What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-08 · 205 added, 248 removed, 674 unchanged (40% of the section changed)

3 unchanged sentences

(In thousands)

September 30,

2024 December 31,

21 unchanged sentences

Income taxes payable 49,325 35,074

Deferred revenue 4 463

Total current liabilities 1,562,206 1,536,692

18 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Product sales, net $ 842,102 $ 884,219

7 unchanged sentences

Acquired in-process research and development 10,000 1,000

Impairment charge — 133,648 — 133,648

Total operating expenses 835,776 766,757

1 unchanged sentence

Interest expense, net ( 66,116 ) ( 74,147 )

Foreign exchange loss ( 1,377 ) ( 4,649 ) ( 566 ) ( 16,532 )

Income (loss) before income tax benefit and equity in loss (gain) of investees 99,518 ( 60,130 ) 236,403 ( 32,791 )

Income tax benefit ( 47,176 ) ( 43,027 ) ( 86,823 ) ( 58,603 )

Equity in loss (gain) of investees ( 126 ) 2,545 2,548 9,148

Foreign exchange gain (loss) ( 1,693 ) 3,193

Income (loss) before income tax expense (benefit) and equity in loss of investees ( 1,602 ) 55,101

Income tax expense (benefit) 11,669 ( 15,324 )

Equity in loss of investees 1,347 1,005

Net income (loss) $ ( 14,618 ) $ 69,420

9 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ ( 14,618 ) $ 69,420

1 unchanged sentence

Foreign currency translation adjustments ( 44,068 ) 145,279

Loss on fair value hedging activities reclassified from accumulated other comprehensive income (loss) to foreign exchange gain (loss), net of income tax benefit of $ — , $ — , $ — and $ 43 , respectively

Unrealized gain on cash flow hedging activities, net of income tax expense of $ 1,720 and $ — , respectively

3,539 — 9,218 —

Gain on cash flow hedging activities reclassified from accumulated other comprehensive income (loss) to interest expense, net of income tax expense of $ 451 and $ — , respectively

( 1,289 ) — ( 2,060 ) —

Other comprehensive income (loss) ( 40,247 ) 145,279

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Issuance of ordinary shares in conjunction with vesting of restricted stock units 686 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 43,266 ) — — ( 43,266 )

Share-based compensation — — — — — 56,646 — — 56,646

Other comprehensive income — — — — — — 145,279 — 145,279

Net income — — — — — — — 69,420 69,420

Balance at March 31, 2023 63,987 $ 6 4,000 $ 55 $ 472 $ 3,511,732 $ ( 980,230 ) $ 803,006 $ 3,335,041

Issuance of ordinary shares in conjunction with exercise of share options 28 — — — — 2,003 — — 2,003

Issuance of ordinary shares under employee stock purchase plan 81 — — — — 8,863 — — 8,863

Issuance of ordinary shares in conjunction with vesting of restricted stock units 58 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 4,188 ) — — ( 4,188 )

Share-based compensation — — — — — 61,705 — — 61,705

Shares repurchased ( 756 ) — — — 1 — — ( 95,595 ) ( 95,594 )

Other comprehensive income — — — — — — 113,407 — 113,407

Net income — — — — — — — 104,438 104,438

Balance at June 30, 2023 63,398 $ 6 4,000 $ 55 $ 473 $ 3,580,115 $ ( 866,823 ) $ 811,849 $ 3,525,675

Issuance of ordinary shares in conjunction with exercise of share options 50 — — — — 5,512 — — 5,512

Issuance of ordinary shares in conjunction with vesting of restricted stock units 59 — — — — — — — —

Issuance of ordinary shares in conjunction with vesting of performance-based restricted stock units 80 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 49,296 ) — — ( 49,296 )

Share-based compensation — — — — — 63,131 — — 63,131

Shares repurchased ( 562 ) — — — — — — ( 74,371 ) ( 74,371 )

Other comprehensive loss — — — — — — ( 40,247 ) — ( 40,247 )

Net income — — — — — — — 146,820 146,820

Balance at September 30, 2023 62,945 $ 6 4,000 $ 55 $ 473 $ 3,639,940 $ ( 1,035,399 ) $ 884,298 $ 3,489,373

JAZZ PHARMACEUTICALS PLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

Net loss — — — — — — — ( 14,618 ) ( 14,618 )

Balance at March 31, 2024 63,028 $ 6 4,000 $ 55 $ 473 $ 3,714,283 $ ( 882,394 ) $ 864,038 $ 3,696,461

Ordinary Shares Non-voting Euro Deferred Capital

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Balance at December 31, 2022 63,214 $ 6 4,000 $ 55 $ 472 $ 3,477,124 $ ( 1,125,509 ) $ 733,586 $ 3,085,734

Cumulative effect adjustment from adoption of ASU 2020-06 — — — — — ( 333,524 ) — 127,474 ( 206,050 )

Issuance of ordinary shares in conjunction with exercise of share options 188 — — — — 21,228 — — 21,228

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Share-based compensation — — — — — 56,646 — — 56,646

Other comprehensive loss — — — — — — ( 190,360 ) — ( 190,360 )

Other comprehensive income — — — — — — 145,279 — 145,279

Net income — — — — — — — 69,420 69,420

Balance at March 31, 2023 63,987 $ 6 4,000 $ 55 $ 472 $ 3,511,732 $ ( 980,230 ) $ 803,006 $ 3,335,041

Issuance of ordinary shares in conjunction with exercise of share options 194 — — — — 16,640 — — 16,640

Issuance of ordinary shares under employee stock purchase plan 81 — — — — 8,234 — — 8,234

Issuance of ordinary shares in conjunction with vesting of restricted stock units 104 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 6,289 ) — — ( 6,289 )

Share-based compensation — — — — — 54,407 — — 54,407

Shares repurchased — — — — — — — ( 54 ) ( 54 )

Other comprehensive loss — — — — — — ( 515,309 ) — ( 515,309 )

Net income — — — — — — — 34,665 34,665

Balance at June 30, 2022 62,623 $ 6 4,000 $ 55 $ 472 $ 3,312,319 $ ( 1,106,029 ) $ 993,958 $ 3,200,781

Issuance of ordinary shares in conjunction with exercise of share options 207 — — — — 21,260 — — 21,260

Issuance of ordinary shares in conjunction with vesting of restricted stock units 60 — — — — — — — —

Shares withheld for payment of employee's withholding tax liability — — — — — ( 2,567 ) — — ( 2,567 )

Share-based compensation — — — — — 56,985 — — 56,985

Other comprehensive loss — — — — — — ( 511,617 ) — ( 511,617 )

Net loss — — — — — — — ( 19,648 ) ( 19,648 )

Balance at September 30, 2022 62,890 $ 6 4,000 $ 55 $ 472 $ 3,387,997 $ ( 1,617,646 ) $ 974,310 $ 2,745,194

The accompanying notes are an integral part of these condensed consolidated financial statements.

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(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

Net income $ 320,678 $ 16,664

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 14,618 ) $ 69,420

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Intangible asset amortization 155,730 149,786

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Acquisition accounting inventory fair value step-up adjustment 28,943 60,458

Other non-cash transactions 54,262 ( 26,352 )

Acquired in-process research and development 10,000 1,000

Depreciation 7,653 7,574

Non-cash interest expense 16,255 32,002

Provision for losses on accounts receivable and inventory 7,403 2,316

Acquired in-process research and development 1,000 69,148

Impairment charge — 133,648

Loss on disposal of a business — 39,258

Non-cash interest expense 5,988 4,766

Deferred tax benefit ( 66,385 ) ( 66,061 )

Other non-cash transactions 14,674 16,773

Changes in assets and liabilities:

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Investing activities

Proceeds from maturity of investments 20,000 —

Acquisition of investments ( 375,000 ) —

Acquired in-process research and development ( 10,000 ) ( 1,000 )

Purchases of property, plant and equipment ( 6,904 ) ( 3,822 )

Acquisition of investments ( 270,000 ) ( 61,036 )

Proceeds from sale of a business — 53,000

Acquisition of intangible assets — ( 25,000 )

Proceeds from maturity of investments 120,000 —

Net cash used in investing activities ( 271,904 ) ( 4,822 )

Financing activities

Proceeds from employee equity incentive and purchase plans 37,606 67,863

Repayments of long-term debt ( 23,250 ) ( 574,264 )

Payment of employee withholding taxes related to share-based awards ( 49,296 ) ( 43,266 )

Share repurchases ( 169,966 ) ( 54 )

Repayments of long-term debt ( 7,750 ) ( 7,750 )

Proceeds from employee equity incentive and purchase plans 494 21,228

Net cash used in financing activities ( 56,552 ) ( 29,788 )

Effect of exchange rates on cash and cash equivalents ( 1,698 ) 331

Net increase in cash and cash equivalents 454,208 247,910

Net increase (decrease) in cash and cash equivalents ( 62,925 ) 286,429

Cash and cash equivalents, at beginning of period 1,506,310 881,482

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We are dedicated to developing life-changing medicines for people with serious diseases - often with limited or no therapeutic options.

We have a diverse portfolio of marketed medicines and novel product candidates, from early- to late-stage development, in neuroscience and oncology.

Within these therapeutic areas, we strive to identify new options for patients by actively exploring small molecules and biologics, and through innovative delivery technologies and cannabinoid science.

Our lead marketed products are:

We have a diverse portfolio of marketed medicines, including leading therapies for sleep disorders and epilepsy, and a growing portfolio of cancer treatments.

Our patient-focused and science-driven approach powers pioneering research and development advancements across our robust pipeline of innovative therapeutics in oncology and neuroscience.

Our lead marketed products, listed below, are approved in countries around the world to improve patient care.

• Xywav® (calcium, magnesium, potassium, and sodium oxybates) oral solution , a product approved by the U.S.

Food and Drug Administration, or FDA, in July 2020, and launched in the U.S.

in November 2020 for the treatment of cataplexy or excessive daytime sleepiness, or EDS, in patients with narcolepsy seven years of age and older, and also approved by FDA in August 2021 for the treatment of idiopathic hypersomnia, or IH, in adults and launched in the U.S.

in November 2020 for the treatment of cataplexy or excessive daytime sleepiness, or EDS, in patients seven years of age and older with narcolepsy, and also approved by FDA in August 2021 for the treatment of idiopathic hypersomnia, or IH, in adults and launched in the U.S.

in November 2021.

Xywav contains 92% less sodium than Xyrem®.

Xywav is also approved in Canada for the treatment of cataplexy in patients with narcolepsy;

• Xyrem (sodium oxybate) oral solution , a product approved by FDA and distributed in the U.S.

for the treatment of cataplexy or EDS in patients with narcolepsy seven years of age and older;

for the treatment of cataplexy or EDS in patients seven years of age or older with narcolepsy;

Jazz also markets Xyrem in Canada for the treatment of cataplexy in patients with narcolepsy.

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in 2018 by GW Pharmaceuticals plc, or GW, and currently indicated for the treatment of seizures associated with Lennox-Gastaut syndrome, or LGS, Dravet syndrome, or DS, or tuberous sclerosis complex, or TSC, in patients one year of age or older;

in the EU and Great Britain (where it is marketed as Epidyolex®) and other markets, it is approved for adjunctive treatment of seizures associated with LGS or DS, in conjunction with clobazam (EU and Great Britain only), in patients 2 years of age and older and for adjunctive treatment of seizures associated with TSC in patients 2 years of age and older (select markets).

• Rylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn) , a product approved by FDA in June 2021 and launched in the U.S.

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coli -derived asparaginase.

In September 2023, the European Commission, or EC, granted marketing authorization for this therapy under the trade name Enrylaze;

In September 2023, the European Commission granted marketing authorization for this therapy under the trade name Enrylaze;

• Zepzelca® (lurbinectedin) , a product approved by FDA in June 2020 under FDA's accelerated approval pathway and launched in the U.S.

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in Canada, Zepzelca received conditional approval in September 2021 for the treatment of adults with Stage III or metastatic SCLC, who have progressed on or after platinum-containing therapy.

• Defitelio® (defibrotide sodium) , a product approved in the U.S.

for the treatment of hepatic veno-occlusive disease, or VOD, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Japan for the treatment of hepatic sinusoidal obstruction syndrome (hepatic VOD).

It is currently approved in the EU, Great Britain and other markets for the treatment of severe hepatic VOD, also known as sinusoidal obstructive syndrome in HSCT therapy.

It is indicated in adults and pediatric patients over 1 month of age;

• Vyxeos® (daunorubicin and cytarabine) liposome for injection , a product approved in the U.S., Canada, EU, Great Britain and other markets (marketed as Vyxeos® liposomal in the EU, Great Britain and other markets) for the treatment of adults with newly diagnosed therapy-related acute myeloid leukemia, or t-AML, or AML with myelodysplasia-related changes, or AML-MRC.

An expanded indication was granted in the U.S.

for the treatment of newly diagnosed t-AML or AML-MRC in pediatric patients aged 1 year and older.

Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated or the context otherwise requires, all references to “Jazz Pharmaceuticals,” “the registrant,” "the Company", “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries.

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GAAP, can be condensed or omitted.

The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with our annual audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10‑K for the year ended December 31, 2022.

The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with our

annual audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10‑K for the year ended December 31, 2023.

In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of our financial position and operating results.

The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, for any other interim period or for any future period.

Our significant accounting policies have not changed substantially from those previously described in our Annual Report on Form 10‑K for the year ended December 31, 2022, other than as described below.

The results for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, for any other interim period or for any future period.

Our significant accounting policies have not changed substantially from those previously described in our Annual Report on Form 10‑K for the year ended December 31, 2023.

These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated.

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Adoption of New Accounting Standards

In October 2021, the Financial Accounting Standards Board issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, or ASU 2021-08, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, “Revenue from Contracts with Customers (Topic 606)”.

The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value.

ASU 2021-08 was effective for the Company from January 1, 2023 and we will apply to future business combinations, if any.

In November 2023, the Financial Accounting Standards Board, or FASB, issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures”, which requires enhanced disclosures about significant segment expenses.

The amendments are effective retrospectively to all prior periods presented in the financial statements, for fiscal years beginning after December 15, 2023.

The new guidance is not expected to have a material impact on our financial statement disclosures.

Significant Risks and Uncertainties

Historically, our business has been substantially dependent on Xyrem and while we expect that our business will continue to meaningfully depend on oxybate revenues from both Xywav and Xyrem, there is no guarantee that we can maintain oxybate revenues at or near historical levels, or that oxybate revenues will grow.

In this regard, our ability to maintain or increase oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties including, without limitation, those related to the launch of Xywav for the treatment of IH in adults and adoption in that indication;

competition from the recent introduction of two authorized generic, or AG, versions of high-sodium oxybate and new products, such as Avadel’s Lumryz, for treatment of cataplexy and/or EDS in narcolepsy in the U.S.

Historically, our business was substantially dependent on Xyrem and while we expect that our business will continue to meaningfully depend on oxybate revenues from both Xywav and Xyrem, there is no guarantee that oxybate revenues will remain at current levels.

In this regard, our ability to maintain oxybate revenues and realize the anticipated benefits from our investment in Xywav are subject to a number of risks and uncertainties including, without limitation, those related to the launch of Xywav for the treatment of IH in adults and adoption in that indication;

competition from the introduction of two authorized generic, or AG, versions of high-sodium oxybate and a branded fixed-dose, high-sodium oxybate, Avadel’s Lumryz, for treatment of cataplexy and/or EDS in narcolepsy in the U.S.

market, as well as potential future competition from additional AG versions of high-sodium oxybate and from generic versions of high-sodium oxybate and from other competitors;

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increased rebates required to maintain access to our products;

challenges to our intellectual property around Xywav and/or

Xyrem, including from pending antitrust and intellectual property litigation;

challenges to our intellectual property around Xywav and/or Xyrem, including from pending antitrust and intellectual property litigation;

and continued acceptance of Xywav and Xyrem by physicians and patients.

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contracting and rebates to pharmacy benefit managers and similar organizations that reduce our net revenue;

increasing scrutiny of pharmaceutical product pricing and resulting changes in healthcare laws and policy;

increasing scrutiny of pharmaceutical product pricing and resulting

changes in healthcare laws and policy;

market acceptance;

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identifying, acquiring or in-licensing additional products or product candidates;

our ability to realize the anticipated benefits of acquired or in-licensed products or product candidates, such as Epidiolex and zanidatamab, at the expected levels, with the expected costs and within the expected timeframe;

pharmaceutical product development and the inherent uncertainty of clinical success;

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and possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt obligations.

In addition, the success of the acquisition of GW, or the GW Acquisition, will depend, in part, on our ability to realize the anticipated benefits from the combination of our and GW's historical businesses.

The anticipated benefits to us of the GW Acquisition may not be realized at the expected levels, within the expected timeframe or at all or may take longer to realize or cost more than expected, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

Concentrations of Risk

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All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.

As of September 30, 2023, we had foreign exchange forward contracts with notional amounts totaling $ 509.9 million.

As of September 30, 2023, the outstanding foreign exchange forward contracts had a net liability fair value of $ 14.6 million.

As of September 30, 2023, we had interest rate swap contracts with notional amounts totaling $ 500 million.

These outstanding interest rate swap contracts had an asset fair value of $ 9.6 million as of September 30, 2023.

As of March 31, 2024, we had foreign exchange forward contracts with notional amounts totaling $ 537.1 million.

As of March 31, 2024, the outstanding foreign exchange forward contracts had a net asset fair value of $ 0.4 million.

As of March 31, 2024, we had interest rate swap contracts with notional amounts totaling $ 500.0 million.

These outstanding interest rate swap contracts had an asset fair value of $ 5.5 million as of March 31, 2024.

The counterparties to these contracts are large multinational commercial banks, and we believe the risk of nonperformance is not significant.

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We monitor economic conditions in certain European countries which may result in variability of the timing of cash receipts and an increase in the average length of time that it takes to collect accounts receivable outstanding.

Historically, we have not experienced significant credit losses on our accounts receivable and as of September 30, 2023 and December 31, 2022, allowances on receivables were not material.

As of September 30, 2023, five customers accounted for 84 % of gross accounts receivable, including Express Scripts Specialty Distribution Services, Inc.

and its affiliates, or ESSDS, which accounted for 45 % of gross accounts receivable, McKesson Corporation and affiliates, or McKesson, which accounted for 12 % of gross accounts receivable and ASD Specialty Healthcare LLC, which accounted for 12 % of gross accounts receivable.

As of December 31, 2022, five customers accounted for 87 % of gross accounts receivable, including ESSDS, which accounted for 55 % of gross accounts receivable, Cardinal Health Inc, which accounted for 10 % of gross accounts receivable and McKesson, which accounted for 9 % of gross accounts receivable.

Historically, we have not experienced significant credit losses on our accounts receivable and, as of March 31, 2024 and December 31, 2023, allowances on receivables were not material.

As of March 31, 2024, five customers accounted for 78 % of gross accounts receivable, including Express Scripts Specialty Distribution Services, Inc.

and its affiliates, or ESSDS, which accounted for 41 % of gross accounts receivable, McKesson Corporation and affiliates, or McKesson, which accounted for 12 % of gross accounts receivable and ASD Specialty Healthcare LLC, or ASD, which accounted for 12 % of gross accounts receivable.

As of December 31, 2023, five customers accounted for 79 % of gross accounts receivable, including ESSDS, which accounted for 41 % of gross accounts receivable, ASD, which accounted for 13 % of gross accounts receivable and McKesson, which accounted for 11 % of gross accounts receivable.

We depend on single source suppliers for most of our products, product candidates and their active pharmaceutical ingredients, or APIs.

With respect to our oxybate products, the API is manufactured for us by a single source supplier and the finished products are manufactured both by us in our facility in Athlone, Ireland and by our U.S.-based supplier.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures”, which requires additional enhanced tax disclosures.

The amendments are effective on a prospective basis, with the option to apply it retrospectively, for fiscal years beginning after December 15, 2024.

We are currently evaluating the impact of adopting this new accounting guidance.

Cash and Available-for-Sale Securities

Cash, cash equivalents and investments consisted of the following (in thousands):

September 30, 2023

March 31, 2024

Losses Estimated

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Our investment balances represent time deposits with original maturities of greater than three months and less than one year.

Interest income from available-for-sale securities was $ 19.2 million and $ 44.4 million in the three and nine months ended September 30, 2023, respectively, and $ 3.5 million and $ 4.4 million in the three and nine months ended September 30, 2022, respectively.

Interest income from available-for-sale securities was $ 23.3 million and $ 10.6 million in the three months ended March 31, 2024 and 2023, respectively.

Fair Value Measurement

The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of September 30, 2023 and December 31, 2022 that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands):

September 30, 2023 December 31, 2022

The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of March 31, 2024 and December 31, 2023, that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands):

March 31, 2024 December 31, 2023

(Level 1) Significant

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Totals $ 789,245 $ 591,172 $ 1,380,417 $ 768,586 $ 441,819 $ 1,210,405

Interest rate contracts $ — $ — $ — $ — $ 3,410 $ 3,410

Foreign exchange forward contracts — 357 357 — 681 681

Totals $ — $ 357 $ 357 $ — $ 4,091 $ 4,091

As of September 30, 2023, our available-for-sale securities included money market funds and time deposits and their carrying values were approximately equal to their fair values.

Money market funds were measured using quoted prices in

active markets, which represent Level 1 inputs and time deposits were measured at fair value using Level 2 inputs.

As of March 31, 2024, our available-for-sale securities included money market funds and time deposits and their carrying values were approximately equal to their fair values.

Money market funds were measured using quoted prices in active markets, which represent Level 1 inputs and time deposits were measured at fair value using Level 2 inputs.

Level 2 inputs are obtained from various third party data providers and represent quoted prices for similar assets in active markets, or these inputs were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data.

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There were no transfers between the different levels of the fair value hierarchy in 2024 or 2023.

As of September 30, 2023 and December 31, 2022, the carrying amount of investments measured using the measurement alternative for equity investments without a readily determinable fair value was $ 5.5 million.

As of March 31, 2024 and December 31, 2023, the carrying amount of investments measured using the measurement alternative for equity investments without a readily determinable fair value was $ 4.3 million.

The carrying amount, which is recorded within other non-current assets, is based on the latest observable transaction price.

As of September 30, 2023, the estimated fair values of the 1.50 % exchangeable senior notes due 2024, or 2024 Notes, the 2.00 % exchangeable senior notes due 2026, or 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes, the 4.375 % senior secured notes, due 2029, or the Secured Notes, and the seven-year $ 3.1 billion term loan B facility were approximately $ 555 million, $ 1.0 billion, $ 1.3 billion and $ 2.7 billion respectively.

As of March 31, 2024, the estimated fair values of the 1.50 % exchangeable senior notes due 2024, or 2024 Notes, the 2.00 % exchangeable senior notes due 2026, or 2026 Notes, which we refer to collectively as the Exchangeable Senior Notes, the 4.375 % senior secured notes, due 2029, or the Secured Notes, and the seven-year $ 3.1 billion term loan B facility, or the Dollar Term Loan were approximately $ 566 million, $ 1.0 billion, $ 1.4 billion and $ 2.7 billion respectively.

The fair values of each of these debt facilities was estimated using quoted market prices obtained from brokers (Level 2).

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Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures.

As of September 30, 2023 and December 31, 2022, the notional amount of foreign exchange contracts where hedge accounting is not applied was $ 509.9 million and $ 505.0 million, respectively.

The foreign exchange gain (loss) in our condensed consolidated statements of income (loss) included the following losses associated with foreign exchange contracts not designated as hedging instruments (in thousands):

As of March 31, 2024 and December 31, 2023, the notional amount of foreign exchange contracts where hedge accounting is not applied was $ 537.1 million and $ 511.7 million, respectively.

The foreign exchange gain (loss) in our condensed consolidated statements of income (loss) included the following gain (losses) associated with foreign exchange contracts not designated as hedging instruments (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

Foreign Exchange Forward Contracts:

2023 2022 2023 2022

Loss recognized in foreign exchange gain (loss) $ ( 13,549 ) $ ( 40,331 ) $ ( 8,921 ) $ ( 95,536 )

Gain (loss) recognized in foreign exchange gain (loss) $ ( 4,086 ) $ 4,275

To achieve a desired mix of floating and fixed interest rates on our variable rate debt, we entered into interest rate swap agreements in April 2023, which are effective until April 2026.

These agreements hedge contractual term loan interest rates.

As of September 30, 2023 , the interest rate swap agreements had a notional amount of $ 500.0 million.

As of March 31, 2024 , the interest rate swap agreements had a notional amount of $ 500.0 million.

As a result of these agreements, the interest rate on a portion of our term loan borrowings is fixed at 3.9086 %, plus the borrowing spread, until April 30, 2026.

The impact on accumulated other comprehensive income (loss) and earnings from derivative instruments that qualified as cash flow hedges for the three and nine months ended September 30, 2023 was as follows (in thousands):

The impact on accumulated other comprehensive income (loss) and earnings from derivative instruments that qualified as cash flow hedges for the three months ended March 31, 2024 was as follows (in thousands):

Interest Rate Contracts:

Three Months Ended

September 30, 2023 Nine Months Ended

September 30, 2023

March 31, 2024

Gain recognized in accumulated other comprehensive income (loss), net of tax $ 5,177

Gain reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax ( 1,356 )

Assuming no change in USD Secured Overnight Financing Rate based interest rates from market rates as of September 30, 2023 , $ 5.1 million of gains, net of tax, recognized in accumulated other comprehensive income (loss) will be reclassified to earnings over the next 12 months.

In order to hedge our exposure to foreign currency exchange risk associated with our seven-year € 625.0 million term loan B facility, or the Euro Term Loan, we entered into a cross-currency interest rate swap contract in May 2021, which matured in March 2022, and was de-designated as a fair value hedge.

The terms of this contract converted the principal repayments and interest payments on the Euro Term Loan into U.S.

The carrying amount of the Euro Term Loan and the fair value of the cross-currency interest rate swap contract were remeasured on a monthly basis, with changes in the euro to U.S.

dollar foreign exchange rates recognized within foreign exchange gain (loss) in the condensed consolidated statements of income (loss).

The impact on accumulated other comprehensive income (loss) and earnings from the cross-currency interest rate swap contract was as follows (in thousands):

Cross-Currency Interest Rate Contract:

Nine Months Ended

September 30, 2022

Loss reclassified from accumulated other comprehensive income (loss) to foreign exchange loss, net of tax $ 128

Loss recognized in foreign exchange loss 2,646

The cash flow effects of our derivative contracts for the nine months ended September 30, 2023 and 2022 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows, except for the settlement of notional amounts of the cross-currency swap, which were included in net cash used in financing activities.

Assuming no change in the U.S dollar Secured Overnight Financing Rate, or Term SOFR, based interest rates from market rates as of March 31, 2024 , $ 3.7 million of gains, net of tax, recognized in accumulated other comprehensive income (loss) will be reclassified to earnings over the next 12 months.

The cash flow effects of our derivative contracts for the three months ended March 31, 2024 and 2023 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows.

The following tables summarize the fair value of outstanding derivatives (in thousands):

Classification September 30,

Classification March 31,

2024 December 31,

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Total fair value of derivative asset instruments $ 6,172 $ 21,819

Derivatives designated as hedging instruments:

Interest rate contracts Other non-current liabilities $ — $ 3,410

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts Accrued liabilities 357 681

Although we do not offset derivative assets and liabilities within our consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event.

These provisions were not applicable as of December 31, 2022 since all derivatives were in an asset position.

The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate and foreign exchange forward contracts subject to such provisions as of September 30, 2023 (in thousands):

September 30, 2023

Total fair value of derivative liability instruments $ 357 $ 4,091

Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event.

March 31, 2024

Gross Amounts of Recognized Assets/ Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet

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Derivative liabilities ( 357 ) — ( 357 ) 250 — ( 107 )

December 31, 2023

Description Derivative Financial Instruments Cash Collateral Received (Pledged) Net Amount

Derivative assets $ 21,819 $ — $ 21,819 $ ( 4,091 ) $ — $ 17,728

Derivative liabilities ( 4,091 ) — ( 4,091 ) 4,091 — —

Inventories consisted of the following (in thousands):

September 30,

2024 December 31,

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Total inventories $ 577,321 $ 597,039

As of September 30, 2023 and December 31, 2022 inventories included $ 348.1 million and $ 457.6 million, respectively, related to the purchase accounting inventory fair value step-up on inventory acquired in the GW Acquisition.

As of March 31, 2024 and December 31, 2023 inventories included $ 297.3 million and $ 328.0 million, respectively, related to the purchase accounting inventory fair value step-up on inventory acquired as part of our acquisition of GW, which we refer to as the GW Acquisition.

Goodwill and Intangible Assets

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Foreign exchange ( 13,635 )

Balance at September 30, 2023 $ 1,705,320

Balance at March 31, 2024 $ 1,739,495

The gross carrying amounts and net book values of our intangible assets were as follows (in thousands):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Average Useful

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Total finite-lived intangible assets $ 7,757,873 $ ( 2,522,377 ) $ 5,235,496 $ 7,800,209 $ ( 2,382,170 ) $ 5,418,039

The increase in the gross carrying amount of intangible assets as of September 30, 2023 compared to December 31, 2022 primarily relates to the positive impact of foreign currency translation adjustments due to the strengthening of sterling against the U.S.

The decrease in the gross carrying amount of intangible assets as of March 31, 2024 compared to December 31, 2023 relates to the negative impact of foreign currency translation adjustments primarily due to the weakening of sterling against the U.S.

The assumptions and estimates used to determine future cash flows and remaining useful lives of our intangible and other long-lived assets are complex and subjective.

They can be affected by various factors, including external factors, such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines.

Based on finite-lived intangible assets recorded as of September 30, 2023, and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands):

Based on finite-lived intangible assets recorded as of March 31, 2024, and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands):

Year Ending December 31, Estimated Amortization Expense

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Property, plant and equipment consisted of the following (in thousands):

September 30,

2024 December 31,

Manufacturing equipment and machinery $ 85,717 $ 82,897

Construction-in-progress 73,286 67,385

Land and buildings 69,750 70,912

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Computer software 38,159 38,134

Construction-in-progress 17,274 18,661

Computer equipment 16,704 15,398

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Other current assets consisted of the following (in thousands):

September 30,

2024 December 31,

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Accrued liabilities consisted of the following (in thousands):

September 30,

2024 December 31,

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Employee compensation and benefits 118,966 121,209

Accrued facilities expenses 52,006 25,864

Consulting and professional services 39,539 19,538

Clinical trial accruals 38,406 44,757

Accrued royalties 29,236 30,706

Selling and marketing accruals 25,890 14,743

Accrued collaboration expenses 24,626 10,158

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Sales return reserve 22,137 20,435

Consulting and professional services 18,507 22,278

Current portion of lease liabilities 18,357 19,447

Derivative instrument liabilities 15,964 —

Selling and marketing accruals 14,573 18,553

Inventory-related accruals 15,902 13,977

Accrued construction-in-progress 7,055 5,141

Accrued facilities expenses 5,333 55,455

Derivative instrument liabilities 357 681

Other 88,033 75,513

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The following table summarizes the carrying amount of our indebtedness (in thousands):

September 30,

2024 December 31,

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Less current portion 605,375 604,954

604,507 31,000

Total long-term debt $ 5,105,111 $ 5,107,988

______________________________

(1) Balance as of September 30, 2023 includes the 2024 Notes since they mature in August 2024.

Credit Agreement

On May 5, 2021, the Company, Jazz Financing Lux S.à.r.l., or Jazz Lux, and certain of our other subsidiaries, as borrowers, or, collectively with the Company and Jazz Lux, the “Borrowers”, entered into the Credit Agreement by and among the Borrowers, the lenders and issuing banks from time to time party thereto, Bank of America, N.A., as administrative agent and U.S.

Bank Trust Company, National Association, as collateral trustee, or the Credit Agreement, that provided for (i) the Dollar Term Loan which was drawn by Jazz Lux on the Closing Date in U.S.

dollars (ii) the Euro Term Loan which was drawn by Jazz Lux on the Closing Date in Euros and (iii) the Revolving Credit Facility.

In January 2024, Jazz Lux entered into an amendment, or Repricing Amendment, to the Credit Agreement.

Upon entry into the Repricing Amendment, certain existing lenders converted outstanding Dollar Term Loans into a new tranche of U.S.

dollar term loans, or the Tranche B-1 Dollar Term Loans, and Jazz Lux borrowed $ 201.9 million aggregate principal amount of additional Tranche B-1 Dollar Term Loans, the proceeds of which were used to repay the outstanding Dollar Term Loans that were not converted.

The Tranche B-1 Dollar Term Loans are a separate class of term loans under the Credit Agreement with the same material terms (including with respect to maturity, prepayment, security, covenants and events of default) as the previously outstanding Dollar Term Loans, with the interest rate amended as described below.

The principal amount of Dollar Term Loans outstanding immediately prior to the Repricing Amendment and the outstanding principal amount of Tranche B-1 Dollar Term Loans immediately following the Repricing Amendment, each totaled $ 2.723 billion.

The Tranche B-1 Dollar Term Loans bear interest at a rate equal to either (a) Term SOFR, or (b) the prime lending rate, in each case, plus an applicable margin.

The applicable margin for the Tranche B-1 Dollar Term Loans is 3.00 % (in the case of Term SOFR borrowings) and 2.00 % (in the case of borrowings at the prime lending rate), a decrease of 50 basis points from the applicable margin on the Initial Dollar Term Loans.

The Tranche B-1 Dollar Term Loans are subject to a Term SOFR floor of 0.50 %.

The applicable margin for the Revolving Credit Facility ranges from 3.25 % to 2.75 % (in the case of Term SOFR borrowings) and 2.25 % to 1.75 % (in the case of borrowings at the prime lending rate), depending on our first lien secured net leverage ratio level.

The Tranche B-1 Dollar Term Loan is subject to a Term SOFR floor of 0.50 % and loans under the Revolving Credit Facility are not subject to a floor.

The Revolving Credit Facility has a commitment fee payable on the undrawn amount ranging from 0.50 % to 0.40 % per annum based upon our first lien secured net leverage ratio.

As of March 31, 2024, the interest rate and effective interest rate on the Tranche B-1 Dollar Term Loans were 8.44 % and 9.04 %, respectively.

As of March 31, 2024, we had an undrawn Revolving Credit Facility totaling $ 500.0 million.

Exchangeable Senior Notes

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No subsidiary of Jazz Pharmaceuticals plc guaranteed the Exchangeable Senior Notes.

Subject to certain local law restrictions on payment of dividends, among other things, and potential negative tax consequences, we are not aware of any significant restrictions on the ability of Jazz Pharmaceuticals plc to obtain funds from the Issuer or Jazz Pharmaceuticals plc’s other subsidiaries by dividend or loan, or any legal or economic restrictions on the ability of the Issuer or Jazz Pharmaceuticals plc’s other subsidiaries to

transfer funds to Jazz Pharmaceuticals plc in the form of cash dividends, loans or advances.

There is no assurance that in the future such restrictions will not be adopted.

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The effective interest rate of the 2026 Notes is 2.26 %.

During the three months ended September 30, 2023 and 2022, we recognized interest expense of $ 5.7 million, of which $ 5.0 million related to the contractual coupon rate and $ 0.7 million related to the amortization of debt issuance costs, respectively.

During the nine months ended September 30, 2023 and 2022, we recognized interest expense of $ 16.8 million, of which $ 15.0 million related to the contractual coupon rate and $ 1.8 million related to the amortization of debt issuance costs, respectively.

During the three months ended March 31, 2024 and 2023, we recognized interest expense of $ 5.5 million, of which $ 5.0 million related to the contractual coupon rate and $ 0.5 million related to the amortization of debt issuance costs, respectively.

The total liability of the 2024 Notes is reflected net of issuance costs of $ 11.4 million which will be amortized over the term of the 2024 Notes.

The effective interest rate of the 2024 Notes is 1.79 %.

During the three months ended September 30, 2023 and 2022, we recognized interest expense of $ 2.5 million, of which $ 2.1 million related to the contractual coupon rate and $ 0.4 million related to the amortization of debt issuance costs, respectively.

During the nine months ended September 30, 2023 and 2022, we recognized interest expense of $ 7.6 million, of which $ 6.4 million related to the contractual coupon rate and $ 1.2 million related to the amortization of debt issuance costs, respectively.

Scheduled maturities with respect to our long-term debt principal balances outstanding as of September 30, 2023 were as follows (in thousands):

During the three months ended March 31, 2024 and 2023, we recognized interest expense of $ 2.5 million, of which $ 2.1 million related to the contractual coupon rate and $ 0.4 million related to the amortization of debt issuance costs, respectively.

Scheduled maturities with respect to our long-term debt principal balances outstanding as of March 31, 2024 were as follows (in thousands):

Year Ending December 31, Scheduled Long-Term Debt Maturities

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2026 1,031,000

2028 2,598,500

Thereafter 1,500,000

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Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, we believe the fair value of these indemnification obligations is not significant.

Accordingly, we did not recognize any liabilities relating to these obligations as of September 30, 2023 and December 31, 2022.

Accordingly, we did not recognize any liabilities relating to these obligations as of March 31, 2024 and December 31, 2023.

No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case we may incur substantial liabilities as a result of these indemnification obligations.

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On June 17, 2020, a class action lawsuit was filed in the United States District Court for the Northern District of Illinois by Blue Cross and Blue Shield Association, or BCBS, against Jazz Pharmaceuticals plc, Jazz Pharmaceuticals, Inc., and Jazz Pharmaceuticals Ireland Limited, or, collectively, the Company Defendants (hereinafter referred to as the BCBS Lawsuit).

The BCBS Lawsuit also names Roxane Laboratories, Inc., Hikma Pharmaceuticals USA Inc., Eurohealth (USA), Inc., Hikma Pharmaceuticals plc, Amneal Pharmaceuticals LLC, Par Pharmaceuticals, Inc., Lupin Ltd., Lupin Pharmaceuticals Inc., and Lupin Inc., or, collectively, the BCBS Defendants.

The BCBS Lawsuit also names Roxane Laboratories, Inc., Hikma Pharmaceuticals USA Inc., Eurohealth (USA), Inc., Hikma Pharmaceuticals plc, Amneal Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., Lupin Pharmaceuticals Inc., and Lupin Inc., or, collectively, the BCBS Defendants.

On June 18 and June 23, 2020, respectively, two additional class action lawsuits were filed against the Company Defendants and the BCBS Defendants:

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Building Trades Welfare Plan on behalf of itself and all others similarly situated, against Jazz Pharmaceuticals plc (hereinafter referred to as the AFL Plan Lawsuit).

The AFL Plan Lawsuit also names Roxane Laboratories Inc., West-Ward Pharmaceuticals Corp., Hikma Labs Inc., Hikma Pharmaceuticals plc, Amneal Pharmaceuticals LLC, Par Pharmaceuticals Inc., Lupin Ltd., Lupin Pharmaceuticals, Inc., and Lupin Inc.

The AFL Plan Lawsuit also names Roxane Laboratories Inc., West-Ward Pharmaceuticals Corp., Hikma Labs Inc., Hikma Pharmaceuticals plc, Amneal Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., Lupin Pharmaceuticals, Inc., and Lupin Inc.

On August 14, 2020, an additional class action lawsuit was filed in the United States District Court for the Southern District of New York by the Self-Insured Schools of California on behalf of itself and all others similarly situated, against the Company Defendants, as well as Hikma Pharmaceuticals plc, Eurohealth (USA) Inc., Hikma Pharmaceuticals USA, Inc., West-Ward Pharmaceuticals Corp., Roxane Laboratories, Inc., Amneal Pharmaceuticals LLC, Endo International, plc, Endo Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., Lupin Pharmaceuticals Inc., Lupin Inc., Sun Pharmaceutical Industries Ltd., Sun Pharmaceutical Holdings USA, Inc., Sun Pharmaceutical Industries, Inc., Ranbaxy Laboratories Ltd., Teva Pharmaceutical Industries Ltd., Watson Laboratories, Inc., Wockhardt Ltd., Morton Grove Pharmaceuticals, Inc., Wockhardt USA LLC, Mallinckrodt plc, and Mallinckrodt LLC (hereinafter referred to as the Self-Insured Schools Lawsuit).

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On March 24, 2021, the U.S.

Judicial Panel on

Multidistrict Litigation conditionally transferred the UHS Lawsuit to the United States District Court for the Northern District of California, where it was consolidated for discovery and pre-trial proceedings with the other cases.

Judicial Panel on Multidistrict Litigation conditionally transferred the UHS Lawsuit to the United States District Court for the Northern District of California, where it was consolidated for discovery and pre-trial proceedings with the other cases.

On August 13, 2021, the United States District Court for the Northern District of California granted in part and denied in part the Company Defendants' motion to dismiss the complaints in the cases referenced above.

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The Court excluded Xywav purchasers from the classes.

On April 26, 2024, we, Hikma, and the plaintiffs filed motions for summary judgment.

The Court scheduled a hearing for these motions on July 19, 2024.

Trial in this matter is scheduled for October 28, 2024.

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On May 12, 2023, the Court granted the motion for preliminary approval of the proposed settlement.

On January 11, 2024, the Court held a hearing on the motion for final approval of the proposed settlement.

The Court deferred ruling and scheduled a further hearing for final approval of the proposed settlement on April 17, 2024.

During February and March 2024, the parties notified the Court of settlements between certain non-class action plaintiffs and each of Amneal and Lupin, and the Court dismissed those plaintiffs’ claims against the applicable parties.

On April 17, 2024, the Court issued an order granting the motion for final approval of the settlement between the class action plaintiffs, Amneal, and Lupin.

On December 11, 2023, Blue Cross and Blue Shield of Florida, Inc.

and Health Options, Inc.

filed a lawsuit in the United States District Court for the Middle District of Florida against the Company Defendants, Hikma Pharmaceuticals plc, Hikma Pharmaceuticals USA Inc., Hikma Labs, Inc., and Eurohealth (USA), Inc., raising similar allegations.

On January 23 , 2024, the Blue Cross Florida case was transferred to the United States District Court for the Northern District of California and consolidated with the above referenced multidistrict litigation for pretrial purposes.

On May 9, 2022, Aetna Inc., or Aetna, filed a lawsuit in the Superior Court of California for the County of Alameda against the Company Defendants, Hikma Pharmaceuticals plc, Hikma Pharmaceuticals USA Inc., Hikma Labs, Inc., Eurohealth (USA), Inc., Amneal Pharmaceuticals LLC, Par Pharmaceutical, Inc., Lupin Ltd., Lupin Pharmaceuticals, Inc., and Lupin Inc, raising similar allegations.

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On June 26, 2023, the Court granted our motions, and granted Aetna leave to further amend its complaint.

On August 7, 2023, Aetna filed a motion seeking leave of the Court to file a second amended complaint.

That motion was granted on November 3, 2023.

On November 17, 2023, Aetna filed its second amended complaint.

On February 2 , 2024, we filed our answer to the second amended complaint and Hikma filed a motion to quash service.

That motion remains pending.

The plaintiffs in certain of these lawsuits are seeking to represent a class of direct purchasers of Xyrem, and the plaintiffs in the remaining lawsuits are seeking to represent a class of indirect purchasers of Xyrem.

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LLC are named as defendants.

In addition to

the Farrell Lawsuit and the Levy Lawsuit, ten additional suits have been filed in New York, California, and Pennsylvania federal courts by purported GW shareholders against GW Pharmaceuticals plc and its board of directors, but which do not name any Jazz Pharmaceuticals parties (hereinafter referred to as the GW Litigation, and collectively with the Farrell Lawsuit and the Levy Lawsuit, as the Transaction Litigation).

In addition to the Farrell Lawsuit and the Levy Lawsuit, ten additional suits have been filed in New York, California, and Pennsylvania federal courts by purported GW shareholders against GW Pharmaceuticals plc and its board of directors, but which do not name any Jazz Pharmaceuticals parties (hereinafter referred to as the GW Litigation, and collectively with the Farrell Lawsuit and the Levy Lawsuit, as the Transaction Litigation).

In the Transaction Litigation, the plaintiffs allege that the Proxy Statement omitted material information and contained misrepresentations, and that the individual members of the GW board of directors breached their fiduciary duties, in violation of state and federal laws, including the Securities Exchange Act of 1934.

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On July 28, 2023, the Court granted the motion for preliminary approval, which conditionally certified a class for settlement purposes.

A hearing on whether final approval should be granted is scheduled for December 11, 2023.

On December 11, 2023, the Court held a hearing regarding final approval of the proposed settlement and took the matter under advisement.

On March 25, 2024, the Court issued an order finally approving the settlement and a judgment dismissing the case.

On April 4, 2024, the Court issued amended versions of the order and judgment.

Patent Infringement Litigation

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On November 1, 2023, the Court held a claim construction hearing relating to disputed terms in the asserted patents.

The Court has not yet issued a ruling.

The Court scheduled a trial regarding our patent infringement claims against Avadel for February 26, 2024.

No trial date has been set for Avadel’s trade secret misappropriation claims or Avadel’s counterclaims related to unlawful monopolization.

On December 15, 2023, the Court issued a written opinion and order resolving the parties’ remaining claim construction disputes.

On November 20, 2023, we and Avadel each filed motions for summary judgment.

On February 14, 2024, the Court issued a written opinion and order denying both parties’ motions for summary judgment.

Trial regarding our patent infringement claims against Avadel began on February 26, 2024 and concluded on March 4, 2024, with the jury finding both of our asserted patents valid, and awarding us damages for infringement for Avadel’s

past sales of Lumryz.

On April 12, 2024, we filed a motion for a permanent injunction and ongoing royalties.

The Court scheduled a hearing on that motion for June 4, 2024.

The Court scheduled a trial regarding Avadel’s counterclaims for unlawful monopolization for November 3, 2025 and a trial regarding Avadel’s trade secret misappropriation claims for December 15, 2025.

On March 13, 2024 and March 19, 2024, we filed motions to stay Avadel’s unlawful monopolization counterclaim and trade secret claims, respectively, pending resolution of post-trial motions and potential appeals in the patent infringement suit.

Both motions to stay remain pending.

On July 21, 2022, Avadel filed a lawsuit against FDA in the United States District Court for the District of Columbia, challenging FDA’s determination that Avadel was required to file a paragraph IV certification regarding one of our Orange Book listed patents.

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The notice from Teva included a paragraph IV certification with respect to thirteen of our patents listed in FDA’s Orange Book for Xywav on the date of the receipt of the notice.

The asserted patents relate generally to the

composition and method of use of Xywav, and methods of treatment when Xywav is administered concomitantly with certain other medications.

The asserted patents relate generally to the composition and method of use of Xywav, and methods of treatment when Xywav is administered concomitantly with certain other medications.

In March 2023, we filed a patent infringement suit against Teva in the United States District Court for the District of New Jersey.

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On May 23, 2023, Teva filed an answer to the complaint and counterclaims asserting that the patents are invalid or not enforceable, and that its product, if approved, will not infringe our patents.

No trial date has been set in the case against Teva.

On December 15, 2023, based on a stipulation between all parties, the Court consolidated the Lupin lawsuits and the Teva lawsuit for all purposes.

No trial date has been set in the consolidated case.

Alkem Patent Litigation

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The answers include defenses and counterclaims asserting that the Epidiolex ANDA Filers’ products, if launched, would not infringe our patents, that our patents are invalid and, in one instance, counterclaims related to allegations of inequitable conduct and improper listing of patents in the Orange Book.

On May 25, 2023, we filed a motion to dismiss certain of the counterclaims, which remains pending.

On May 25, 2023, we filed a motion to dismiss certain of the counterclaims.

On January 11, 2024, the Court issued an order granting in part and denying in part our motion to dismiss.

The Court in the Epidiolex Patent Litigation scheduled trial for September 2025.

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On October 24, 2023, we entered into a settlement agreement with Padagis US LLC, or Padagis, that resolved our patent litigation with Padagis related to Epidiolex.

Under the settlement agreement, we granted Padagis a license to manufacture,

market, and sell its generic version of Epidiolex on a date that depends on the occurrence of certain other events.

Under the settlement agreement, we granted Padagis a license to manufacture, market, and sell its generic version of Epidiolex on a date that depends on the occurrence of certain other events.

The specific terms of the Padagis settlement agreement are confidential.

The settlement with Padagis does not resolve the litigation against the other nine Epidiolex ANDA Filers, which is ongoing.

On November 20, 2023, we entered into a settlement agreement with Teva Pharmaceuticals, Inc., or Teva, that resolved our patent litigation with Teva related to Epidiolex.

Under the settlement agreement, we granted Teva a license to manufacture, market and sell its generic version of Epidiolex on a date which remains confidential.

The specific terms of the Teva settlement agreement are confidential.

On December 4, 2023, we entered into a settlement agreement with Alkem Laboratories Ltd., or Alkem, that resolved our patent litigation with Alkem related to Epidiolex.

Under the settlement agreement, we granted Alkem a license to manufacture, market, and sell its generic version of Epidiolex on a date which remains confidential.

The specific terms of the Alkem settlement are confidential.

The settlements with Padagis, Teva and Alkem do not resolve the litigation against the other seven Epidiolex ANDA Filers, which is ongoing.

We cannot predict the specific timing or outcome of events in these matters with respect to the remaining defendants or the impact of developments involving any specific parties or patents on other ongoing proceedings with any specific Epidiolex ANDA Filer.

Epidiolex also has ODE for the treatment of seizures associated with LGS or DS in patients 2 years of age and older through September 28, 2025, and for the treatment of seizures associated with LGS or DS in patients between 1 and 2 years of age and for the treatment of seizures associated with TSC through July 31, 2027.

In September and October 2023, we received notice from certain of the Epidiolex ANDA filers that they had each filed a paragraph IV certification regarding one or more newly-issued patents listed in the Orange Book for Epidiolex.

On December 15, 2023, we filed an additional lawsuit against seven of the original Epidiolex ANDA Filers with whom we have not previously settled.

We filed this lawsuit in the United States District Court for the District of New Jersey alleging that, by filing its ANDA, each Epidiolex ANDA Filer infringed the newly-issued patents related to methods of treatment using Epidiolex.

The suit seeks an order that the effective date of FDA approval of each Epidiolex ANDA Filer’s application shall be a date no earlier than the expiration of the newly-issued patents.

Epidiolex also has orphan drug exclusivity, or ODE, for the treatment of seizures associated with LGS or DS in patients 2 years of age and older through September 28, 2025, and for the treatment of seizures associated with LGS or DS in patients between 1 and 2 years of age and for the treatment of seizures associated with TSC through July 31, 2027.

The Company vigorously enforces its intellectual property rights but cannot predict the outcome of these matters.

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MSP seeks monetary damages, restitution, disgorgement, and a declaration that the conduct alleged is unlawful.

On July 25, 2023, we and certain other defendants filed motions to dismiss MSP's complaint, which remain pending.

On July 25, 2023, we and certain other defendants filed motions to dismiss MSP's complaint, which the Court granted on December 12, 2023.

On January 5, 2024, the MSP filed an amended complaint.

On February 20, 2024, we filed a motion to dismiss MSP’s amended complaint.

The Court scheduled a hearing on the motion for June 13, 2024.

No trial date has been set for this matter.

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On June 22, 2023, we filed a complaint in the United States District Court for the District of Columbia seeking a declaration that FDA’s approval on May 1, 2023 of the New Drug Application, or NDA, for Avadel's Lumryz was unlawful.

In the complaint, we allege that FDA acted outside its authority under the Orphan Drug Act, when, despite the orphan drug exclusivity, or ODE, protecting Jazz’s low-sodium oxybate product Xywav, FDA approved the Lumryz NDA and granted Lumryz ODE based on FDA’s finding that Lumryz makes a major contribution to patient care and is therefore clinically superior to Xywav and Xyrem.

In the complaint, we allege that FDA acted outside its authority under the Orphan Drug Act, when, despite ODE protecting Jazz’s low-sodium oxybate product Xywav, FDA approved the Lumryz NDA and granted Lumryz ODE based on FDA’s finding that Lumryz makes a major contribution to patient care and is therefore clinically superior to Xywav and Xyrem.

Jazz further alleges that in doing so, FDA failed to follow its own regulations, failed to follow established agency policy without providing a reasoned explanation for the departure, reversed prior decisions by its own staff and experts without a reasoned explanation, and disregarded the relevant scientific literature and data.

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On October 20, 2023, Avadel and FDA filed cross motions for summary judgment.

These motions remain pending and the Court has not set a hearing date.

Oral argument on these motions is currently scheduled for May 10, 2024.

From time to time we are involved in legal proceedings arising in the ordinary course of business.

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Share Repurchase Program

In November 2016, our board of directors authorized a share repurchase program and as of September 30, 2023 had authorized the repurchase of ordinary shares having an aggregate purchase price of up to $ 1.5 billion, exclusive of any brokerage commissions.

In November 2016, our board of directors authorized a share repurchase program and, as of March 31, 2024, had authorized the repurchase of ordinary shares having an aggregate purchase price of up to $ 1.5 billion, exclusive of any brokerage commissions.

Under this program, which has no expiration date, we may repurchase ordinary shares from time to time on the open market.

1 unchanged sentence

The share repurchase program may be modified, suspended or discontinued at any time without prior notice.

During the nine months ended September 30, 2023, we spent a total of $ 170.0 million to purchase 1.3 million of our ordinary shares under the share repurchase program at an average total purchase price, including commissions, of $ 128.89 per share.

All ordinary shares repurchased were canceled.

As of September 30, 2023, the remaining amount authorized under the share repurchase program was $ 261.2 million, exclusive of any brokerage commissions.

During the three months ended March 31, 2024, no shares were repurchased.

As of March 31, 2024, the remaining amount authorized under the share repurchase program was $ 161.4 million, exclusive of any brokerage commissions.

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

The components of accumulated other comprehensive loss as of March 31, 2024 and December 31, 2023 were as follows (in thousands):

Net Unrealized

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Balance at December 31, 2023 $ 235 $ ( 842,382 ) $ ( 842,147 )

Other comprehensive income before reclassifications 9,218 82,952 92,170

Other comprehensive income (loss) before reclassifications 5,177 ( 44,068 ) ( 38,891 )

Amounts reclassified from accumulated other comprehensive income (loss) ( 1,356 ) — ( 1,356 )

Other comprehensive income, net 7,158 82,952 90,110

Balance at September 30, 2023 $ 7,158 $ ( 1,042,557 ) $ ( 1,035,399 )

During the nine months ended September 30, 2023, other comprehensive income primarily reflects foreign currency translation adjustments, primarily due to the strengthening of the sterling against the U.S.

Other comprehensive income (loss), net 3,821 ( 44,068 ) ( 40,247 )

Balance at March 31, 2024 $ 4,056 $ ( 886,450 ) $ ( 882,394 )

During the three months ended March 31, 2024, other comprehensive income (loss) primarily reflects foreign currency translation adjustments, primarily due to the weakening of sterling and the euro against the U.S.

Net Income (Loss) per Ordinary Share

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ ( 14,618 ) $ 69,420

Effect of interest on assumed conversions of Exchangeable Senior Notes, net of tax — 6,963

Net income (loss) for dilutive net income per ordinary share $ 152,732 $ ( 19,648 ) $ 340,629 $ 16,664

Net income (loss) for dilutive net income (loss) per ordinary share $ ( 14,618 ) $ 76,383

Weighted-average ordinary shares used in per share calculations - basic 62,537 63,494

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Diluted $ ( 0.23 ) $ 1.04

Potentially dilutive ordinary shares from our employee equity incentive and purchase plans are determined by applying the treasury stock method to the assumed exercise of share options, the assumed vesting of outstanding restricted stock units, or RSUs, and performance-based restricted stock units, or PRSUs, and the assumed issuance of ordinary shares under our employee stock purchase plan, or ESPP.

Potentially dilutive ordinary shares from our employee equity incentive and purchase plans are determined by applying the treasury stock method to the assumed vesting of outstanding restricted stock units, or RSUs, and performance-based restricted stock units, or PRSUs, the assumed exercise of share options and the assumed issuance of ordinary shares under our employee stock purchase plan, or ESPP.

Potentially dilutive ordinary shares from the Exchangeable Senior Notes are determined by applying the if-converted method to the assumed issuance of ordinary shares upon exchange of the Exchangeable Senior Notes.

In August 2023, we made an irrevocable election to fix the settlement method for exchanges of the 2024 Notes to a combination of cash and ordinary shares of the Company with a specified cash amount per $1,000 principal amount of the 2024 Notes of $1,000.

As a result, the assumed issuance of ordinary shares upon exchange of the 2024 Notes has only been included in the calculation of diluted net income per ordinary share in the three and nine months ended September 30, 2023 up to the date the irrevocable election was made.

The potential issue of ordinary shares upon exchange of the Exchangeable Senior Notes was anti-dilutive and had no impact on diluted net income per ordinary share for the three and nine months ended September 30, 2022.

As a result, the assumed issuance of ordinary shares upon exchange of the 2024 Notes has only been included in the calculation of diluted net income per ordinary share in the three months ended March 31, 2023.

The potential issue of ordinary shares upon exchange of the 2026 Notes was anti-dilutive and had no impact on diluted net loss per ordinary share for the three months ended March 31, 2024.

The following table represents the weighted-average ordinary shares that were excluded from the calculation of diluted net income (loss) per ordinary share for the periods presented because including them would have an anti-dilutive effect (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Employee equity incentive and purchase plans 2,501 2,194 3,091 1,904

Exchangeable Senior Notes 6,418 —

Employee equity incentive and purchase plans 3,500 1,072

The following table presents a summary of total revenues (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Xywav $ 315,300 $ 277,761

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Total Neuroscience 580,983 651,898

Rylaze 104,859 73,513 292,479 200,687

Rylaze/Enrylaze 102,750 85,927

Zepzelca 75,100 67,181

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Total revenues $ 901,983 $ 892,812

_____________________________

(1) Divestiture of Sunosi U.S.

was completed in May 2022.

The following table presents a summary of total revenues attributed to geographic sources (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

United States $ 808,214 $ 810,116

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

ESSDS 42 % 51 %

McKesson 12 % 12 %

Cardinal Health, Inc.

Financing and payment

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Share-Based Compensation

Share-based compensation expense related to share options, RSUs, PRSUs and grants under our ESPP was as follows (in thousands):

Share-based compensation expense related to RSUs, PRSUs, grants under our ESPP and share options was as follows (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Selling, general and administrative $ 40,213 $ 37,402

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

RSUs granted (in thousands) 1,955 1,571

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The Compensation & Management Development Committee of our board of directors and, in the case of our Chief Executive Officer, the independent members of our board of directors, approved awards of PRSUs to certain employees of the Company, subject to vesting on the achievement of certain commercial and pipeline performance criteria to be assessed over a performance period from the date of the grant to December 31, 2024, December 31, 2025 and December 31, 2026, respectively.

Following the determination of the Company’s achievement with respect to the performance criteria, the amount of shares awarded will be subject to adjustment based on the application of a relative total shareholder return, or TSR, modifier.

The number of shares that may be earned ranges between 0 % and 200 % of the target number of PRSUs granted based on the degree of achievement of the applicable performance metric and the application of the relative TSR modifier.

The number of shares that will be awarded is determined based on the Company’s achievement with respect to the performance criteria.

For PRSUs granted prior to 2024, the amount of shares awarded will be subject to adjustment based on the application of a relative total shareholder return, or TSR, modifier.

For PRSUs granted in 2024, the relative TSR represents one of the performance metrics.

In both cases, the number of shares that may be earned ranges between 0 % and 200 % of the target number of PRSUs granted.

The table below shows the number of PRSUs granted covering an equal number of our ordinary shares and the weighted-average grant date fair value of PRSUs granted:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

PRSUs granted (in thousands) 297 252

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The Company evaluated the performance targets in the context of its current long-range financial plan and its product candidate development pipeline and recognized expense based on the probable number of awards that will ultimately vest.

As of September 30, 2023, compensation cost not yet recognized related to unvested RSUs, PRSUs, ESPP and share options was $ 351.8 million, $ 44.1 million, $ 6.0 million and $ 3.3 million, respectively, which is expected to be recognized over a weighted-average period of 2.6 years, 1.4 years, 1.1 years and 0.7 years, respectively.

Our income tax benefit was $ 47.2 million and $ 86.8 million for the three and nine months ended September 30, 2023, compared to an income tax benefit of $ 43.0 million and $ 58.6 million for the same periods in 2022, relating to tax arising on income or losses in Ireland, the U.K., the U.S.

and certain other foreign jurisdictions, offset by deductions on subsidiary equity, Foreign Derived Intangible Income and patent box benefits.

Our effective tax rate was ( 47.4 )% and ( 36.7 )% for the three and nine months ended September 30, 2023 compared to effective tax rates of 71.6 % and 178.7 % for the same periods of 2022.

The increase in the income tax benefit for the three and nine months ended September 30, 2023, resulted primarily from the mix of pre-tax income and losses across tax jurisdictions partially offset by the impairment of our acquired in-process research and development asset in 2022.

We do not provide for Irish income taxes on undistributed earnings of our foreign operations that are intended to be indefinitely reinvested in our foreign subsidiaries.

As of March 31, 2024, compensation cost not yet recognized related to unvested RSUs, PRSUs, ESPP and share options was $ 435.9 million, $ 51.5 million, $ 8.3 million and $ 0.3 million, respectively, which is expected to be recognized over a weighted-average period of 3.0 years, 1.8 years, 1.1 years and 0.5 years, respectively.

Our income tax expense was $ 11.7 million for the three months ended March 31, 2024, resulting primarily from tax deficiencies from share based compensation.

Our income tax benefit was $ 15.3 million for the same period in 2023, relating to tax arising on income or losses in Ireland, the U.K., the U.S.

and certain other foreign jurisdictions, offset by deductions on subsidiary equity, foreign derived intangible income, or FDII, and patent box benefits.

Our net deferred tax liability is primarily related to acquired intangible assets, and is net of deferred tax assets related to U.S.

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(at the federal level and in most states), carryforwards that were generated in 2019 and earlier may still be adjusted upon examination by the taxing authorities.

Certain of our Luxembourg subsidiaries are currently under examination by the Luxembourg taxing authorities for the years ended December 31, 2017, 2018 and 2019.

One of our subsidiaries is currently under examination by the Luxembourg taxing authorities for the years ended December 31, 2017, 2018 and 2019.

In October 2022 and in January 2023, we received tax assessment notices from the Luxembourg taxing authorities for all years under examination relating to certain transfer pricing and other adjustments.

The notices propose additional Luxembourg income tax of approximately $ 23.7 million, translated at the foreign exchange rate as September 30, 2023.

The notices propose additional Luxembourg income tax of approximately $ 24.2 million, translated at the foreign exchange rate as March 31, 2024.

We disagree with the proposed assessments and are contesting them vigorously.

The Government of Ireland, the jurisdiction in which Jazz Pharmaceuticals Plc is incorporated, transposed the Global Minimum Tax Pillar Two rules into domestic legislation as part of the Finance (No.

2) Act 2023 (the "Finance Act").

The Finance Act closely follows the EU Minimum Tax Directive and OECD Guidance released to date.

The Company is within the scope of these rules, which took effect from January 1, 2024.

Under the new legislation, we are liable to pay a top-up tax for the difference between the Pillar Two effective tax rate per jurisdiction and the 15% minimum rate.

The rules on how to calculate the 15% effective tax rate are detailed and highly complex and specific adjustments envisaged in the Pillar Two legislation can give rise to different effective tax rates compared to those calculated for accounting purposes.

We will account for it as a current tax when it is incurred.

We expect to be subject to the top-up tax in relation to our operations in Ireland, where the trading statutory tax rate is 12.5%, though the impact in 2024 is not significant.

The proportion of our profit before tax which is subject to the top-up tax and our exposure to Pillar Two income taxes in future years will depend on factors such as future revenues, costs and foreign currency exchange rates.

We will continue to monitor changes in law and guidance in relation to Pillar Two.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements