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.
Is now the time to buy JAZZ? Find out in our full research report (it’s free for active Edge members).
Jazz Pharmaceuticals (JAZZ) Q3 CY2025 Highlights:
- Revenue: $1.13 billion vs analyst estimates of $1.11 billion (6.7% year-on-year growth, 1.4% beat)
- Adjusted EPS: $8.13 vs analyst estimates of $5.85 (39% beat)
- Adjusted EBITDA: $380.3 million vs analyst estimates of $479.6 million (33.8% margin, 20.7% miss)
- The company reconfirmed its revenue guidance for the full year of $4.23 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $8.05 at the midpoint, a 54.8% increase
- Operating Margin: 5.1%, down from 24.7% in the same quarter last year
- Market Capitalization: $8.33 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Jazz Pharmaceuticals’s Q3 Earnings Call
- Marc Goodman (Leerink): Asked for details on how Jazz’s Kv7 epilepsy candidate is differentiated. Executive Vice President Rob Iannone explained the molecule’s high specificity for Kv7.2/7.3, aiming to avoid off-target effects and improve tolerability compared to existing compounds.
- Jessica Fye (JPMorgan): Sought clarity on the impact of potential generic Xyrem entrants and how payer behavior may affect Xywav. Chief Commercial Officer Samantha Pearce stated that while generics could disrupt revenues, Jazz will focus on maintaining access and highlighting Xywav’s unique attributes.
- Jason Gerberry (BofA): Questioned whether Jazz anticipates the need for price concessions on Xywav to maintain access in the face of generics. CEO Renée Galá indicated it is too early to speculate, but emphasized efforts to secure strong payer access and differentiate Xywav.
- Annabel Samimy (Stifel): Asked about the sustainability of Modeyso’s initial launch and physician awareness. Pearce reported high awareness and strong demand, with the majority of patients being new to the drug rather than from early access programs.
- Mohit Bansal (Wells Fargo): Inquired about the outlook for authorized generic royalties from Hikma. CFO Phil Johnson explained that current royalty rates would remain through 2025, with step-downs in subsequent years, and anticipated meaningful ongoing revenue.
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 $135.25, down from $137.61 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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