Shares in Jazz Pharma dropped over 7 per cent yesterday in US trade as the market digested results that came in slightly below expectations for the final quarter of 2013 alongside bullish guidance for the current year.
Analysts were also slightly edgy over news that the company is entering a formal dispute procedure with the Food and Drug Administration over its narcolepsy drug Xyrem.
Jazz, originally a US company, relocated its domicile to Ireland in 2102 as part of a deal that saw it acquire Azur Pharma – the specialty drug development group founded by former Elan executive Seamus Mulligan – in an all-stock deal that valued the Irish business at around $500 million.
It announced earlier this month that it was investing €50 million in constructing a new manufacturing plant outside Athlone in a move likely to create 50 jobs at the company by 2016. It had previously announced the $1 billion acquisition of Gentium, an Italian rare disease drug developer in December.
Jazz announced full year figures that showed a 49 per cent increase in turnover to $872.4 million in 2013 but the growth in the fourth quarter was a more modest 28 per cent to $235.8 million.
The company said increase sales were driven primarily by Xyrem and Erwinaze /Erwinase, a leukaemia drug.
Profit from continuing operations was $216.3 million, or $3.51 per diluted share, compared to $261.1 million, or $4.34 per diluted share, for 2012.
"Looking ahead, we expect strong top and bottom line growth this year driven by revenues from Xyrem, Erwinaze and Defitelio," chief financial officer Kate Falberg said. "We expect total revenue for 2014 to be in the range of $1.1 billion to $1.16 billion, up 26 to 33 per cent on a reported basis from 2013."
Non-GAAP adjusted EPS are expected to be between of $8 to $8.25, representing growth of between 27 and 31 per cent.
Chief executive Bruce Cozadd said 2013 had been "an outstanding year for Jazz as we delivered strong top-line growth and continue to generate significant cash flow".
He noted the company had continued to deliver sales growth of Xyrem and Erwinaze, “as well as further development and enhancement of our infrastructure to support our corporate development efforts. 2014 is off to a great start.”
But an escalating dispute with the FDA cast a shadow over the figures, not least for analysts who see it as deterring potential suitors for the business.
Cantor Fitzgerald analyst Arena Rivkind, who downgraded Jazz stock to hold from buy, cited the dispute over the risk evaluation and mitigation strategy (Rems) for future generic rivals to the company’s most important drug, Xyrem.
Jazz, which supplies all of the drug through one central pharmacy in the US, does not want to open that supply chain up to rivals, despite pressure from the regulator.
Also yesterday, the company said Ms Falberg was stepping down "to pursue other interests". She is replaced by Matt Young, an investment banker specialising in life sciences who joined the company last year and has driven its corporate development group since.
