Jazz Pharmaceuticals (JAZZ) continues to make impressive strides in the biopharma industry thanks to its diverse portfolio of treatments. The company posted top-and-bottom-line beats for the third quarter. It has further projected an above-expectations increase in earnings for 2024, driven by positive sales growth from key products like Xywav and Epidiolex. Jazz recently obtained accelerated approval for Ziihera, a treatment for HER2-positive biliary tract cancer (BTC). Meanwhile, imminent milestones like the phase 3 topline PFS results on Zanidatamab further establish the company as a standout in the pharmaceutical industry with upside potential.
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The stock trades at a discount to industry peers, making it an attractive option for value investors interested in adding biopharma to their portfolio.
Jazz Pharmaceuticals Boasts Promising Portfolio
Jazz Pharmaceuticals is a biopharmaceutical company committed to creating medicines targeting patients with severe diseases with limited therapeutic options. With recent advancements in research and development, particularly within oncology and neuroscience, Jazz Pharmaceuticals boasts a varied portfolio of marketed medicines treating sleep disorders, epilepsy, and a growing range of cancer types.
The company’s successful first-generation drug, Xyrem, which treats narcolepsy and idiopathic hypersomnia (IH), has gone off patent, so the company is working to transition patients to the improved version – Xywav. In the third quarter, the patient base for Xywav increased to approximately 13,625 active users. The DUET trial results further solidified Xywav’s efficacy and safety. Meanwhile, sales for Xyrem oral solution declined by 54%.
Sales of Epidiolex/Epidyolex increased by 18% year-over-year. The drug is approved in over 35 countries outside the U.S., and it continues to show significant reductions in seizures among patients with Lennox-Gastaut syndrome.
Other Potential Treatments
Zepzelca, another drug in the portfolio, saw a 10% year-over-year sales increase. At the same time, it has shown statistically and clinically meaningful results from the Phase 3 clinical trial, conducted in partnership with Roche (RHHBY), to evaluate Zepzelca combined with Tecentriq (atezolizumab) for the treatment of extensive-stage (ES) small cell lung cancer (SCLC). Based on positive results from the trial, the company plans to submit a supplemental New Drug Application (sNDA) for Zepzelca in 1L ES-SCLC in the first half of 2025.
Finally, Jazz Pharmaceuticals has also received the U.S. FDA’s accelerated approval for Ziihera (zanidatamab-hrii) 50mg/mL, an injection for treating adults with previously treated, inoperable or metastatic HER2-positive (IHC 3+) biliary tract cancer (BTC). Ziihera is the first and only dual HER2-targeted bispecific antibody and a chemotherapy-free treatment for patients with BTC. The FDA approval is based on data from the HERIZON-BTC-01 trial, the largest Phase 2b clinical trial specifically for this patient population.
This study achieved its primary endpoint of a confirmed objective response rate and demonstrated an objective response rate of 52% and a median duration of response of 14.9 months. The Phase 3 HERIZON-BTC-302 trial is ongoing and aims to evaluate Zanidatamab combined with standard-of-care therapy.
Jazz Pharma’s Recent Financial Results & Outlook
The company recently reported solid results for Q3, with revenue of $1.05 billion exceeding analysts’ projections by $10 million, marking a 14% year-over-year increase—the non-GAAP earnings per share (EPS) of $ 6.61, beating expectations by $1.11.
As of the quarter’s end, the company had cash, cash equivalents, and investments totaling $2.6 billion, with a long-term debt balance of $6.2 billion. It also had an undrawn borrowing capacity of $500 million under a revolving credit facility.
Following Q3 solid earnings, JAZZ’s management has issued guidance for 2024, projecting revenue of $4.0 to $4.1 billion and GAAP R&D expense guidance to $862 to $908 million, primarily driven by strategic pipeline prioritization. The company also increased its GAAP EPS guidance range to $6.70 to $8.50 and non-GAAP EPS guidance range to $19.50 to $20.60.
What Is the Price Target for JAZZ Stock?
The stock has been range-bound for much of the past year, breaking out in the past three months as the stock has climbed over 12%. It trades in the upper half of its 52-week price range of $99.06 – $134.17 and shows ongoing positive price momentum as it trades above all major moving averages. The P/S ratio of 2.02x sits well below the Biotechnology industry average of 8.8x, marking it as trading at a deep relative discount.
Analysts following the company have been bullish on JAZZ stock. For instance, Robert W. Baird analyst Joel Beatty, a five-star analyst according to Tipranks’ ratings, recently reiterated an Outperform rating while raising the price target from $154 to $162, noting the uptick of patients on Xywav as a reassuring sign, as well as the potential upcoming catalyst from phase 3 topline PFS results on Zanidatamab in 2Q25.
Jazz Pharmaceuticals is rated a Strong Buy overall, based on the recommendations of 17 analysts. The average price target for JAZZ stock is $178.82, representing a potential upside of 47.07% from current levels.
Final Riff
Jazz Pharmaceuticals continues to make headway with its robust product pipeline, breakthroughs in research and development, and strategic market positioning. Specifically, key products like Xywav and Epidiolex have demonstrated positive sales growth, while promising new drugs like Ziihera and Zanidatamab underscore Jazz’s potential upside. The company’s strong pipeline and attractive valuation make it an appealing prospect for investors.
