Welcome to the Jazz Pharmaceuticals PLC First Quarter 2017 Earnings Conference Call. Following an introduction from the company, we will open the call to questions. I will now turn the call over to Kathy, Head of Investor Relations at Jazz Pharmaceuticals.
Thank you for joining our investor call. Today, we reported our first quarter.
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Thank you, Chanel, and thank you for joining us today for our investor call. Today, we reported our first quarter 2017 financial results and updated financial guidance in a press release. The release and slide presentation accompanying this call are available in the Investors section of our website. With me for today's call are Bruce Cozadd, our Chairman and Chief Executive Officer, Matt Young, our Chief Financial Officer, Russ Cox, our Chief Operating Officer, Mike Miller, our Executive Vice President. Future inventory and supply challenges, ongoing and future clinical trials, and other product development and regulatory activities, and the timing of such events and activities. Statements involve numerous risks and uncertainties that could cause actual events, performance, and results to differ materially. These risks and uncertainties are identified and SG&A and R&D expenses.
We believe these non-GAAP financial measures are helpful in understanding our past financial performance and potential future results. They are not meant to be considered in isolation or as a substitute for comparable reported GAAP measures. Reconciliations of GAAP to non-GAAP financial measures discussed on this call are included in today's press release and slide presentation, both of which are posted in the Investors section.
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Ladies and gentlemen, please stand by. Your conference call will resume momentarily. Again, please stand by. Your conference call will resume momentarily. Thank you.
Hi, everyone. Welcome to the call. Sorry, we've had a little technical difficulty here, but thank you for joining our investor call today. Today, we reported our first quarter 2017 financial results and updated financial guidance in a press release.
The release and the slide presentation and commentary in this call are available in the investor section of our website. With me for today's call are Bruce Cozadd, Chairman and CEO, Matt Young, Chief Financial Officer, Russ Cox, Chief Operating Officer, Mike Miller, Executive Vice President of U.S. Commercial, and Karen Smith, our Executive Vice President, Global Head of R&D and Chief Medical Officer.
Reduction in sodium content compared to Xyrem and has demonstrated bioequivalence to Xyrem in a pilot study. We expect to be in a position to submit an NDA by the first quarter of 2018. We initiated our global phase III study of JZP-258 in narcolepsy patients last quarter or in the first quarter.
JZP-258 has a 90% reduction in sodium content compared to Xyrem. We expect to complete the study in the second half of 2018 to support a planned NDA submission in 2019. Turning to a brief legal and intellectual property update on Xyrem. As previously mentioned, we resolved our patent litigation with Hikma, granting Hikma's subsidiary, West-Ward Pharmaceuticals, the right to sell an authorized generic version of Xyrem in the U.S. under the Xyrem NDA commencing on January 1st, 2023, or earlier under certain circumstances. This AG product will be distributed through the Xyrem REMS. The initial term of the AG arrangement is six months, and West-Ward has the option to continue to sell the AG product for up to a total of five years. West-Ward was also granted a license to sell its generic sodium oxybate product under its ANDA at the end of the AG term.
I'll remind you that we settled with two other ANDA filers, Wockhardt and Ranbaxy, in the second quarter of 2016. Patent litigation continues against four other companies that have filed ANDAs for a generic sodium oxybate. The consolidated patent litigation against Amneal, Par, Watson and Lupin is pending in the U.S. District Court for the District of New Jersey, and a trial could be scheduled for as early as the first half of 2018. Turning to JZP-110, we announced the TONES-2, TONES-3 and TONES-4 positive results over the past two months, and we're pleased with the robust efficacy and comparable safety profile to our previous phase II studies in narcolepsy. We plan to submit an NDA late this year for excessive sleepiness in OSA and in narcolepsy. We look forward to presenting data from our three phase III trials at the APSS meeting from June 3rd- 7 th in Boston.
We will also hold an investor event from APSS on Tuesday, June 6th at 7:00 P.M. Eastern Time at the Sheraton Boston. This will also be webcast. Now on to the Hematology-Oncology franchise. Erwinaze sales were flat in the first quarter of 2017 compared to the same period in 2016. We continue to experience supply challenges on a global basis and expect temporary disruptions in our ability to supply certain markets, including the U.S. In early March, Porton BioPharma Limited, or PBL, the manufacturer of Erwinaze, submitted its compliance action plan to the FDA as a response to the warning letter PBL received in February. We are working diligently with PBL to resolve FDA concerns and consistently deliver high-quality products to the patients who need it.
Now I'll turn to Defitelio, where we saw strong worldwide growth in the first quarter, with sales more than doubling over the same quarter in 2016. The launch of Defitelio in the U.S. continues to progress well, with 131 accounts having ordered products since launch. These accounts represent approximately 79% of total U.S. transplant volume. We continue to observe growing demand with the addition of 14 new accounts in the first quarter and reorders from 84% of all accounts placing orders since launch. Our U.S. sales initiatives remain focused on educating healthcare providers for adult patients on recognition of the signs and symptoms of VOD, the diagnosis and treatment of VOD with multiorgan dysfunction, the clinical benefits of initiating Defitelio treatment in patients with renal or pulmonary dysfunction, and importantly, the urgency to treat patients in a timely manner once diagnosed.
This remains an important growth opportunity in the U.S. In the E.U., our team is focused on ensuring that physicians, key hospital administrators, and pharmacists are aware of the clinical and health economic benefits associated with the administration of Defitelio. Now on to Vyxeos. We completed our rolling NDA submission on March 31. We expect to hear the status on the priority review request later this month. I'll remind you that Vyxeos has breakthrough therapy designation and Fast Track designation in the U.S. We continue to anticipate submitting our E.U. marketing authorization application later this year following required pre-submission regulatory meetings.
We are looking forward to the rest of 2017 as we prepare for multiple expected clinical development and regulatory milestones, as well as other events, including presentation of the data from the phase III JZP-110 TONES 2, 3 and 4 studies evaluating excessive sleepiness in OSA and in narcolepsy at the APSS meeting in June, submission of the JZP-110 NDA to FDA by the end of 2017, presentation of the Xyrem pediatric data at the APSS meeting, submission of an sNDA for Xyrem to include the pediatric phase III study results and the pediatric written request in late 2017, potential approval and launch of Vyxeos in the U.S., submission of the marketing authorization application for Vyxeos in the E.U. in the second half of 2017, preparation of the JZP-507 NDA submission by first quarter 2018, potential approval of our NDS for Defitelio in Canada, and potential corporate development transactions.
We continue to focus on our growth strategy and sustainable business model. We are investing in our R&D pipeline and remain committed to bringing additional meaningful products into the portfolio through corporate development activities to further diversify and expand our commercial and development portfolio and to fuel future growth. Our strong balance sheet, increased clarity on Xyrem longevity, including through our oxybate molecules in late-stage development, global approach to molecule development and growth prospects, both commercially and through our expanding development portfolio, provide significant opportunities for Jazz to provide value to patients and to our shareholders. Matt, let me turn the call over to you.
Thanks, Bruce, and good afternoon, everyone. Our first quarter 2017 revenues increased 12%, driven primarily by higher sales of Xyrem and Defitelio compared to the first quarter of 2016. Net sales of Xyrem for the quarter were $272 million, up 9% from $250 million in the first quarter of last year. As Bruce mentioned, Xyrem net sales were impacted by fewer government pay patients during the quarter compared to the same period of 2016, as well as the typical first quarter payer churn.
We are updating our guidance range for Xyrem net product sales for 2017 to $1.2 billion-$1.23 billion from a previous range of $1.22 billion-$1.25 billion and now expect volume growth in the low- to mid-single-digit range for 2017. Turning to Erwinaze, f irst quarter net sales in both 2017 and 2016 were $51 million. In the first quarter of 2017, we continued to experience supply challenges, which at times led to our inability to supply certain markets and resulted in fluctuations in inventory levels. As we continue to experience supply challenges, the timing of supply disruptions and resupply to the market can result in intra-quarter variability in Erwinaze net product sales.
We are maintaining our guidance for Erwinaze net sales for 2017 in the range of $205 million-$225 million. Worldwide Defitelio net sales were $36 million in the first quarter, an increase of $18 million compared to the first quarter of 2016. The increase in Defitelio net sales was primarily driven by the April 2016 launch of Defitelio in the U.S. In the first quarter of 2017, U.S. sales were $12 million, and the rest of world net sales increased by $6 million compared to the same period in 2016.
As a reminder, VOD is an ultra-rare disease, and we continue to expect intra-quarter variability in Defitelio net sales, which can be impacted by the timing of patient diagnosis or product orders, duration of therapy, and the mix of adult versus pediatric patients being treated given weight-based dosing. We are maintaining our guidance for Defitelio net sales for 2017 in the range of $130 million-$150 million, with an estimated U.S. sales of $45 million-$55 million. Prialt net sales for the first quarter of 2017 increased to $8 million compared to $6 million in the same period of 2016, primarily due to changes in relative mix of vial sizes sold and inventory restocking resulting from a temporary supply disruption.
For 2017, we expect some strong top-line growth and are maintaining our total revenue guidance in the range of $1.63 billion-$1.7 billion. Our guidance assumes potential FDA approval and U.S. launch of Vyxeos in 2017, an estimated net sales in the range of $10 million-$20 million. Turning to operating expenses, a djusted SG&A expenses for the first quarter of 2017 were $118 million, or 32% of revenue, compared to $103 million or 31% of revenue in the same period of 2016. The increase in adjusted SG&A was primarily due to the expansion of our business, including higher headcount, particularly in our U.S. Hematology Oncology field force, Vyxeos launch preparation expenses and expenses related to our narcolepsy disease awareness campaign.
As a reminder, our adjusted SG&A expenses as a percentage of revenue are historically higher during the first quarter, consistent with our typical pattern of spend. Our 2017 guidance for adjusted SG&A expenses remains in the range of $440 million-$460 million, or 26%-28% of 2017 revenue guidance. Adjusted R&D expenses for the first quarter of 2017 were $41 million, or 11% of total revenues, compared to 28%, or 8% of total revenues in the same period of 2016. The increase in R&D expenses was primarily driven by an increase in costs related to the completion of the Vyxeos rolling NDA submission, our oxybate-related R&D programs, the Defibrotide prevention of VOD study, and an increase in headcount required to support these activities.
Our 2017 guidance for adjusted R&D expenses remains in the range of $165 million-$180 million, or approximately 10%-11% of 2017 revenue guidance. First quarter of 2017 adjusted net income was $141 million or $2.31 per diluted share, compared to $135 million or $2.15 per diluted share for the first quarter of 2016. We are confirming our 2017 non-GAAP adjusted EPS guidance to be in the range of $10.70-$11.30 per share.
As of March 31st, the outstanding principal balance of our long-term debt was $2 billion, and we had approximately $470 million in cash equivalents and investments and $550 million in undrawn revolver. During the first quarter, we made a $150 million payment toward our revolving credit facility and used $14 million to repurchase shares at an average cost of approximately $118 per ordinary share. In April, we made an additional $100 million payment toward our revolving credit facility. Further diversification of our commercial and R&D portfolio is a high priority, and we continue to identify and evaluate multiple corporate development opportunities. Our strong cash generation provides us with the financial flexibility to support our capital deployment strategy, with an emphasis on reinvesting in our R&D pipeline and building long-term growth for our shareholders.
Thank you for joining us on the call today, and I'll now turn the call over to Kathy.
Thanks, Matt. We request that you limit your questions to one at a time and then feel free to jump back into the queue if you have further questions. With that said, I'm gonna turn the call back to the operator, so we can open the lines now for your questions. Operator?
Yes. Our first question comes to the line of Annabel Samimy of Stifel. Your line is now open.
Hi, thanks for taking my question. I'd like to ask you a question on Vyxeos. Clearly, you're excited about this, opportunity and optimistic about the FDA outcome because you've included sales in your guidance, which I guess is uncharacteristically aggressive for you. Maybe you can tell us what kind of preparations you're doing, right now, talks that you've had with physicians in the community, any educational efforts, and what kind of feedback are you hearing that gets you so excited about the opportunity that you'd be willing to put guidance, Vyxeos in the guidance right now? Thanks.
A couple of comments at a high- level, and then maybe I can turn it over to Mike Miller a little bit more for physician commentary. In terms of being ready for a launch, you know, with breakthrough therapy designation, you know, we believe this is a high priority for FDA as well as for us to try to get this product to patients, obviously with an overall survival benefit in a very tough to treat condition, you know, this represents we think a real advance for AML patients. At a high- level, I would say our preparations for the launch began when we reconfigured our U.S. field force effective at the beginning of the year to bring on additional adult hemonc specialists.
Obviously, before Vyxeos approval, they can be helpful to us with our existing portfolio, particularly with the adult focus on Defitelio. That has an immediate impact on our business that I think we're already seeing, but also positions us well to be ready to go with Vyxeos when we need to be. Mike?
Yeah, Bruce, we're very excited about Vyxeos. Clearly, the data is very compelling to clinicians. We have already begun much of the training of the sales force. Our launch planning is basically complete. At this point, we've done a lot of work on our HEOR and economic value. And then, as Bruce said, the targeting and the profiling is well underway, so we feel very good about it. As far as our objectives, we really wanna establish Vyxeos as the standard of care for induction for all eligible first-line AML and maintain the continuum of care through consolidation. And the most important aspect is to ensure patient access.
Okay. Thank you.
Thank you. As a reminder, ladies and gentlemen, to ask a question at this time, please press the star then the one key on your touchtone telephone. If your question has been answered, or you wish to remove yourself from the queue, please press the pound key. Our next question comes from the line of Gary Nachman of BMO Capital Markets. Your line is now open.
Hi. What initiatives are you focused on to try and improve volume growth for Xyrem, which I guess is coming in a little lower than expected? Would more DTC potentially help? Now that you've settled with Hikma, how will you be managing development of the low sodium forms of Xyrem? Does anything change in terms of when you would wanna potentially bring those to market? Thanks.
Mike, why don't you start with the Xyrem-
Sure.
growth initiatives?
Sure. We have a couple underway, and Bruce mentioned them. First, on the awareness campaign, we feel very good about the awareness campaign. We've generated about 70,000 screened patients online in the quarter. We've also driven about 10,000 patients to our specialist finder online. We've seen type one diagnosis go up in sixteen about 7.5%, so we feel good about that. We did mention on the commercial payer, which is by far our large majority of our business, we feel very good about the approval rate around 80%. And what I especially like is our field reimbursement folks have been really making a difference. In fact, we're going to expand that team.
We saw the electronic prior authorization rate jump to about 62%, which was really a product of them educating offices around how to help patients get access to Xyrem. We feel very good about it.
Gary, on the second part of your question, you know, we remain interested in pursuing both of the low sodium versions of oxybate, JZP-507 and JZP-258. Those two programs have different characteristics. You know, JZP-258 would represent a greater, significantly greater reduction in sodium load, and I think that would be a real benefit to patients. Of course, that program has additional risk because we're in a phase three trial that started accruing in the first quarter of this year. We need to finish that trial. We need to see the results. But I think at this point, having both programs going gives us the most options for us and for patients.
In terms of determining specifics of how and when we launch those products, let's wait and see what the data looks like and how that process plays out before we talk specifics on that.
Okay, thanks.
Thank you. Our next question comes from the line of Bill Tanner of Cantor Fitzgerald. Your line is now open.
Thanks for taking the question. I had one, maybe it's for Mike, as it relates to JZP-110 for OSA. I don't know if you guys have talked much about the commercial strategy. If you have, I apologize, I've forgotten it. But just thinking about, say, launching it in the latter part of next year. I'm assuming that for narcolepsy, you're gonna be able to leverage the existing sales force. But maybe if you could speak a little bit to how you would contemplate targeting the OSA market. Then one other one-on-one, Tim, maybe it's for Karen. Well, just curious if there are any DDI interactions to be mindful of as you think about going into PD.
Let me take the first half of that, which is around looking at how we would launch JZP-110. We're very excited about this. Clearly, narcolepsy lines up very nicely with our current sales configuration, sales force configuration. OSA will likely include other specialties. We have not announced what, you know, how that spreads out across different specialties, but obvious ones will be pulmonologists. That would be certainly one that we would look at. I think as we go forward, we'll be looking at all of this. We're just elated with the clinical study results.
For the second part of your question around DDI, I don't think we've said that much so far, but Karen, maybe you could say a word or two.
Well, we haven't said a great deal about that. We do know that, JZP-110 is excreted predominantly through the kidneys, so there are no known PK drug-drug interactions. Obviously, that's going to provide a better view from a physician standpoint than a drug that is liver metabolized, which is the majority of drugs that are used today to treat excessive sleepiness. With respect to, Parkinson's that you mentioned, obviously, we would, want to see what concomitant meds the patient is on. As you know, a lot of the medications that are used to treat Parkinson's patients do have an effect on, dopamine. As JZP-110 is a DNRI, then we would want to take that into consideration. We'll be doing so as part of the clinical trial.
Okay. All right. Thanks very much.
Thank you. Our next question comes from the line of Liav Abraham of Citi. Your line is now open.
Good afternoon. I'm curious if there are any changes to your thoughts on business development and M&A following the settlement with Hikma and the clarity that you've received in Xyrem. In particular, is there any change to how you're thinking about the size of potential acquisitions, the extent to which you would consider new therapeutic areas, the urgency of doing deals? Any additional color would be helpful. Thank you.
Yeah, Leah, maybe I'll start with a couple broad comments and then ask Matt to talk about the current landscape and how we're thinking about it. You know, we already saw many opportunities to broaden our commercial and our development pipeline through corp dev. You know, we've been doing a couple transactions a year on average, and have been very pleased with how those transactions have performed, in the time since we've completed them. I think, you know, our general mindset was and remains that there are some great opportunities for us to pursue if they're congruent with our strategy and value creating. I think the significance of the Hikma settlement is it gives us a little more clarity, around, you know, the future for Xyrem and our oxybate franchise.
That additional clarity may be helpful to us in thinking through relative prioritization of different types of transactions, sequencing and the like. I don't wanna overstate that. I would say for the most part, we were and remain very interested in corp dev as a piece of our ongoing sustainable strategy.
Yeah. Just following on to Bruce's comments, Liav, I don't think it changes things very dramatically. We continue to be very focused in both sleep and hematology oncology as core therapeutic areas, but also have and continue to look around our pain franchise and in areas beyond, some of which we've sort of hinted at. Again, things that can create adjacencies and let us keep expanding our growth drivers in areas where we feel like we've got some differentiated understanding of the markets and where we can find the same types of products we continually look for in terms of differentiation, with attractive margin and return profiles, as we've discussed previously.
Urgency is also something where I would say not really changed other than to say, we've certainly made the comment that as our size increases, we know we need to contemplate the sort of frequency and number of transactions we may do a year may go up over time. We continue to be very excited about what we see in the current environment and landscape and the opportunity to be able to deploy our capital into corporate development initiatives.
Okay. Thank you.
Yep.
Thank you. Our next question comes from the line of Mark Goodman of UBS. Your line is now open.
Hey, Mark, are you there?
If your phone is on mute, please take it off mute. If your phone is on speaker, please lift the handset.
Mark?
We'll circle back.
We can circle back.
Our next question comes from a line of Gregg Gilbert of Deutsche Bank. Your line is now open.
Thanks. Can you comment on how much your Xyrem business is government payer, how that's changed over time, and specifically what happened to government patients or for government patients in the first quarter? As a follow-on, if you don't mind, regarding the Hikma settlement, traditional authorized generic deals tend to have the majority of the economics staying with the innovator. I realize this is a settlement, not just a straight AG arrangement, but can you comment directionally on how value is split either in absolute terms or how it evolves over time? Thanks.
Sure. Mike, you want to take the first part of that?
Sure. As we've said, the single-digit reduction in volume that we've had due to the decline in government pay is a smaller percentage of our business. It largely can be impacted for a number of reasons. But for instance, Medicare Part D patients could hit the donut hole in the first quarter. If they can't cover this, they're gonna have to seek other means of either assistance or discontinued therapy altogether. They, you know, this is what we saw, a decline in that sector. Greg, on the second part of your question, you know, under the terms of our settlement, we can't give specific economics.
I think what both we and Hikma have said in our public comments is that there are substantial economics to Jazz, that those economics in general increase as sales of the AG increase, and then over time, should Hikma choose to continue that AG period, they go up yet again. We can't say more than that at this point.
All right, thanks.
Thank you. Our next question comes from the line of Mark Goodman of UBS. Your line is now open. If your phone is on mute, please take it off mute.
Yeah, let's move on, operator.
Our next question comes from the line of Ken Cacciatore of Cowen and Company. Your line is now open.
Hey, Ken.
Ken, are you there?
I think your line is.
Yeah, now we can hear you, Ken.
Sure. Thanks. Just wondering about your once-nightly Xyrem formulations. Are you still working on any of these, or have these been shelved? Any just commentary on that.
Yeah, not shelved. We haven't been too disclosing of late on what we're doing on the once-nightly side. You know, it was not all that long ago that for the first time we started talking about our two low sodium programs. Certainly before we had disclosed those, we really didn't wanna say what we were doing on the once-nightly side for two separate reasons. First of all, those programs were more advanced than the once-nightly program, and we thought it important to tell you the things that we thought were closest to the finish line.
Also you can imagine that because we think it's so important to reduce that sodium load for patients that even in our once-nightly program we'd be contemplating a reduction in sodium as well. Before we had talked about the other low sodium programs it would have been a little hard to have that conversation. At this point we have the two low- sodium programs going. We also have a once-nightly program going. It's further back in our pipeline than JZP-258 and JZP-507 and at the appropriate time in the future we'll provide more of an update on that.
Great. Thank you.
Thank you. Our next question comes from line of Douglas Tsao of Barclays. Your line is now open.
Hi, good morning. Thanks. Good afternoon, thanks for taking the questions. Just maybe a little bit of an update on Defitelio. It certainly seems like the U.S. launch is, you know, going, tracking really well. I mean, if I just sort of do rough math, you know, it doesn't seem like that much of a stretch for you to, you know, sort of hit the guidance just at the current level. You know, should we, you know, how should we think about the cadence as we go through the rest of the year, 'cause it certainly seems like there's a good chance.
Yeah. I think in general, Douglas, we're really pleased with how we got out of the gates in the first part of the year with Defitelio. You know, we've had the experience with Erwinaze in the past, and I suspect we will have the experience with Defitelio at times when we'll get some bounciness between quarters just because, you know, a fairly small number, a small movement in the number of patients or the split of adult versus pediatric patients can have a meaningful impact. You know, we're really pleased with the way we started the year, both in Europe and the U.S. We think both teams are doing a great job, and let's see how the next couple quarters go.
I'd love for you to be right and for us to be too conservative at this point, but there's just too much variability for us to be overconfident after one quarter.
Just as a follow-up, if you could give an update on penetration into the adult market. Just quickly on Xyrem, I know you sort of warned us about not focusing on the number too much, but I did notice the number of active patients was flat to the fourth quarter. Typically, we see a little bit of a step- down, and that seems a little inconsistent with sort of a little bit of the slower volume that we saw. Just curious if you could provide some comments around that as well. Thank you.
Yeah, I'll take the second part first. I think we've cautioned you not to over analyze the average number of patients. It's kind of a noisy number that bounces around depending on when we do that cut. You know, pretty typical for us to see, you know, fourth quarter to first quarter is not the best comparison. That would be true again this year, but I wouldn't read too much into it. Mike, maybe you could provide a little more color on the adult-
Sure.
progress on Defitelio.
Sure. We touched on a little bit earlier that the, you know, the expansion of the hem-onc team in preparation for the Vyxeos launch.
Allowed us to get some good infusion of adult hem-onc talent, and those folks were trained early on Defitelio, and I think they're making a difference now in those adult transplant centers. We feel that our adoption is growing in the adult. I would say that in the first quarter, the majority of it has been ped, but we feel very good about the adult pickup.
Thank you. Our next question comes from the line of David Amsellem of Piper Jaffray. Your line is now open.
Thanks. A question on JZP-110. You initiated the study in EDS associated with Parkinson's. Just curious to get your thoughts on other potential expansion opportunities. Have you given or are you willing to discuss, you know, your latest thinking, and when could we see additional studies for JZP-110 begin? Thanks.
All right. Maybe I'll let Russ talk a little bit about a broader opportunity set for JZP-110.
Yeah. Hey, David. We've spent a lot of time thinking about what are the other opportunities that could exist with JZP-110. We believe there is an excessive sleepiness platform that could exist. We're analyzing well beyond Parkinson's a number of those potential opportunities, and we actually are thinking beyond that as well. I would characterize those as early stage and some thinking that has gotten us to proposals, but nothing that we're actually underway with. You know, stay tuned. We'll get back to you with more on that one.
If I may sneak in.
David, I'll just add, you know.
Yeah, go ahead.
As you think about that, there certainly have been a number of other stimulants and wake-promoting agents that have been studied and in some cases used in other populations. You know, now that we've got even more clinical data around JZP-110 to look at the ways in which we see it working from an efficacy standpoint, the way we characterize the safety profile, you know, relative to what we've seen with JZP-110 in earlier trials, but also relative to what we've seen with other agents, it allows us, I think, to better assess where we wanna go next with the molecule.
If I may sneak in a follow-up, just, I mean, I know that psychiatry is not in, necessarily in your wheelhouse, but the product is a reuptake inhibitor. Would you consider, are you considering psychiatric indications?
I think, you know, we wanna think through opportunities on multiple dimensions, probably the most important being where could the product make a difference for patients, particularly where there might be areas where, you know, relative to other agents, this might be particularly helpful to patients. The second dimension to that is it the right commercial fit for us? It's, you know, it's always conceivable there would be something that would be a great medical application where we might or might not be the best commercializer, but there are ways to deal with that too through partnerships or other arrangements. Let's start with what difference do we think it could make for patients?
Okay, thanks.
Thank you. Our next question comes from the line of Umer Raffat of Evercore ISI. Your line is now open.
Hi. Thank you so much for taking my question. Bruce, my question to you is, and this is probably a diligence issue that came up for you as well. Has FTC ever formally taken an opinion whether an authorized generic should or should not count as a generic under acceleration clause for ANDA settlements? And then on the R&D side, could you give us some more color on JZP-110, on insomnia and chest discomfort at the 150 mg dose? Thank you.
On the second question, you know, we haven't released anything other than the couple press releases for the phase III program. Obviously, there is some phase II data out there already. We'll be presenting data at the sleep meeting in June, and that's probably the best time to get an update on that. Nothing more to add at this point. On your first question, it's kind of a specific question. I'm not sure I wanna take that one on right now other than to say in general, you know, as we looked at our potential settlement, we were conscious of making sure it was pro-competitive. In our view, we think it is on multiple dimensions.
You're you know, zeroing in on one fairly narrow dimension, but I don't think we need to comment on that on this call.
Thank you. Our next question comes from the line of Ken Trbovich of Janney. Your line is now open.
Thanks. I know we're anxiously awaiting the potential approval of Vyxeos, and I was wondering when we might hear more about label expansion studies and potential use, not just in AML beyond secondary, but potentially outside of AML?
Yeah, I think, Ken, you know, as we've said, our very clear first priority post the Celator transaction last summer was making sure we got in a really high-quality submission to FDA and soon behind that to the European authorities as well. We wanna get this product out there into patients. What we'll do with it next in terms of you know, clinical development, whether those are approval trials or exploratory trials, what'll happen with investigator-initiated work, what else we might do with the CombiPlex program, what we might do in combination with Vyxeos and other therapies, all things we're thinking about right now.
Anytime there's a question about priorities, we push the team right back to, you know, the first focus is let's make sure we get this product on the market as expeditiously as we can. I think we'll come back and talk about our near-term priorities for expansion beyond its initial use.
Okay. Thank you.
Thank you. Our next question comes from the line of Jessica Fye of J.P. Morgan. Your line is now open.
Hey, guys. Thanks for taking my question. Just one for me. Love to hear your comments on why you felt the need to implement the poison pill on the back of the settlement. Thank you.
Yeah. Jessica, good question. You know, in general, we wanted to take a pause after a number of significant developments in our business, of which the Hikma settlement was only one. This came right on the heels of top-line data on OSA. Of course, at that point, we had not yet unblinded JZP-110 and narcolepsy. You know, we've only released the barest bones of what we've seen, and we're looking forward to presenting that data next month at the APSS meeting. The Vyxeos submission was just going. We had just started a number of new trials, JZP-258, JZP-110 in Parkinson's, the prevention of VOD trial for Defibrotide.
A lot of activity that was brand new during a period where I think many investors were highly focused on Xyrem durability and would we settle and how would we settle. The rights plan essentially gives our board the chance to ensure that if somebody wanted to take a look at the company and do so at a very opportune time for them, that we had the best positioning to be able to get good information out to our investors that would reflect the value of the company and empower the board if we went that direction to get the very best deal for shareholders. This is a little different for an Irish domiciled company like Jazz. We operate under Irish Takeover Panel rules.
Those rules do not allow a company to do what many U.S. companies would do, which is have a rights plan ready to go but not adopt it. If approached, put it into place. Under the Irish rules, once you've been approached, and I would say approached is a broadly defined or interpreted term, you can't do it. Our view was do it. I think we did it in a responsible way, which is limited to one year, so it'll sunset after a year. This is something our board had been thinking about for a while, that this would be the appropriate time to just take a pause and make sure everyone had a chance to get current on the story in light of the many changes during this brief period of time.
Operator, this will be our last question coming up.
Thank you. Our last question comes from the line of David Maris of Wells Fargo. Your line is now open.
Hi. Good afternoon. Mark said I could take his questions as well, so I have, like, half a dozen of them. On the BD front, can you talk about what the holdup is? I know that, you know, no one wants you to rush and do a bad deal, but has it been fit or price or finding, you know? Are there? You've expressed before that there are lots of opportunities. You know, I know that people always say, "Well, it always comes down to price," but is that really what the case is here?
Yeah. Always hard to comment on pacing of corp dev completion because it's not done till it's done. You know, our strategy over the last couple of years has been to always be working on a number of transactions we think are a good fit for us. I'll remind you that after the fact, when we can talk about completed transactions, we often tell you about our long period of being in contact with companies and working with them. That was true of Celator. That was true of JZP-110. I think that was a two-year process before we completed that deal.
We're always in conversations on multiple opportunities that we think could make sense, and we're waiting for the right moment, whether that's from a value inflection standpoint or whether that's a development on the other company's side, new clinical data, regulatory milestone, or something else, that would make it transactable. You know, many of those things aren't within our control. Our sense is over time, if we have a good group looking at multiple opportunities across our business, so that's across development and commercial, across the U.S. And Europe, across sleep and hem-onc and potentially other therapeutic areas as we grow, we'll be able to execute on the best transactions.
I think, you know, speaking for myself and for Matt in our commentary this year, I think we've been pretty bullish about our opportunity set and getting some things done and nothing has changed of late on that front.
Great. Thank you very much.
Thank you. I'm showing no further questions at this time. I would now like to turn the call over to Ms. Kathy Littrell for closing remarks.
Thank you. Thank you all again for joining us today. We'll be participating in the UBS Global Healthcare Conference this month and then at the Goldman Sachs Global Healthcare Conference next month, and we hope to see many of you. This now ends our call.
Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.