Q1 2023 Jazz Pharmaceuticals PLC Earnings Call

Speaker 1: and thank you for standing by. Welcome to the Q1 2023 Jazz Pharmaceuticals Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.

Speaker 1: To ask a question during the session, you will need to press TAR 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press TAR 11 again.

Speaker 1: Please be advised that today's conference is being recorded.

Speaker 1: I would now like to hand the conference over to your speaker today, Andrea Flynn, Vice President and Head of Investor Relations. Please go ahead.

Speaker 2: Thank you, operator, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its first quarter 2023 financial results. The slide presentation accompanying this webcast is available on the investors section of our website. Investors may also refer to the press release we issued earlier today, which is also posted to our website.

Speaker 2: On the call today, our Bruce Cozad, Chairman and Chief Executive Officer, Renee Gala, Executive Vice President and Chief Financial Officer, Dan Swisher, President and Chief Operating Officer, and Rob Yunoan, Executive Vice President Global Head of R&D.

Speaker 2: Kim Sablitch, Executive Vice President and General Manager, United States, will join the team for Q&A.

Speaker 2: On slide two, I'd like to remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, growth potential, and anticipated development and commercialization milestones and goals, which involve risks and uncertainties that could cause actual events, performance, and results.

Speaker 2: to differ materially from those contained in these forward-looking statements.

Speaker 2: We encourage you to review the statements contained in today's press release, in our slide deck, and in our latest FCC disclosure document, which identifies certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in these forward-looking statements made on today's webcast.

Speaker 2: We undertake no duty or obligation to update our forward-looking statements.

Speaker 2: Turning to slide three, on this webcast, we'll discuss non- GAAP financial measures. Descriptions of these non- GAAP financial measures and reconciliation of gap to non- GAAP financial measures are included in today's press release and the slide presentation available on the investor's section of our website. I'll now turn the call over to Bruce.

Speaker 3: Thanks Andrea. Good afternoon everyone and thank you for joining us today. I'll start on slide 5.

Speaker 3: In the first quarter of 2023, we once again delivered strong commercial results, continued to advance our pipeline, and built on our record of operational excellence.

Speaker 3: Our results for the quarter underscore the durability and growth of our core commercial products and our enhanced R&D capabilities.

Speaker 3: On the commercial front, our focus on execution continues to drive key product sales, headlined by the strong performance of low sodium zy-wave.

Speaker 3: were especially pleased that physicians and patients continued to choose thy wave even as a high sodium oxydate authorized generic or AG entered the market.

Speaker 3: We continue to expect the Zywave will both grow and remain the oxybate of choice in 2023, even with the availability of high sodium oxybate AG and branded fixed-host high sodium oxybate.

Speaker 3: Zywave active patients grew in both narcolepsy and idiopathic hypersomnia or IH in the first quarter. And our efforts to educate prescribers and patients about the benefits of Zywave remain effective and are resonating in the market.

Speaker 3: ZaiWave is now amulizing it more than a billion dollars in net product sales, making it our largest product by net sales. And as outlined in Vision 2025, we anticipate our Oxidate franchise will generate $2 billion in revenue in 2025.

Speaker 3: We saw significant year-over-year growth in product sales for Epidiolex.

Speaker 3: Importantly, outside the US we have now launched in all five key European markets.

Speaker 3: The man for Islaes remains strong in the US with potential European approval later this year.

Speaker 3: Zepzelka remains the treatment of choice in second line small cell lung cancer, and longer term our ongoing efforts to explore Zepzelka in several new patient populations.

Speaker 3: including first-line small cell lung cancer may open up opportunities for meaningful growth.

Speaker 3: Moving to R&D, we continue to advance multiple investigational therapies in our pipeline and expect to have at least three late-stage readouts by the end of 2024, including JCP-150 and Post-Traumatic Stress Disorder.

Speaker 3: Supercultamide and Essential Tremor, in Zany Data Mab and first line gastroesophageal adnocarcinoma or GEA.

Speaker 3: On the operational side, our strong execution grows significant top and bottom line growth in the first quarter compared to the prior year. We have a business that continues to generate meaningful cash flow, in line with our discipline capital allocation we continue to invest in areas of our business that we believe will drive the most benefit for patients.

Speaker 3: and value for shareholders, including a robust pipeline with more than 20 novel candidates across neuroscience, oncology, and cannabinoids.

Speaker 3: We are reaffirming our 2023 guidance, which we will discuss in more detail.

Speaker 3: Turning to slide six.

Speaker 3: Vision 2025 remains our strategic north star, which we believe will deliver sustainable growth and enhanced value.

Speaker 3: We have made meaningful progress in all three areas of vision 2025 and believe we are well positioned to achieve these important milestones, each of which are critical to our transformation into a high-growth global bio-farmal leader.

Speaker 3: I'll now turn the call over to Dan to review our commercial performance after which Rob will share an update on our R&D progress. René will provide a financial overview and then we'll open the call to Q&A. Dan?

Speaker 4: Thanks, Bruce.

Speaker 5: I'm excited to share the continued progress across our commercial portfolio.

Speaker 5: I'll begin on slide 8 with neuroscience in our Oxidate franchise. We remain confident in the durability of our Oxidate franchise and have established low sodium thy weight as the Oxidate treatment of choice.

Speaker 5: ThyWave became our largest product by net product sales as of the fourth quarter of 2022, and is annualizing at more than a billion dollars as a result of continued adoption of both Narcolepsy and IH.

Speaker 5: In the first quarter average, active jazz octubate patients increased to approximately 17,400, representing growth of approximately 5 percent, and total octubate revenues, including royalties from high sodium octubate AG, grew by approximately 6 percent compared to the year prior. In the first quarter average, active jazz octubate patients increased to approximately

Speaker 5: In our policy, we continue to focus on educating patients and prescribers on the benefits of reducing sodium intake. And this message is resonating.

Speaker 5: We were very pleased with performance in the first quarter and exited 1Q23 with approximately 9,050 narcolepsy patients taking zy-weights, an increase of approximately 500 patients from the fourth quarter of 2022.

Speaker 5: In IH, we see continued growth of new prescribers and exiting the first quarter there were approximately 2,000 IH patients taking Zayweb. IH is a 24-hour sleep disorder and Zayweb is the first and only treatment approved by FDA to treat the full condition of IH.

Speaker 5: Importantly, it has been studied across the multiple symptoms of IH.

Speaker 5: Our field force remains focused on educating prescribers on the importance of proper diagnosis and identifying appropriate patients for thy weight therapy.

Speaker 5: And a recent jazz survey of sleep specialists indicates that approximately 70% anticipate increasing their prescribing over the next six months.

Speaker 5: Slide 9 highlights the compelling low sodium health benefits we are sharing with healthcare professionals and patients.

Speaker 5: Narcolepsy is a debilitating chronic condition and we have focused on education around the lifelong burden of high sodium intake from narcolepsy patients who live with an increased risk of cardiovascular comorbidities. Thy weight is the only approved low sodium oxybate and has 92% of the sodium oxybate.

Speaker 5: 100 milligrams of sodium per day compared to high sodium off the base.

Speaker 5: This has significant potential health benefits, including lower blood pressure and improved cardiovascular health. To add to the literature on sodium impact, we presented data at this year's American Academy of Neurology meeting that showed narcolepsy patients treated with high sodium oxibate Actual

Speaker 5: had a higher risk of new onset hypertension diagnosis or anti-hypertensive medication initiation within 180 days of starting therapy when compared to a match control group of narcolepsy patients not being treated with high sodium oxybate.

Speaker 5: In fact, the risk of those taking high sodium oxydate was approximately twice out of the control group. With regard to oxydate competition, a high sodium oxydate AG was launched in January , and we anticipated additional AG and branded fixed dose high sodium oxydate competition in the coming months.

Speaker 5: patients and we expected to be the only hospital indicated for IH for the foreseeable future.

Speaker 5: Second, we expect that Zyly will both grow and remain the oxidative choice in 2023, even with the availability of high-setting oxidative.

Speaker 5: I'll highlight that the large majority of narcolepsy patients beginning off state therapy in the first quarter, chose thy weight over high sodium off state.

Speaker 5: And we expect to continue to see patients transition from those Lyram and high sodium oxidative age 2 sign wave.

Speaker 5: Third, we believe that the majority of patients and healthcare providers will continue to prioritize long-term health when evaluating oxygate therapy.

Speaker 5: FDA continues to recognize seven years of orphan drug extensivity through July 2027 for zy-way than narcolepsy. FDA has also recognized the difference in sodium content between zy-way and lume rise, a fixed dose high sodium oxivate.

Speaker 5: is likely to be clinically meaningful in all patients with narcolepsy and that side wave is safer than lumerized in all such patients.

Speaker 5: I'll also note that branded chick stoves high sodium oxybate has the same sodium content as Xyram and the high sodium oxybate A-G. And Xywave is the only approved oxybate therapy that does not carry a warning and precaution related to high sodium intake. All of these factors give us confidence that Xywave is the durable product.

Speaker 5: that we believe will continue to be a core growth driver for jazz.

Speaker 5: Moving to slide Sam, we are pleased with the continued growth of FDILACS with net product sales in first quarter 23 growing by 20% year over year to 189 million government or employees within the electrical industry target during damage to the

Speaker 5: Growth was driven by underlying demand in the US and expansion to new markets outside the US and we are seeing increasing use of Epidiolytes earlier in the treatment algorithm.

Speaker 5: We continue to see seasonality and ordering patterns in the U.S. with the combination of a more gradual build-in inventory over the second half of the year and insurance plan resets with payers impacting the first quarter, not dissimilar to what we've seen historically with Oxidate.

Speaker 5: Turning to slide 11, we are building on our solid foundation to capitalize on additional opportunities we see to drive the epidemics growth.

Speaker 5: We've recently launched a number of initiatives, including educational efforts focused on optimal dosing and caregiver reported outcomes of Epidiolysis treatment, including seizure behavior and cognition data from the BECOMES survey. These new initiatives are complemented by the compelling data presented last year for use of Epidiolysis treatment.

Speaker 5: European markets and while it's early.

Speaker 5: We are very encouraged by uptake in those markets with pricing and access remaining strong.

Speaker 5: Moving to slide 12, Met product sales for RILA's were $86 million for the first quarter of 58% increase year over year.

Speaker 5: Based on the availability of RILA, health care providers have indicated they are returning to best clinical practice and switching therapy at the first signs of hypersensitivity.

Speaker 5: The approval of Monday Wednesday Friday dosing allows for a dosing schedule that is more in line with preferred clinical practice.

Speaker 5: Ryleis is maintaining strong momentum in pediatric oncology protocols and has been almost universally adopted in this setting.

Speaker 5: We are also encouraged to see that there is an increasing use of violates in the treatment of adolescents and young adults or the AYA market, which is an area of increased emphasis for us in 2023.

Speaker 5: Outside of the U.S., we submitted a marketing authorization application to the European Medicine Agency in May 2022. We are also continuing to evaluate patient needs and other geographies. We are also continuing to evaluate patient needs and other geographies.

Speaker 5: Slide 13 highlights that we have rapidly established Depp Delca's treatment of choice in second line small cell lung cancer. Depp Delca Net product sales increased 13% to $67 million in first quarter 23 compared to the same period in 2022.

Speaker 5: Rob will discuss our development plans for Zestelka, which also includes trials in first-line small cell lung cancer and other tumor types providing the opportunity for meaningful future growth in new patient populations.

Speaker 5: I'll turn the call over to Rob for an update on our pipeline and upcoming milestones. Rob? Yeah.

Speaker 5: I'll turn the call over to Rob for an update on our pipeline and that's coming miles done Rob. Thanks Dan.

Speaker 6: Starting on slide 15, we've detailed key clinical programs in our pipeline. Our team is energized by the advances we've made, so we're looking forward to late-stage data readouts from at least three clinical stage programs in 2023 and 2024. KDP 150 and PTSD.

Speaker 6: I'll highlight several programs in more detail shortly.

Speaker 6: But first, I want to touch on a few key points as we look across the breath of the pike

Speaker 6: I want to touch on a few key points as we look across the breadth of the pike farm. Starting with the other side.

Speaker 6: year. We're also advancing trials for sous le calcimide in both essential tremor or ET and Parkinson's disease tremor.

Speaker 6: for one, Phase One Program.

Speaker 6: We anticipate initial proof of concept and healthy volunteers this year. KDP 441 has the potential to treat narcolepsy.

Speaker 6: Hi, age as well as other sleep disorders moving town, college

Speaker 6: Santa Data Math is a priority program for us and we are committed to bringing this novel therapy to patients.

Speaker 6: In late April , we amended our agreement with Zymerx and are excited to welcome new colleagues who are focused on Sanidad and Ava Zymerx to jazz.

Speaker 6: This allows us to benefit from their wealth of knowledge and expertise as we look to bring Zanada Data Mab to the market as rapidly as possible.

Speaker 6: and explore other opportunities beyond VTC and GEA. For Zipselka, we expect to complete enrollment this year for the ongoing Phase III trial to evaluate the Zipselka in combination with Tocentric in first line extensive stage small cell lung cancer.

Speaker 6: Turning to slide 16, I'll discuss down a data map in more detail. Candidate a map is a novel per two targeted by specific antibody with five paratopic binding.

Speaker 6: and the potential to transform the current state of the care in multiple her two expressing cancers.

Speaker 6: As an oncologist, I'm impressed to see the monetary activity with Zanny across multiple her two expressing tumor types.

Speaker 6: including cases resistant to prior HER2 therapies. The most advanced clinical work with Zannie is in bilayery tract cancers or BTC, and gastroesophageal adenocarcinoma or GIA.

Speaker 6: These are both cancers with significant unmet need and poor outcomes with current standards of care.

Speaker 6: As a reminder, last year, we in our partner's sign works reported positive top-line results from a pivotal Phase II B trial, evaluating Sanidatamab has monotherapy in patients with previously treated, HER2 amplified and expressing BTC. In the trial,

Speaker 6: 41% of these patients with BTC achieved an objective response as assessed by Blinded Independent Sensor Review.

Speaker 6: with BTC achieved an objective response as assessed by blinded independent censor review. By contrast,

Speaker 6: Standard of care came with therapy in second line BTC would be expected to have an objective response rate of less than 10%. Currently there are no hurt you targeted therapies approved for the treatment of BTC.

Speaker 6: And we are in dialogue with the FDA regarding the potential regulatory path forward for Zany NBTC. For please, the data from this trial have been accepted as an oral presentation at ASCO this year.

Speaker 6: For those of you interested in more detail in those data, I hope you will join us for the KOL webcast we are hosting following that presentation.

Speaker 6: We are also progressing our program in GGA.

Speaker 6: At the January ASCO GI conference, the first anti-data map overall survival data were presented from a Phase II trial to evaluate anxiety-data map in combination with chemotherapy and first-line patients with HER2 expressing metastatic GA.

Speaker 6: The preliminary results show that the median overall survival had not yet been reached.

Speaker 6: with an 18-month survival rate of 84%. The overall survival findings in this trial are compelling, given that they historically reported overall survival rate for the currently approved standard of care is a median of 14 months.

Speaker 6: These results show Zanadata maps potential as a foundational treat for patients with HER2 positive GEA.

Speaker 6: and we look forward to additional data from the ongoing pivotal phase three TEA trial expected to read out in 2024, which may support US and global regulatory submissions.

Speaker 6: Since we acquired data map, for confidence in this program has only grown based on positive data from both BTC and GBA. Tomorrow our initial focus is on those two tumor types.

Speaker 6: We believe Zana Data Mab has the potential to transform the current standard of care in multiple her two expressing cancers. To that end, we're excited that Zana was added to the I-SPI breast cancer platform this year.

Speaker 6: In addition, we have multiple early stage trials, assessing Xamadata maps, clinical potential, and a range of tumor types, and are actively evaluating opportunities to pursue additional labeled indications.

Speaker 6: Turning to slide 17, I'd like to highlight Supercaldomite.

Speaker 6: which is a highly selective, can state dependent modulator of T-type calcium channels in clinical development for the treatment of a central tremor, or ET, and Parkinson's disease tremor. Top-line data readout for the ET trial is anticipated in the first half of 2024, so I'll focus my comments today on that indication.

Speaker 6: There is a high unmet need for ET treatment with no new medicines approved in over 50 years.

Speaker 6: ET can be highly debilitating with significant effects on patients' quality of life and activities of daily living, such as eating, drinking, dressing, shaving, and writing, and can lead to substantial impairment on physical functioning.

Speaker 6: ET can be highly debilitating with significant effects on patients' quality of life and activities of daily living, such as eating, drinking, dressing, shaving, and writing, and can lead to substantial impairment on physical functioning. Some patients also experience cognitive deficits.

Speaker 6: anxiety, social phobia, depression, and sleep disturbances.

Speaker 6: In the US and key European markets, there are approximately 2 million diagnosed patients with a prevalence estimated of 11 million. Slide 18 illustrates sub-account to my differentiated mechanism of action.

Speaker 6: For the exact underlying pathophysiology of ET is not clear, through its strong evidence to support the role of P-Kype calcium channels.

Speaker 6: T-Sythe calcium channels regulate the balance of calcium ions. Hecting as a gay keeper, calcium ions both enter and leave the cell membrane.

Speaker 6: In some pathologic states such as ET, increased activation of these channels leads to excessive rhythmic signaling.

Speaker 6: and prompt tremor. The high selectivity of sous-vacal-domine for T-type calcium channels make it a promising candidate for the treatment of ET.

Speaker 6: Importantly, Suvic Althamide is differentiated from other T-type calcium channel blockers in development as it is state dependent.

Speaker 6: meaning that it targets channels under conditions of hyper excitability while sparing the form of the channel important for normal neuronal signaling. Slide 19 provides a co-review of the SUVA-CALTIMINE ET Phase-2B trial design.

Speaker 6: Approximately 400 participants with moderate to severe ET will be treated with one of three dose levels of Sue Accommod or placebo for 12 weeks.

Speaker 6: Based on the results from our prior Phase IIa proof of concept trial, known as TCOM, as well as FDA feedback.

Speaker 6: The primary endpoint being used in this trial is a change from baseline to week 12 on a composite of the Tremor Research Group Essential Tremor Rating Assessment Scale known as Tetris.

Speaker 6: The two composite measure is composed of items from two scales, 11 items from the Tetris Activity of Daily Living, which includes measures such as feeding with a spoon, hygiene and using keys, and two items from the Tetris Performance Scale.

Speaker 6: which represent handwriting and drawing in the Archimedes spiral, which was depicted on slide 17.

Speaker 6: We conducted post hoc analyses on TCOM, which was a four-week randomized double-blind placebo-controlled study to better understand the treatment effect with the Tetris composite endpoint. We believe that our ongoing Phase IIb trial has been optimally designed to help our patients understand the treatment effect.

Speaker 6: to use the Faith 2A learnings.

Speaker 6: and that an appropriate patient population, primary endpoint, and study duration have been selected to adequately evaluate the safety and efficacy of subacalcimides across three dose levels.

Speaker 6: On slide 20, we've highlighted several key aspects of our program exploring JZP150 for the treatment of PTSD, a psychiatric disorder that affects millions of people.

Speaker 6: Patients frequently have uncontrolled symptoms that impact their ability to perform activities of daily living and social function.

Speaker 6: PTSD effects up to 8% of adults during their lifetime and is associated with significant morbidity and mortality.

Speaker 6: There haven't been any new medicines approved for the treatment of PTSD in over two decades.

Speaker 6: Current standard of care includes cognitive behavior therapy with SSRIs and SNRIs used as first line pharmacotherapy treatments.

Speaker 6: However, response rates to pharmacological treatments rarely exceed 60 percent in even fewer patients achieved clinical remission.

Speaker 6: JCP150 is a potent, selective, and irreversible inhibitor of fatty acid amide hydrolase, or FOC.

Speaker 6: This is a novel mechanism of action to potentially target the underlying pathophysiology and core symptoms of PTSD. We expect top-line data from this trial linked this year.

Speaker 6: Slide 21 provides an overview of our CFSELCA first-line small cell lung cancer program. Small cell lung cancer patients have particularly poor outcomes with a five-year overall survival rate of less than 10%.

Speaker 6: Currently, Zabsilka is indicated to treat patients in the second line setting, but we see a clear mechanistic rationale for Zabsilka to potentially increase the duration of response in the first line setting, because maintenance therapy in combination with the standard of care. —

Speaker 6: which is chemotherapy plus a PD-L1 inhibitor. We have an ongoing first-line trial being run in collaboration with Roche to evaluate Cilka in the setting with chemotherapy plus the centric, or Tizolizumab. The trial design is outlined on the bottom portion of the slide, and we expect to complete enrollment by the end of the year.

Speaker 6: Now, I will turn the call over to Renee for a financial update.

Speaker 6: Now I will turn the call over to Renegh for a financial update. Renegh.

Thanks, Rob. I'll start with our top and bottom line results on slide 23. As a reminder, our full financial results are available in our press release and 10-Q . In the first quarter of 2023, we recorded impressive year-over-year revenue growth of 10% achieving $893 million in total revenues.

This was driven by growth of our key products in both neuroscience and oncology, including year-over-year double-digit growth of ZiWave, Epidiolex, and Reilase.

Our discipline, capital allocation, and focus on operational excellence drove adjusted net income of $285 million. Growing broadly in line with our revenues compared to the same period in 2022.

sheet, we have strategic flexibility to invest in growth drivers within our current business, as well as corporate development opportunities.

Corporate development is an important component of Vision 2025, and we are actively assessing opportunities that we believe will deliver innovation for patients and contribute to building a sustainable business that provides meaningful returns to shareholders.

range for 2023 is $3.675 to $3.875 billion, positioning us for year-over-year total revenue growth.

Our 2023 guidance for neuroscience of $2.675 to $2.825 billion incorporates expected growth for both ZIWAVE and Epidial X, as well as the continued decline in ZIRAW due to robust ZIWAVE adoption.

and the introduction of competitive high sodium oxivates. As a reminder, our neuroscience guidance also includes high sodium oxivate AG royalties.

which are recognized within total revenues under royalties, not under neuroscience net product sales. Due to the royalty structure within our AG agreement with HICMA, we expect our royalties to be significantly higher in the second half of 2023 relative to the first half.

As a reminder, in the first half of 2023, while HICMA maintains exclusive rights to distribute high sodium oxabate AG, the royalty rate paid to Jazz is tiered and wide-ranging, starting at 10% and going all the way to 90%, based on the volume of AG units sold as a percentage of total oxabate units.

regardless of the AG volumes.

Our oncology guidance reflects expectations of continued double-digit growth for this franchise with a revenue range of 950 million to 1.05 billion, resulting in a midpoint of a billion dollars.

Continuing on slide 25, our SG&A guidance for 2023 is a reduction compared to 2022, and we are tracking through the first quarter as expected. As we noted in our last quarterly update, our R&D guidance of $700 million at the midpoint represents enhanced investment over 2022.

approximately 46% for the year.

We'll continue to prioritize commercial R&D and corporate development efforts that we believe will deliver the most value, leveraging our cash generation to invest in our business, improve our bottom line, and deliver strong shareholder returns.

2025 and deliver further diversification, sustainable growth, and enhanced value to patients and to shareholders.

and deliver further diversification, sustainable growth, and enhanced value to patients and to shareholders. I'd now like to turn the call back to Bruce.

Thanks, Renee. I'll conclude our prepared remarks on slide 27. We started 2023 with significant momentum, and I'm pleased to report that we've continued making strong progress in the first quarter of 2023. On the commercial front, we've successfully launched multiple products over the past several years, which are now demonstrating strong and durable the performance.

Our pipeline is more robust than it's ever been in the company's history, and we have at least three anticipated late-stage data readouts through 2024 that have the potential to continue to diversify and transform our business. We also remain focused on strategic capital allocation.

With our strong cash flow, balance sheet and margins, we have the flexibility to make significant investments across commercial, pipeline and corporate development to drive sustainable growth and enhanced value.

That concludes our prepared remarks. I'd now like to turn the call over to the operator to open the line for Q&A. As a reminder to ask a question, please press tar 1-1 on your telephone and wait for your name to be announced.

To withdraw your question, please press TAR 11 again. Please limit your question to one question only. Thank you. Please stand by while we compile the Q&A roster.

And then second, what kind of business development is most interesting to you in this current environment? Thank you. All right. Well, let's start with the question about the authorization era. And then Renée, maybe you can jump in to handle corporate development.

You know, the most important thing to say about our first quarter with an AG on the market is that it's played out very much the way we thought it would thus far. We have a new entrant in the high sodium.

category when we are obviously growing Zywaves as the only low sodium product both in narcolepsy and in idiopathic hypersomnia where it remains the only approved product without an AG generic.

The ability to grow in both narcolepsy and idiopathic hypersomnia in the face of the AG generic, I think is consistent with what we had guided to, and you saw us reaffirm our overall guidance for the year based on that first quarter experience.

The ability to grow in both narcolepsy and idiopathic hypersomnia in the face of the AG generic I think is consistent with what we had guided to and you saw us reaffirm our overall guidance for the year based on that first quarter experience. Renee, you want to take corporate development?

Sure, thanks, Ruth. So corporate development continues to be an important priority for us, as I had mentioned in our prepared remarks. In terms of the assets we are interested in, we are squarely focused on commercial and near commercial assets as part of our Vision 2025.

revenue goals. We think the Zany Data Mav can certainly contribute to that goal, but it will not fully cover it. We also are looking at pipeline assets. We have a rather robust pipeline right now that we're pushing forward, and we think we can continue to look at bringing in assets that can complement that pipeline.

We do believe there are some good opportunities for us to transact across both of those areas. With respect to commercial or near commercial assets, to be clear, we're not going to overpay for assets, nor do we think that we need to in this environment. So sitting here today, there are multiple opportunities we're interested in, and we're quite busy within that team.

And then just to get a bit more specific in terms of the types of assets, you know, we really tend to focus on areas of great unmet need, where we think we can have a really meaningful impact for patients, where there's an addressable commercial call point that enables us to leverage our expertise, our global footprint, and then create a durable...

revenue stream for the company. We're largely focused on neuroscience and oncology areas where we currently operate already, but certainly we're also exploring rare and orphan areas outside of those two therapeutic areas, given the vast majority of our current commercial products.

are currently serving rare or orphan disease populations, there's certainly applicable expertise that we've developed there. So we're excited, we think there's a lot of opportunity. We're well positioned also from a financial perspective to be able to transact.

with understanding what's happening behind the scenes. Thanks.

Mark, let me turn that question over to Kim. Hi, yes. So we are continuing to see the growth in idiopathic hypersomnia is quite compelling with 2000 active patients exiting the first quarter. And when you look underneath that, we see that we're continuing to bring new prescribers on board and creating a larger prescriber base, which is great. So we are continuing to see the growth in idiopathic hypersomnia is quite compelling with 2000 active patients.

in the future. But do keep in mind that, you know, Zywave remains the only FDA approved treatment option for adults with idiopathic hypersomnia, which is a rare multiple symptom sleep disorder. And the only treatment studied across, you know, the multiple symptoms of IH. And we're really still just building this kind of non-existent market.

both for healthcare providers as well as patients across multiple channels and platforms. And our emphasis really is on educating prescribers on the importance of a proper and solid diagnosis and identifying the patients that are appropriate for XI-Wave and really about the fact that XI-Wave is approved to treat the full condition of idiopathic hypersomnia.

Not just the excessive daytime sleepiness that they have been treating for a number of years with off-label stimulants and weight promoting agents. And really important at the core of that as well, since they've been so focused on the daytime symptom of excessive daytime sleepiness, is reminding them that idiopathic hypersomnia is actually a 24 hour condition.

And a Xi wave can address multiple symptoms of idiopathic hypersomnia. So, an important educational effort there, and we're gaining traction. Patients so far have been reporting that they're quite pleased with the comprehensive and customized support that they're receiving from Jazz during the path to access. So overall, we're feeling really good, remaining very confident in our ability Susan andTeam.gen butter. Thanks for your choice. So at this point I really want to thank our special guest, V uploaders, for making this happy for them and for producing this content. And thank you for your

to maximize the potential of the xi wave in this really underserved market. Your next question comes from the line of Jason Gerber with Bank of America. Your line is now open.

Hey guys, thanks for sticking my questions. Just a question on the step up, the meaningful step up in the Hickmer royalty in second half. Is that driven off of the assumption that the Hickmer AG volumes will step up in a big way and thus their sales or is it more just that the royalty rate spikes up in the second half.

once tightly oxybate. Would you expect that to have to be stepped through the AG generics just you know pairs historical reluctance to pay for convenience? Thanks.

Yeah, on the first part of the question, Jason, it's pretty straightforward that the emphasis we're trying to put there is really that the royalty rate is expected to be meaningfully higher in the second half of the year. It's not really a timing or accounting thing. You know, Hickman has been adding patients.

over time, so they probably have more patients at the end of a period than at the beginning of a period, so that will contribute too. But the royalty rate is meaningfully different. And on the payer side, in the sort of high-oxibate space and how they might handle that, Kim, maybe I'll come to you. Sure.

So, you know, we started out the year and we continue to experience greater than 90% of patients, commercial patients, having payer coverage, formulary coverage for ZiWave, and we anticipate that to continue. You know, we've been educating payers for some time now about the importance of

of reducing sodium and we do believe that payers are generally understanding the importance of that reduction. And they're seeing the fact that, you know, oxybate, a guy wave is the oxybate market leader with more than half of all oxybate patients on guy wave and the fact that we've continued to grow this market leading position over the high sodium oxybate. So, you know, we anticipate that it's...

Josephson with coin. Your line is now open.

Hi there. Good afternoon. Thank you for taking my question. Maybe one on the pipeline for JDP-150 and PTSD since we're going to see those data this year. Maybe what sort of change in the CAHPS 5 scale do you think is clinically meaningful or would support additional investment in this program? And placebo response rates are, they can be historically pretty variable in...

Neuropsych indication. So is there anything that you can do in the conduct of the phase two to try and minimize placebo response? Thanks Rob over to you on on that one Yeah, thanks for happy to take the question So on the first part, we haven't said exactly what we think would be clinically meaningful, but we certainly had discussions with FDA

and key experts and we feel that the study is well-powered with the two dose levels that we've included. And to your point, it's a well-controlled design with placebo. We certainly think the level of severity in the patients that we're recruiting and the well-established end point will allow us to differentiate from any placebo effect that you might see in that.

in that particular population is pretty severe upon study entry.

Your next question comes to the line of red and folks with Cantor Fritz Journal. Your line is now open. Your next question comes to the line of red and folks with Cantor Fritz Journal.

All right, thanks for taking my question. Maybe just following on from an earlier question about the IH market, can you maybe just elaborate a little bit on the willingness you're seeing in the field of prescribers to use a sleep promoting agent for the IH patients, especially those patients with heavy sleep inertia?

fleet promoting age and that to highlight the education that we need to do in this marketplace. You know, where, as I mentioned earlier, working to educate prescribers, that IH is actually a 24-hour condition and that we can address the multiple of both daytime and nighttime symptoms of IH.

And once they understand that the daytime symptoms, including sleep inertia that you mentioned, are the result of poor sleep quality at night or what we call nonrestorative sleep, they understand why treating with ZY wave at nighttime makes sense. So we're making progress there and education is key to...

changing their understanding and their beliefs. And your next question comes from the line of Ami Farya with Needham & Co. Company. Your line is now open. Great, thanks for taking my question. I have one question.

and so I was just curious what you thought you might see from your study and it's the end point that you expect to continue to evaluate going forward and just to follow up to the dynamic and the oxidative market. It is fair to say that there's aren't really influencing

switches to the generic and it really boils down to physician choice.

So, in that case, who's really taking the generic xylem? Thank you.

So, Rob, let's come to you first on subacallamide. Yeah, so thanks for the question. We feel as though we learned a lot from the TCOMP study, that was the Phase 2a study, and a number of respects, including not only the endpoints, but also the endpoints of the

but how to measure the endpoints. And we certainly notice that it can be challenging to assess performance aspects of the Tetris through a remote observer. So in our trial we're not doing that. But overall, the combined Tetris endpoint having to do with activities in daily living and performance scale.

is agreed upon with the FDA, and is certainly something we were able to evaluate in our TCOM study, and we have confidence around our drug. And I think you're highlighting differences in trial designs potentially, but I would also highlight differences in drugs.

at the FDA and is certainly something we were able to evaluate in our TCOM study and we have confidence around our drug. And I think you're highlighting differences in trial designs potentially, but I would also highlight differences in drugs.

Our agent is a state dependent cat 3 and that's critical because it allows you potentially to push the dose into higher efficacious ranges given the differential activity on pathologic calcium ion channels versus normal resting state channels.

So we think we have a differentiated asset. We think we're able to push the dose and evaluate those three doses in a phase two design that's supported by our prior data. And Kim, on the AG uptake, you want to make a comment on that?

Yeah, sure. I mean, so we don't have exact data on that. What I'll say is that we're continuing to see nice uptake, as Bruce said, of ZY wave in the face of the AG. Switching dynamics can happen in a number of places. They can happen with the payer, which I don't think we're really seeing is the case right now. They can happen.

from Xyrem to the AG.

Your next question comes from the line of biology for thought with Barclays. Your line is now open. I agree with you just two quick ones from me. Firstly, could you comment on the access that you have to the neurologist and physicians with regard to epidemics?

comment on ongoing litigation. But Dan, why don't you talk about Epidiolex access sort of worldwide?

Yeah, just sort of thinking more broadly about the dial, the 20% year over year growth is great. And we remain confident that we're near blockbuster status on that brand. You know, in both markets we've got a strong HCP engagement, face to face engagement.

We've got great access as we had some wins coming in to the US market. And so we've always had the quantity of access, but now we've got the quality of access. In Europe , France was the last of the five major countries to get access to. And we're continuing to drive in the smaller markets, both.

reimbursement as well as TSC reimbursement for that indication. So I think this stage is well set with the face-to-face interactions, the ability to talk to the HCTs, not only about the clinical rationale thanks to the seizure benefit and the combination of Clovisam, but also some of the BECOM data from caregivers that were shared, which also had behavioral and recognition outcome.

And then there's the areas that I mentioned in the presentation or the prepared remarks about additional areas of growth with enhanced focus with adults. You know, adults were also getting to those physicians that had been impacted by COVID and we see that plus long-term care as an area to further double down on.

As well as optimal does et cetera. So I think the stage is well said, and we're pleased with the year over year growth and. Where the brands going for 2023. And the next question.

It comes from Mark Mar with Goldman Sachs. Your line is now open. Hey, thanks for taking our questions. Maybe on the corporate and business development front, how do you think about kind of the boundary between commercial versus near commercial assets as each quarter moves forward towards 2025? Is there a sense that like if you get to a certain point, it really shifts from commercial or near commercial to really...

wanting to be commercial assets to kind of contribute meaningfully to Vision 2025? Thanks for the question. I would say our primary focus is ensuring that we're targeting assets that we think and have a really meaningful benefit for patients and meaningful impact and therefore benefit our business and our shareholders.

or whether we're looking at something that we can essentially lift and drop right into our footprint. So, you know, our focus is essentially the long-term value generation, durability of the asset, how it fits into our overall portfolio. And we do think there are opportunities to ensure that we're hitting our Vision 2025.

for the line off Gregory Aranza with RBC Capital Markets. Your line is now open. Great. Good afternoon, Bruce and team.

line off Gregory Aranza with RBC Capital Markets. Your line is now open. Great. Good afternoon, Bruce and team. Congrats on the progress and thanks for taking my question.

First, maybe just spinning back to ZiWave and as you go to market with the low sodium messaging which we acknowledge is rather intuitive and with respect to just the simplicity of that messaging, I'm just curious what barriers would you point to that you think are perhaps underappreciated.

by investors and others as that messaging gained traction and pulls through with the iWave. Thanks so much. Kim, why don't I let you take this one? Sure, so at this point we do feel that our low sodium messaging is resonating with healthcare providers and with many patients as well, I think as evidenced by the amount of

because Xyrem has changed their lives. We should never underestimate how much patients love their Xyrem and just don't want to take any chance no matter what you tell them about the product being the same act of moiety in terms of switching products. So we're continuing to work on that patient side of things and educating patients.

about Xywave and making nice progress over time. The other reason that we hear most is that in the smaller healthcare practices, they feel they just don't have the means to do the transitioning of the patient. So we do see

these offices starting, you know, patients on Zaiway, then they believe in sodium reduction, but, you know, it does take some work to transition patients over. No problem for the larger offices with, you know, plenty of staff, but in some of these smaller offices, they just feel that they don't have the manpower to do that.

Our next question comes from the line of Akash Tiwari with Jeffries. Your line is now open.

500 x I waist-mark collapsing patients add, and over 1,000 there are run patients lost, and assume the same year-over-year as the dialogues growth rate as what you had for last year. Your franchise seems to train to the lower end of the school year guidance. I guess, what do you think we are missing here? And then just a quick one on our exam.

So, alchemy said they will use different doses for narcolepsy PEP1 and PEP2 patients for isoxine drugs, and doses for PEP2 patients will be several folds higher. And also, they aim to dose below 10 mg. I guess, what's your view on this comment, and what doses range are you targeting at right now for PEP1? Thank you.

Yeah, I'll take the first part and then come to Rob and just say, you know, our guidance coming into the year was a couple months ago and was at the franchise level neuroscience and oncology. And in in particular animal direELLO

get into product level and as we're saying today we're very pleased with the way the first quarter progressed and we think we're right in line with all our expectations to achieve that overall guidance so we're not going to get more specific on that.

Rob, maybe you could take the erection part of the question. Yeah, and I the question I heard was do we expect the dose to be different across patient populations? So correct me if I didn't hear that. I would say the dose of course depends on on the drug itself in factors such as

availability and potency, et cetera, et cetera. But within any given drug, there certainly is the possibility that different doses might be needed across different populations.

We know that the relative level of correction in the brain may differ between NT1 and NT2 or other sleepy populations because we're certainly interested in other populations as well. As you know, we have an ongoing program where we're evaluating and learning effects in healthy volunteers and ultimately use those data to transition.

with a line of Greg Fraser with Truist Securities. Your line is now open. Thank you. Good afternoon, folks.

Just following up on the Ziwave survey, did the survey include physicians that haven't yet prescribed Ziwave as well as current Ziwave prescribers? And for those that plan to increase their prescribing of Ziwave for IH, what were some of the key reasons behind the predictions? I'm curious to be heard for thoughts about diagnosis rates growing, patient awareness.

Any additional color on the survey learnings would be helpful. Thank you. Sure. I am happy to do that. I do believe the survey was of specialists in general. That increase would mean both those who have tried it and those who have yet to try it. In terms of, I do not have my fingertips whether in the survey we asked the reasons why, but I can tell you based on more qualitative.

feedback that we've had from physicians, that the main reason that they are going to continue to use more of it is that it's actually performing in line with what they expected from the phase 3 clinical trial results, which were better than healthcare provider community anticipated. They were very excited about those results and they're very happy to see that it's performing in line with those results, and they're getting positive feedback from their patients. The following video shows an observe Ad vs X 4am Bug

And, you know, along with the coverage from the payers has been there and, you know, that the patient experience and getting on the product, you know, all of that has been very positive. In line with they have lots of these patients and they've had, you know, really very little to be able to treat with them, other than off-label weight promoting agents and stimulants over the years. And many of those patients have had very little to treat with them, other than off-label weight

of Jeff Hall with Morgan Stanley , their line is now open.

Thanks for taking my question. You mentioned that 60% of U.S. providers are using Epidiolex earlier in the treatment algorithm. What do you think it will take to further drive this integrated proportion of providers, and what kinds of initiatives do you have to help accomplish this? Thanks. Kim, do you want to start on that one? Yeah, I can speak from the U.S. and, again, we are quite pleased with how Epidiolex has been coming along.

number of years in terms of access to treatment centers and physicians offices. We're having some really great discussions and seeing the light bulb go off with quite a few of them and more, you know, prescribers coming on board. But in terms of, you know, driving growth you know, moving forward, that's very encouraging.

is that we've got some really great clinical data, the data we've been out there with for about a year now in terms of showing the great impact that you can have in combining clobazam with Epidiolex. We're really getting a lot of traction with that in the marketplace. It's getting HCPs really to reconsider why they're not using more of it or using it earlier in the treatment algorithm as that 60% shows.

Then, later on top of that, earlier this year, we started to go out there and talk about more than just seizure control through this caregiver survey called BECOM and showing HCPs quantitatively what they'd actually been hearing from caregivers since the launch of Epidiolysis. That is that the caregiver sees improvements in behavior and cognition in the patient that they're caring for. That combined with, I'd say, the adult setting, particularly the long-term care setting in the US, was slower to open up as many instances of seizure control.

on what optimally dosing Epidiolysis looks like so they can have an even more positive experience with it moving forward. So that's within the US and then obviously we've got a number of ex-US launches expected this year.

Yeah, and Kim, this is Dan, just to add into it as we see Epidiolysis, one of our core core growth drivers going into Vision 2025 and beyond. We're really pleased with the real world performance and assisting physicians that are in a multi miner company right now again. Bye!

in terms of exploring additional seizure types. Some of it's gonna be observational studies and some of it's gonna be leveraging now an increasing number of medical records to show some of those trends that would hire and more optimal dose and you can get to better efficacy sooner.

And then exploring what we saw in the caregiver survey, for example, of the beyond seizure benefit and and seeing that in additional clinical data. So, you know, super excited for this evidence generation that we've got should support all regions. In the long term growth of the product.

Your next question comes to the line of Annabelle's name with TECL. Your line is now open. Annabelle, we're not hearing you.

All right, your next question comes from the line of Ash Bremo with UBS. Your line is now open.

Hi. Thanks for the work questions. I had to…so, with respect to Avidel's Lumerism, in your view, could PEARS push narcolepsy patients towards using a once-nightly product if Avidel comes in with a significant price discount? And then, second, like, do you think Lumeris can also be used off-label for IH? As we understand, IH patients can vertically struggle with…

Sure, I'd be happy to. And we talked a little while ago about payers in general. So really our strategy there is not changing. Again, we've been talking to payers for some time about the benefits of low sodium by-way. And we do believe that payers are understanding the importance of that.

as other high sodium oxidates come on to the market and are ultimately added to formularies that a Zi-Wave is gonna continue to maintain a broad commercial coverage. You asked about idiopathic hypersomnia and we don't expect the approval of FT-218 will affect the IH.

for IHN adult patients. That's what the label allows. All right, and operator, I think we've got time for one more question.

And your last question comes from the line David Ansell with Piper Sandler. Your line is now open. Hey, thanks. So I wanted to get your thoughts on the potential impact of Pitollas and Wake Ex.

on ZiWave to the extent that that product eventually gets approved. And then secondly on the erection, I think I've asked this before but I wanted to pick your brain on it. Any thoughts on why you're dosing it at night here? It seems a little counterintuitive so I was wondering if there's any reason mechanistically or from a PK perspective.

that you're doing so. Thank you. If I understood that question that was about Erexin. Rob, do you want to take that one first? Yeah, I just I didn't fully understand it either Bruce. The question is why would you be dosing?

I didn't follow it. That's right. I mean, the others, I believe it's a wakefulness drug, so why are you just thinking about it at night? Oh, in our phase one. We're leveraging. And...

we're leveraging a model in healthy volunteers where you sleep-deprive healthies and then measure the wakefulness of the intervention when people have a high, high propensity for sleep. That turns out to be a pretty good model for disorders of daytime sleepiness like narcolepsy. And so it just gives us an opportunity to learn more about the drug and ultimately select doses when we get into patients.

who will then receive the drug during the day. Yeah, maybe I'll start on... Yeah, go ahead, Dan. I was just going to say, on Patolisan, I mean, we... Yeah, it's all going to depend on the data, of course, but the xyways is...

Got some very powerful efficacy across multiple endpoints to treat the full condition and having the nighttime. Therapy is resulting in significant benefit through the day. Whereas, yeah, similar to the wake promoting agents will be used during the day and. It's always going to be a bit of a challenge for the long sleepers because you have to be awake to take the oral dose.

So we don't see it as a significant threat or displacement, but again, more treatment options for these patients. More commercial noise and education around IH would be a benefit for us.

And we have no further questions at this time. I will not try to call back all but you, Bruce Kozak.

All right, thanks, operator. So just to wrap, thanks for the wide-ranging questions. I think we hit pretty much all the key topics that we covered in our news release and our script. I don't think we got many questions on oncology. I'll just reiterate we're really excited for the growth of...

to be focused on Vision 2025.

Remember that we've got upcoming Phase 2B zany datumab BTC data at ASCO in June . That's the first time zany findings are going to be featured during an oral session at a major oncology conference and immediately after that presentation we're hosting webcast where Dr. Shubham Pant who's presenting the data at ASCO will review findings. We're also presenting multiple datasets at this year's American Academy of Sleep Medicine annual meeting.

This completes today's conference call. Thank you for your participation. He may now disconnect.