Total revenues at Jazz Pharmaceuticals plc for the third quarter of 2015 were $340.9 million, an increase of 11% over total revenues of $306.6 million for the third quarter of 2014. The increase in total revenues was driven by higher net product sales of Xyrem (sodium oxybate) oral solution and Erwinaze/Erwinase (asparaginase Erwinia chrysanthemi). Total revenues include net product sales, royalties, and contract revenues.

Net product sales for the third quarter of 2015 were as follows:

  • Xyrem: Xyrem net sales increased by 19% to $242.9 million in the third quarter of 2015 compared to $204.3 million in the third quarter of 2014. During the third quarter of 2015, the average number of active Xyrem patients in the United States was approximately 12,450.
  • Erwinaze/Erwinase: Erwinaze/Erwinase net sales increased by 8% to $56.3 million in the third quarter of 2015 compared to $52.1 million in the third quarter of 2014.
  • Defitelio (defibrotide): Defitelio/defibrotide net sales increased to $19.6 million in the third quarter of 2015 compared to $18.9 million in the third quarter of 2014. Product volume was in line with expectations, but sales were impacted by unfavorable foreign currency exchange movements.
  • Prialt (ziconotide) intrathecal infusion: Prialt net sales were $6.0 million in the third quarter of 2015 compared to $6.3 million in the third quarter of 2014.
  • Psychiatry products: Net sales of the company’s psychiatry products were $9.9 million in the third quarter of 2015 compared to $10.8 million in the third quarter of 2014.
  • Other: Net sales of other products in the third quarter of 2015 were $3.9 million compared to $11.9 million in the third quarter of 2014. In March 2015, the company completed the sale of certain products and the related business that the company acquired as part of the acquisition of EUSA Pharma Inc. in 2012.

Operating Expenses and Other

Operating expenses for the third quarter of 2015 were $209.3 million compared to $248.5 million for the third quarter of 2014. Operating expenses changed over the prior year period primarily due to the following:

  • Cost of product sales for the third quarter of 2015 was $28.4 million compared to $27.0 million for the same period in 2014. Gross margin for the third quarter of 2015 was 91.6% compared to 91.1% for the same period in 2014.
  • Selling, general and administrative (SG&A) expenses for the third quarter of 2015 on a GAAP basis were $104.0 million compared to $93.5 million for the same period in 2014. Adjusted SG&A expenses for the third quarter of 2015 were $84.5 million, or 25% of total revenues, compared to $78.7 million, or 26% of total revenues, for the same period in 2014. The increase in both GAAP and adjusted SG&A expenses was primarily due to higher headcount and other expenses resulting from the expansion of the company’s business.
  • Research and development (R&D) expenses for the third quarter of 2015 were $50.8 million on a GAAP basis compared to $22.4 million for the same period in 2014. The increase resulted primarily from a $25.0 million milestone payment that was triggered by the acceptance for filing by the FDA of the first new drug application (NDA) for defibrotide. The milestone was paid in October 2015. Adjusted R&D expenses for the third quarter of 2015 were $23.0 million, or 7% of total revenues, compared to $18.4 million, or 6% of total revenues, for the same period in 2014. Both GAAP and adjusted R&D expenses increased due to higher clinical studies and outside services costs for the development of new product candidates and line extensions for the company’s existing products.
  • Acquired in-process research and development expenses of $75.0 million incurred during the third quarter of 2014 related to an upfront payment made for rights to defibrotide in the Americas.

Net interest expense for the third quarter of 2015 was $12.7 million compared to $14.5 million for the third quarter of 2014. In June 2015, the company refinanced its existing term loans and revolving credit facility and obtained a more favorable interest rate, which reduced interest expense.

As of September 30, 2015, cash and cash equivalents were $998.9 million, and the outstanding principal balance of the company’s long-term debt was $1.4 billion. Cash and cash equivalents increased from December 31, 2014 primarily due to cash generated by the business. In October 2015, the company repaid its revolving credit facility balance of $80.0 million.
During the nine months ended September 30, 2015, the company repurchased 0.1 million ordinary shares for $21.3 million at an average cost of $172.43 per ordinary share under its $200 million share repurchase program announced in 2013. The company completed this share repurchase program in August 2015.