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Jazz Pharmaceuticals plc (JAZZ)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: total revenue $1.126B, up 7% y/y; non-GAAP adjusted EPS $8.13; GAAP EPS $4.08. Strength came from Epidiolex (+20% y/y to $302.6M) and Xywav (+11% y/y to $431.4M), plus Modeyso launch ($11.0M) . Total revenue and EPS exceeded Wall Street consensus, with revenue beating by ~$17.6M and EPS by ~$2.28 (see Estimates Context).*
  • 2025 guidance raised and narrowed: total revenues to $4.175–$4.275B (from $4.150–$4.300B). Non-GAAP EPS raised to $7.65–$8.45 (from $4.80–$5.60). GAAP net loss improved to $(435)–$(315) vs prior $(565)–$(450) .
  • Oncology catalysts: FDA approved Zepzelca + Tecentriq as first-line maintenance in ES‑SCLC (NCCN preferred regimen). IMforte showed 46% PFS risk reduction and 27% OS risk reduction vs Tecentriq alone . Phase 3 zanidatamab HERIZON‑GEA‑01 top-line PFS data expected in 4Q25; ITT analysis expanded to full 920 patients .
  • Sleep franchise: Xywav active patients ~15,675 exiting Q3 (+~450 net adds). Management flagged 2026 generic Xyrem entry risk but emphasized Xywav’s low-sodium differentiation and payer strategy .
  • Balance sheet and cash: $2.0B cash/investments; $993.3M operating cash flow YTD; $5.4B debt; $885M undrawn revolver .

What Went Well and What Went Wrong

What Went Well

  • “Achieving the highest revenue quarter in Jazz's history speaks to the strength of our diversified portfolio… led by double-digit percentage growth from Epidiolex and Xywav.” – Renee Gala, CEO .
  • Modeyso accelerated approval and rapid uptake ($11.0M sales; >200 patients; early NCCN inclusion); launch cited as strong with positive physician feedback .
  • Zepzelca + Tecentriq first-line maintenance approval in ES‑SCLC; NCCN preferred regimen; IMforte data: median OS 13.2 vs 10.6 months (HR=0.73); PFS 5.4 vs 2.1 months (HR=0.54) .

What Went Wrong

  • Zepzelca net sales declined 8% y/y to $79.3M due to competitive dynamics in 2L SCLC; oncology revenue mix headwinds (Defitelio down) despite Modeyso/Ziihera adds .
  • SG&A spiked on litigation settlements (Avadel $90M, Xyrem antitrust $61.5M) and higher compensation; GAAP SG&A $530.6M (47.1% of revenue) vs $325.8M (30.9%) a year ago .
  • 2026 risk: potential generic Xyrem entrants and payer actions could disrupt Xywav; management lacks visibility on number/timing/price of generics, signaling access/pricing pressure ahead .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Revenue ($USD)$1,054.969M $1,045.712M $1,126.107M
GAAP Diluted EPS ($)$3.42 $(11.74) $4.08
Non-GAAP Adjusted EPS ($)$6.54 $(8.25) $8.13
GAAP Gross Margin (%)88.7% 88.2% 87.9%
Non-GAAP Gross Margin (%)92.6% 92.3% 92.2%
GAAP SG&A (% Revenue)30.9% 34.3% 47.1%

Consensus vs Actual (quarterly):

MetricQ3 2025 ConsensusQ3 2025 Actual
Revenue ($USD)$1,108.541M*$1,126.107M
Primary EPS ($)$5.85*$8.13
# EPS Estimates16*—
# Revenue Estimates15*—
Values retrieved from S&P Global.*

Product and Segment Revenue

Product/Segment ($USD ‘000s)Q3 2024Q3 2025
Xywav$388,466 $431,410
Xyrem$58,114 $35,663
Epidiolex/Epidyolex$251,558 $302,608
Sativex$4,586 $4,752
Total Neuroscience$702,724 $774,433
Rylaze/Enrylaze$98,780 $99,868
Zepzelca$85,843 $79,295
Defitelio/defibrotide$65,818 $51,752
Vyxeos$34,313 $37,583
Ziihera (zanidatamab)—$8,306
Modeyso (dordaviprone)—$11,032
Total Oncology$284,754 $287,836
High‑sodium oxybate AG royalty revenue$58,157 $52,945
Other royalty & contract$7,105 $8,750
Total Revenues$1,054,969 $1,126,107

KPIs

KPIQ3 2025
Xywav net patient adds~450
Xywav active patients (exit Q3)~15,675 (10,725 narcolepsy; 4,950 IH)
Epidiolex: volume growth~10% (benefited from lower gross-to-net)
Modeyso patients>200 by quarter-end
Cash, cash equivalents & investments$2.0B
Long-term debt (principal)$5.4B
Operating cash flow (9M)$993.3M

Guidance Changes

MetricPeriodPrevious Guidance (Aug 5, 2025)Current Guidance (Nov 5, 2025)Change
Total Revenues ($M)FY 2025$4,150–$4,300 $4,175–$4,275 Raised/Narrowed
GAAP Gross Margin (%)FY 202588% 88% Maintained
GAAP SG&A ($M)FY 2025$1,620–$1,693 $1,786–$1,846 Raised (litigation)
GAAP R&D ($M)FY 2025$805–$865 $771–$810 Lowered
GAAP Effective Tax Rate (%)FY 20254%–16% 35%–45% Raised
GAAP Net Loss ($M)FY 2025$(565)–$(450) $(435)–$(315) Improved
GAAP LPS ($)FY 2025$(9.25)–$(7.50) $(7.10)–$(5.20) Improved
Non‑GAAP Gross Margin (%)FY 202592% 92% Maintained
Non‑GAAP SG&A ($M)FY 2025$1,450–$1,500 $1,590–$1,630 Raised
Non‑GAAP R&D ($M)FY 2025$730–$780 $680–$710 Lowered
Non‑GAAP Effective Tax Rate (%)FY 202527%–37% (20)%–(15)% Lowered (negative)
Non‑GAAP Net Income ($M)FY 2025$300–$350 $475–$525 Raised
Non‑GAAP EPS ($)FY 2025$4.80–$5.60 $7.65–$8.45 Raised

Notes: Guidance reflects acquired IPR&D ($947.9M), litigation settlements ($323.5M), and $205.9M tax benefit affecting GAAP and non-GAAP outcomes .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Sleep franchise momentum & Xywav differentiationQ1: Xywav +9% y/y; DUET/XYLO data; affirmed revenue guidance . Q2: +13% y/y; 625 net adds .+11% y/y; ~450 net adds; AHA/ACC sodium guidance cited; nurse educator program enhances persistency .Sustained growth; narrative intensifies differentiation vs high-sodium and future generics.
Epidiolex trajectoryQ1: +10% y/y; blockbuster target reiterated . Q2: +2% y/y (inventory dynamics) .+20% y/y; 10% volume; GtN refinement boosted revenue; blockbuster reiterated .Re-accelerating; supportive real-world evidence.
Oncology – ZepzelcaQ1/Q2: 2L declines; Priority Review for 1L maintenance .FDA approval 1L maintenance; NCCN preferred; IMforte OS/PFS benefits .Positive inflection; new 1L maintenance launch underway, offsetting 2L headwinds over time.
Modeyso (dordaviprone)Q2: PDUFA Aug 18; priority review .Accelerated approval Aug 6; $11.0M sales; >200 patients; confirmatory ACTION OS‑focused updates .Rapid launch & uptake; long-term OS confirmatory timeline (late 2026/early 2027).
Zanidatamab (Ziihera) HER2 programsQ1/Q2: GEA P3 top-line expected 2H/4Q25; EU CMA in BTC .ITT expanded to full enrollment for PFS; top-line GEA readout by YE; strategy vs Herceptin; PD‑L1 subgroup exploratory .Heightened confidence; broader ITT analysis.
Litigation/royaltiesQ1: $172M Xyrem antitrust settlements; guidance updated . Q2: continued settlements; guidance parameterization .Avadel settlement impacts SG&A; HICMA AG royalty framework extended with step-downs; potential generic dynamics in 2026 .One-offs absorbed; royalty stream persists with modifications.
Tax & non-GAAP frameworkQ2: Pillar Two impacts; higher non-GAAP tax .Non-GAAP effective tax rate guided to (20)%–(15)%; $205.9M deferred tax asset benefit .Favorable non-GAAP tax for FY; GAAP rate higher.

Management Commentary

  • “We achieved our highest-ever revenue quarter… driven by robust growth from Xywav, Epidiolex, and the early successful launch of Dordaviprone.” – Renee Gala, CEO .
  • “We narrowed our 2025 revenue guidance to $4.175–$4.275 billion, reflecting increased confidence.” – Philip Johnson, CFO .
  • “Given very high unmet need… we’ve seen rapid uptake [Modeyso], with more than 200 patients having received Modeyso at the end of the third quarter.” – Sam Pearce, CCO .
  • “We aligned with FDA to conduct the GEA PFS analysis on the entire randomized patient population… we remain highly confident we will announce top-line results later this year.” – Rob Iannone, CMO .

Q&A Highlights

  • Xywav in 2026: Management emphasized uncertainty on number/timing/pricing of generic Xyrem entrants and possible payer actions; strategy centers on low-sodium differentiation, disease awareness, and payer collaboration; HICMA amendment extends AG arrangement with step-down royalties and new termination rights .
  • Zanidatamab GEA statistics/design: ITT expansion endorsed by FDA; robust PFS powering; interim OS maturity may be better than initially assumed due to slower PFS events .
  • Epidiolex gross-to-net: 10% volume growth; majority of the uplift to +20% revenue from U.S. accrual refinements; not expected to be material in future quarters .
  • Orexin agonists & Xywav: Management views orexin agonists as complementary day wake-promoters; Xywav uniquely restores sleep architecture and addresses root cause; potential insomnia risk with longer half-life orexin agents .
  • Royalties/AG: Base case includes continuation of authorized generic royalties from HICMA in 2026, with meaningful contribution albeit at reduced rates .

Estimates Context

  • Q3 2025 beat: Revenue $1,126.1M vs consensus $1,108.5M; EPS $8.13 vs consensus $5.85. Stronger non-GAAP results reflect Epidiolex demand plus U.S. accrual refinements and tax benefits tied to Chimerix deferred tax assets .*
  • Sequentially, Q2 2025 results were a trough on large IPR&D charges; Q4 2025 consensus implies continued top-line strength ($1,156.2M) and EPS $6.43, with typical quarter-to-quarter shipping weeks noted for U.S. oncology (13 weeks in Q4) .* Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Quality beat and record quarter: Broad-based growth in sleep/epilepsy plus new oncology revenue drove revenue and EPS beats; guidance meaningfully raised, narrowing uncertainty .*
  • Near-term catalysts: Zanidatamab GEA top-line PFS/OS later in 4Q25 and Zepzelca 1L maintenance ramp can re-rate oncology expectations; watch NCCN and launch adoption curves .
  • Modeyso launch trajectory: Early uptake and NCCN inclusion support multi-year opportunity; confirmatory ACTION trial OS endpoint may extend timelines, but strengthens durability of label .
  • 2026 sleep franchise risk: Generic Xyrem entry could pressure Xywav via payer actions; Jazz’s differentiation, advocacy, and AG royalty framework aim to mitigate, but access/pricing risks remain .
  • Tax and one-time items: FY25 non-GAAP tax rate now negative, boosting EPS; GAAP reflects IPR&D and litigation costs; model cash conversion remains robust given ~$1B YTD CFO .
  • Segment mix: Neuroscience strength offset oncology 2L headwinds; new indications (Zepzelca maintenance, Modeyso) should gradually improve oncology mix .
  • Trading setup: Into GEA readout and early Zepzelca maintenance adoption, catalysts skew positive; monitor payer updates and any clarity on 2026 oxybate generic landscape as potential overhang .

Additional relevant press releases in the period:

  • FDA approval of Zepzelca + Tecentriq in ES‑SCLC (maintenance); NCCN preferred regimen .
  • Avadel global settlement with Jazz; $90M payment to Avadel and ongoing royalties structure, clarifying legal overhangs (context for SG&A in Q3) .
  • Appointment of Dr. Ted W. Love to the Board, adding strategic biopharma experience .