Jazz Pharmaceuticals PLC
NASDAQ:JAZZ
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Jazz Pharmaceuticals PLC
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Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Jazz Pharmaceuticals First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. [Operator Instructions]
At this time, I would like to turn the conference over to Ms. Andrea Flynn. Ma'am, you may begin.
Thank you, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its first quarter 2022 financial results. The slide presentation accompanying this webcast is available on the Investors section of our website. Investors may also refer to the press release we issued earlier today, which is also posted to our website. On the call today are Bruce Cozadd, Chairman and Chief Executive Officer; Renee Gala, Executive Vice President and Chief Financial Officer; Dan Swisher, President; and Rob Iannone, Executive Vice President, Global Head of R&D; Kim Sablich, Executive Vice President and General Manager, North America; and Phil Jochelson, Neuroscience Therapeutic Head, will join the team for Q&A.
On Slide 2, I'll remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, including expectations related to Vision 2025 and our guidance for 2022, growth potential and anticipated development and commercialization milestones and goals, which involve risks and uncertainties that could cause actual events, performance and results to differ materially from those contained in these forward-looking statements.
We encourage you to review the statements contained in today's press release, in our slide deck and in our latest SEC disclosure documents, which identify certain factors that may cause the company's actual events, performance and results to differ materially from those contained in the forward-looking statements made on today's webcast. We undertake no duty or obligation to update our forward-looking statements.
Turning to Slide 3. On this webcast, we'll discuss non-GAAP financial measures. Reconciliations of GAAP to non-GAAP financial measures are included in today's press release and in the slide presentation available on the Investors section of our website.
I'll now turn the call over to Bruce.
Thanks Andrea. Good afternoon, everyone. And thank you for joining us today. I'll start on Slide 5. Following our strong performance and execution in 2021, we began 2022 with substantial momentum. Since the beginning of the year, we've demonstrated considerable progress across commercial, R&D and corporate development, while delivering solid year-over-year, top and bottom line growth in the first quarter. Importantly, we continue to substantially diversify our business with an eye toward optimizing our product portfolio and improving our adjusted operating margin.
I'm excited by the progress we are making in transforming our business. Despite typical first quarter payer churn and impact from the Omicron variant. Our year-to-date performance has been strong that coupled with our continued focus on strategic capital allocation has enabled us to increase our guidance ranges for both the top and bottom line.
On the commercial front, we're very encouraged by the positive direction of the launch of Xywav in idiopathic hypersomnia or IH underscored by the growing number of patients on therapy, the effectiveness of ongoing outreach to educate prescribers and patients about the benefits of Xywav and the high level of engagement and receptivity in the market.
We're seeing strong demand for Rylaze. And in January of this year, we submitted sBLA to support Monday, Wednesday, Friday, intramuscular dosing followed in April by a separate sBLA for IV administration. Dan will provide a more complete overview of our performance across our commercial portfolio later in the call.
Turning to our pipeline. We've made substantial advances this year, starting with oncology. We enrolled the first patient in a Phase 2 basket trial for Zepzelca, evaluating its safety and efficacy across several solid tumors. And for the first time, we presented preclinical data on JZP815, our next-generation pan-RAF kinase inhibitor at the AACR annual meeting in April.
Moving to neuroscience, data from the first of three ongoing Phase 3 clinical trials of nabiximols in multiple sclerosis related spasticity is expected this quarter as is the initiation of our Phase 3 trial of Epidiolex in epilepsy with myoclonic-atonic seizures or EMAS.
We've also added two promising compounds to our pipeline since the beginning of the year. This afternoon, we announced a licensing agreement with Sumitomo Pharma for DSP-0187, which we are now referring to as JZP441. JZP441 is a potent, highly selective orexin-2 receptor agonist that has the potential to advance the treatment of narcolepsy and other sleep disorders and further solidifies our sleep leadership position. This follows our licensing agreement last month with Werewolf Therapeutics for WTX-613, which we now refer to as JZP898.
JZP898 is a differentiated conditionally activated interferon alpha INDUKINE molecule that has the potential to minimize the toxicity associated with systemic interferon alpha therapy, thereby expanding its clinical utility in treating cancer. Both of these transactions expand our pipeline in core therapeutic areas and are consistent with our strategy. While expanding our pipeline and diversifying our revenue remain key imperatives. We also regularly review our commercial and pipeline portfolios to prioritize the medicines and R&D programs that are most likely to deliver value to patients and shareholders.
As a result in the first quarter, we entered into an agreement to divest Sunosi to Axsome Therapeutics. We believe Axsome is well positioned to deliver continued access to this important medication. These transactions demonstrate our discipline, strategic allocation of capital and commitment to drive long-term value as we transform our business. Our execution in the first quarter drove significant growth and has positioned us to raise our guidance for the year on both the top and bottom line with improved operating margin at the midpoint.
We continue to see growth opportunities for our key commercial products and remain focused on operating efficiency and enhancing and expanding our pipeline. In short, we're really pleased with where the business is and more importantly, where it's going. Moving to Slide 6, in January, we announced Vision 2025, which includes three components central to driving sustainable growth and enhanced value, commercial, pipeline and operational excellence.
After achieving over $3 billion in revenue in 2021, we're positioned to grow revenue to $5 billion in 2025. Our R&D organization continues to advance key programs, addressing significant patient needs in neuroscience and oncology, including recent Phase 2 trial initiations for suvecaltamide and JZP150. And we anticipate delivering at least five novel product approvals by the end of the decade.
Our 2021 adjusted operating margin was 43%. And we plan to improve that by five percentage points from 2021 to 2025, delivering more of our top line through to the bottom line. Collectively, our continued execution in the first quarter provides additional evidence of our ability to achieve Vision 2025.
I'll now turn the call over to Dan for an overview of our first quarter commercial performance, after which Rob will share an update on progress of our R&D programs. Renee will provide a financial overview and discuss the year's corporate development transactions. And then we'll open the call to Q&A. Dan?
Thanks, Bruce. Well, I'm excited to share an update on our commercial portfolio. Starting with neuroscience, the divestiture of Sunosi allows our highly experienced commercial team to further sharpen its focus on our key neuroscience products, Xywav and Epidiolex. We continue to build momentum in our oxybate franchise as highlighted on Slide 8, in addition to market leading adoption of Xywav in narcolepsy, we are with the progress of the commercial launch of Xywav in IH. Average active oxybate patients increased to approximately 16,650 in the first quarter and approximate 6% increase compared to the same period last year.
With Xywav, we have meaningfully advanced patient care with a lower sodium oxybate product and continue to see enthusiasm for adoption. In narcolepsy, our effort center around educating physicians and patients about the lifelong burden of high sodium intake in this patient population who live with an increased risk of cardiovascular comorbidities.
In the first quarter, we continued to drive adoption in narcolepsy and importantly, we see opportunities for additional growth in narcolepsy. We exited the first quarter with approximately 7,050 narcolepsy patients taking Xywav. For Xywav in IH, we're encouraged by the continued launch momentum as well as feedback from prescribers and the IH community.
We are seeing increasing coverage of IH and plans that are in the process of updating their formularies have been providing access to Xywav without significant barriers. Exiting the first quarter, there were approximately 750 IH patients taking Xywav. We're particularly pleased with this initial adoption, given that we expect new patients starts in IH to more closely track the trajectory of a rare disease launch, where there have been previously no approved therapies.
Turning to Slide 9. In Epidiolex we saw 6% revenue growth in the first quarter compared to the same period in 2021 on a pro forma basis. As a reminder in the fourth quarter of last year, Epidiolex net product sales benefited from a temporary increase in specialty pharmacy inventory levels, which increased fourth quarter net sales by approximately $18 million. The majority of this reversed in first quarter 2022, reducing first quarter’s revenues. Excluding this impact, we saw double digit percentage revenue growth in the first quarter with continued growth and underlying demand, despite challenges posed by the Omicron variant.
We have been successfully adding new prescribers, growing Epidiolex’s active prescriber base. As we have previously highlighted, we expect that as newer prescribers gain experience with Epidiolex and see its clinical utility, they will more broadly adopt Epidiolex as a cornerstone of therapy for their treatment resistant epilepsy patients.
We’re also continuing to make significant progress in Europe and are very pleased with adoption in markets where Epidiolex is reimbursed. During the first quarter, we launched Epidiolex in Ireland and expect to launch in France later this year, pending final pricing and reimbursement discussions at which point Epidiolex would be launched and reimbursed in all five major European markets.
The increasing use of Epidiolex earlier in the treatment algorithm and positive experiences in real world settings are being driven by its unique mechanism of action, efficacy and safety profile and ability to be combined with other therapies. Given the efforts of our commercial team, we are confident we can achieve blockbuster status as a global standard of care in treatment-resistant epilepsies.
Now moving to oncology and starting with Zepzelca on Slide 10. First quarter net revenues were $59.3 million and include some quarter-to-quarter variability driven primarily by inventory levels. We have rapidly established Zepzelca as the treatment of choice in second line small cell lung cancer and see opportunities for growth within our current indication.
We continue to invest in additional real world evidence and observational studies, as well as perspective clinical trials in second line small cell lung cancer and see additional opportunities to continue to grow market share. We believe these data will add to the body of evidence around Zepzelca’s positive benefit risk profile for second line small cell lung cancer patients, and potentially drive increased adoption moving forward. Beyond second line therapy, we believe our robust development plan, which Rob will cover in more depth has the potential to identify additional patients who can benefit from this therapy, providing the opportunity for accelerated and meaningful growth.
Turning to Slide 11. First quarter net product sales for Rylaze or recombinant erwinia asparaginase therapy were $54.2 million and we’re encouraged by the continued increase in demand through the first quarter. As a reminder, fourth quarter 2021 net product sales included an initial buildup of inventory, which is typical for products early in launch and inventory levels began to normalize through 1Q 2022.
While there could be further inventory effects as distributors optimize stocking levels, going forward, we expect net revenues will more closely reflect demand. Rylaze sales reflect increased brand awareness among customers and its physician in the market as the only therapy available to patients in the U.S. who have a hypersensitivity reaction to E. coli-derived asparaginase.
Feedback from customers remains positive and prescribers have indicated they are now returning to best clinic practice with respect to moving to non-E. coli-derived asparaginase because of the product profile, reliable supply of Rylaze and suite of support services that we provide. Looking ahead, we’re excited to evolve our launch messaging based on the potential label update to intramuscular dosing on our Monday, Wednesday, Friday schedule and IV administration, which Rob will also cover in more detail. Overall, our team started 2022 by again, delivering strong results, providing increased optimism for a successful year ahead.
Now I’ll turn the call over to Rob to provide an R&D update. Rob?
Thank you, Dan. Slide 13 provides an overview of our R&D pipeline, and I’m excited about the recent addition of two promising early stage molecules. This afternoon, we announced that we have licensed rights from Sumitomo Pharma to DSP-0187, a potent highly selective oral orexin-2 receptor agonist with potential application for the treatment of narcolepsy, idiopathic hypersomnia and other sleep disorders.
As Bruce mentioned, we have designated this molecule as JZP441. Sumitomo has already initiated a Phase 1 clinical program in Japan, and we expect to rapidly advance this program based on those clinical findings. In April, we licensed global development and commercialization rights for JZP898, formally referred to as WTX-613, a differentiated, conditionally activated interferon alpha INDUKINE molecule.
JZP898 is activated specifically within the tumor microenvironment, which may serve to minimize the severe toxicities that have been observed with systemically active recombinant interferon alpha therapy, and therefore maximize clinical benefit. These early stage programs represent innovative approaches in areas where there is critical unmet patient need that can benefit from our unique insights. A potential for multiple indications and are in therapeutic categories where we believe we can develop and commercialize efficiently. In the near-term, our team will be working to rapidly advance these programs with the ultimate goal of delivering them to patients.
I also want to highlight that at the American Association of Cancer Research annual meeting in April, we presented data on JZP815 for the first time. JZP815 is our next generation pan-RAF kinase inhibitor and preclinical data showed that JZP815 selectively and potently inhibits mutant A, B and C RAF kinases and also demonstrated anti-tumor activity in RAS and RAF mutant xenograft models. Based on this encouraging preclinical activity, we intend to file an IND with the FDA later this year.
I’m really excited about the progress we have made to strengthen and mature our R&D organization. Our concerted effort to expand our pipeline and capabilities is now beginning to bear fruit, following multiple clinical trial initiations in 2021, we are primed for a number of exciting program milestones in 2022 and multiple IND submissions through 2023.
On Slide 14, we’ve detailed the mid and late stage clinical programs in our pipeline. Starting with programs emerging from the GW cannabinoid platform, we are on track to begin a Phase 3 trial for Epidiolex in epilepsy with myoclonic-atonic seizures later this quarter. Our Nabiximols program has three active trials focused on multiple sclerosis-related spasticity. The first trial, which is smaller and shorter relative to the other two is assessing changes in muscle tone, using elements of the modified Ashworth scale.
We remain on track for data to read out this quarter. And if results from this first trial are supportive, there is the potential for a regulatory submission in the U.S. later this year. We do anticipated delay in data readouts for the subsequent two trials due to challenges with site activation and enrollment related to COVID-19.
Interest in these trials remains high. And now that the first trial is fully enrolled, we can take advantage of the opportunity to learn from both its upcoming data readout and site operations to optimize the other two trials. Further, we have identified opportunities to mitigate COVID-related challenges, and we will provide updates regarding the trial and timing as appropriate.
Our Phase 2b trial for suvecaltamide or JZP385 in essential tremor began enrolling at the end of last year. And this trial may potentially contribute to a pivotal package. We also initiated a Phase 2 trial for JZP150 in PTSD last year. The enrollment for both trials is ongoing and we remain on track to top line data from these trials in the first half of 2024 and late 2023, respectively.
Moving to oncology. As Dan mentioned, we are advancing a robust development effort for Zepzelca. Three separate trials were initiated in 2021, a Phase 3 trial supported by Jazz and our partner Roche to evaluate Zepzelca in combination with TECENTRIQ in first line extensive stage small cell lung cancer. A confirmatory Phase 3 trial in second line small cell lung cancer being run by our partner PharmaMar, and our own post-marketing observational trial in second line small cell lung cancer.
In the first quarter of this year, we also initiated our Phase 2 basket trial called EMERGE-201. This is a multicenter open label trial designed to assess the safety and efficacy of Zepzelca as monotherapy in three cohorts of patients with solid tumors, advanced urothelial carcinoma, large cell neuroendocrine carcinoma, the lung and homologous recombination deficient tumors. The primary objective of the trial is to determine Zepzelca’s ability to improve patient outcomes as measured by objective response rate.
Now moving Rylaze. In January, we submitted an sBLA for Rylaze to update our label to an intramuscular Monday, Wednesday, Friday dosing schedule with patients receiving 25 milligrams per meter squared on Monday and Wednesday and 50 milligrams per meter squared on Friday. This schedule, which is more in line with current clinical practice to avoid weekend dosing allows patients to maintain a clinically meaningful level of serum asparaginase activity through the entire duration of treatment.
Currently, the label dosing schedule is every 48 hours at 25 milligrams per meter square. Similar to the review of our original BLA, the sBLA will be reviewed under real time oncology review process. And I’m pleased to announce that we recently completed a separate sBLA to support intravenous administration, which will also be reviewed under RTOR. We’re also planning to submit an application in Europe for both IM and IV administration midyear with potential approval in 2023.
Now I’ll pass the call over to Renee for a financial update. Renee?
Thanks, Rob. I’ll begin on Slide 16. Our first quarter results maintained a positive momentum we established last year. First quarter total revenue of $814 million, represent growth of 34% compared to the same quarter in 2021. This included neuroscience and oncology revenues of $612 million and $197 million respectively, both delivering double digit growth compared to the same period in 2021.
As we continue to drive operational efficiency and grow our recently launched products, first quarter adjusted SG&A expenses were 32% of total revenue, an approximate six percentage point improvement compared to first quarter 2021. First quarter adjusted R&D expenses increased to 14% of revenues reflecting our investment in multiple clinical trials and development of the GW cannabinoid platform. This is aligned to our focus on driving value from our R&D pipeline and platforms. Our continued focus on both the top and bottom line drove first quarter adjusted net income of $262 million, a 14% increase compared to the same period in 2021.
Adjusted EPS was $3.73 in the first quarter, slightly below the same period last year, and reflecting the increased share count related to the accounting change for convertible debt.
This accounting change results in dilution of approximately $0.44 in our first quarter adjusted EPS. And without this change, adjusted EPS growth would’ve been 7% compared to the same period last year. We’re pleased to deliver strong first quarter results despite payer churn, seasonality, and the impact of Omicron.
Turning to Slide 17. These first quarter results coupled with our disciplined approach to capital allocation enabled us to raise both top and bottom line guidance. We’ve increased total revenue guidance to $3.5 billion to $3.7 billion driven by neuroscience revenues, which were increasing to $2.6 billion to $2.8 billion or $40 million at the midpoint. This increase reflects our confidence in both Epidiolex and Xywav adoption, the increased focus and resources available to support those products, divestment of Sunosi, continued Xyrem strength and updates to our assumptions regarding Xyrem competitive entry, which have the dual effect of strengthening Xyrem revenues and pushing out our assumptions on the entry timing of Xyrem authorized generics to late 2022 or possibly even January 2023.
With the divestment of Sunosi and our increased revenue guidance, we expect our full year 2022 revenues from newly launched or acquired products to be between 60% and 65% representing substantial diversification of our business since 2020 and importantly, a strong foundation for growth.
In terms of non-GAAP OpEx guidance, we have reduced our projected 2022 SG&A expense by $50 million at the midpoint. This is primarily attributed to the reallocation and reduction of expenses as a result of the divestiture of Sunosi.
In addition, we have added IPR&D expense of $65 million to reflect the upfront payments in our licensing agreements with Werewolf and Sumitomo.
Turning to the bottom line, we are raising our adjusted net income guidance by $50 million to a range of $1.18 billion to $1.25 billion. This represents year-over-year A&I growth of greater than 22% at the midpoint and translates to a full year adjusted operating margin of 46% at the midpoint. As a reminder, our guidance does not include any new yet to be announced corporate development transactions.
Turning to Slide 18. We have already demonstrated rapid deleveraging following the GW transaction, and we are on track to meet our stated non-GAAP net leverage ratio target of below three and a half times by the end of 2022.
In less than a year from closing the GW acquisition, we have reduced our non-GAAP net leverage ratio by a full churn to approximately 3.9 times at the end of the first quarter, which will enable us to remain opportunistic with respect to corporate development and other strategic investments in our business.
Slide 19 details our corporate development activities so far this year. Corporate development is a foundational pillar of our strategy to deliver long-term growth and value for both patients and shareholders and it’s critical to our efforts to achieve vision 2025. We are pleased to have executed on three value enhancing transactions since the start of the year, each of which is well aligned with our strategy and vision and reflect our continued transformation into a more innovative and agile company.
Our divestiture of Sunosi will enable us to sharpen our focus on our highest strategic priorities. And laser focuses our neuroscience commercial teams on achieving the full potential of Xywav and Epidiolex. Our timeline to close remains on track and we believe that Axsome is well positioned to deliver access to this important medication.
I’m also excited by the potential of the compounds we’ve licensed from Sumitomo, and Werewolf both are promising and differentiated compounds, targeting significant unmet patient needs in areas where we can leverage our expertise and internal R&D engine to drive their development. These three transactions are aligned with using our capital wisely, optimizing our portfolio and positioning us to drive long-term value and growth.
As we look at additional pipeline and commercial deals, primarily in our core therapeutic areas, we will remain focused on opportunities where we believe we can provide unique insights, commercialize efficiently, and bring significant value to patients.
With our strategic investments, long live product portfolio, and continued commitment to operational excellence, we believe we are well positioned to achieve our vision 2025 and deliver further diversification, sustainable growth and enhanced value to patients and shareholders.
I’d now like to turn the call back to Bruce.
Thanks, Renee. I’ll conclude our prepared remarks on Slide 21. Our achievements in the first quarter of 2022, we’re a continuation of the strong momentum we created last year. As I shared at the outset of the call, we have demonstrated considerable progress across commercial, R&D and corporate development. In commercial, we are focused on execution across our neuroscience and oncology portfolios, including maintaining the strong start of our Xywav and IH [ph] and Rylaze launches, as well as realizing the blockbuster potential of Epidiolex and continuing to drive adoption of Xywav in narcolepsy.
With respect to our pipeline, we anticipate multiple IND submissions through 2023. We are advancing several mid and late stage programs and expect the first clinical data from nabiximols program this quarter. Operational excellence remains a key area of focus, including optimizing our adjusted operating margin. The corporate development transactions announced already in 2022, expand our oncology pipeline and extend our leadership in sleep medicine.
Importantly, they also demonstrate our ability to utilize our significant cash flow, to expand and diversify our business. We’re pleased with the way we’ve leveraged our experience and expertise to identify and perform against the drivers outlined in vision 2025, which in our view, come down into having the right foundation, the right assets and the right opportunities for execution, raising our top and bottom line guidance for the year, underscores our confidence across the business and our strategy.
That concludes our prepared remarks. I’d now like to turn the call over to the operator to open the line for Q&A.
Thank you. [Operator Instructions] Our first question or comment comes from the line of Ken Cacciatore from Cowen. Your line is open.
Hey, great start to the year everyone. Just wondering as we think about the Zywave and IH really nice penetration, and I know Dan gave some perspective of this could look like a standard rare disease launch. I was wondering if he could frame out a little bit what his view of a kind of a standard rare disease launch looks like maybe kind of over a three year window. And with that, just wondering if where you believe this could peak obviously Xyrem using maybe narcolepsy and Xyrem’s penetration into narcolepsy as a comparator. Can you give a sense of where you think eventually this may be able to peak at as you work through the early launch? Thanks so much.
Yes. Ken, couple parts to that question. So let me split it up a little bit and maybe comment first on peak expectations, there’s never been a drug approved to treat this serious disorder idiopathic hypersomnia. So we’re in uncharted territory right now. But we do have a highly effective agent as evidenced by our clinical trial data. And in a second, you’ll hear from Kim a little bit how that early launch is going and what we’re hearing from our customers and patients.
But I will say we think the ultimate size of this market opportunity at least is measured by patients could be as large as the narcolepsy opportunity. Our initial launch focus is a little more narrow than all potential diagnosed patients with IH, but there’s certainly that potential that this could be a quite significant opportunity.
I’ll break the rest of your question into a couple pieces. Maybe Dan could talk a little bit about why he used the language, he did in describing how this launch might be different from our narcolepsy’s Xywav launch. And then Kim, maybe you can comment on, what we’ve seen in our first few months, so Dan?
Sure. Thanks, Bruce. Yes So in IH, unlike narcolepsy, there’s not a pool of experienced oxybate patients. So in narcolepsy, we had the data and we are able to very rapidly bring experienced oxybate Xyrem patients over to Xywav. In IH, it’s more of a first FDA-approved therapy. We know that there’s 37,000 diagnosed patients actively seeking treatment but it’s sort of bringing them into the office making them aware of the medicine getting them enrolled in the REMS and bringing them on patient by patient and titrating up. The good news and you’ll hear from Kim is that in real world, the experience has been very positive for the patients who’ve adopted therapy. So maybe with that, Kim, you want to give more color?
Sure. Happy to Dan. So hopefully you’re gathering that we are very pleased with the positive early launch momentum that we’re seeing and very pleased that 750 patients with IH and have already been started on Xywav since we launched it just last November. And really what we’ve been hearing the last quarter is very consistent with what we’ve been hearing since November and that our healthcare providers are very pleased with the profile of the medicine, excited to have a treatment option with positive and compelling clinical trial results that ultimately addresses not just one or two of symptoms of the condition, but addresses the full condition itself. And really the Phase 3 clinical trial results have been very powerful for us in terms of them looking both at objective and patient assessed measurements and really hitting the mark with prescribers.
And then lastly, the initial coverage that we’ve had from payers on this launch has ultimately allowed prescribers to prescribe with confidence. They’ve very been very pleased with that coverage. And it’s really been a driver for us in the launch. So overall our team is remaining focused on executing our launch strategy, building on the momentum that we have and executing both a branded effort as well as continuing to help educate our customers around some important aspects of idiopathic hypersomnia and diagnosing it and doing patient identification. So overall, very positive signals we’re receiving.
Thank you. Our now next question or comment comes from the line of Jessica Fye from JPMorgan. Your line is open.
Hey guys. Good afternoon. Thanks for taking my question. I wanted to ask about the orexin agent, in licenced, what attracted you to this molecule in particular and how confident are you that you’ll be able to avoid the side effects that we’re seen with Takeda’s product, was that issue they had on target or off target. And then related to that, when do you expect to have the Japan Phase 1 data? And do you expect to also conduct Phase 1 work in the U.S.?
Hi, Jess, thanks for the question. Late breaking news, obviously coming out just a few minutes before our press release, but maybe I can ask Rob to weigh in a little bit on what excites us about this particular program, but also address your question about how it might or might not relate to what we’ve seen from another agent. So, Rob?
Yes, happy to, Bruce. So very excited about this mechanism, which we know a great deal about. And the molecule that we’ll be developing is a highly specific orexin two agonist. That’s also highly potent and given the preclinical and clinical validation around this target we think it’s a very promising mechanism and has the potential to really be complementary to oxybate as a treatment for narcolepsy, but also beyond into idiopathic hypersomnia and obvious sleep disorders.
With regard to the question around toxicity that was observed with Takeda, this is a novel chemical entity. We don’t believe that the toxicity was mechanism based. And so I don’t – I only anticipate any read through to this particular molecule with regard to toxicity.
And then, you asked about the ongoing development. This is a clinical phase molecule currently healthy volunteers are being dosed in Japan and we will leverage those emerging data even before that trial ends to help initiate and accelerate further Phase 1 development to set us up for a rapid transition into pivotal trials.
Thank you. Our next question or comment comes from the line of Jason Gerberry from Bank of America. Your line is open.
Hey guys, thanks for taking my question. So I just wanted another Xywav IH question, I'm trying to understand March dynamics. Can you speak to the impact like dose titration has on revenue recognition in the early period, like 1Q where oxybate or Xywav sales were a little bit light versus is consensus, but yet you’re raising guidance. So trying to just get a sense of when you might get patients to a more normalized maintenance dose or alternatively, perhaps the guidance raised on sales was more about the push to the AG launch and that’s fine, just wanted to clarify those dynamics? Thanks.
Yes, maybe I’ll split this into a couple pieces. There was a piece of this that was very specific to IH, but maybe I’ll come to Renee in a second for just talking about what we typically see in the first quarter for our oxybate business, be at Xywav for narcolepsy, Xywav for IH or Xyrem. But on your particular question about IH, it is true that patients new to therapy which is generally the case for all IH patients and not generally the case for most narcolepsy cases where they can transfer over dose for dose. People are being titrated up on dose over time. And so, obviously usage of the product is what drives our revenue recognition. So that does increase with time. But I think the dynamic you’re seeing in our results is probably more attributed to something else and Renee, maybe I can ask you to weigh in on that.
Sure. I’m happy to. So generally speaking and we’ve seen this over the last several years with the oxybate franchise. What we see in Q1 is largely a function of payer churn, plan resets, and then as a result increase in patients accessing those patient access programs that we provide. So that results in increased growth to net. And if you look at the last several years, you do see a decline from Q4 to Q1 in terms of the oxybate revenues.
But coming back to the guidance more broadly in terms of raising by $40 million at the top line, which of course was driven by neuroscience, there are a number of factors that do go into it as I’d mentioned on the call, we have Xywav and Epidiolex adoption. And what we’re seeing that gives us continued confidence. We do with the Sunosi divestment have an increased focus in terms of shared management teams and marketing teams that now will be focused squarely on Epidiolex and Xywav, really looking to maximize the potential. And then Jason, you’d also mention AGs. So with continued Xyrem strengths related to updates on [indiscernible] assumed Xyrem competitive entry that has the impact of also pushing out our assumptions for AG timing. So it’s a combination of those factors that lead to the change in guidance.
Thank you. Our next question or comment comes from the line of Marc Goodman from SVB Leerink. Your line is open.
If I was hoping you could give us a little more color just on Epidiolex, talk about some of the underlying fundamentals in the United States, but also in Europe. And just give us a set of how it’s ramping in some of these countries? Thank you.
Yes. Maybe Marc will have Kim start on the U.S. side and then Dan, maybe you can jump in with some commentary ex-U.S. as well. So, Kim?
Yes, sure. So as we saw on the results, we saw 6% revenue growth in the first quarter compared to first quarter 2021 last year. And I think you recall back in 4Q, we did talk about the fact that Epidiolex net product sales benefited from a temporary increase in specialty pharma inventory levels of about $18 million. Now we have seen the majority of this reduce reverse out in the first quarter. And if we exclude this impact, we saw double digit revenue growth of about that will basically double digit revenue growth in the first quarter plus continued growth and underlying demand, despite, the challenges that were certainly out there posed by the Omicron surge in the early part of the quarter. So, all of this underlies that is that we’re continuing to see positive trends in terms of adding new prescribers as well as we see current prescribers broadening their use and using it earlier in the treatment regimen.
And as we bring those new prescribers on board, we just feel like they’re going to follow suit with the existing prescribers in terms of getting more experience, seeing the clinical utility in the product and starting to adopt it more broadly and ultimately make it a cornerstone of therapy. So, we remain very confident that this is going to become a standard of care and treatment resistant epilepsy. And I’ll just leave you also with the notion that we’re very pleased right now with the increases in personal engagement that we achieved in March and April, as we kind of came out of this Omicron surge and really feel like we’re building some of those nice moments in here. So that’s – what’s giving us a lot of encouragement in terms of where it will go in the rest of the year.
And outside the U.S., we’re really pleased with the progress we’ve been making, significant progress in Europe. In the first quarter, we launched Epidiolex in Ireland and Norway. We expect the full impact of a full year from the second half launches of Italy and Spain that we’re off to a good start in the end of 2021. And so the last major market country is in France where we expect launched this year, pending final pricing and reimbursement discussions. And that would have us launched fully in all five major European markets. And there’s still opportunity for additional launches and growth. We’ve got approval in 34 countries. We’ve launched in 13, importantly, because of the value of the product and the data we’ve got, we’ve been able to establish pricing at greater than 70% of the U.S. whack. So I think there’s a lot of opportunity for continued momentum outside the U.S.
Thank you. Our next question or comment comes from a line of Brandon Folkes from Cantor Fitzgerald. Your line is open.
Hi, thanks for taking my questioning, and congratulations on the good start and guidance. Let me just on Zepzelca, any color in the current market share in the second line small cell lung cancer setting compared to topotecan and immuno-oncology monotherapy at this stage? Thank you.
Kim, maybe I’ll turn that one over to you.
Yes, sure. So we’re thrilled to have rapidly establish the built it as the treatment of choice in second line small cell lung cancer. So it is the leader out there and a fair amount of the share has come from topotecan, while we don’t provide product level guidance, we are continuing to see opportunities for growth with Zepzelca by displacing just what you alluded to further displacing topotecan as well as immuno-oncology products that are being used as monotherapy.
But we also see quite a bit of potential among patients that are, today being rechallenged with platinum-based chemotherapies or receiving other chemotherapy regimens. So, we’re continuing to see demand for Zepzelca and are progressing as you heard, Rob talk about a robust clinical development program that we feel is going to make the products proposition even stronger and provide even more rationale for expanding its use in the second-line setting.
And Ken, this is Rob Iannone.
Go ahead, Rob.
Yes, I'd love to add to that color there, just to say that I think from a medical perspective as physicians gain experience with Zepzelca in the second-line, they're going to find that it's a relatively easy drug to give and very well tolerated, relative to re-challenging for example, with a platinum doublet, which can only be given for a limited time period. And I think that experience grows, I'd be expecting greater use, especially in that segment. I'm also very optimistic about the potential to bring this into first-line therapy as an add-on.
And as you know, we have an ongoing first-line trial where will be compared to placebo’s add-on therapy during maintenance for extensive states, small cell lung cancer. That's a disease that has a very poor prognosis. The great majority of patients have active residual disease at the end of their chemo. And so it's a real opportunity to extend their progression-free survival and hopefully ultimately overall survival, giving patients a longer duration of therapy then if they were to wait for second-line.
Thank you. Our next question or comment comes from the line of Jeff Hung from Morgan Stanley. Your line is open.
Thanks for taking the question. You've been active on the BD front, such as today's announcement of JZP441. Was the divestment of Sunosi more of a one-time event like what is your view on divesting other assets to further refocus on the higher strategic priorities? Thanks.
Yes. Renee, maybe I'll hand that over to you.
Sure. Yes. Thanks for the question, Jeff. So as we think about the Sunosi transaction, as we said, we're really focused on ensuring that we have the ability to focus on our highest strategic priorities. Coming into 2022 and looking at our business holistically, we see other priorities that relate to products that we've either launched or acquired since we launched Sunosi. So as we look at our broader portfolio and think about what has transpired since getting approval and launching Sanofi, we had approval and launch of Xywav in both narcolepsy and IH, we have launched Zepzelca.
We acquired GW with Epidiolex and then also launched Rylaze. So clearly, our business has transformed fairly dramatically and we're really thrilled with the momentum that we have across our business. So we'll continue to look at the portfolio, ensure that we're optimizing both the commercial portfolio, where we are expanding geographically and then importantly, continuing to lean into business development, both for expanding and growing our pipeline, but as well as expanding and diversifying our revenues, as we've stated with Vision 2025.
Thank you. Our next question or comment comes from the line of Balaji Prasad from Barclays. Your line is open.
Thanks for the questions. Couple of them, first in Epidiolex, can you help us understand with regard to the Xywav and the response that you're seeing with 40% of respondents moving this drug up their treatment algorithm? Are you seeing it in the form of increased prescription growth? Or if not, is there an incremental that we need to look forward to? And secondly, on Sunosi, I think it's been – it's scratcher for me. I would think that Jazz with the calling points that you have and this fitting your narcolepsy and sleep focus, you would've been in the best position to extract value from this asset. Can you help us understand why the divestment? Thanks.
Yes, Balaji, maybe I'll take those in opposite order and just say on Sunosi, the call point was a little bit different as we moved out of that core narcolepsy space that we've been so active in for so long into EDS in obstructive sleep apnea, which required a much broader set of physicians and physicians who obviously both weren't familiar with oxybate and – or I'm sorry, we're not familiar with Sunosi, but also didn't in all cases have drug therapy as part of their standardized approach to optimizing their OSA patients. So not quite as perfect and overlap as you'd think.
And as Renee said, when we looked at our portfolio after everything that's happened with, all of our product launches over 2020 and 2021 and the acquisition of GW, we essentially had our smallest near-term opportunity product with the largest sales force. And while we could have continued down that road, we had other places in our business, including our ongoing launches, some exciting pipeline programs in addition to some exciting corp dev opportunities. And when we thought about where we wanted to deploy our capital, we saw more on-target strategic opportunities available to us.
On the first part of your question about Epidiolex and what that survey data about potentially moving it up in the algorithm means for our business. Kim, maybe I hand that to you.
Sure. Yes. And I'll clarify. So these are current prescribers, those that have gotten some experience early on first couple years, that Epidiolex, really telling us that while they were primarily using it as a fourth line, let's say agent, they've had good results with it, and they're starting to use it third-line, second-line and so forth. So that's really the intention there. And I would say that the effect of that is being felt now, but also in the future, because they're basically saying they're just starting to do that.
Additionally, as we talked about is we're adding new prescribers onto a prescriber base, we feel very confident. They're going to go through a very similar experience, having their positive first experience with those patients in later lines of use and then moving towards – forward to earlier lines of use.
Thank you. Our next question or comment comes from the line of Madhu Kumar from Goldman Sachs. Your line is open.
Hey guys, thanks for taking our call. This is Rob on for Madhu. I was just wondering, could you break down the levers that are driving the picked up revenue guidance through the end of the year, just like maybe specifically go through what gives you confidence that you can raise – that you were able to raise guidance. Thanks.
Yes. Renee, you want to take that one?
Sure. Yes, I'm happy to. So as we've mentioned previously, the $40 million raise at the top line was driven by neuroscience, truly reflects our continued confidence in both Epidiolex and Xywav adoption, but also as we'd mentioned that with the divestment of Sunosi having increased focus and resources available to get then behind those two product launches.
We did have shared management, shared marketing that supported both Xywav and Sunosi. And so we're also now able to shift some of that focus over squarely to our remaining neuroscience products. Also we'd mentioned that as we look at Xywav and Xyrem and the competitive situation, we've updated some of our assumptions regarding the competitive entry timing. And while that shifts out, it does both strengthen Xyrem revenues, but also has the impact of pushing our assumptions around the Xyrem AG entry to late 2022 or as I'd mentioned on the call – on the prepared remarks, even potentially January, 2023.
And we were able to raise that revenue guidance despite taking Sunosi, a revenue generating product out of the portfolio. And I'll also just comment that we didn't just raise the top line guidance. Of course, we reduced SG&A by 50 million at the midpoint, we brought in two assets and raised our expectation for IP R&D by $65 million, and then still managed to increase our expectations for A&I by $50 million at the midpoint. And going back to our commitment to delivering more to the bottom line to operational excellence, this has in turn the impact of expanding our projected adjusted operating margin to 46% at the midpoint for the year of 2022.
Thank you. Our next question or comment comes from the line of Ami Fadia from Needham & Company. Your line is open.
Hello, guys. Thank you for taking the question. This is [indiscernible] for Ami. I wondered if you can give me some insight on what would it look like for the Xywav growth rate for the rest of year, you focus on growth for the first Q – it is going to continue for the remainder of the year?
I'm not sure I totally understood your question. So why don't you try that one more time? Sorry, you broke up a little bit.
I'm sorry. So I wondered if you can add more color on the growth in the narcolepsy patient population. You mentioned that there are some growth in the first Q. I wanted to know if it is – you think it's going to be continuing in the 2022?
Yes. Kim, you want to talk about growth in Xywav specifically on the narcolepsy side, both what we saw on the first quarter, but how to think about that going forward. Kim, are you muted?
Yes. Sorry that. So in the first quarter, we saw some nice growth there in narcolepsy for Xywav specifically, we had an increase from 6,650 patients in the fourth quarter to 7,050 patients in the second quarter. So overall, pleased with that launch, now – that growth now we would expect with any launch the uptake curve to come down and flatten a bit over time, particularly as we were impacted by, as we mentioned Omicron in January and February. But we feel very confident that that growth that we've been seeing is going to continue throughout the year. And physicians are going to continue to adopt this and transition their patients over from Xyrem to Xywav.
Maybe I'll just broaden the answer a little bit to say, in the near-term, we'll have a business unit that's completely focused on Xywav, which we obviously view as a huge opportunity, both in narcolepsy and idiopathic hypersomnia, but I also just want to go back to Vision 2025 and point out that we view this as a global and durable franchise, even in the face of competition. And so our target that $2 billion in revenues, even as we get out to 2025 would be coming from the oxybate franchise, I think tells you where we see continued opportunity over time.
Thank you. Our next question or comment comes from the line of Gary Nachman from BMO Capital Markets. Your line is open.
Hi, thanks. In terms of the ramp for Xywav in IH, 250 patients last quarter and 750 this quarter. I'm curious how concentrated that prescribing has been with your target physicians, the early adopters. So I'm wondering how much low hanging fruit there is to capture those IH patients versus how challenging it'll be to really get much broader prescribing across the sleep specialists. And will primary care play a role here at all with referrals or is that much farther down the line? Thank you.
Kim, I’ll hand it over to you to take the Xywav IH related questions.
Sure. Let me start with the back half of that around primary care. We really see right now that the opportunity for IH is concentrated in the hands of really more of the sleep specialists which have multiple different kind of specialties behind them, but ultimately are concentrated in focusing on treating patients with sleep conditions and really in terms of sequencing in growth. We are focused, I think as we've said several times today at launch on those 37,000 patients that we can see out there and claim data not only have a diagnosis for idiopathic hypersomnia, but also have been actively engaging very recently in the healthcare system.
So, it's not a stale diagnosis, but as we also have indicated, we do believe that the patient population that idiopathic hypersomnia could be as large as that the narcolepsy patient population. So while today, we're really focused on going after those patients who have this diagnosis and who are largely seeing a sleep specialist, not a primary care physician. We will, at one point in time be able to sequence from there and really sequence less from a specialty standpoint, but more from a patient standpoint to those patients, probably that are beyond that 37,000 that perhaps get a more solid diagnosis as a result of us or start reengaging with the healthcare system as a result of their finally being a product out there that is clinically proven and approved by the FDA for the condition of idiopathic hypersomnia. This is a very efficient commercial undertaking for us and that there is 90% overlap between those physicians that we are targeting for the launch of idiopathic hypersomnia and those that we already called up on today for narcolepsy.
Thank you. Our question or comment comes from the line of David Amsellem from Piper Sandler. Your line is open.
Thanks. So I wanted to pick your brain on a couple of R&D. One is, what’s the extent to which you’re prioritizing a once nightly low sodium product? That’s number one. Number two is, are you looking at other sleep disorders to target for further Xywav development or even a next-gen or once-nightly oxybate product. And then on the orexin that you just been licensed, sort of similar question beyond narcolepsy, is there an opportunity in IAH or other sleep disorders and how should we think about that? Thank you.
Yes. David, maybe I’ll take the first part of that specific to oxybate and Rob, have you weigh in a little bit on the orexin side. On the once-nightly low sodium product, that is part of our development portfolio. But we don’t have additional updates on that. At the moment, you know that we made a decision many years ago, that the most important thing we could do for narcolepsy patients getting oxybate was substantially reduce the sodium burden by 1 gram to 1.5 gram per night, a 92% reduction that FDA has found provides a clinically superior product because it’s safer and will result in fewer cardiovascular comorbidities for these patients. And so, that has been our focus, is get that product to market.
When we think about dosing, while once-nightly sounds convenient and if you ask most people the question, would you rather take a drug once or twice a night? You get a predictable answer. But remember that change in half life has other ramifications for patients in terms of taking a full night’s dose of the date drug or something that really knocks you out and you can’t untake it once you’ve taken it. And so that has potential implications for patient’s ability to get up in the middle of the night to go to the bathroom. So enuresis is something you think about ability to check on kids during the middle of the night. And flexibility in timing of your own life, if you take a dose a little bit later at night, then you’re used to – that has implications for when you can get up and safely operate an automobile in the morning, get to an early morning meeting.
Obviously, the more immediate release dosing gives patients a little more flexibility in how they live their life. So we’ve said we believe Xywav will be the dominant product in this space. Even if patients have access to branded Xyrem, IRU generic Xyrem, Xywav potential once a night products, we believe that Xywav is actually going to be the preferred product across that patient population. We haven’t said anything to date about going beyond narcolepsy and idiopathic hypersomnia with oxybate. And Rob maybe I’ll hand it off to you to talk about potential utility of orexin agonist program.
Yes, happy to Bruce. And certainly the orexin agonist we’re developing has the potential beyond narcolepsy to other sleep disorders, including idiopathic hypersomnia or any other disorder that cause this daytime somnolence. The mechanism is likely to be very potent across sleep disorders given what it’s demonstrated preclinically and from the Takeda clinical data so far. So we’re very interested.
Thank you. Our next question or comment comes from the line of Annabel Samimy from Stifel. Your line is open.
Thanks for taking my question. So given the Nabiximols data is coming up this quarter, I guess, what would determine whether the first of these three studies is efficient enough to justify an NDA filing? And are there any hard endpoints that you can draw from the EU studies that could ensure that you could potentially file on that first – this first smaller study? So I know that Europe was a little bit more based on subjective measure, so maybe you can just give us a little bit more color there.
Yes. Rob, do you want to take the question about how this upcoming clinical data unbinding will inform potential submission and how that relates to data that we already know from prior studies?
Yes. So, Jess [ph], as you know Sativex is approved in 29 European countries based on really an extensive set of data, not only around efficacy, but also on dosing and safety. And so our strategy in the U.S. is really to leverage all of those data and bridge to a U.S. submission, which the FDA has said should include additional data using endpoints other than the numeric rating scale that we – that was the primary endpoint for European submissions and approvals. In particular, the FDA wanted to see measures of either muscle tone or spasm frequency.
So we’ll certainly leverage all of those prior data and we will evaluate the outcome of this relatively small study that’s about to readout. And if those data are promising, we certainly would want to go to the FDA to have a conversation around, how soon can we submit an NDA. As you know, the other trials that are ongoing are larger meant to be a more robust assessment, both a muscle tone and spasm frequency separately. And so that if this smaller study is not sufficient for an NDA, at this point we would have those studies to leverage down the road.
Thank you.
Thank you. Our next question or comment comes from the line of Oren Livnat from H. C. Wainwright. Your line is open.
Thanks for taking the question. I was hoping I could build upon with someone earlier touched on the Xywav in narcolepsy ramp. I mean, clearly, you were able to raise guidance on several factors. But Xyrem strength is one of those. And so I look at it as sort of a trade-off, or I know it’s not purely a switch. But I guess if you have slowing Xywav penetration that I guess would make Xyrem less longer, right? So can you talk about that trend now? I think you added in terms of exit rates, 1,200 patients in Q2, 900 in Q3, 650, now 400 and Q1. And I’m just wondering, is Q1 seasonally tougher for the Xywav new starts and/or switches? Or there’s some other dynamics that we should expect us to continue to potentially slow in terms of rate of patient adds in narcolepsy, like payer pressure seeing AGs coming or any other headwind?
Yes. Well, we’re excited Oren to be in a position where we’ve got Xywav being rolled out, I would still say, still fairly early in narcolepsy and now brand new in idiopathic hypersomnia. These are both patient populations that can benefit from this new medication and where we see substantial opportunity. And while you pointed out correctly, the sort of rate of narcolepsy adds, of course, we added 900 patients to Xywav across the two indications in the first quarter, which is really terrific.
And in our promotional efforts, we definitely want to balance continuing to make progress in narcolepsy, where we think all patients can benefit from the sodium reduction relative to Xyrem where we’re seeing new patients to oxybate predominantly start directly on Xywav, rather than going through Xyrem. But also now offering this to patient with idiopathic hypersomnia who had no FDA approved treatment options before.
So Kim, maybe you could just close this answer by talking a little bit about how you do think about allocating the sales force across those areas and how we continue to make progress in the narcolepsy ramp.
Yes, sure. So in terms of making progress, it’s really staying the course on our strategy that we think is really resonating with customers about the benefits of reduced sodium for patients, and the fact that the FDA has recognized Xywav’s clinical superiority to that of Xyrem. But also I’d say that the strategic divestiture of Sanofi that we were talking about earlier does enable us to sharpen our focus and our highest strategic priorities, specifically in sleep, it allows our sleep team to be very laser focused on achieving the full potential of Xywav, both in narcolepsy and in IAH.
And we do have the luxury of having both of these very large opportunities to go after. And it is a balancing act for us with our sales force and our resources in general. But we really feel like we’re striking that right balance in terms of continuing to encourage customers to transition patients from Xyrem to Xywav and at the same time to really identify those idiopathic hypersomnia patients that would benefit from Xywav.
So, we feel fortunate to have both opportunities and really right now it’s about staying the course and executing on both very strongly. And we think that the team is doing a really solid job at that.
Thank you. Our next question or comment comes from the line of Greg Fraser from Truist Securities. Your line is open.
Thanks and good afternoon folks. I had a question on ERWINAZE and the potential for that product to come back to the market. You hold the BLA, is your prior partner trying to acquire the BLA from you? Is that something that’s on the table, any color on that would be helpful? Thank you.
So Greg, the quick answer to that is that relationship ended when we stopped selling ERWINAZE and I wouldn’t comment on any possibilities for the two companies working together going forward. PBL is obviously pursuing their own strategy there. But Dan, maybe I could ask you to comment generally how we think about Rylaze being on the market today in the U.S. and where we’re going. Not just in the U.S., but globally, and how we think about potential entry of another or erwinia asparaginase product.
Yes. I mean, we’re really excited with the Rylaze launch and it’s the one and only, and reliable – reliably supplied, we’re seeing the change in the medical practice back to ensuring that any patient who shows a sign of hypersensitivity or reaction to an E. coli-based can move to Rylaze. But it’s not only the supply, it’s the fact that we studied it and optimized the dose schedule. And as we get the Monday, Wednesday, Friday, and the IV that creates additional optimization of this relative to the package label that we had with ERWINAZE. And I’d say also there’s a suite of services, plus a field of medical team that knows that customer extremely well.
Outside the U.S., we’re on track for a midyear filing. And we anticipate a product launch as soon as 2023, and look forward to bringing that same optimized product, which is in an easy vial already reconstituted, it’s got a higher concentration than ERWINAZE into those markets as well, where ERWINAZE is available. So, our anticipation is that Rylaze can be the treatment of choice broadly in this market.
Thank you. I’m showing no additional questions in the queue. At this time, I would like to turn the conference back over to Mr. Bruce Cozadd for any closing remarks.
All right. Thanks, operator. Let me just close by saying, we’ve got numerous opportunities across our commercial portfolio, our pipeline and our operations to continue to drive a growth and value and achieve operational excellence. We’re very focused on Vision 2025 and excited about the progress we’re making. And I think our results have demonstrated the power of our products, our platform and our people. Would be a year ago tomorrow that we close the GW acquisition.
And when I look at how we’ve successfully integrated the two organizations, something that sometimes trips people up in acquisitions and think about how well we did that during a pandemic. What we’re seeing in terms of ongoing combined performance, including being efficient with our spend and importantly de-leveraging as quickly as we have in that 12 month period, it couldn’t be more pleased.
I’d like to close the call by recognizing our Jazz colleagues for their tenacity, their dedication and their creativity, which have led to us delivering new therapeutic options to patients. And I also want to thank our partners and shareholders for their continued confidence and support. We look forward to updating you on our progress this year, as we now move toward our raised top line guidance, our raised bottom line guidance, our improved guided midpoint margin. Again, we’re really excited about the rest of this year and importantly, how that continues to position us well toward achieving Vision 2025. So with that thanks everyone for joining us today and stay well.
Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.