforts to improve physician awareness and time to diagnosis of VOD, to increase the reach and penetration into new accounts, and to make Daffodil available in additional countries. Our internal global expansion team is continuing to assess additional geographic regions for Vixios and Daffodilio, and in 2020, we expect to pursue new marketing authorization submissions in multiple countries. For Irwin-Ace, we did experience significant global supply outages throughout 2019 due to ongoing supply disruptions and manufacturing issues at the sole manufacturer, PBL. We may experience continued supply disruptions this year, which is reflected in a broad range of our 2020 guidance.

As and for the year 2019 as a whole.

The recent launch of Defitelio in Japan is going very well with positive feedback from physicians and our partner Ponchan Jaco.

Our 2020 initiatives are focused on educational and promotional efforts to improve physician awareness and time to diagnosis of the D to increase the reach and penetration into new accounts and to make defitelio available in additional countries.

Our internal global expansion team is continuing to assess additional geographic regions for Vyxeos and Defitelio and in 2020, we expect to pursue new marketing authorization submissions in multiple countries.

For Irwin Ace, we did experience significant global supply outages throughout 2019, due to ongoing supply disruptions and manufacturing issues at the sole manufacturer PBL.

We may experience continued supply disruptions this year, which is reflected in a broad range of our 2020 guidance.

Daniel N. Swisher: We are continuing to engage with PBL in an effort to reach agreement on a new Irwin Ace supply and license agreement before our current agreement with PBL terminates at the end of this year. As for Lirbanectadine, last month, we completed an exclusive U.S. license agreement with PharmaMar for Lirbanectadine, a late-stage product candidate for relapsed small-cell lung cancer. PharmaMAR submitted an NDA to FDA for accelerated approval of Lervinectadin in December, and earlier this month, it was accepted with priority review and a PDUFA action date of August 16. In the NDA filing acceptance letter, the FDA stated that they are not currently planning to hold an advisory committee meeting to discuss the NDA.

We are continuing to engage with PBL in an effort to reach agreement on a new Irwin a supply and license agreement before our current agreement with PBL terminates at the end of this year.

So on loop an accident last month, we completed an exclusive U.S. license agreement with farm Amar forward LRB connected into late stage product candidate for relapse small cell lung cancer.

Farm Amar submitted and then da to F.D.A. for accelerated approval of love enacted in December and earlier. This month. It was accepted with priority review with the PDUFA action date of August 16.

In the NDA filing acceptance letter the FDA stated that they are not currently planning to hold and Advisory Committee meeting to discuss the NDA.

Daniel N. Swisher: We have commenced pre-launch activities, including building out our Solid Tumor Medical Science Liaison Team, and we're planning market access and commercial initiatives to ensure that we are ready for launch upon approval. Additionally, we are recruiting for other key roles vital to the launch of Lervinectadine. We are conducting right now a rigorous Salesforce sizing analysis, and we will be initiating the hiring of additional sales representatives in the first half of this year to complement our current Vixios team. The Salesforce platform will allow us to reach the 5,000 to 6,000 thoracic and medical oncologists in both the academic and community settings who treat the vast majority of small cell lung cancer. A majority of patients with small cell lung cancer receive treatment in the community setting. We will initially be targeting prescribers in the top deciles to optimize the opportunity, and we'll be expanding our outreach initiatives as the launch progresses. So in the community setting, prescribers are heavily influenced by treatment guidelines.

We have commenced prelaunch activities, including building out our solid tumor medical science liaison team and we're planning market access and commercial initiatives to ensure that we are ready for launch upon approval.

Additionally, we are recruiting for other key roles vital to the launch of little bit back to them.

We are conducting right now a rigorous salesforce sizing analysis, and we will be initiating the hiring of additional sales representatives in the first half of this year to complement our current Vyxeos team. The sales force will allow us to reach.

The five to 6000 throughout sick and medical oncologists in both the academic and community settings, who treat the vast majority of small cell lung cancer.

The majority of patients with small cell lung cancer receive treatment in the community center setting.

We'll be initially we will initially be targeting prescribers in the top deciles to optimize the opportunity and we'll be expanding our outreach initiatives as the launch progresses.

So in the community setting prescribers are heavily influenced by treatment guidelines. Therefore, we're planning to submit Bourbon accidents compelling clinical data to NCCN prior to its annual scheduled meeting in may for timely inclusion into the treatment guidelines upon approval.

Robert Iannone: Therefore, we're planning to submit Lerbanectadine's compelling clinical data to NCCN prior to its annual scheduled meeting in May for timely inclusion in the treatment guidelines upon approval. Lastly, we're leveraging the significant work we've been undertaking with VIXIOS in pursuing distribution options, including new relationships with group purchasing organizations, GPOs, that we believe will be critical in ensuring broader access to Lerbanecta So we're looking forward to bringing this important new treatment option to patients. In the meantime, before Live Connected is available commercially, PharmaMar has launched an expanded access program in the U.S. to support patients with relapsed small cell lung cancer who need a new treatment option outside of clinical trials. So with that, I'll now turn the call over to Rob for an update on our development programs.

Lastly, we are leveraging the significant work we have been undertaken vyxeos in pursuing distribution options, including new relationships with group purchasing organizations. GPS shows that we believe will be critical in ensuring broader access to learn connected and across hospitals.

And community practices following approval.

So we're looking forward to bring in this important new treatment option to patients in the meantime, before was enacted and is available commercially pharma Maher has launched an expanded access program in the U.S. to support patients with relapsed small cell lung cancer, who need a new treatment option outside of clinical trials. So.

That I'll now turn the call over to Rob for an update on our development programs.

Thank you again.

Robert Iannone: Thank you again. We are pleased with the expanding capabilities of our R&D organization and our progress in diversifying our portfolio through internal efforts as well as external opportunities, including innovative technologies, partnerships, and collaboration. We are strengthening and advancing our R&D pipeline, which includes multiple new medicines in early through late-phase development with the goal of providing important new therapeutic options and improving patient outcomes in difficult-to-treat diseases. In 2020, our R&D organization will focus on maximizing opportunities for our commercial products through data generation and evaluation of new indications. Continued expansion and diversification of our early and late stage pipeline and exploring opportunities to acquire, in-license, and integrate highly differentiated product candidates into our development portfolio. I'll begin with development activities in our sleep and neuroscience therapeutic area.

We are pleased with the expanding capabilities of our R&D organization and our progress in diversifying our portfolio through internal efforts as well as external opportunities, including innovative technologies partnerships and collaborations.

We are strengthening and advancing our R&D pipeline, which includes multiple new medicines and early through late stage development with the goal of providing important new therapeutic options and improve patient outcomes difficult to treat diseases.

In 2020, R&D organization will focus on maximizing opportunities for our commercial products data generation and evaluation of new indications.

Continued expansion and diversification of our early and late stage pipeline.

And exploring opportunities to acquire in license and integrate highly differentiated product candidates into our development portfolio.

I'll begin with development activities, and our sleep and there are signs therapeutic area.

On the development front JCP to Fiveeight, we're pleased with the strong enrollment in our phase three idiopathic hypersonic study, which reached 50% enrollment in fourth quarter 2019, and we're looking forward to completing enrollment in this study in the second half of this year.

Robert Iannone: On the development front for JGP 258, we are pleased with the strong enrollment in our Phase 3 Idiopathic Hypersomnia Study, which reached 50% enrollment in the fourth quarter of 2019, and we are looking forward to completing enrollment in this study in the second half of this year. Our development of Sanofi for patients with major depressive disorder and persistent EDS also continues to progress. MDD is a common psychiatric disorder affecting approximately 11 to 12 million individuals in the U.S.

Our development of Sanofi for patients with major depressive disorder and persistent S. Also continues to progress.

MDD is a common psychiatric disorder affecting approximately 11 to 12 million individuals in the U.S.

Robert Iannone: Approximately 45% of MDD patients have EDFs, with only about 5% receiving therapy. We have finalized the protocol for this Pivotal Phase III study and expect to initiate the study mid-year. Moving to JCP385, our highly selective modulator of T-type calcium channels for the treatment of patients with essential tremor, we are working to develop a modified release formulation of JVP 385 with one CLE administration to enhance its clinical profile. We plan to use this formulation in our Phase 2B study in patients with essential tremor, which we expect to initiate later this year. Now, turning to our hematology-oncology development activities, I'll begin with Vixia. Our broad VIXIOS development program is moving forward, evaluating VIXIOS as treatment for the upfront, intermediate risk, and borderline fit population.

Approximately 45% of MDD patients have S with only about 5% receiving therapy.

To finalize the protocol for this pivotal phase three study and expect to initiate the study mid year.

Moving to JCP 385.

Highly selective modulator of T. type calcium channels for the treatment of patients with essential tremor.

We are working to develop a modified release formulation of JCP 385.

Once daily administration to enhance the clinical profile.

We plan to use this formulation in our phase Twob study patients was essential tremor, which we expect to initiate later this year.

Turning to our hematology oncology development activities I'll begin with Vyxeos.

Our broad Vyxeos development program is moving forward evaluating vyxeos as treatment for the upfront intermediate risk and borderline fit populations.

Robert Iannone: We are pleased to have enrolled the first patient in our VFAS study evaluating Vixios in combination with other approved therapies. These data generation activities will be important to support the value of VIXIOS, particularly as we evaluate the safety and efficacy of VIXIOS in combination with other agents and in these new patient populations. We also look forward to the five-year overall survival data from the pivotal study and the potential for some early combination data this year. Our Global Defibritide Development Program also made good progress in 2019.

We're pleased to have enrolled the first patient in RV fast study evaluating vyxeos in combination with other approved therapies.

These data generation activities will be important to support the value of Vyxeos, particularly as we evaluate the safety and efficacy of Vyxeos in combination with other agents and in these new patient populations.

We also look forward to the five year overall survival data from the pivotal study and the potential for some early combination data this year.

Our global Defibrotide development program also made good progress in 2019.

Robert Iannone: We completed enrollment in the Phase 2 Prevention of Acute TVHD Study in 2019, and we expect the initial top-line data in the second half of this year. In the prevention of VOD Phase 3 study, we continue to expect to complete the interim analysis of the first 280 patients and also reach enrollment of 400 patients in the first half of this year. This interim analysis will allow us to determine whether to continue enrollment beyond 400 up to a maximum of 600 patients for our predefined adaptive design or to stop the study for early efficacy or futility. Turning to our recombinant Erwinia asparaginase program, JCP458 is a recombinant Erwinia asparaginase derived from a novel pseudomonass fluorescence expression platform. This non-E. coli expression system utilizes a modern and efficient manufacturing process with the goal of generating a consistent and reliable supply of this important medicine. In December, we began enrollment in our single-arm Pivotal Phase 2-3 study conducted in collaboration with the Children's Oncology Group. And we expect to submit our BLA as early as the fourth quarter this year. I will now turn the call back over to Bruce for the financials.

Completed enrollment in the phase two prevention of acute Gvhd study in 2019, and we expect the initial topline data in the second half of this year.

In the prevention of the Phase three study we continue to expect to complete the interim analysis of the first 280 patients and also reach enrollment of 400 patients in the first half of this year.

This interim analysis will allow us to determine whether.

We continue enrollment beyond 400 to maximize the 600 patients for Predefine adaptive design or to stop the study for early efficacy or futility.

Turning to our recombinant are winning asparaginase program JCP four or five aided the recombinant her winnie asparaginase derived from a novel Pseudomonas fluorescence expression platform.

This non ecolab expression system utilizes a modern and efficient manufacturing process.

With the goal of generating a consistent and reliable supply of this important medicine.

In December we began enrollment in our single arm pivotal phase two three study conducted in collaboration with the children's oncology.

And we expect to submit our be law as early as fourth quarter. This year.

I will now turn the call back over to Bruce for the financial update.

Bruce C. Cozadd: Thanks, Rob. I'm just delighted to announce that we've appointed Renee Gala as our new Chief Financial Officer, effective March 16th. Renee will lead all areas across our global finance, FP&A, strategy, corporate development, investor relations, and information technology groups. She brings more than 25 years of industry experience in finance, corporate strategy, and corporate and business development. She most recently served at Grail as CFO, and before that, at TheraVance Biopharma. Renee's proven track record, strategic insights, and strong leadership capabilities will be instrumental to Jazz as we enter the next phase of maturity.

Thanks, Rob.

Im just delighted to announce that we've appointed Rene gala as our new Chief Financial Officer effective March 16th Renee will lead all areas across our global finance FP in a strategy corporate development Investor Relations and information technology groups Rene brings more than 25 years of industry experience in finance.

Corporate strategy and corporate and business development. She most recently served at Grail as CFO and before that as CFO of Theravance Biopharma Rnase proven track record strategic insights and strong leadership capabilities will be instrumental to jazz as we enter the next phase of maturity.

Bruce C. Cozadd: 2019 was an exceptional year for Jazz with strong top and bottom line growth compared to 2018. We generated $2.2 billion of revenue and more than $900 million in adjusted net income while making significant investments that we believe are essential to supporting our sustainable growth strategy. We look forward to further diversifying our revenue base by executing on key strategic priorities, including the ongoing U.S. launch and upcoming European launch of Cynosi, as well as the U.S. launches of Lerbanectadine, JCP-258, and JCP-458 following approval. For 2020, our total revenue guidance is $2.32 to $2.4 billion, representing expected growth of 7 to 11 percent over 2019. Now, I'm turning to our key products.

2019 was an exceptional year for jobs with strong top and bottom line growth compared to 2018, we generated $2.2 billion of revenue and more than $900 million and adjusted net income while making significant investments. The we believe are essential to supporting our sustainable growth strategy.

We look forward to further diversifying our revenue base by executing on key strategic priorities, including the ongoing us launch and upcoming European launch of Sanofi as well as the U.S. launches of little enacted in JCB to 58 and JCB for 58 following approval.

For 2020, our total revenue guidance is $2.32 billion to $2.4 billion, representing expected growth of 7% to 11% over 2019.

Now turning to our key products Xyrem continued to deliver strong growth with 2019 net sales of $1.64 billion, an increase of 17% compared to 2018.

As we think about net sales guidance for 2020, we're including Xyrem sales and any initial sales of JCP to 58 under the heading of Oxybate franchise, the expectations in our guidance reflect low to mid single digit volume growth new market entrance and the impact of contracting on gross to nets.

Bruce C. Cozadd: Xyrem continued to deliver strong growth with 2019 net sales of $1.64 billion, an increase of 17% compared to 2018. As we think about net sales guidance for 2020, we are including Xyrem sales and any initial sales of JCP 258 under the heading of Oxibate Franchise. The expectations in our guidance reflect low- to mid-single-digit volume growth, new market entry, and the impact of contracting on gross-to-nets as we focus on our long-term strategy to ensure high-quality patient access for our expanding portfolio of sleep products. The Oxivate Franchise Net Sales Guidance for 2020 is $1.71 to $1.76 billion, representing expected revenue growth of 4% to 7% compared to 2019. Our guidance for CENOSI net sales for 2020 is $30 to $50 million. This guidance is consistent with the expectations we provided at launch last year regarding our view of the launch curve, which assumes key factors such as securing broad payer coverage and expanding the OSA prescriber base, which will position us to initiate a direct-to-consumer TV campaign later this year or early next year.

As we focus on our long term strategy to ensure high quality patient access for our expanding portfolio sleep products.

The Oxybate franchise net sales guidance for 2020.

As $1.71 billion to $1.76 billion, representing expected revenue growth of 4% to 7% compared to 2019.

Our guidance for Sanofi net sales for 2020 is $30 million to $50 million.

This guidance is consistent with the expectations. We provided at launch last year regarding our view of the launch curve, which assumes key factors such as securing broad payer coverage and expanding the Oh, let's say prescriber base, which will position us to initiate a direct to consumer TV campaign later this year or early next year.

For our global Hematology oncology portfolio, including Irwin is Defitelio and Vyxeos, we're guiding to net product sales of $500 million to $580 million representing growth of 14% at the midpoint I'll refer you to our year end earnings release, and slide presentation on our Investor Web.

Site for specifics byproduct.

Now I'll turn to operating expenses.

This year, we're continuing to invest in our business as we prepare for multiple product launches advancements in our key clinical programs and further corporate development activities, we have prioritized, our SGN, a and R&D investments with a focus on future revenues and long term value drivers for the company while leveraging the.

Bruce C. Cozadd: For our global hematology-oncology portfolio, including Irwinase, Deftelio, and Vixios, we are guiding to net product sales of $500 to $580 million, representing growth of 14% at the midpoint. I'll refer you to our year-end earnings release and slide presentation on our investor website for specific byproducts. Now I'll turn to operating expenses.

Efficiencies, we've developed in our base business. We believe 2020 will be a very exciting year as we further diversify our commercial portfolio and thoughtfully grow our R&D pipeline.

For 2020, adjusted SG Nay guidance is 32% to 35% of revenues and adjusted R&D guidance is 12% to 14% of total revenues.

Bruce C. Cozadd: This year, we are continuing to invest in our business as we prepare for multiple product launches, advancements in our key clinical programs, and further corporate development activities. We have prioritized our SG&A and R&D investments with a focus on future revenues and long-term value drivers for the company, while leveraging the efficiencies we have developed in our base business. We believe 2020 will be a very exciting year as we further diversify our commercial portfolio and thoughtfully grow our R&D pipeline. For 2020, adjusted SG&A guidance is 32 to 35 percent of revenues, and adjusted R&D guidance is 12 to 14 percent of total revenue. Our tax provision and effective tax rate for 2019 on a non-GAAP basis were favorably impacted by the application of the Italian Patent Box Incentive and the release of reserves upon the Excluding these benefits, our 2019 adjusted ETR would have been in the high teens.

Our tax provision an effective tax rate for 2019 on a non-GAAP basis were favorably impacted by the application of the Italian patent box incentive and the release of reserves upon the expiration of the statute of limitations during the year. Excluding these benefits are 2019 adjust.

DTR would've been in the high teens.

Our 2020, adjusted each year guidance is 18% to 20%.

Let me provide an update on how we'll report our adjusted non-GAAP net income and adjusted EPS beginning in 2020, we will no longer adjust for upfront and milestone payments and arriving at our non-GAAP financial measures.

Ill remind you that we made an upfront payment of $200 million in January to pharma more.

Which will have an after tax impact to our 2020, adjusted net income and adjusted EPS guidance of approximately $175 million or $3 in 13 cents per diluted share.

For 2020, our non-GAAP adjusted EPS guidance is $12 in 50 cents to $13.40.

Bruce C. Cozadd: Our 2020 adjusted ETR guidance is 18 to 20 percent. Let me provide an update on how we'll report our adjusted non-GAAP net income and adjusted EPS. Beginning in 2020, we will no longer adjust for upfront and milestone payments in arriving at our non-GAAP financial measures. I'll remind you that we made an up-front payment of $200 million in January to PharmaMart, which will have an after-tax impact on our 2020 Adjusted Net Income and Adjusted EPS guidance of approximately $175 million or $3.13 per diluted share. For 2020, our non-gap adjusted EPS guidance is $12.50 to $13.40. In closing, 2020 will be a year of investments as we broaden our global biopharmaceutical presence and focus on leveraging our base business and expertise to drive long-term growth.

In closing 2020 will be a year of investments as we broaden our global biopharmaceutical presence and focused on leveraging our base business and expertise to drive long term growth with our strong balance sheet and robust liquidity position, we have the financial flexibility to invest broadly in the business to support the diversification.

One of our commercial and R&D portfolio, while continuing to pursue attractive corporate development transactions. We are excited about the significant opportunities ahead for jazz as we prepare for multiple launches advanced and expand our portfolio and bring multiple new and differentiated treatment options to patients.

Thank you for joining us on the call today I'll now turn it back over to Kathy Thanks Bruce.

We kindly request that you limit yourself to one question. During this call. So that everyone has an opportunity to ask a question. We will gladly address any additional questions. After the call are you can reenter the queue with that said operator, please open the lines for questions.

Ladies and gentlemen, if you have a question or comment at this time. Please press the star than the one key on your touched on telephone. If your question asked and answered there were some over so from the Q. Please press the pound.

Bruce C. Cozadd: With our strong balance sheet and robust liquidity position, we have the financial flexibility to invest broadly in the business to support the diversification of our commercial and R&D portfolio while continuing to pursue attractive corporate development transactions. We are excited about the significant opportunities ahead for Jazz as we prepare for multiple launches, advance and expand our portfolio, and bring multiple new and differentiated treatment options to patients. Thank you for joining us on the call today. I'll now turn it back over to Kathy.

Our first question comes from Britain, and folks with Cantor Fitzgerald.

All right. Thanks for taking my question congratulations on the progress and the culture and you have my question is can you just elaborate on how we should think about the launch ramp for the next and initiate assuming it gets improved how long would it take for the NCCN guidelines to change post approval.

Terms of coverage and if they are the inclusion of these guidelines prerequisite for any coverage and then maybe is there any risk weighted JV nikitin revenue in the 2020 guys. Thank you.

Kathy Luttrell: We kindly request that you limit yourself to one question during this call so that everyone has an opportunity to ask a question. We will gladly address any additional questions after the call, or you can re-enter the queue. With that said, operator, please open the line for questions.

Sure I'll start and Mike can add end, but we're really excited to be in the solid tumor base.

Area of unmet need very little and the way of new therapies in second line, so really favorable profile and we're happy to date with the interaction that the companies have been having with the FDA.

In terms of the launch ramp what we said is.

Unknown Executive: Ladies and gentlemen, if you have a question or a comment at this time, please press the star and then the 1 key on your touchtone telephone. If your question has been answered and you wish to move yourself from the queue, please press the pound key.

You can model out Theres 17000 patients in second line.

Many of them are dissatisfied with the current one approved treatment option, which is topotecan and we think we've got efficacy safety and administration advantages over that.

The key was how do we make sure that theres awareness.

Unknown Executive: Our first question comes from Brandon Folkes with Interface Gerald. Hi, thanks for taking my question and congratulations on the progress made in the quarter and the year. My question is, can you just elaborate on how we should think about the launch ramp for Leuvinectin this year, assuming it gets approved? How long would it take for the NCCN guidelines to change post-approval in terms of coverage? Are the inclusion of these guidelines a prerequisite for any coverage? And then maybe, is there any risk-weighted Leuvinectin revenue in the 2020 guidance? Thank you.

The clinical data and far more has done a nice job of publishing some of that data many of US just came back from.

The World Lung Congress down in Santa Monica, and there was a surprising degree of an awareness given that theres not even a journal publication, yet on that and what is key particularly as we think about moving into the community practices is to get inclusion into the guideline.

So we're going to lean into this we're going to get the data to.

The relevant part of the NCCN ahead of their annual meeting around small cell, which will be in may and so hopefully then with the data in front of them and a good label approval potentially in the near future we would get the inclusion soon after launch.

Unknown Executive: Sure. You know, I'll start, and Mike can add in, but we're really excited to be in the solid tumor base area of unmet need. Very little in the way of new therapies in the second line. So really favorable profile, and we're happy, you know, to date with the interaction that the companies have been having with the FDA. In terms of the launch ramp, what we said is, you know, you can model out, there are 17,000 patients in the second line. Many of them are dissatisfied with the current one approved treatment option, which is Topatican, and we think we've got efficacy, safety, and administration advantages over that.

And then we'll be prepared from a medical science liaison and sales reps to get too close to 90% of the market potential in terms of the doctors were going to be covering so yes. We're really excited for that we're not giving specific guidance I don't think on on sales.

But anyway really good new opportunity for us as we do an expanded field force around adult and oncology and.

So.

Narrowly to your question in our total revenues, we have included a little bit for blurb enacted in but it's not really significant to the company as a whole.

Great. Thanks, very much I was very helpful.

Unknown Executive: So the key was, you know, how do we make sure that there's awareness of the clinical data? And PharmaMar has done a nice job of publishing some of that data. Many of us just came back from the World Lung Congress down in Santa Monica, and there was a surprising degree of awareness given that there's not even a journal publication yet on that. And what is key, particularly as we think about moving into community practices, is to get inclusion into the guidelines. So we're going to lean into this.

Our next question comes from remember that with Evercore.

Hi, Thanks, so much for taking my question.

Bruce I know theres could be a possible interim on urban is this summer and my question is what should be the bogey on response rate, we should be looking for and I asked because if I look at your I am study because I am as the part one of this ongoing trial.

I am study on your label for urban is it has the response rate of 100%. So I was just not sure what the right bogey for us should be going into this.

Unknown Executive: We're going to get the data to the relevant part of the NCCN ahead of their annual meeting around small cells, which will be in May. And so hopefully, with the data in front of them and a good label approval, potentially in the near future, we will get inclusion soon after launch. And then we'll be prepared, from a medical science liaison and sales reps, to get to, you know, close to 90% of the market potential in terms of the doctors we're going to be covering. So, you know, really excited about that. We're not giving specific guidance, I don't think, on sales. But anyway, a really good new opportunity for us is that we have an expanded field force around adult oncology.

Yes, So let me start by just pointing out we're talking about JCP for 58 here.

And maybe Rob Rob you could remind people what the endpoint of our study is and what would be looking for to demonstrate the kind of efficacy we need for this product.

Yes, so the endpoint is inspired todays activity at 72 hours after after the dose.

And so we have an agreement on precision around the proportion of patients who need to hit that target with the FDA.

I guess, maybe the only other thing I would add is the dose for this trial was selected based on healthy volunteer studies.

Unknown Executive: And just narrowly to your question, in our total revenues, we have included a little bit for Lerbanectadine, but it's not really significant to the company as a whole.

Where we have a high degree of confidence that will hit that target as we transition to translate that from healthy volunteers patients.

Thank you. Your next question comes from Gary Nachman with BMO capital markets.

Unknown Executive: Great, thank you very much, that was very helpful. Our next question comes from Umar Rafat with Evercore. Hi, thanks so much for taking my question. Bruce, I know there could be a possible interim on UrbanAIDS this summer.

Hi, good afternoon, JCP to five eight any thoughts on how aggressive you you'll be promoting the product and the benefits over xyrem and if you will add any reference to try and expand the market and also any thoughts directionally in how you might be thinking about pricing. How do you expect payers will handle the two products. Thank you.

Unknown Executive: And my question is, what should be the bogeyman on response rate we should be looking for?

[music].

Yes, so maybe I'll, let Dan away in a little bit on how we think about sales force.

Unknown Executive: and I ask because if I look at your IAM study, because IAM is part one of this ongoing trial, the IAM study on your label for urban is, it has a response rate of 100%. So I was just not sure what it was.

It's too early for us to talk about pricing.

In terms of payer access, we certainly will be seeking broad access for what we believe.

Unknown Executive: So I was just not sure what the right bogeyman for us should be going into this. Yeah, so let me start by just pointing out we're talking about JCP-458 here, and maybe, Rob, you could remind people what the endpoint of our study is and what we'll be looking for to demonstrate the kind of efficacy we need for this product.

A better product for all patients.

And our promotion will be will be tied to that we've developed this patient or this product.

Candidate to be safer to be a better lifelong therapy for patients and we're excited for patients to get the benefit of that.

Thanks, Bruce Yes in terms of on the Salesforce side, Yes. Good news is we've got a very deep and longstanding franchise with the Narcoleptic treaters and we continue to very much cultivate that those relationships as we've been expanding recently into say treaters.

Robert Iannone: So the end point is asparaginase activity at 72 hours after the dose. And so, you know, we have an agreement on precision around the proportion of patients who need to hit that target with the FDA. I guess maybe the only other thing I would add is that the dose for this trial was selected based on healthy volunteer studies where we have a high degree of confidence that we'll hit that target as we transition and translate that from healthy volunteers to patients. Thank you. Our next question comes from Gary Nachman with BMO Capital Markets. Hi, good afternoon.

And we're going to continue to ensure that we've got the right field force with ride share of voice behind two fiveeight and make sure both medically as well as Promotionally.

There is a good understanding of the value proposition that to five eight brings to patients who have lifelong therapy.

So we see good opportunity with the existing patients with new patients enrolled patients, who otherwise would not be candidates for the high sodium xyrem program.

Unknown Executive: On JCP 258, any thoughts on how aggressive you'll be promoting the product and the benefits over Xyrem? And if you'll add any reps to try and expand the market? And also, any thoughts directly on how you might be thinking about pricing? How do you expect payers to react?

In terms of pricing as Bruce said, we're not going to reference that but importantly, we do have now payer contracts as most of the major payers broadly across our sleep franchise and I think you know our initial goal is make sure that we don't have the.

Unknown Executive: Others will handle the two products. Thank you. Yes, so maybe I'll let Dan weigh in a little bit on how we think about Salesforce. It's too early for us to talk about pricing. In terms of payer access, we certainly will be seeking broad access for what we believe is a better product for all patients.

Pricing obstacles.

Those physicians and patients want to convert over to the 258.

It's not blocked by market access issues.

Ill just wrap up by picking up on Dan's comment about sleep franchise and say when we look at accessing and honestly when we look at promotional activities, it's really across our our full portfolio. It's not just thinking about a successful launch of 258, its ensuring we continue to support so no see as we expand on knowledge of.

Unknown Executive: And our promotion will be tied to that. We've developed this patient or this product candidate to be safer, to be a better lifelong therapy for patients. And we're excited for patients to get the benefit of that.

About Sonos is we expand the physician base that understands the product and eventually as we think we encourage more patients to go seek treatment.

Daniel N. Swisher: Yeah, thanks, Bruce. In terms of on the Salesforce side, the good news is we've got a very deep and long-standing franchise with the narcoleptic treaters, and we continue to very much cultivate those relationships as we've been expanding recently into OSA treaters, and we're going to continue to ensure that we've got the right field force with the right share of voice behind 258 and make sure both medically as well as promotionally there's In terms of pricing, as Bruce said, we're not going to reference that, but importantly, we do now have payer contracts with most of the major payers, you know, broadly across our sleep franchise, and I think, you know, our initial goal is to make sure that we don't have pricing obstacles, so if physicians and patients want to convert over to the 258, it's not blocked by market access issues.

Okay. Thank you.

Our next question comes from Gregg Gilbert with Suntrust.

Thank you on the pipeline a question on unless maybe perhaps you can talk about.

Why doxorubicin was chosen.

The combination of combination agent in the past for that ongoing study and maybe you can talk about what's on the drawing board in terms of potential future combinations that could make sense and similarly on pipeline opportunities for four or five eight can you provide some color on.

What studies you may decide to do to expand the market there to get revenue potential.

Well beyond what we've seen historically given supply issues. Thanks.

So I can take this is Rob you down I'll take that question on the combination with auction Robison so those.

The program, obviously was around by pharma Maher and they had a combination with doxorubicin that looks very promising that those data where emerging even before the single arm data mature so they launched into a pivotal trial in combination with Levered estimate.

Bear in mind that that combination has for the upfront portion of the treatment for those patients who have progressed after they've gotten their full dose of doxorubicin. They continue on levered accident at the full monotherapy dose.

In terms of in terms of other combinations and it's something we are or other opportunities with Evertec and then we're thinking through that carefully now we think there's actually a great deal of opportunity for starters within small cell lung cancer potentially getting into earlier lines of therapy. We think there are logic.

Bruce C. Cozadd: And I'll just wrap up by picking up on Dan's comment about Sleep Franchise and say, when we look at access, and honestly when we look at promotional activities, it's really across our portfolio, it's not just thinking about a successful launch of 258, it's ensuring we continue to support Synosy as we expand knowledge about Synosy, as we expand the physician base that understands the product, and eventually as we think we encourage more patients to go seek treatment.

Oral combination sensors with immunotherapy.

There's been some initiation of immunotherapy combination trials already there may be a rationale for combining with other.

Agents as well and those would be potentially.

Unknown Executive: Okay, thank you. Our next question comes from Greg Gilbert with SunTrust. Thank you. On the pipeline, a question on LRB. Perhaps you can talk about...

In subsequent lines of therapy as you know the basket trial included tumor types beyond just small cell and so we.

We are we are.

Unknown Executive: why Doxorubicin was chosen as the combination treatment?

Looking forward to those data maturing and giving us potentially some signals and other tumor types that we may be able to pursue as well.

Unknown Executive: Association

Unknown Executive: [inaudible] What studies you may decide to do to expand the market there to get revenue potential well beyond what we've seen historically given the supply issues? Thanks.

And then then pattern or should I comment on potential broader use of asparaginase says we follow up.

Robert Iannone: So I can take, this is Rob Iannone, and I'll take the question on the combination with Dr. Rubison. So the program obviously was run by PharmaMar, and they had a combination with Dr. Rubison that looked very promising. And those data were emerging, you know, even before the single-arm data were mature.

For 58, we've obviously been limited in how we can.

User when A's in clinical investigation due to limited supply but.

You might talk about where we could go with asparaginase.

Yeah, Thanks for that Bruce.

So first and foremost will be thinking about JV to four or five they beyond the the U.S. So in conversation with Europe, and Japan around what datasets, we would need to ultimately support approvals in other regions.

Unknown Executive: So they launched a pivotal trial in combination with LiverNet. Bear in mind that that combination is for the upfront portion of the treatment, and for those patients who haven't progressed after they've gotten their full dose of Doxorubicin, they continue on Lebernexidin at the full monotherapy dose. In terms of other combinations, you know, something we are, or other opportunities with iridectinin, we're thinking through that carefully now. We think there's actually a great deal of opportunity for starters within small cell lung cancer, potentially getting into earlier lines of therapy. We think there are logical combinations, such as with immunotherapy. There have been some initiation of immunotherapy combination trials already. There may be a rationale for combining with other agents as well, and those would potentially be in subsequent lines of therapy. As you know, the BASCA trial included tumor types beyond just small cells, and so we are looking forward to those data maturing and giving us potentially some signals and other tumor types that we may be able to pursue as well. And then Bob, I don't know if you want to comment on the potential broader use of asparaginase as we go along.

As you know asparaginase case is used.

Currently depending on the protocols and the age groups and so we think especially in that adolescents and young adult group, where it isn't used as much as in the younger group, there's an opportunity to evaluate it there to show the benefits of this charge and if not setting that certainly would be of interest for four or five they.

And interestingly the literature as.

I'd say pretty rich in data started today and other tumor types specialty around combinations.

Other leukemias like I am now solid tumors et cetera, so as Bruce alluded to with a robust.

Supply will give us an opportunity to really truly compete for five years in other indications.

And the one other thing I'd, just add with the with your supply constraints in the supply constraints, we expected four or five eight is to be able to move into other geographic markets.

So we've got a partner in Japan has been unable to launch despite approval and I think from both supply and quality is very important in some of these other markets and so we look forward to supporting our partners in those regions as well.

Robert Iannone: 458. We've obviously been limited in how we can use Erwinase in clinical investigation due to limited supply, but you might talk about where we could go with asparaginase.

Robert Iannone: Yeah, thanks for that, Bruce. So, first and foremost, we'll be thinking about JCPOA 458 beyond the U.S., so in conversation with Europe and Japan around what data sets we would need to ultimately support approvals in other regions. As you know, asparaginase is used differently depending on the protocols and the age groups. And so, especially in that adolescent and young adult group, where it isn't used as much as in the younger group, there's an opportunity to evaluate it there to show the benefits of asparaginase in that setting. That certainly would be of interest for 4, 5, 8. And interestingly, the literature is, I would say, pretty rich in data about asparaginase and other tumor types, especially around combinations, other leukemias like AML, solid tumors, et cetera. And so, as Bruce alluded to, with a robust supply, it will give us an opportunity to really truly explore DHCP 4, 5, 8 and other indications.

Thanks next question comes from dividends sell them with our for sale.

Okay.

Thanks, I wanted to ask a bigger picture question about.

The Oxybate franchise.

As you as you stare down the launch.

58.

I have also.

Other wakefulness agents in the market you have seen also of course, you have that's all ascent awake.

Then there is evidence once nightly product. So as you think about the longer term picture for the Oxybate markets are you worried at all that the market may start to slide there to some extent and how does that play into your thinking regarding the extent of patient capture as far the low sodium products in other words.

How do you.

Looked at the market over say the next three to four years.

With more with a more varied landscape and what that might mean for too.

Thank you.

Yes, good good broad question, David Thank you for asking that.

Unknown Executive: And one other thing I would just add, with your supply constraints and no supply constraints, we expect the 458 to be able to move into other geographic markets. So we've got a partner in Japan who's been unable to launch despite approval, and I think both supply and quality are very important in some of these other markets, and so we look forward to supporting our partners in those regions as well.

As we as we look at our sleep franchise, we see a number of growth opportunities you've seen continued growth in diagnosis and treatment.

Of narcolepsy.

We're obviously broadening on the excessive daytime sleepiness side outside narcolepsy into over say, we're now broadening geographically an opportunity. We did not have was xyrem due to prior commercial rights.

Unknown Executive: Thanks. Our next question comes from David Amsellem with Piper Sam.

Unknown Executive: I wanted to ask a bigger picture question about the Oxidate franchise. You know, as you stare down the launch of 258, you also have other wakefulness agents in the market. You have Sanosi, of course. You have PitolaSense, Awakex. Then there's Avidel's Once Nightly product.

And we think that that growth potential household has a long way to run including as I talked about the potential that to 58 might be appropriate for patients for whom xyrem has not been the appropriate appropriate treatment choice as we see more entrance into the market both potentially on the.

Unknown Executive: So as you think about the longer-term picture for the Oxidate market, do you worry at all that the market may start to splinter to some extent? And how does that play into your thinking regarding the extent of patient capture for the low-sodium product? In other words, how do you look at the market over, say, the next three to four years with a more varied landscape and what that might mean for 258? Thank you.

Oxybate side as well as the week promoting agent side, we're very confident that we have really good products thats true of our existing products Xyrem in terms of its efficacy profile in both DDS and cataplexy and its long proven sort of gold standard.

Status its true Sonos see in terms of the data we've put out on the efficacy of that product across.

Narcolepsy Ano essay.

Hi, and we think it's going to be true up to 58 and its profile having other treatment options out for patients is not necessarily bad the market remains under diagnosed and undertreated as we sit here today.

Bruce C. Cozadd: Yeah, a good, broad question, David. Thank you for asking that.

Unknown Executive: You know, as we look at our sleep franchise, we see a number of growth opportunities. We've seen continued growth in the diagnosis and treatment of narcolepsy. We're obviously broadening on the excessive daytime sleepiness side outside narcolepsy into OSA. We're now broadening geographically, an opportunity we did not have with Xyrem due to prior commercial rights. And we think that growth potential has a long way to run, including, as I talked about, the potential that 258 might be appropriate for patients for whom Xyrem has not been the appropriate treatment choice. As we see more entrance into the market, both potentially on the Oxibate side as well as the weight-promoting agent side, you know, we're very confident that we have really good products. That's true of our existing product Xyrem in terms of its efficacy profile in both EDS and cataplexy and its long proven sort of gold standard status. It's true of Cynosi in terms of the data we've put out on the efficacy of that product across narcolepsy and OSA.

More promotion out there to help people understand proper diagnosis of the disease and treatment options isn't necessarily a bad thing, but we're focused on doing what we can with what we believe are really great products on the market today and still to come.

Yeah. The one thing I would add is we were also pursuing a yeah. The first first ever pivotal trial in idiopathic hypersonic, which is a signal.

Area of unmet need and I think 258 again as a chronic therapy with low sodium and a good efficacy trial will would be ideal in that setting. We've we're really pleased that we got 50% accrual last year and on track for full full accrual this year and look forward to having the results.

Soon.

Alright, thank you.

Our next question comes from Jason Gerberry Bank of America.

Hi, good evening.

Thanks for taking my question.

Bruce Theres Theres, a fair amount of investor focus on the upcoming Abdel read out so in lieu of that can you just remind us youre confident thats your intellectual property.

Would pose.

30 month barrier to entry and I just wanted to clarify.

Unknown Executive: And we think it's going to be true of 258 and its profile. Having other treatment options out for patients is not necessarily bad. The market remains underdiagnosed and undertreated as we sit here today. Therefore, more promotion out there to help people understand proper diagnosis of the disease and treatment options isn't necessarily a bad thing. But we're focused on doing what we can with what we believe are really great products on the market today and in the future.

On on.

Your comment around comment discussions of PBL and being engaged with PBL is there something different that we should read into it any sort of tone shift regarding how the discussions of PBL have evolved thanks.

Yes, Jason I'll take the second question first there was no intend to change in on there that was intended to be very similar to what we said before hopefully it was.

On the upcoming.

Unknown Executive: Yeah, the one thing I would add is we were also pursuing the first-ever pivotal trial in idiopathic hypersomnia, which is a significant Area of Unmet Need, and I think 258 again is a chronic therapy with low sodium, and a good efficacy trial would be ideal in that setting. We're really pleased that we got 50% accrual last year and are on track for full accrual this year and look forward to having the results soon.

Abdel read outs.

We'll have to see what the data shows.

We'll be very interested to see that data as well other people.

On the IP side, you know our belief is that in using the regulatory pathway, they're using they should certified Orange book listed patents, which would give at least the opportunity if appropriate.

Unknown Executive: All right. Thank you. Our next question comes from Jason Gerberry, Bank of America. Okay, good evening.

For litigation that could provide up to 30 months stay but just in general say, we have a number of patents that do cover xyrem.

Unknown Executive: Bruce, there's a fair amount of investor focus on the upcoming Avidel readout, so in lieu of that, can you just say something?

Hi, and we'll evaluate our options for enforcing our intellectual property.

Unknown Executive: Can you just remind us of your confidence that your intellectual property would pose a 30-month barrier?

Okay. Thanks.

Our next question comes from contractual or with Cowen and company.

Unknown Executive: Thank you for the entry. I just wanted to clarify something about your presentation.

Thanks, Bruce just strategic question, you've been doing these smaller deals and earlier stage deals, but the stock just keeps going down. So just wondering what do you think why do you think thats happening in what's the stock price telling you does it make you pause at all the does it make you think of taking a different strategic tax.

Unknown Executive: Your comment around discussions with PBL and being engaged with PBL is it...

Unknown Executive: Is there something different that we should read into, any sort of tone shift regarding how the discussions with...

Bruce C. Cozadd: And that's how the discussions with PBL have evolved. Yeah, Jason. I'll take the second question first.

Unknown Executive: There was no intended change in tone there. That was intended to be very similar to what we said before. Hopefully, that was.

May be going private sale are doing larger transactions just your thought on that thank you.

Yes, Ken Good question, we have done.

Unknown Executive: On the upcoming Avidel readout, you know, we'll have to see what the data shows. We'll be very interested to see that data, as will other people. On the IP side, you know, our belief is that in using the regulatory pathway they're using, they should certify to Orange Book listed patents, which would give at least the opportunity, if appropriate, for litigation that could provide up to a 30-month stay. But just in general, I'll say we have a number of patents that do cover Xyrem, and we'll evaluate our options for enforcing our intellectual property Got it. Thanks.

As a variety of deals of late a couple that were fairly early stage.

That includes some targets, we're really excited about we understand those are farther from market in the higher risk, but they're also tremendous opportunities with approaches we think are worth pursuing.

At the same time, we did a mid stage development deal and caviar on coming off of Phase two trial that gave us what we believe is the signal we need to proceed with the second phase two trial, and then and needed at the end of the year. We did a deal. We're at the end da had already been submitted.

Unknown Executive: Our next question comes from Ken Cacciatore with Cowen & Company.

Bruce C. Cozadd: Thanks, Bruce. Just a strategic question. You've been doing these smaller...

So thats a variety of types of deals and we certainly haven't ruled out doing things that would be larger or already on market. We continue to look at a variety of.

Unknown Executive: So the stock just keeps going down. So I was wondering, you know, what do you think?

Unknown Executive: Why do you think that's happening? And what's the stock price telling you? Does it make you pause at all? Does it make you think of taking a different strategic approach, maybe going private, a sale, or doing larger transactions? Just your thoughts on that.

Opportunities across sleep neuroscience across Hmong potentially even into other therapeutic areas and across geographies and our goal is to productively put our capital to work and we've got an appetite to do that.

To continue growing returns to our shareholders and we want to do the deals that will offer the best returns.

Unknown Executive: Your thoughts on that? Thank you.

Unknown Executive: Yeah, Ken, good question. You know, we have done a variety of deals of late, a couple that were fairly early stage that include some targets we're really excited about. We understand those are farther from the market and higher risk, but they're also tremendous opportunities with approaches we think are worth pursuing. At the same time, we did a mid-stage development deal for Cavion coming off of a phase two trial that gave us what we believe is the signal we need to proceed with a second phase two trial. And then at the end of the year, we did a deal where the NDA had already been submitted. So there are a variety of types of deals, and we certainly haven't ruled out doing things that would be larger or already on the market.

Regardless of size and and we think a variety of types of transactions is the right way to do that.

We're very focused on revenue diversification not necessarily in 2019 or 2020, but as we move out through the 20 Twentys.

Because we're very interested in a sustainable growth strategy, it's not all about revenues today, it's having that visibility on continued growth.

In the Oxybate franchise on beyond the Oxybate franchise, and certainly if you look at the progress in 2019, and what we've outlined as our objectives for 2020, I think you're seeing an inflection in our ability to deliver on that vision.

Unknown Executive: We continue to look at a variety of opportunities across sleep neuroscience, across hemlock, potentially even into other therapeutic areas, and across geographies. And our goal is to productively put our capital to work, and we've got an appetite to do that, to continue growing returns to our shareholders and we want to do the deals that will offer the best returns regardless of size and and we think a variety of types of transactions is the right way to do that you know we're very focused on revenue diversification not necessarily in 2019 or 2020 but as we move out through the 2020s because we're very interested in a sustainable growth strategy it's not all about revenues today it's having that visibility on continued growth in the Oxybate franchise and beyond the Oxybate franchise and certainly if you look at the progress in 2019 and what we've outlined as our objectives for 2020 I think you're seeing an inflection in our ability to deliver on that vision.

Thanks for your next question comes from Us to refer them from Oppenheimer.

Great. Thanks.

Thank you for taking my question I have just one on Defitelio can you maybe help us understand.

Yes.

The opportunity here with the VLP.

Indication and specifically and also with the acute gvhd.

Yes, so maybe I'll ask Rob to comment on that a little bit, but I'll just start with the big picture, which is.

We think Defitelio is a really interesting molecule and has a lot of potential use.

And we believe that as we look at data coming not only from the treatment of severe Vo D, which is the indication we have today in the U.S. and around the world.

But also the potential prevention of via D., the pretend potential prevention of acute gvhd.

Our work in car T associated neurotoxicity and other indications that as we develop clinical data around those it may help people understand that broader potential for the molecule Rob.

Unknown Executive: Thank you. Our next question comes from Esther Ravello from Oppenheimer. Great, thanks. Thank you for taking my question. I have just one on defitalio. Can you maybe help us understand the opportunity here with the VOD indication and, specifically, and also with acute GVHD?

Maybe I'll just add from a clinical perspective. So the continues to be a major problem that bone marrow transplant, especially as new agents more intensive treatment regimens become standard.

Unknown Executive: Yeah, so maybe I'll ask Rob to comment on that a little bit, but I'll just start with the big picture, which is that we think Daffodilio is a really interesting molecule and has a lot of potential use. And we believe that as we look at data coming not only from the treatment of severe VOD, which is the indication we have today in the U.S. and around the world, but also the potential prevention of VOD, the potential prevention of acute GVHD, our work in CAR T-associated neurotoxicity, and other indications, as we develop clinical data around those, it may help people understand that broader potential for the molecule.

We know that earlier the intervention that are the outcomes logical progression then the notion of giving defitelio as prevention of CMV and we're hoping that study.

Right now positive likewise for acute gvhd.

It remains a significant morbidity and cause of mortality in bone marrow transplantation. As you know BMT is much more widely available now as we're doing transplant across Asia delay barriers, which also results in more significant gvhd in some cases and so with the signal that we had.

Bruce C. Cozadd: Rob?

Robert Iannone: Yeah, maybe I just add from a clinical perspective so VOD continues to be a major problem in bone marrow transplant, especially as new agents and more intensive treatment regimens become standard, and we know that the earlier the intervention, the better the outcomes. The logical progression then to test the notion of giving defotilio as prevention of VOD, and we're hoping that the study reads out positive. Likewise, for acute GVHD, it remains a significant morbidity and cause of mortality in bone marrow transplantation. As you know, BMT is much more widely available now as we're doing transplants across HLA barriers, which also results in more significant GVHD in some cases, and so with the signal that we had suggesting that there may be activity in acute GVHD, we're hopeful that Depotilio provides another treatment option for Thank you. Our next question comes from Akash Tewari with Wolf Research.

Hi, suggesting that there may be activity in acute gvhd, we're hopeful that defitelio provides another.

Treatment option for those patients.

Thank you.

Our next question comes from a customer with Wolfe Wolfe research.

Hey, guys. So given there's a chance platinum sensitive chemo patients who get re challenge in second line for small cell will probably show similar efficacy. The liver next meeting and I feel like that kind of suggest the Atlanta trial read that negatively where do you see this drug fitting into the standard of care do you see it taking market share in second line chemo sensitive.

Patients because of the large neutropenia rates or maybe in the patients who are chemo sensitive.

Unknown Executive: Hey guys, given there's a chance platinum-sensitive chemo patients who get re-challenged in second line for small cell lung cancer will probably show similar efficacy to lurbinectidine, and I feel like that kind of suggests the Atlantis trial reads out negatively. Where do you see this drug fitting into the standard of care? Do you see it taking market share in second-line chemosensitive patients because of the lower neutropenia rates? Or maybe in patients who aren't chemo sensitive? Like where is the home for lurbinectidine if the Atlantis trial fails? Thanks. So, if you don't mind, I'll take this. This is Robbie now.

Like whereas the home for Lebron acting if the Atlanta is trial.

Sales thanks.

So if you don't mine I'll take this this is Rob you announce so.

Yes, certainly while there is.

There is some response rate to retreating where the platinum doublet and patients who have had more than six months interval by no means what I'd say that thats as strong as what we're observing connected and so I think theres going to be an advantage levered exited in second line across all three of populations, whether it's the most.

And are the most sensitive.

Robert Iannone: So, you know, certainly while there is, there is some response rate to pre-treating with a platinum doublet in patients who have had more than a six-month interval. By no means would I say that that's as strong as what we're observing in lerberdectin. So I think there's gonna be an advantage to lerberdectin in second line across all treatment populations, whether it's the most resistant or the most sensitive. Secondly, I would say, at least initially, the second line is really wide open, and you hear this as you talk to key opinion leaders. Again, as Dan mentioned, we had a big presence at the Santa Monica Lung Conference, where there's high interest because Topatican is not only poorly tolerated, difficult to give with five infusions consecutively, but also has a very low response rate.

Secondly, I would say so at least initially the second line is really wide open and where you hear this as you talk to key opinion leaders again as Dan mentioned it a big presence with the Santa Monica Lung conference, where there is high interest because typically Ken is not only poorly tolerated it's difficult to give with five.

Hi, fusions consecutively, but also a very low response right. So we think the uptake in second line is going to be really breadth.

Having said that.

So my comments earlier theres, an opportunity to find a way to use levered accidents enhance.

Therapy and other.

Indications within small cell lung cancer, so even upfront therapy for example, or through rational combinations and there are several different.

Robert Iannone: So we think the uptake in the second line is going to be really brisk. Having said that, to my comments earlier, there's an opportunity to find a way to use liver nectin to enhance therapy and other indications within small cell lung cancer, so even upfront therapy, for example, or through rational combinations, and there are several different active agents that may be rationally combined with liver nectin, you know, given how tolerable. Okay, just as a follow-up, would it be fair to say then that maybe you Yes, I mean, my response to you was

Active agents that maybe rationally combined with a connected and given given how tolerable orders.

Okay, Hey, up just as a follow up would that would it be fair to say that that maybe youre more bullish on the Atlanta trial reading out than maybe they street is necessarily.

Yes, I mean my response you was yes.

Hey, Rob I was just going to add one thing just because I thought it was interesting as we got to know the pharma Martine initially they set that combination up yes based on preclinical data and the rationale that they thought that would be the best path forward to have a positive trial.

Unknown Executive: Hey Rob, I was just going to add one thing just because I thought it was interesting as we got to know the PharmaMART team, you know, initially they set that combination up, you know, based on preclinical data and the rationale that they thought that would be the best path forward to have a positive trial. They were asked to do a monotherapy trial to really just support what the single agent profile was, and actually, sometimes preclinical data doesn't translate into clinical, and they got a much stronger signal in the clinic with that monotherapy trial than they thought. They were encouraged to expand that trial, which they did, and then to submit that data, and so now, you know, our expectation is monotherapy is going to be the likely standard second-line therapy and where it's going to get most used. Obviously, we'll see what the combination looks like and what else that tells us, but we're really banking our analysis around, you know, monotherapy being really the second line therapy of choice but that it's a combinable agent that we do want to explore in other areas, including frontline with immuno-oncology. I got it. Thank you.

They were asked to do a monotherapy trial to really just support.

What the single agent profile was and actually sometimes preclinical data doesn't translate into clinical and they got a much stronger signal in the clinic without monotherapy trial than they thought.

They were encouraged to expand that trial, which they did and then to submit that data and so I would say now.

Our expectation as monotherapy as going to be the likely.

Standard second line therapy, and where it's going to get most used obviously, we'll see what the combination looks like and what else that tells us, but we're really banking our analysis around.

The monotherapy being a really the second line therapy of choice, but that it's a combinable agent that we do want to explore into other areas, including frontline with immuno oncology.

Got it thank you.

Our next question comes from Ronny Gal with Bernstein.

Hi, Thank you for taking my call.

Just a little bit more on the xyrem, you're guiding to commence at 5.5% revenue.

Can you just as share with us what is the.

I guess patient count of volume count embedded into that assumption and then if you think about the level of Rebating, you're providing right now I essentially fully penetrated across your your marketing 2020.

Unknown Executive: Our next question comes from Ronnie Gao with Bernstein. Hi, thank you for taking my call.

Unknown Executive: Just a little bit more on Zyrem. You're guiding to the commensurate 5.5% revenue growth. Can you just share with us what is the, I guess, patient count or volume count embedded into that assumption? And then if you think about the level of rebate you're providing right now, are you essentially fully penetrated across your marketing in 2020 across the OxyBed patients? Or should we expect another step up in rebate in 2021 as you capture the rest of the market? Just a feeling of what's embedded in your Zyrem estimates for this year.

Across the oxidation or should we expect another step up in rebate in 2021 as you capture the rest of the market just just a feeling of what's embedded in your xyrem.

Estimates for this year.

Yes, so running whats built in from of patient volume perspective is low to mid single digit volume growth for the Oxybate franchise.

Bruce C. Cozadd: Yeah, so Ronnie, what's built in from a patient volume perspective is low to mid single-digit volume growth for the Oxybate franchise. In terms of, uh... rebates, we gave guidance on total revenues, which you can back into implies that we're going to realize probably less than half of the gross price increase we took earlier this year. So there will be net price growth as well as volume growth that gets us to the oxidate franchise revenue guidance we gave. Probably too early to predict 21, although the contracting we've put in place does cover most commercial lives, so I don't mean to imply there's a whole lot to go there, but it's probably a little too early to call 21 at this point.

In terms of Rebating, we gave guidance.

On total revenues, which you can back into implies that.

We're going to realize probably less than half of the gross price increase we took.

Earlier this year, so there will be net price growth as well as volume growth that get us.

To the Oxybate franchise revenue guidance, we gave.

Probably too early to predict 21, although.

Hey, you know the contracting we've put in place does cover most commercial lives. So I don't mean to imply there's a whole lot to go there but.

Probably a little too early to call 21 at this point, but fair to say they are rebate caps Ashley growth caps, the pricing that are incorporated into those.

Unknown Executive: But it is fair to say there are rebate caps, essentially growth caps on pricing that are incorporated into those contracts.

And to those contracts.

Unknown Executive: So I'm not going to comment on the specifics of how we've done our contracting, although we certainly did it with a multi-year horizon in mind.

So I'm not going to comment on the specifics of how we've done our contracting although we've certainly done it with a multi year horizon in mind.

Unknown Executive: Great, thank you very much.

Thank you very much.

Our next question comes from Annabel Samimy with Stifel.

Unknown Executive: Thank you very much. Our next question comes from Annabel Samimy with Steve. Hi.

Hi, Thanks for taking my question and just again on on that contracting for.

Unknown Executive: Thanks for taking my question. And just again on the contracting for the sleep franchise, I was just wondering, first, when you think about 258 and how that's priced, so it just rolls right into these agreements without any kind of prior authorization or step edits or any kind of hurdles or NDC blocks. And I guess, is that one of the benefits of the contracting for the franchise? And if you could just give us a sense of where the Sanosi gross net might end up this year. They were pretty high so far, I guess, from the second quarter and launch. And I was just wondering what that progression might be as we proceed through 2020. Thanks.

That that sleep franchise I was just wondering.

First when you think about 258 and and.

How that's crazy prices. So just roll is right into these agreements without any kind of prior authorizations or step edits or any kind of hurdles or NDC blocks.

And I guess is that one of the benefits of the contractor for the franchise NFC could just.

Give us sense of where the no secret and that might end up this year they were pretty high so far I guess.

Second quarter and launch just wondering what that progression maybe as we proceed through 2020. Thanks.

Yeah, Annabel thanks for the questions on the contracting.

Bruce C. Cozadd: Yeah, Annabel, thanks for the questions. On the contracting, it's too early to comment on 258 yet. You know, again, we did our contracting with a view to our sleep franchise as a whole over a long period of time, but 258 is not yet an improved product. On the Cenosi gross to nets, you know, we certainly gave a sense during our launch call as to where we thought gross to nets might end up. And honestly, with most of the commercial lives under contract now, I think that's a reasonable place to expect us to be over the course of 2020. But I can't talk yet about exact quarter to quarter progression. Um, but we think the expectations we set coming in were good expectations. Mike, do you want to add anything to that?

Too early to comment on 258, yet.

Again, we did our contracting with a view toward our sleep franchise as a whole over a long period of time, but 258 is not yet an improved product.

On the Sonos see a gross to nets, we certainly gave.

A sense during our launch call as to where we thought gross to nets might end up and honestly with most of the commercial lives under contract now I think thats, a reasonable place to expect us to be over the course of.

2020 can't talk you added about exact quarter to quarter progression.

But but we think the expectations, we set coming in were good expectations, Mike do you want to add anything on that.

Yes, Bruce I had one thing that typically the gross to nets shut for the most in the beginning of the launch and then get better and Thats what will be shape.

Mike Miller: Yeah, Bruce, I had one thing in that typically, gross fines suffer the most in the beginning of the launch and then get better, and that's what we'll be seeing. Our next question comes from Randall Stanicki with RBC Capital. Great. Thanks, Bruce.

Great. Thanks.

Our next question comes from Randall Stanicky with RBC capital markets.

Great. Thanks, Bruce you made a comment earlier about the business growing over the next several years do you expect the Oxybate franchise.

Unknown Executive: Bruce, you made a comment earlier about the business growing over the next several years. Do you expect the Octobate franchise to grow over the next couple of years as well versus perhaps taking a step down as we see some of that switch activity take place or the move to 258? And then the follow-up, we saw SG&A up 20% last year; Midpoint has it up 20% this year. You've got several products still coming out to be launched. When do we expect to see, or when should we expect to see, the operating leverage in the Jazz business model start to play out? Thanks.

To grow over the next couple of years as well versus perhaps taking a step down as we see some that switch activity take place or the move to 258 and then the follow up we sized DNA up 20% last year midpoint has it up 20%. This year, you've got several products still coming to be launched when do we expect.

So you're what should we expect to see the operating leverage in the jazz business model start to play out. Thanks.

Bruce C. Cozadd: So on Oxibate growth, we continue, as I think I said in an earlier answer, to see growth opportunity, exactly how that's going to play out in adoption of 258, how much of that business comes from patients moving from Xyrom, how much of that comes from new patients going on 258, impact of other entrants into the market, including our own Synosy, you know, probably too early to call that over too long a On SG&A, I would say. One important thing to understand is that this really is an increase in sales and marketing expenses. Our GNA portion of that is essentially flat on a percentage of revenues basis. Um, in terms of when we'll see operating leverage, you know, we're increasing our investment right now because we think it'll pay off for shareholders over a long period of time. You'll see that operating leverage as you see revenue accelerate, and that's going to look a little different product by product. You know, the 258 dynamic, where we already have So you know, those will all add up over time, but we do believe as we get out into 21, and, Great.

So on Oxybate growth, we continue as I think I've said in an earlier answer to see growth opportunity exactly how thats going to play out in the adoption of to 58.

How much of that business comes from patients moving from Xyrem, how much of that comes from new patients going on to 58.

Impact of other entrance into the market, including our own Sonos C.

You know probably too early to call that over to long a period of time, but we do think there's opportunity to continue to grow this.

Business.

On SGN, a I would say.

One important thing to understand is that really is an increase in sales and marketing expenses.

RG in a portion of that is essentially flat on a percentage of revenues basis.

In terms of when we will see operating leverage you know, we're increasing our investment right now because we think it will pay off.

For shareholders over a long period of time.

You'll see that operating leverage as you see revenue accelerate and that's going to be look a little different product by product.

You know the to 58 dynamic where we already have an oxybate product on on the market may be different from what you would see.

With a retail launch like Sonos C, which will be different from what you will see with on oncology launch like.

Little bit accident so.

Those all add up overtime, but we do believe as we get out into 21 in 22 will start to see.

That leverage in terms of more rapid growth in revenues than expenses.

Unknown Executive: Great, thanks.

Unknown Executive: Our next question comes from Ami Fadia with SBB Learning. Hi, good evening. Thanks for taking my question.

Great. Thanks.

Our next question comes from Amy for do with SVP Larry.

Hi, good evening, Thanks for taking my question.

Unknown Executive: Bruce, as we think about kind of the next couple of years, and more specifically, you know, the 2023-2024 timeframe, most of the street expects a decline in your revenue as we anticipate the entry of competition from generics and then maybe potentially, you know, a once Nike version from Abadel. How do you, how are you anticipating kind of that timeframe? And do you think you've got other growth drivers in your portfolio that can offset them,

Just as we think.

It's kind of the next couple of years and more specifically 2023 2024 timeframe.

Most of the street has a declining revenue.

Anticipate entry as competition from generics and then maybe potentially.

Once Nike version from Avondale.

How do you how are you anticipating that timeframe and do you think you've got.

Other growth drive is in your portfolio that can offset.

Unknown Executive: Some of it, or most of it, and then what else do you think you would...

Thomas said or most of it and what else do you think you would need to do unit to drive continuous growth.

Unknown Executive: I think you would need to do this, you know, to drive continuous growth.

Bruce C. Cozadd: Yes, so I would think about this in terms of our Oxibate franchise and then the rest of our... The goal is to optimize each of those independently. I wouldn't think about one making up for the other.

Q.

Yes, so I would I would think about this in terms of our Oxybate franchise and then the rest of our.

Well as to optimize each of those independently I wouldn't think about one making up for the other on the Oxybate side.

Bruce C. Cozadd: On the Oxabate side, we are anticipating, of course, a generic entry for Oxabate in 2023. That will be through an authorized generic. Remember, we have economics in that authorized generic that are significant, and then six months after that, several limited volume authorized generics where we again have significant economics. So between Xyrem, Authorized Generic Economic Share, and 258. We think we've got a significant revenue stream for many years into the future. A reminder that we also have a once nightly, although in our case, once nightly lower sodium product also in development, and we see a continued opportunity here for significant returns to Jazz shareholders. Beyond that, you know, we just talked about a number of early launches or upcoming launches, geographic expansion, and label indication expansion, and we have no intention of stopping our investment of our cash flow and using our balance sheet to continue adding new growth drivers in the near term and the longer term through our corporate and business development efforts.

We are anticipating of course generic entry of Oxybate in 23.

That's through an authorized generic remember we have economics in that authorized generic that are significant.

And then six months after that several limited volume authorized generics, where we again have significant economics, so between xyrem authorized generic.

Economic share and to 58.

We think we've got a significant revenue stream for many years into the future.

A reminder, that we also have a once nightly although in our case once nightly lower sodium.

Product also in development.

And see a continued opportunity here.

For significant returns to jazz shareholders beyond that we just talked about a number of early launches were upcoming launches geographic.

Expansion label indication expansion.

And we have no intention of stopping our investment of our cash flow and using our balance sheet to continue adding.

New growth drivers.

In the near term and the longer term.

Through our corporate and business development efforts.

Thank you.

Bruce C. Cozadd: Thank you. Our next question comes from David Reisinger with the Morgan Family.

Our next question comes from David Risinger with Morgan Stanley.

Yes, thanks very much.

Unknown Executive: Yes, thanks very much.

So.

I guess, Oh I'll just follow up given your comment Bruce could you just update us on the timing of validation of the once nightly low sodium version of.

Unknown Executive: So. I guess I'll just follow up. Given your comment, Bruce, could you just update us?

Unknown Executive: on the timing of validation of the once nightly low sodium version of Xyrem that you just mentioned. And I'll leave it at that since you asked just one question. Thank you. David, I'm going to give you a second question because you're not going to be happy with the answer to the first one, which is that we don't have an update at this point. We just haven't said much about the program. In part, that's because our internal efforts right now are squarely on executing a high-quality approval and launch of JCP 258. But we think there are some other reasons for us to say less rather than more on the once nightly front at the moment.

Xyrem that you just mentioned.

And I'll leave it at that since you asked for just one question. Thank you.

David I'm going to give you a second question because you're not going to be happy with the answer to the for which is we don't have an update at this point.

We just haven't said much about the program impart that's because our internal efforts right now we're squarely on.

Executing a high quality approval and launch of JCB to 58.

But but we think there's some other reasons for us too.

Say less rather than more on the one slightly front at the moment so back to you for another question.

Bruce C. Cozadd: So back to you for another question. Oh, thank you very much.

Oh, Thank you very much.

Unknown Executive: It would be helpful, you know. Obviously, there were a lot of questions about the...

So.

It would be helpful. You know obviously there were lot of questions about the pipeline, but could you just frame for us what do you see as the key early stage R&D candidate proof of concept read outs in 2020 and 2021.

Unknown Executive: about the pipeline, but could you just frame for us what you see as the key early stage R&D candidate proof of concept readouts in 2020 and 2021? Rob, would you like to talk a little bit about that? I'm not sure we've given too much specific guidance sectionally.

Rob you want to talk a little bit about that I'm not sure we'd given too much specific guidance actually.

Robert Iannone: Yeah, so depending on how far back and how far out you want to look, in the earliest part of the pipeline, we have the PAN-RAF inhibitor program. We haven't updated any timelines on that, but we continue to be encouraged there. We have a Kodiak collaboration, where we continue to work on several targets, especially in the heme malignancy area. We also have the ability to look at other solid tumor drugs delivered through the CombiFlex technology, which we continue to work on and hope to progress a candidate in that context as well.

Yes so.

Depending on how far back on how far out do you want to look in the early as part of the pipeline.

We have the Pan RAF inhibitor program.

We haven't updated any timelines on that but we continue to be encouraged.

There.

We have.

Kodiak collaboration where we continue to work on several targets, especially in he malignancy.

Area.

We have the ability to look at.

They are solid tumor drugs delivered through the complex technology, which we continue to work on and hope to progress the candidate.

In that context.

Robert Iannone: You know, later in development, as was mentioned earlier, we have the essential tremor trial, 2B trial, which could be part of a pivotal program for essential tremor. And then if you go a bit later than that, and you think about marketed products that have been in development for 2, 5, 8, you have the idiopathic hypersomnia program, you have 4, 5, 8, which could have a very accelerated path to approval We mentioned QTVHD and PVOD as well. Thank you. Our next question comes from Balaji Prasad with Mark. Greetings and thanks for taking my call.

As well.

Your later in development as was mentioned earlier.

We have.

The essential tremor trial, yet to be trial, which.

Could be part of a pivotal program for essential tremor.

And then if you go a bit later than that and you think about.

Marketed products that have ongoing development her to five eight you have the idiopathic Sandia.

Program.

Four or five eight which could have a very accelerated.

Path to approval within Defitelio, we mentioned acute gvhd and PVR these well.

Thank you.

Our next question comes from velocity Brossard with Barclays.

Hi, good again, thanks for taking my call.

Unknown Executive: So most of it has been answered. I just wanted to get your updated thoughts on capital allocation. When I look at the share repurchase programs that you have laid out over the last couple of years, you have accelerated them. The stock is currently at a price below the average purchase price of the last three years. What are your updated thoughts on it? Would you reconsider the share repurchase, or would you accelerate it at these price levels? And would that be the most efficient capital allocation strategy that you could think of for 2020?

So most often have been answered just wanted to get your updated thoughts on capital allocation when I look at the share repurchase programs that you laid out over the last couple of years you have accelerated.

The stock is content at prices below the average purchase price of the last three years.

What are your updated thoughts on equity reconstruct the shape of shares all would you accelerated at these price levels on would that be the most efficient capital allocation strategy that you could think off 2020.

Bruce C. Cozadd: Thank you.

Unknown Executive: Yeah, thanks for the question. So you know, we still have over half a billion dollars available under our existing authorization. I think on average, we've bought back more shares when our stock price has been lower than when it's been higher. I'm not necessarily predicting what we're going to do next, but we think our stock is a very attractive purchase right now and fully intend to continue being a buyer. In part, that's because our liquidity, balance sheet, and cash flow give us the strength to do that and maintain significant flexibility for CorpDev transactions, and I want to emphasize that. We fully intend to continue being a buyer of our stock, but our bigger priority is putting capital to work on the business and corporate development side. So expect us to continue to be a buyer but to maintain flexibility for biz and CorpDev.

Thank you.

Yes. Thanks for the question. So we still have over half a billion dollars available in our existing.

Authorization I think on average we've bought back more shares when our stock price has been lower than when it's been higher.

I'm not necessarily predicting what we're going to do next but.

We think our stock is a very attractive purchase right now and fully intend to continue being a buyer in part that's because our liquidity and balance sheet and cash flow.

Give us the strengths to do that and maintain significant flexibility.

Corp, Dev transactions and I want to emphasize that we we fully intend to continue being a buyer of our stock but are bigger priority is putting capital to work on the business and corporate development side. So I expect us to continue to be a buyer.

But to maintain flexibility for for Biz Incorporative.

Bruce C. Cozadd: Well done, Bruce. Thank you. Our next question comes from Jessica Fye at J.P. Morgan. Hey guys, good evening. Thanks for taking my questions. Just a couple quick ones. You're guiding to the Oxibate franchise, but will you report sales for Xyrem and 258 separately? And related to that, for 258, once it launches, do you plan to report on a quarterly basis what proportion of the volume is coming from Xyrem relative to 258?

Thank you.

Our next question comes from drift apart with JP Morgan.

Hi, guys. Good evening, Thanks for taking my questions couple quick ones.

You're guiding to the Oxybate franchise, but will you report sales for Xyrem in two five it separately unrelated to that for two five at once it launches do you plan to report on a quarterly basis, what proportion of the volume is coming from Xyrem relative to two funny.

Unknown Executive: Yeah, I'm not sure we've made all the determinations about what we'll be reporting and not. I do expect we will be reporting sales of the products individually. Our choice to group them for guidance this year had more to do with uncertainty about the approval date and launch date. We haven't talked about pricing yet. There are lots of reasons why it's hard for us to give you that more granular guidance. But, you know, we understand it will be important for investors and important for us to understand how 258 performs over time. And we will give you some more expectations as we get closer to launch about what that should look like and what we're trying to do.

Yeah, I'm not sure Weve made all the determinations about what will be reporting and not I do expect we will be reporting sales of the products individually.

Our choice to group them for guidance. This year had more to do with uncertainty about approval date launch state.

We haven't talked about pricing yet there are lots of reasons, it's hard for us to.

To give that.

More granular guidance.

But we we understand it will be important for investors and important for us to understand.

How to 58 performs over time and we.

I will give you some more expectations as we get closer to launch about what that should look like and what we're trying to it.

Unknown Executive: Okay.

Okay.

Unknown Executive: [inaudible]

Unknown Executive: Sorry, just to confirm, it sounds like the guidance includes the upfront for LRB; does it not reflect the anticipated payment to PharmaMar upon approval, and if not, why not?

[music].

Sorry, just to confirm it sounds like the guidance includes.

The upfront for loved the does it not reflects the anticipated payment to pharma more upon approval and if not why not.

Thanks for the question Jess.

Unknown Executive: Thanks for the question, Jess. Our guidance does include that payment, but that would be a payment on approval. So rather than expensing that, we would capitalize that and then amortize it over the life of the product.

So our guidance does include that payment, but that would be in a payment on approvals or rather than expensing that we would capitalize that and then amortize that over the life of the product.

Unknown Executive: The $200 million that's in the guidance is the upfront payment to PharmaMarkt. Does that make sense?

The.

$200 million that in the guidance is the upfront payment to pharma Mark yes.

Did that make sense, yes.

Unknown Executive: All right, and Operator, this will be our...

Yeah, all right operator, this will be on our last question.

Unknown Executive: Operator, this will be our last question. The next question comes from Craig Senevaj with Goldman Sachs. Great, thank you for taking my question. I just wanted to ask about...

Next question comes from cracks none of us with Goldman Sachs.

Great. Thank you for taking my question.

I just wanted to ask about.

Unknown Executive: earnings growth for the company.

Earnings growth for the company.

Unknown Executive: On a near term basis, I realize that perhaps you're not in a position to provide kind of longer term guidance, and you just provided 2020.

On a near term basis I realize that perhaps.

You're not in a position to provide a kind of a longer term guidance and you just for about 2020, but how should we think about the earnings power of the company over the next several years any comments there would be appreciated. Thank you.

Unknown Executive: If there's any comments there, it would be appreciated. Thank you.

Yeah. Good good wrap up question.

Bruce C. Cozadd: Yeah, good, good wrap-up question. Um, you know, again, we're trying to drive diversified revenue growth across. Sleep Neuroscience, across hemonc and solid tumor, across geographies and then to continue to bring our R&D portfolio to bear to continue that growth, across our existing products and new products. And I do think that unlocks significant earnings growth going forward. You know, obviously, we announced a deal at the very end of December that closed in January, which brought us another near-taunch that we're really excited about. We think that was a great investment for us to make. But that did have the impact, even putting aside the $200 million upfront expense, did have the impact of adding more expense ahead of revenue for Lerbanectadin to our 2020, to our very near-term results. But as we look out in the years to follow, we think we'll see the benefit of that increasing revenue line across products. And maybe, since that was our last question, I'll just wrap up with a comment about the rate of change.

Again, we're trying to drive diversified revenue growth across sleep neuroscience.

Cross Hmong consolidate tumor.

Across geographies and then to continue to bring.

Our R&D portfolio to bear to continue that growth.

Across our existing products and new products and I do think that unlock significant earnings growth going forward.

You know, obviously, we announced the deal at the very end of December that closed in January which brought us another near on.

That we're really excited about we think that was in grade investment for us to make but that did have the impact even putting aside the 200 million.

Upfront expense did have the impact of adding more expense ahead of revenue for learned that didn't.

To our 2022 are very near term results, but as we look out in the years to follow we think we'll see the benefit of that increasing revenue line across products.

And maybe since that was our last question I'll, just wrap up with a comment about a rate of change.

Bruce C. Cozadd: And just to remind all of you that, as we sit here talking about where our business is in February 2020, it wasn't that long ago that you would have evaluated it very differently. You know, Spinozzi was just launched, and we achieved good access and good initial uptake relatively quickly. 258 We hadn't shown phase three data until September, and now we've got an NDA submitted, and we're gearing up for a launch. 458 Before August of last year, it was labeled as in pre-clinical development, and we're now trying to get a BLA as early as the end of this year. Lerbonectadin was something we had never talked about until the beginning of this year, and we're gearing up for a product launch. Coming right behind that, we've got good clinical trials, including now in movement disorders. We've talked about idiopathic hypersomnia before.

And just to remind all of you that as we sit here talking about where our businesses at February 2020, it wasn't that long ago that you would have evaluated a very differently.

So no see was just launched.

And we've achieved a good access and good initial uptake relatively quickly to 58, we hadn't shown phase three data until September and now we've got an end da submitted and we're gearing up for a launch for 58 before August of last year was labeled as in.

Preclinical development and we're now trying to get a B.L.A. in as early as the end of this year learn connected in was something we had never talked about until.

The beginning of this year and we're gearing up for a product launch.

Coming right behind that we've got good clinical trials, including now in movement disorders.

We've talked about idiopathic hyper some money we've talked about the various defitelio.

Bruce C. Cozadd: We've talked about the various Defitelio readouts and progress we've got coming up. This is a tremendous amount of progress in the near term, and I think it sets us up for a pretty catalyst-rich 2020. At the same time, we've been continuing to build out our management team, and I can't tell you how proud I am of the talent we've added to the company, including today's announcements. Remember, we just added Rob Yunone, Nina Patil, and Finbar Larkin last year to the Executive Committee, and then today we announced the addition of Sam Pearce and Renee Gala to our management team. So that's five new senior managers joining our company to help us execute on this broadened portfolio of opportunities, and we're really excited to demonstrate what we can do as a company. Kathy

Read outs and progress we've got upcoming this is a tremendous amount of progress in the near term and I think it sets us up for a pretty catalyst rich 2020 at the same time, we've been continuing to build out our management team and I can't tell you, how how proud I am of victory.

Talent, we've added to the company.

Hey, you know, including today's announcements remember, we just added Rob you known and Nina Phil.

Okay, and Finbar Larkin last year to the Executive Committee and then today, we announced the addition of Sam Pearson Rene Gala to our management team. So thats five new senior managers, joining our company to help us execute on this broadened.

Portfolio of opportunities and we're really excited to demonstrate what we can do as a team.

Kathy.

Kathy Luttrell: All right. We'd like to thank all of you. Thank you, Operator, for your help today, and thank you all for joining us today. We will be participating in the upcoming Cowan and Barclays Healthcare Conferences, and we hope to see many of you there. This now will end our call.

Okay.

Alright, and we'd like to thank all of you. Thank you operator for your help today and thank you all for joining us today, and we will be participating in the upcoming Cowen and Barclays healthcare conferences, and we hope to see many of you. There. It's now we'll end our call.

Unknown Executive: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

Ladies and gentlemen does concludes todays presentation you may now disconnect and have a wonderful day.