Biopharma company Jazz Pharmaceuticals (NASDAQ: JAZZ) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 6.7% year on year to $1.13 billion. The company expects the full year’s revenue to be around $4.23 billion, close to analysts’ estimates. Its non-GAAP profit of $8.13 per share was 39% above analysts’ consensus estimates.

Is now the time to buy JAZZ? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Jazz Pharmaceuticals delivered a quarter that exceeded Wall Street’s expectations, with management attributing results to robust demand for Xywav and Epidiolex, as well as the swift and successful launch of Modeyso following its FDA approval. CEO Renée Galá highlighted the company’s execution, noting, "We delivered 2 FDA approvals that underscore Jazz's ability to bring highly differentiated therapies to patients with serious unmet needs." The quarter also saw positive developments in Jazz’s sleep and oncology franchises, reinforced by expanded guidelines and new data, which management believes will support continued growth.

Looking forward, Jazz Pharmaceuticals’ guidance reflects expectations for continued momentum from its sleep and epilepsy portfolios, as well as anticipated clinical trial milestones in oncology. Management pointed to the upcoming Phase III readout for zanidatamab in gastroesophageal cancer as a key catalyst, with Executive Vice President Rob Iannone stating, "We remain highly confident that we will announce top line results later this year." The company’s outlook also incorporates potential challenges related to generic competition and payer dynamics, particularly for Xyrem and Xywav, but management emphasized ongoing investments in differentiation and access strategies across its portfolio.

Key Insights from Management’s Remarks

Management attributed third quarter performance to strong uptake of recently launched products, sustained demand in established franchises, and execution on regulatory and business development milestones.

• Xywav momentum continues: The sleep franchise, anchored by Xywav, saw 11% year-over-year sales growth, with management crediting field team execution, targeted digital campaigns, and the positive impact of new sodium intake guidelines that support Xywav’s low-sodium profile. Disease awareness efforts and nurse educator initiatives also contributed to net patient additions.
• Epidiolex demand and evidence: Epidiolex revenue grew 20%, driven by 10% volume growth and a one-time benefit from refined accrual rates in the U.S. Management pointed to sustained demand, supported by real-world evidence and improved patient adherence through the Nurse Navigator program. New data from the EpiCom study is expected to reinforce the product’s value proposition.
• Modeyso rapid launch: Modeyso, approved for an ultra-rare brain tumor, achieved $11 million in sales within weeks of launch. The company coordinated a targeted provider engagement plan and established comprehensive patient support services. Early feedback from physicians has been positive, and over 200 patients initiated therapy by quarter end.
• Oncology pipeline progress: The oncology portfolio was bolstered by FDA approval of Zepzelca in combination with Tecentriq for first-line maintenance in small cell lung cancer. Management highlighted inclusion in key clinical guidelines and the upcoming pivotal readout for zanidatamab in gastroesophageal cancer as important milestones.
• Portfolio expansion and legal resolutions: Jazz completed the acquisition of Chimerix, adding Modeyso to its portfolio, and entered into a global licensing agreement for a preclinical epilepsy candidate from Saniona. Settlement of major litigation, including Xyrem antitrust cases, was achieved, allowing management to focus resources on growth priorities.

Drivers of Future Performance

Management’s outlook anticipates both opportunities and headwinds, with new product launches, clinical trial milestones, and generic competition shaping revenue and profit expectations.

• Generic competition for Xyrem: The introduction of generic Xyrem in the coming year presents a risk to Xywav revenues, as management acknowledged uncertainty around the number and timing of entrants and their impact on payer dynamics. The company plans to emphasize Xywav’s differentiated, low-sodium profile and maintain strong field engagement to defend market share.
• Oncology catalysts: The Phase III zanidatamab trial in gastroesophageal cancer is a key near-term event. Management expects the trial’s expanded patient population and FDA-aligned endpoints to enhance its potential for regulatory approval. Continued uptake of Modeyso and Zepzelca in new indications is also expected to support growth.
• Pipeline and business development: Jazz intends to leverage its strong balance sheet to pursue additional business development in neuroscience and oncology, including advancing the Kv7.2/7.3 epilepsy candidate. Management sees opportunities for external innovation to drive long-term portfolio diversification and growth.

Catalysts in Upcoming Quarters

In the next few quarters, our team will closely monitor (1) the market response and payer dynamics as generic Xyrem launches and its impact on Xywav’s share, (2) the top line data release for the zanidatamab Phase III trial in gastroesophageal cancer and subsequent regulatory progress, and (3) continued uptake and reimbursement milestones for Modeyso and Zepzelca in their expanded indications. Additional focus will be on Jazz’s ability to execute new business development initiatives in neuroscience and oncology.

Jazz Pharmaceuticals currently trades at $140, up from $137.61 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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