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This Could Drive Jazz Pharmaceuticals’ Revenue Growth

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Xyrem revenue trends

In 2Q17, Jazz Pharmaceuticals’ (JAZZ) Xyrem generated revenues of ~$298 million, which represents ~6% growth on a YoY (year-over-year) basis and ~10% growth on a QoQ (quarter-over-quarter) basis. In 1H17, Xyrem reported revenues of ~$570 million, which represents ~7% growth YoY. Higher net selling prices and increased sales volumes contributed to Xyrem’s revenue growth in 2Q17.

In 2Q17 and 1H17, Xyrem contributed ~$76% and 75%, respectively, to Jazz’s net sales. Jazz anticipates that net sales of Xyrem in fiscal 2017 will be in the range of $1.20 billion–$1.23 billion.

Jazz has estimated that in 2Q17, the average number of active Xyrem patients was ~13,000. The company is actively working to increase awareness if narcolepsy diseases, to accelerate diagnosis, and to target sales teams to physicians with high numbers of narcolepsy patients.

Jazz is thus focused on Xyrem’s label expansion. In June 2017, it presented the detailed results of a phase-3 study that evaluated the safety and efficacy of Xyrem in pediatric narcolepsy patients with cataplexy.

Jazz plans to submit a sNDA (supplemental new drug application) to the FDA (US Food and Drug Administration) by 4Q17. (Check out Market Realist’s “This Alone Could Boost Xyrem’s Addressable Market in 2018.”)

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Settlement of patent litigation

In April 2017, Jazz entered into an agreement with Hikma Pharmaceuticals to resolve patent litigation associated with Xyrem. The patent litigation had been pending in a US District Court in New Jersey since 2010, due to the submission of an ANDA (abbreviated new drug application) to FDA by Roxane Laboratories, which has been acquired by Hikma Pharmaceuticals, for the approval of generic versions of Xyrem.

Jazz has now permitted Hikma and its wholly owned subsidiary, West-Ward Pharmaceuticals, the right to market authorized generic versions of Xyrem after January 1, 2023.

Jazz’s peers in the narcolepsy drug market include Teva Pharmaceuticals (TEVA), Novartis (NVS), Mylan (MYL), and Allergan. Notably, the iShares US Pharmaceuticals ETF (IHE) has ~2.6% of its total portfolio holdings in JAZZ.

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