Thank you guys for being here. Pleasure to have Jazz management join us. Before we kick things off, maybe I'll turn it over to you, Renee, to get us going.
Sure. Yeah, happy to. Thanks for having us, and thank you all for joining us. Just a few housekeeping items. We will be making forward-looking statements today. Please see our website and SEC filings for more information about our business. Should we make reference to financial guidance, we're not updating or reiterating today; all of our guidance is as of Q3 earnings call on November the 8th. And should we make reference to non-GAAP measures, you can find full reconciliations on our website. So turning to the business, I'm quite energized by where we are today. The business has been through a complete transformation over the last several years. In 2020, we had about $2.4 billion in revenues; 75% of that was coming from a single product. Our pipeline was more nascent and R&D capabilities more limited.
Looking at where we are today in 2023, the midpoint of our top-line revenue guidance is over $3.8 billion, so significant growth over that period of time, and importantly, the composition of that revenue looks very different today. That revenue is coming from a diverse and durable group of commercial products that collectively, when we look at our Q3 results, our collective key growth products increased 24%, Xywav, Rylaze, and Epidiolex in the third quarter. So we're quite pleased by the overall execution of our business and what we've been able to accomplish from a commercial perspective. That has obviously put us in a strong financial position.
We generated over $900 million in cash flow in the first nine months of the year, ended the quarter with $1.6 billion and a healthy net leverage ratio, which puts us in an ideal position to continue to invest in our business, to invest in growth, in our commercial drivers, in our pipeline, as well as corporate development, which has been an important pillar of growth and diversification for us over time. We were also able to allocate capital to share repurchases. We repurchased about $175 million of our stock in the second quarter and third quarter, and importantly, that does not limit our ability to keep investing, given our financial position. We've also transformed our pipeline and R&D business. Back in 2020, as I'd mentioned, we had a more nascent pipeline.
We now have full end-to-end capabilities in research and development. We have an early pipeline, both internally and with external collaboration partners, and we also are positioned in 2024 to have up to five late-stage readouts, which gives us a number of catalysts to be able to look at going forward. I'd love to have Kelvin just provide an update on the pipeline.
Thank you, Renee. So yes, I agree. I mean, transformation is very much the word that we would describe our R&D organization and capabilities. We have, as Renee was saying, up to five potential late-stage readouts in 2024. The first will be for JZP150, for the treatment of PTSD, and we expect to have, you know, top-line data in January of 2024, having and fully enrolled that study. Secondly, JZP385, our treatment for essential tremor. We're expecting top-line data from that study in the first half of 2024. And then also from a Epidiolex perspective, we're really pleased on the progress of our frontline of our pivotal study that's going on in Japan, where we expect that to read out in the second half of 2024.
Turning to our early pipeline, as Renee was saying, we now have, you know, expertise from end to end now. You know, we wanted to share some information around JZP441, our orexin 2 receptor agonist, and we're announcing today that we have achieved proof of concept in our healthy volunteer study, which is primarily looking at MWT in determining proof of concept. So while we have achieved proof of concept, we're also sharing today our decision to pause the 441 program. That's as a result of some emerging information around visual disturbances and some cardiovascular effects that we're seeking to understand and characterize much further. So this is early and emerging data, but we've taken this decision.
I remind you that orexin programs in general are very much in the early stage, and that's across the board, is what we're seeing some of the information from, other companies as well. So we will be providing a further update. Don't expect anything too soon as we continue to understand fully and characterize these emerging data that we're seeing for JZP441. But orexin agonists do remain a focus for us. We do have a backup program in orexin agonists, and we do have a range of molecules which are forming part of that backup program. If I was just to very quickly then turn to back to our late-stage programs, I did wanna share also that we have Zepzelca, which is in a frontline study combined with Tecentriq.
We expect that study to report out top-line data for PFS at the late 2024 or potentially into 2025. But really, the area of greatest focus for us right now is zanidatamab, probably our most de-risked program. We've shared before our ambitions about potentially up $2 billion+ in terms of revenue, and we're pleased to announce that we'll be submitting our a rolling submission for zanidatamab in biliary tract cancer, second line, seeking an accelerated approval for zanidatamab in BTC. So we'll submit that rolling BLA by the end of this year. We expect to complete that by the first half of 2024. And importantly for us, we have a late-stage program for zanidatamab in frontline gastroesophageal adenocarcinoma. That study continues to progress well, and we expect to have top-line data for that in 2024.
So lots to talk about, lots of excitement within our R&D program, and happy to take any questions. Perhaps I'll go back to you.
Yeah. Maybe since you talked about an update on the orexin program, I'll start. I didn't actually plan on spending too much time there, but let me just to close the loop. So you're pausing it, but you're not terminating it? I guess you're bringing a backup program forward. Is that effectively what you're communicating?
Phil, would you like to-
Yeah.
Yeah.
So I would say we're pausing it at this time, to further characterize these, safety observations that we've seen. I think, as you know, this field is, emerging, of course, in its early days. We've seen a lot of data at World Sleep, that would, suggest that, you know, half-life is gonna be important, therapeutic index with regard to on-target toxicity or on-target effects versus off-target effects is also gonna be important. So I think we just want to further characterize this and regard some additional analysis to do. However, I think Kelvin did, allude to, the fact that we have some, other compounds, that are much earlier stage, as part of our orexin, overall program. But at this stage, we're not giving an update, necessarily.
Right. And so visual disturbance is probably akin to what Alkermes reported as well, which was visual blurs on multi-dose, but not single-dose?
Well-
Higher the dose.
Well, we're not gonna comment on the dose or on competitor data, 'cause that's limited, but we've actually-
Right
learned at World Sleep. I think you're familiar with the-
Yeah
same posters and abstracts that we've seen. It's hard to compare one study to another-
Makes sense
but I think we're seeing, you know, you know, these effects, and we'll, we'll-
Got it
we wanna understand it better.
To the extent you're continuing to invest in orexin, is it reasonable to think you don't believe this is a class effect, it's not because it's a stimulant of sorts, the visual disturbances?
I don't think we know necessarily at that time, and we're not gonna comment. I think this is the work that we have to do to further elucidate the mechanism and characterize these effects, both, you know, from a non-clinical and clinical perspective, further with additional analyses.
There was nothing preclinically that would have hinted that. I'm only asking because there's a second program you're moving forward from in the preclinical.
Yeah, I'd say it's very early days, and it's very early in terms of this data emerging. So it does require, as Phil and Kelvin have alluded, it does require additional work. So stay tuned. We will provide an update as appropriate. And I wanna also affirm, yes, we are pausing, we are not terminating the program, which was a question you'd asked earlier.
Got it. Okay. Okay, that's super helpful. So maybe stepping out of Orexin for a quick second-
Mm-hmm.
and maybe just actually the last one on Orexin. This ties back to your broader franchise. Do you believe, Renee, and I think this topic's come up previously as well, Orexins are add-ons to an oxybate in terms of treatment paradigm, or how, how do you think about that, broadly speaking?
Yes, we do think they're complementary to oxybates. Would you like to comment further?
Yeah, yeah. And, I'll remind you, you know, the oxybate is, the benefit, the clinical benefit is both for the daytime symptoms and the nighttime symptoms. Whereas the wake-promoting agents, such as the orexin agonist, will be predominantly for the daytime symptoms and taken during the day. So we do see it as, complementary to oxybate, and even in today's world with oxybate, there are many patients that are taking a wake-promoting agent on top of oxybate therapy. But exceptionally important to understand that this is a 24-hour disease, and, with oxybate, we have the ability to have effects on both daytime and nighttime symptoms. It's a very much complementary approach from our perspective.
Got it. Excellent. So maybe stepping back and where I initially intended to start the discussion, which was, I know there were some press reports recently around exploring strategic options, perhaps a neuroscience business separate from the rest of the business, just given the evolving R&D pipeline. How are you thinking about Renee? Is this like, Renee is going neuro, and Bruce is going to the rest of the company? Like, what's going on there?
Yeah, so we don't comment on market rumors or speculation, which is what was essentially out in the Bloomberg article. This was not information that we provided. I would say we are highly focused on Vision 2025 and what we've laid out as, you know, our strategic objectives, which is growing our revenue, continuing to diversify our revenue. If you look at our Vision 2025 targets, it includes both organic growth as well as potential growth through corporate development. That's been an important pillar for us. If you think about splitting apart a business, that would probably be less diversification versus more diversification.
Right.
It's not in line with what we have been stated as our focus. We, of course, will continue to look at all opportunities to optimize our business, and what we think is most appropriate right now is investing in growth, continuing to diversify our business, and continuing to invest in the pipeline.
Got it. Okay, excellent. Maybe, tying back to your top line, because there's several moving parts heading into 2025.
Mm-hmm.
I know consensus tracks a bit below, not dramatically below, but a bit below. Is there a very clear disconnect you see where you see an opportunity for clearly performing well ahead of where consensus stands heading into the 2025 number?
Yeah, I think the primary disconnect when you look at consensus versus our targets is that we're not getting credit for corporate development that has not been completed, and that is not at all a surprise. We laid out a $5 billion revenue expectation, comprised of about $4.5 billion of organic growth, and a $500 million placeholder for corporate development because we have a track record, a history of doing corporate development transactions that are revenue diversifying and growing in nature. In 2020, we closed the Zepzelca transaction that's now annualizing at $300 million. It was a highly accretive transaction for us, and of course, 2021 was GW with Epidiolex, 2022 was Zanidatamab.
So if you look at our consensus targets, they're in and around that organic growth target of $4.5 billion, but we're not yet getting credit for transactions that have yet to be completed. We believe we're on track for $5 billion. We're highly engaged with respect to corporate development transactions. We're also not going to overpay just to complete a corporate development transaction.
Got it. That makes a lot of sense. And as, as some of these moving parts evolve, the 2025 guidance remains intact, and it would move, based on anything strategic that does evolve. Is that correct?
Right now, we feel confident in that target.
Okay.
Of course, if we end up completing a transaction that impacts that target, we will update as appropriate, but, you know, we feel we're well on track.
Got it. And would you Renee, from your perspective, is there a preference for clinical stage versus commercial stage? How are you thinking about prioritizing, optionalities?
So we are highly focused on commercial stage assets, but I would also say, we've been continuing to look at clinical stage assets as well. We were thrilled to be able to execute the Zanidatamab in-licensing transaction last year. We think that was an excellent transaction for the company. $50 million upfront, with the rest of the upfront being paid more in the form of an option after we had seen data. And as we look at that program now, as you heard from Kelvin, we think that's our largest potential product, our most de-risked R&D program, and one that we're investing heavily in. So we're thrilled to have been able to execute that transaction. We're accelerating our and expanding our investment behind the asset.
As we've talked about, we think it has $2+ billion revenue potential, and those are the type of transactions we'd also want to continue to do as we look at being able to continue to leverage our commercial footprint, to be able to build long-term value.
Excellent. Okay, makes a lot of sense. Any questions from the audience as we're continuing to move forward here? Okay, so I know another big readout for you, so that was very helpful on the 2024 readouts, but I know the lurbinectedin small cell lung cancer readouts are gonna be very, very important. There's a couple of layers to them. The primary endpoint is both PFS and OS. Mature OS might take a bit longer. How are you thinking about whether if it hits early on PFS and OS is immature, could that form the basis of submission?
Yeah, so we have, we have a number of opportunities to get, confirmation and get the accelerated approval, you know, formalized as, as an approval for Zepzelca. That will be through the confirmatory trial. So there's a second-line confirmatory trial that's being run by PharmaMar, where lurbinectedin will be compared to lurbinectedin plus irinotecan versus investigator's choice of irinotecan versus topotecan. That study is enrolling well, and we expect that we're expecting data from that study in 2025. We haven't disclosed exactly when, but also there's an opportunity in the frontline as well. So as we were describing earlier, there's an opportunity for us to move into frontline extensive stage small cell lung cancer. That's our collaboration with Roche Genentech.
We expect that data, PFS, end of 2024, and well, beginning of 2025, and as you said, OS could come soon after. So there's a number of opportunities, and shots on goal there, and I think it really undermines our confidence or underplays our confidence around, Zepzelca and, you know, the opportunity to bring that forward.
Got it. Okay, maybe a bit more specifically, I know there's been a lot of chemo shortage in the marketplace right now, and I realize Zepzelca has a current line of usage based on the existing data, but do you foresee some of that becoming a lot more sticky in light of some of the chemo shortages that have been prevalent?
Yeah?
Yeah, so absolutely, we've been there for customers, reminding them since the shortage started, that Zepzelca can be used in place of re-challenging patients with, platinum therapy, and we have seen a number of customers who otherwise would have re-challenged the patient, utilize Zepzelca. And we have all along had a number of patient customers who have been doing this and seen a really positive response. At the same time, we've been sharing some data that we haven't shared before, our secondary endpoints, around OS and PFS in this patient population, which is actually where we see the greatest efficacy in this patient population, and they've been very impressed, and we think they're gonna see very good results.
So, you know, combined with the data and them seeing, I think, firsthand the results you can get in using Zepzelca in this patient population, I can't help but think that some of that business will be sticky over the long term. You know, similarly, in the community setting, I think we've seen some increased use in the community setting, where the profile of the product is quite nice, fits nice there in terms of ease of use, no need for inpatient monitoring of the product. So, you know, I think we'll see a little bit of return to practices, but some of that I think will be sticky over the long term.
Excellent. I know we're past time, so I wanna be respectful. Renee, is there one major thing we should definitely touch upon before we wrap up? I know there's a couple important readouts next year in the PTSD and essential tremor, but I also know there's some biz dev as well as strategic optionalities all coming into front heading into 2024. Is there one, a take-home message you'd leave us with?
Yeah, I would say we're very well positioned for both growth in the commercial business, but also a number of value inflection points through those five, up to five readouts we'd mentioned in 2024. I think of 2024 as the year of the pipeline, for Jazz, so we're very excited to be able to, to get through those readouts, and importantly, we're very well positioned from a financial perspective to optimize that pipeline and be able to create a sustainable business.
Excellent. Fantastic. Thank you so much-
Great
for making time, and looking forward to being in touch. Good luck in the 2024.
Thank you.
Thank you.
Thanks so much.
So good to see you.
Great. Good to see you.
Likewise.