Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | JAZZ | |
Entity Registrant Name | Jazz Pharmaceuticals plc | |
Entity Central Index Key | 1,232,524 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 59,892,335 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 366,567 | $ 988,785 |
Investments | 59,418 | 0 |
Accounts receivable, net of allowances | 238,072 | 209,685 |
Inventories | 32,351 | 19,451 |
Prepaid expenses | 23,304 | 20,699 |
Other current assets | 24,517 | 19,047 |
Total current assets | 744,229 | 1,257,667 |
Property and equipment, net | 99,898 | 85,572 |
Intangible assets, net | 3,110,439 | 1,185,606 |
Goodwill | 927,993 | 657,139 |
Deferred tax assets, net, non-current | 0 | 122,863 |
Deferred financing costs | 10,258 | 7,209 |
Other non-current assets | 37,764 | 27,548 |
Total assets | 4,930,581 | 3,343,604 |
Current liabilities: | ||
Accounts payable | 17,626 | 21,807 |
Accrued liabilities | 172,418 | 164,070 |
Current portion of long-term debt | 36,094 | 37,587 |
Income taxes payable | 5,222 | 1,808 |
Deferred revenue | 1,499 | 1,370 |
Total current liabilities | 232,859 | 226,642 |
Deferred revenue, non-current | 2,881 | 3,721 |
Long-term debt, less current portion | 2,147,379 | 1,150,857 |
Deferred tax liability, net, non-current | 725,358 | 294,485 |
Other non-current liabilities | 106,101 | 69,253 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Ordinary shares | 6 | 6 |
Non-voting euro deferred shares | 55 | 55 |
Capital redemption reserve | 472 | 471 |
Additional paid-in capital | 1,635,431 | 1,562,900 |
Accumulated other comprehensive loss | (235,376) | (267,472) |
Retained earnings | 315,415 | 302,686 |
Total shareholders’ equity | 1,716,003 | 1,598,646 |
Total liabilities and shareholders’ equity | $ 4,930,581 | $ 3,343,604 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Product sales, net | $ 371,621 | $ 338,754 | $ 1,084,647 | $ 977,895 |
Royalties and contract revenues | 2,560 | 2,118 | 6,705 | 6,027 |
Total revenues | 374,181 | 340,872 | 1,091,352 | 983,922 |
Operating expenses: | ||||
Cost of product sales (excluding amortization of intangible assets) | 24,311 | 28,385 | 71,730 | 78,496 |
Selling, general and administrative | 124,368 | 104,044 | 375,751 | 323,564 |
Research and development | 47,796 | 50,784 | 118,139 | 105,798 |
Acquired in-process research and development | 15,000 | 0 | 23,750 | 0 |
Intangible asset amortization | 26,453 | 26,127 | 75,832 | 74,472 |
Total operating expenses | 237,928 | 209,340 | 665,202 | 582,330 |
Income from operations | 136,253 | 131,532 | 426,150 | 401,592 |
Interest expense, net | (18,498) | (12,650) | (42,811) | (44,707) |
Foreign currency loss | (749) | (977) | (1,568) | (646) |
Loss on extinguishment and modification of debt | (638) | 0 | (638) | (16,815) |
Income before income tax provision and equity in loss of investee, net of tax | 116,368 | 117,905 | 381,133 | 339,424 |
Income tax provision | 29,120 | 29,945 | 108,482 | 92,651 |
Equity in loss of investee, net of tax | 103 | 0 | 103 | 0 |
Net income | 87,145 | 87,960 | 272,548 | 246,773 |
Net loss attributable to noncontrolling interests, net of tax | 0 | 0 | 0 | (1) |
Net income attributable to Jazz Pharmaceuticals plc | $ 87,145 | $ 87,960 | $ 272,548 | $ 246,774 |
Net income attributable to Jazz Pharmaceuticals plc per ordinary share: | ||||
Basic (in dollars per share) | $ 1.44 | $ 1.43 | $ 4.49 | $ 4.04 |
Diluted (in dollars per share) | $ 1.41 | $ 1.39 | $ 4.40 | $ 3.91 |
Weighted-average ordinary shares used in per share calculations - basic (in shares) | 60,437 | 61,435 | 60,692 | 61,145 |
Weighted-average ordinary shares used in per share calculations - diluted (in shares) | 61,644 | 63,154 | 61,983 | 63,072 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 87,145 | $ 87,960 | $ 272,548 | $ 246,773 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 14,612 | 16,779 | 32,096 | (109,174) |
Other comprehensive income (loss) | 14,612 | 16,779 | 32,096 | (109,174) |
Total comprehensive income | 101,757 | 104,739 | 304,644 | 137,599 |
Comprehensive income attributable to noncontrolling interests, net of tax | 0 | 14 | 0 | 5 |
Comprehensive income attributable to Jazz Pharmaceuticals plc | $ 101,757 | $ 104,725 | $ 304,644 | $ 137,594 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities | ||
Net income | $ 272,548 | $ 246,773 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Intangible asset amortization | 75,832 | 74,472 |
Share-based compensation | 74,490 | 67,233 |
Depreciation | 8,165 | 7,143 |
Acquired in-process research and development | 23,750 | 0 |
Loss on disposal of property and equipment | 3 | 117 |
Excess tax benefit from share-based compensation | 0 | 320 |
Deferred income taxes | (16,462) | (25,368) |
Provision for losses on accounts receivable and inventory | 1,764 | 4,021 |
Loss on extinguishment and modification of debt | 638 | 16,815 |
Amortization of debt discount and deferred financing costs | 16,418 | 17,348 |
Other non-cash transactions | 1,460 | (3,834) |
Changes in assets and liabilities: | ||
Accounts receivable | (28,274) | (10,661) |
Inventories | (14,117) | (3,595) |
Prepaid expenses and other current assets | (8,512) | (5,298) |
Other long-term assets | (4,920) | (9,555) |
Accounts payable | (4,288) | 4,826 |
Accrued liabilities | (9,647) | 4,642 |
Income taxes payable | 3,323 | 8,993 |
Deferred revenue | (682) | (659) |
Other non-current liabilities | 18,352 | 18,469 |
Net cash provided by operating activities | 409,841 | 412,202 |
Investing activities | ||
Purchases of property and equipment | (6,555) | (32,591) |
Acquisitions, net of cash acquired | (1,502,443) | 0 |
Acquisition of in-process research and development | (23,750) | 0 |
Acquisition of investments | (64,693) | 0 |
Acquisition of intangible assets | (150,000) | 0 |
Net proceeds from sale of business | 0 | 33,703 |
Net cash provided by (used in) investing activities | (1,747,441) | 1,112 |
Financing activities | ||
Net proceeds from issuance of debt | 994,777 | 898,960 |
Proceeds from employee equity incentive and purchase plans | 17,951 | 34,025 |
Repayments of long-term debt | (19,282) | (896,363) |
Payment of employee withholding taxes related to share-based awards | (20,595) | (25,402) |
Share repurchases | (259,819) | (21,302) |
Excess tax benefit from share-based compensation | 0 | (320) |
Acquisition of noncontrolling interests | 0 | (60) |
Repayments under revolving credit facility | 0 | (80,000) |
Net cash provided by (used in) financing activities | 713,032 | (90,462) |
Effect of exchange rates on cash and cash equivalents | 2,350 | (8,035) |
Net increase (decrease) in cash and cash equivalents | (622,218) | 314,817 |
Cash and cash equivalents, at beginning of period | 988,785 | 684,042 |
Cash and cash equivalents, at end of period | $ 366,567 | $ 998,859 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies Jazz Pharmaceuticals plc is an international biopharmaceutical company focused on improving patients’ lives by identifying, developing and commercializing meaningful products that address unmet medical needs. We have a diverse portfolio of products and product candidates, with a focus in the areas of sleep and hematology/oncology. Our lead marketed products are: • Xyrem ® (sodium oxybate) oral solution , the only product approved by the U.S. Food and Drug Administration, or FDA, for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in patients with narcolepsy; • Erwinaze ® (asparaginase Erwinia chrysanthemi ) , a treatment approved in the U.S. and in certain markets in Europe (where it is marketed as Erwinase ® ) for patients with acute lymphoblastic leukemia, or ALL, who have developed hypersensitivity to E. coli -derived asparaginase; and • Defitelio ® (defibrotide sodium) , a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, or SOS, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio ® (defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy. Our strategy is to create shareholder value by: • Growing sales of the existing products in our portfolio, including by identifying and investing in growth opportunities such as new treatment indications; • Acquiring clinically meaningful and differentiated products that are on the market or product candidates that are in late-stage development; and • Pursuing targeted development of post-discovery differentiated product candidates. We apply a disciplined approach to allocating our resources between investments in our current commercial and development portfolio and acquisitions or in-licensing of new assets. On July 12, 2016, we completed the acquisition of Celator Pharmaceuticals, Inc., or Celator, which acquisition we refer to in this report as the Celator Acquisition. The aggregate consideration for the Celator Acquisition was approximately $1.5 billion . The Celator Acquisition broadened our hematology/oncology portfolio with the acquisition of worldwide development and commercialization rights to Vyxeos TM , an investigational product in development as a treatment for acute myeloid leukemia, or AML. In September 2016, we initiated a rolling submission of a new drug application, or NDA, to the FDA seeking marketing approval for Vyxeos. We expect to complete the NDA submission in the first quarter of 2017. In addition, the Celator Acquisition provided us with Celator’s proprietary technology platform, CombiPlex®, which has the potential to enable the rational design and rapid evaluation of optimized combinations of additional anti-cancer drugs. Please see Note 2 for additional information regarding the Celator Acquisition. On July 12, 2016, we entered into an amendment to our existing 2015 credit agreement, which amended agreement we refer to in this report as our amended credit agreement, that provides for a revolving credit facility of $1.25 billion , which replaced our prior revolving credit facility of $750.0 million , and a $750.0 million term loan facility, of which $721.9 million principal amount was outstanding as of September 30, 2016 . We used the proceeds of $1.0 billion of loans under the revolving credit facility, together with cash on hand, to fund the Celator Acquisition. The maturity date of both our revolving credit facility and term loan facility was extended from June 2020 to July 2021. Please see Note 7 for further information regarding the 2015 credit agreement and the amended credit agreement. In June 2016, we received FDA approval of our manufacturing and development facility in Ireland. We are using this facility for the manufacture of Xyrem, and in September 2016, we manufactured and shipped our first commercial batch of Xyrem from this facility. We plan to also manufacture development-stage products at this facility. Throughout this report, unless otherwise indicated or the context otherwise requires, all references to “Jazz Pharmaceuticals,” “the registrant,” “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries. Throughout this report, all references to “ordinary shares” refer to Jazz Pharmaceuticals plc’s ordinary shares. Basis of Presentation These unaudited condensed consolidated financial statements have been prepared following the requirements of the U.S. Securities and Exchange Commission, or SEC, for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. 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 consolidated financial statements and accompanying notes included in our Annual Report on Form 10‑K for the year ended December 31, 2015 . The results of operations of the acquired Celator business, along with the estimated fair values of the assets acquired and liabilities assumed in the Celator Acquisition, have been included in our condensed consolidated financial statements since the closing of the Celator Acquisition on July 12, 2016, the closing date of the Celator Acquisition. In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual 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, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 , for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated. Adoption of New Accounting Standard Effective January 1, 2016, we adopted Accounting Standards Update, or ASU, No. 2015-03 “Interest - Imputation of Interest”, or ASU No. 2015-03. ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability instead of as an asset. The standard requires retrospective application. The adoption of ASU No. 2015-03 resulted in a $16.1 million reduction of both deferred financing costs and long-term debt, less current portion in our condensed consolidated balance sheet as of December 31, 2015 . Significant Risks and Uncertainties Our financial results remain significantly influenced by sales of Xyrem. In the three and nine months ended September 30, 2016 , net product sales of Xyrem were $285.9 million and $816.4 million , respectively, which represented 77% and 75% of total net product sales, respectively. Our ability to maintain or increase sales of Xyrem in its approved indications is subject to a number of risks and uncertainties, including the potential introduction of generic competition or an alternative sodium oxybate or other product that competes with Xyrem; changed or increased regulatory restrictions or regulatory actions by the FDA; our suppliers’ ability to obtain sufficient quotas from the U.S. Drug Enforcement Administration, or DEA; any supply, manufacturing or distribution problems arising with any of our suppliers or distributors, most of whom are sole source providers for us; any increase in pricing pressure from or restrictions on reimbursement imposed by third party payors; changes in healthcare laws and policy; continued acceptance of Xyrem by physicians and patients; changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem; and operational disruptions at the central pharmacy or any failure to comply with our risk evaluation and mitigation strategy, or REMS, obligations to the satisfaction of the FDA. Seven companies have sent us notices that they have filed abbreviated new drug applications, or ANDAs, with the FDA seeking approval to market a generic version of Xyrem. We have filed lawsuits against each of these companies seeking to prevent the introduction of a generic version of Xyrem that would infringe our patents. In the second quarter of 2016, we settled two of these lawsuits, granting the settling ANDA applicants a license to manufacture, market and sell their generic versions of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. The court in which our ANDA litigation is ongoing has determined that all of our pending patent litigation (other than our lawsuit filed in August 2016) against the first ANDA filer, Roxane Laboratories, Inc., or Roxane, will be consolidated for trial and set trial in this consolidated case for the second quarter of 2017. We cannot predict the timing or outcome of this or the other ANDA litigation proceedings. Certain ANDA filers have also filed petitions for inter partes review, or IPR, by the Patent Trial and Appeal Board, or the PTAB, of the U.S. Patent and Trademark Office, or USPTO, with respect to the validity of certain distribution, method of use and formulation patents covering Xyrem. The PTAB instituted IPR trials with respect to patents and patent claims that are the subject of certain of these petitions. In July 2016, the PTAB issued final decisions that the claims of six distribution system patents that were the subject of certain IPR trials are unpatentable; as a result, if the United States Court of Appeals for the Federal Circuit upholds those decisions or if the time for appeal expires, these claims will be canceled. For a description of these matters, see “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q. We cannot predict whether additional post-grant patent review challenges will be filed by any of the ANDA filers or any other entity, the outcome of any pending IPR or other proceeding, the outcome of any appeal or rehearing of the July 2016 IPR decisions with respect to six patents covering the distribution system for Xyrem or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings or other aspects of our Xyrem business. We expect that the approval of an ANDA that results in the launch of a generic version of Xyrem, or the approval and launch of other sodium oxybate products that compete with Xyrem, would have a material adverse effect on our business, financial condition, results of operations and growth prospects. Approval of an ANDA with respect to a generic version of Xyrem will require a REMS, which may be either a single shared REMS with Xyrem or a separate REMS with differing but comparable aspects of elements to assure safe use, or ETASU, to those in the approved Xyrem REMS. We and the ANDA applicants had interactions with respect to developing a single shared REMS for several years. The ANDA applicants are not currently engaging in single shared REMS discussions with us, but we have been seeking to continue the interactions with the goal of developing a single shared REMS. However, we cannot predict whether, or to what extent, our interactions with the ANDA applicants will resume or whether we will develop a single shared REMS with the ANDA applicants. We are aware that, separate from the discussions with us, the FDA and ANDA applicants have exchanged communications regarding a REMS for sodium oxybate. If we and the ANDA applicants do not develop a single shared REMS, if we do not license or share intellectual property pertinent to our Xyrem REMS with generic competitors within a time frame or on terms that the FDA considers acceptable or if a generic competitor otherwise successfully petitions the FDA for a waiver of the shared REMS requirement, the FDA may assert that its waiver authority permits it to approve the ANDA of one or more generic competitors with a separate REMS that differs in some aspects from our approved Xyrem REMS. We also may face pressure to develop a single shared REMS with potential generic competitors for Xyrem that is different from the approved Xyrem REMS or to license or share intellectual property pertinent to the Xyrem REMS, or elements of the Xyrem REMS, including proprietary data required for safe distribution of sodium oxybate, with generic competitors. We cannot predict the outcome or impact on our business of any future action that we may take with respect to the development of a single shared REMS for sodium oxybate, licensing or sharing intellectual property pertinent to our Xyrem REMS or elements of the Xyrem REMS, or the FDA’s response to a request by one or more ANDA applicants for a waiver of the requirement for a single shared REMS, including in connection with a certification that the applicant had been unable to obtain a license. The FDA’s response to any such request could include approval of one or more ANDAs. In addition, the Federal Trade Commission, or FTC, other governmental authorities or others could claim or determine that we are using the Xyrem REMS in an anticompetitive manner (including in light of the FDA’s statement in the Xyrem REMS approval letter that the Xyrem REMS could be used in an anticompetitive manner inconsistent with applicable provisions of the Federal Food, Drug and Cosmetic Act, or FDCA) or have engaged in other anticompetitive practices. In August 2015, we implemented the final Xyrem REMS, which was approved by the FDA in February 2015, and we have submitted and expect to continue to submit ongoing assessments as set forth in the FDA’s Xyrem REMS approval letter. However, we cannot guarantee that our implementation and ongoing assessments will be satisfactory to the FDA or that the Xyrem REMS will satisfy the FDA’s expectations in its evaluation of the Xyrem REMS on an ongoing basis. Any failure to comply with the REMS obligations could result in enforcement action by the FDA; lead to changes in our Xyrem REMS obligations; negatively affect sales of Xyrem; result in additional costs and expenses for us; and/or take a significant amount of time, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects. Obtaining and maintaining appropriate reimbursement for Xyrem in the U.S. is increasingly challenging due to, among other things, the attention being paid to healthcare cost containment and prescription drug pricing, pricing pressure from third party payors and increasingly restrictive reimbursement conditions being imposed by third party payors. In this regard, we have experienced and expect to continue to experience increasing pressure from third party payors to agree to discounts, rebates or other pricing terms for Xyrem. Any such restrictive pricing terms or additional reimbursement conditions could have a material adverse effect on our Xyrem revenues. In addition, drug pricing by pharmaceutical companies is currently, and is expected to continue to be, under close scrutiny, including with respect to companies that have increased the price of products after acquiring those products from other companies. We expect that healthcare policies and reforms intended to curb healthcare costs will continue to be proposed, which could limit the prices that we charge for our products, including Xyrem, limit the commercial opportunities for our products and/or negatively impact revenues from sales of our products. Also, price increases on Xyrem and our other products, and negative publicity regarding pricing and price increases generally, whether with respect to our products or products distributed by other pharmaceutical companies, could negatively affect market acceptance of Xyrem and our other products. In the three and nine months ended September 30, 2016 , net product sales of our second largest product, Erwinaze/Erwinase (which we refer to in this report as Erwinaze unless otherwise indicated or the context otherwise requires), were $43.0 million and $143.9 million , respectively, which represented 12% and 13% of total net product sales, respectively. We seek to maintain and increase sales of Erwinaze, as well as to make Erwinaze more widely available, through ongoing sales and marketing and research and development activities. However, a significant challenge to our ability to maintain current sales levels and to increase sales is our extremely limited inventory of Erwinaze, past supply interruptions and our need to minimize or avoid additional supply interruptions due to capacity constraints, production delays, quality or regulatory challenges or other manufacturing difficulties. Erwinaze is licensed from and manufactured by a single source, Porton Biopharma Limited, or PBL. The current manufacturing capacity for Erwinaze is completely absorbed by demand for the product. We are working with PBL to evaluate potential expansion of its production capacity to increase the supply of Erwinaze over the longer term and to address the production delays, quality challenges and related regulatory scrutiny. As a consequence of constrained manufacturing capacity, we have had an extremely limited or no ability to build product inventory levels that can be used to absorb disruptions to supply resulting from quality, regulatory or other issues, and we have experienced product quality, manufacturing and inventory challenges that have resulted in disruptions in our ability to supply certain markets and caused us to implement batch-specific, modified product use instructions. Most recently, we experienced supply interruptions of Erwinaze in the U.S. late in the third quarter of 2016 and also during October 2016, and we expect to experience another supply interruption in the fourth quarter of 2016. We expect that we will continue to experience inventory and supply challenges, which have resulted, and may continue to result, in further temporary disruptions in our ability to supply certain markets, including the U.S., from time to time. As capacity constraints and supply disruptions continue, whether as a result of continued quality or other manufacturing issues, regulatory issues or otherwise, we will be unable to build a desired excess level of product inventory, our ability to supply the market may continue to be compromised, physicians’ decisions to use Erwinaze may continue to be negatively impacted and our sales of and revenues from Erwinaze, our potential future maintenance and growth of the market for this product, and/or our business, financial condition, results of operations and growth prospects could be materially adversely affected. Our ability to successfully and sustainably maintain or grow sales of Erwinaze is also subject to a number of other risks and uncertainties, including the limited population of patients with ALL and the incidence of hypersensitivity reactions to E. coli -derived asparaginase within that population, our need to apply for and receive marketing authorizations, through the European Union’s, or EU’s, mutual recognition procedure or otherwise in certain additional countries so we can launch promotional efforts in those countries, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. In the three and nine months ended September 30, 2016 , net product sales of Defitelio/defibrotide represented 8% and 7% of our total net product sales, respectively. We acquired this product in January 2014 in connection with our acquisition of Gentium S.r.l., or Gentium, which we refer to as the Gentium Acquisition, and secured worldwide rights to the product by acquiring rights to defibrotide in the Americas in August 2014. We launched Defitelio in certain European countries in 2014 and continue to launch in additional European countries on a rolling basis. On March 30, 2016, the FDA approved our NDA, for Defitelio for the treatment of adult and pediatric patients with VOD, also known as SOS, with renal or pulmonary dysfunction following HSCT. We launched Defitelio in the U.S. shortly after FDA approval, and our U.S. commercial launch is still at an early stage. Our ability to realize the anticipated benefits from our investment in Defitelio is subject to risks and uncertainties, including: • the acceptance of Defitelio in the U.S. by hospital pharmacy and therapeutics committees and the availability of adequate coverage and reimbursement by government programs and third party payors; • U.S. market acceptance of Defitelio at its commercial price now that it is no longer available to new patients under an expanded access treatment protocol; • the lack of experience of U.S. physicians in diagnosing and treating VOD, particularly in adults, and the possibility that physicians may delay initiation of treatment or terminate treatment before the end of the recommended dosing schedule; • our ability to successfully maintain or grow sales of Defitelio in Europe; • delays or problems in the supply or manufacture of the product; • the limited size of the population of VOD patients who are indicated for treatment with Defitelio (particularly if changes in HSCT treatment protocols reduce the incidence of VOD); • our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA for Defitelio; and • our ability to obtain marketing approval in other countries and to develop the product for additional indications. If sales of Defitelio do not reach the levels we expect, our anticipated revenue from the product will be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In furtherance of our growth strategy, we have made a significant investment in Vyxeos through the Celator Acquisition. Vyxeos is currently not approved as a marketed product in any jurisdiction. In September 2016, we initiated a rolling submission of an NDA to the FDA seeking marketing approval for Vyxeos. We expect to complete the NDA submission in the first quarter of 2017 and to make a regulatory submission for Vyxeos in Europe in the second half of 2017. Breakthrough Therapy designation has been granted for Vyxeos for the treatment of adults with therapy-related AML or AML with myelodysplasia-related changes. Breakthrough Therapy designation is a process designed to expedite the development and review of a drug that is intended to treat a serious or life-threatening disease or condition when preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on one or more clinically significant endpoints. Our ability to realize the anticipated benefits from this investment is subject to a number of risks and uncertainties, including: • our ability to successfully obtain marketing approval for Vyxeos in the U.S. and Europe; • risks associated with developing products based on the CombiPlex technology platform that we acquired in the Celator Acquisition, such as Vyxeos, the first injectable fixed ratio, drug delivery combination oncology product that the FDA would potentially be considering for approval; • our ability to differentiate Vyxeos from other liposomal chemotherapies and generically available chemotherapy combinations with which physicians and treatment centers are more familiar; • the need to establish pricing and reimbursement support for Vyxeos in the event we are able to obtain marketing approval for Vyxeos in the U.S. or in other countries; • the acceptance of Vyxeos in the U.S. and other countries by hospital pharmacy and therapeutics committees and the availability of adequate coverage and reimbursement by government programs and third party payors; • delays or problems in the supply or manufacture of the product, including with respect to the requirement of the third parties upon which we rely to manufacture Vyxeos and its active pharmaceutical ingredients, or APIs, to obtain the approval of the FDA and/or other regulatory authorities to manufacture Vyxeos; and • the limited size of the population of AML patients who may potentially be indicated for treatment with Vyxeos. If we are unable to obtain regulatory approval for Vyxeos in the U.S. or in Europe in a timely manner, or at all, or if sales of an approved Vyxeos product do not reach the levels we expect, our anticipated revenue from Vyxeos would be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. For more information on risks and uncertainties relating to Erwinaze, Defitelio and Vyxeos, see the risk factor under the heading “While Xyrem remains our largest product, our success also depends on our ability to effectively commercialize our other products and, in the case of our newly acquired product candidate, Vyxeos, our ability to obtain regulatory approval in the U.S. and Europe and, if approved, to successfully launch and commercialize Vyxeos. Our inability to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. In addition to risks specifically related to Xyrem, Erwinaze, Defitelio and Vyxeos, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations. These risks and uncertainties include: • the challenges of protecting and enhancing our intellectual property rights; • the challenges of achieving and maintaining commercial success of our products; • delays or problems in the supply or manufacture of our products and product candidates, particularly with respect to certain products as to which we maintain limited inventories, and our dependence on single source suppliers for most of our products, product candidates and APIs; • the need to obtain and maintain appropriate pricing and reimbursement for our products in an increasingly challenging environment due to, among other things, the attention being paid to healthcare cost containment and other austerity measures in the U.S. and worldwide, including the need to obtain and maintain reimbursement for Xyrem in the U.S. in an environment in which we are subject to increasingly restrictive conditions for reimbursement required by government programs and third party payors; • our ability to identify and acquire, in-license or develop additional products or product candidates to grow our business; • the challenges of compliance with the requirements of the FDA, the DEA, and non-U.S. regulatory agencies, including with respect to product labeling, requirements for distribution, obtaining sufficient DEA quotas where needed, marketing and promotional activities, patient assistance programs, adverse event reporting and product recalls or withdrawals; • the difficulty and uncertainty of pharmaceutical product development, including the timing thereof, and the uncertainty of clinical success, such as the risk that results from preclinical studies and/or early clinical trials may not be predictive of results obtained in later and larger clinical trials planned or anticipated to be conducted for our product candidates; • the inherent uncertainty associated with the regulatory approval process, especially as we continue to undertake increased activities and make growing investment in our product pipeline development projects; • the risks associated with business combination or product or product candidate acquisition transactions, including risks associated with the Celator Acquisition, such as the challenges inherent in the integration of acquired businesses with our historical business, the increase in geographic dispersion among our centers of operation and the risks that we may acquire unanticipated liabilities along with acquired businesses or otherwise fail to realize the anticipated benefits (commercial or otherwise) from such transactions; and • possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt obligations, which have increased as a result of, among other things, the Celator Acquisition. Any of these risks and uncertainties could have a material adverse effect on our business, financial condition, results of operations and growth prospects. All of these risks and uncertainties are discussed in greater detail, along with other risks and uncertainties, in Part II, Item 1A of this Quarterly Report on Form 10-Q. Concentrations of Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, investments and marketable securities. Our investment policy permits investments in U.S. federal government and federal agency securities, corporate bonds or commercial paper issued by U.S. corporations, money market instruments, certain qualifying money market mutual funds, certain repurchase agreements, and tax-exempt obligations of U.S. states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities and issuers of investments to the extent recorded on the balance sheet. We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in the U.S., and to other international distributors and hospitals. Customer creditworthiness is monitored and collateral is not required. We monitor deteriorating 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 we do not expect to have write-offs or adjustments to accounts receivable which would have a material adverse effect on our financial position, liquidity or results of operations. As of September 30, 2016 , five customers accounted for 90% of gross accounts receivable, including Express Scripts Specialty Distribution Services, Inc. and its affiliates, or Express Scripts, which accounted for 71% of gross accounts receivable. As of December 31, 2015 , five customers accounted for 90% of gross accounts receivable, including Express Scripts, which accounted for 69% of gross accounts receivable, and IDIS Limited, which accounted for 11% of gross accounts receivable. We depend on single source suppliers for most of our products, product candidates and their APIs. We commenced manufacturing of Xyrem in our Ireland facility in the third quarter of 2016. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Net Income Attributable to Jazz Pharmaceuticals plc per Ordinary Share Basic net income attributable to Jazz Pharmaceuticals plc per ordinary share is based on the weighted-average number of ordinary shares outstanding. Diluted net income attributable to Jazz Pharmaceuticals plc per ordinary share is based on the weighted-average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding. Basic and diluted net income per ordinary share were computed as follows (in thousands, except per sh |
Business Combination, Asset Acq
Business Combination, Asset Acquisitions and Equity Method Investment | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations And Equity Method Investments [Abstract] | |
Business Combination, Asset Acquisitions and Equity Method Investment | Business Combination, Asset Acquisitions and Equity Method Investment Celator Acquisition On May 27, 2016, we entered into a definitive merger agreement with Celator pursuant to which we made a cash tender offer of $30.25 per share for all of the outstanding shares of Celator’s common stock. As of the expiration of the offer period on July 12, 2016, 36,516,173 shares, which represented approximately 81% of Celator’s then outstanding common stock, were properly tendered and not withdrawn in the tender offer. The condition to the tender offer that more than 50% of Celator’s outstanding common stock be validly tendered and not withdrawn prior to the expiration of the tender offer was satisfied. In addition, notices of guaranteed delivery were delivered with respect to 2,016,237 additional shares representing approximately 4% of Celator’s outstanding common stock as of the expiration of the tender offer. On July 12, 2016, we completed the Celator Acquisition under the terms of the merger agreement, pursuant to which Celator became an indirect wholly owned subsidiary of Jazz Pharmaceuticals plc and each share of Celator common stock then outstanding (other than shares owned by us or Celator) was converted into the right to receive $30.25 , the same price per share offered in the tender offer. The aggregate cash consideration for the Celator Acquisition was $1.5 billion . On July 12, 2016, we entered into the amended credit agreement that provides for a revolving credit facility of $1.25 billion , which replaced our prior revolving credit facility of $750.0 million , and a $750.0 million term loan facility, of which $721.9 million remained outstanding as of September 30, 2016 . Please see Note 7 for further information regarding the 2015 credit agreement and the amended credit agreement. We used the proceeds of $1.0 billion of loans under the revolving credit facility, together with cash on hand, to fund the Celator Acquisition. Celator is an oncology-focused biopharmaceutical company that seeks to transform the science of combination therapy and develop products to improve patient outcomes in cancer. The Celator Acquisition broadened our hematology/oncology portfolio with the acquisition of worldwide development and commercialization rights to Vyxeos, an investigational product in development as a treatment for AML. In addition, the Celator Acquisition provided us with Celator’s proprietary technology platform, CombiPlex, which has the potential to enable the rational design and rapid evaluation of optimized combinations of additional anti-cancer drugs. The Celator Acquisition was accounted for as a business combination using the acquisition method under which assets and liabilities of Celator were recorded at their respective estimated fair values as of the closing date of the Celator Acquisition and added to the assets and liabilities of Jazz Pharmaceuticals plc, including an amount for goodwill representing the difference between the acquisition consideration and the estimated fair value of the identifiable net assets. The results of operations of Celator and the estimated fair values of the assets acquired and liabilities assumed have been included in our consolidated financial statements since the closing date of the Celator Acquisition. During the three and nine months ended September 30, 2016 , we incurred $7.8 million and $10.0 million , respectively, in acquisition-related costs related to the Celator Acquisition, which primarily consisted of banking, legal, accounting and valuation-related expenses. These expenses were recorded in selling, general and administrative expense in the accompanying condensed consolidated statements of income. During the three and nine months ended September 30, 2016 , we did not recognize any revenues from the acquired Celator business. The portion of total expenses and net loss associated with the acquired Celator business was not separately identifiable due to the integration with our operations. The preliminary fair values of assets acquired and liabilities assumed at the closing date of the Celator Acquisition are summarized below (in thousands): Cash and cash equivalents $ 26,137 Other receivables 386 Prepaid expenses and deposits 151 Property and equipment 767 Intangible assets 1,825,000 Goodwill 261,783 Other non-current assets 43 Accrued liabilities (19,076 ) Deferred tax liability, net, non-current (565,609 ) Other non-current liabilities (1,002 ) Total acquisition consideration - cash paid $ 1,528,580 The fair value estimates for the assets acquired and liabilities assumed were based upon preliminary calculations, and our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The areas of these preliminary estimates that are not yet finalized relate primarily to tax-related items. Identifiable intangible assets acquired comprise in-process research and development, or IPR&D, which represents incomplete research and development projects at Celator related to Vyxeos. Management estimated the fair value of Vyxeos IPR&D to be approximately $1.8 billion . The fair value of acquired IPR&D was determined using the income approach, including the application of probability factors related to the likelihood of success of Vyxeos reaching final development and commercialization. This approach also took into consideration information and certain program-related documents and forecasts prepared by management. The fair value of acquired IPR&D was capitalized as of the closing date of the Celator Acquisition and is subsequently accounted for as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the closing date of the Celator Acquisition, this asset will not be amortized into earnings; instead, this asset will be subject to periodic impairment testing. Upon successful completion of the development process for an acquired IPR&D project, determination as to the useful life of the asset will be made. The asset would then be considered a finite-lived intangible asset and amortization of the asset into earnings would begin over the remaining estimated useful life of the asset. The excess of the total acquisition consideration over the fair value amounts assigned to the assets acquired and the liabilities assumed represents the goodwill amount resulting from the Celator Acquisition. We believe that the factors that contributed to goodwill included the Celator workforce, which will complement our clinical experience in hematology/oncology and our expertise in reaching targeted physicians who treat serious medical conditions, and the deferred tax consequences of intangible assets recorded for financial statement purposes. We do not expect any portion of this goodwill to be deductible for tax purposes. Pro Forma Financial Information (Unaudited) The following unaudited supplemental pro forma information presents our combined historical results of operations with pro forma adjustments as if the Celator Acquisition had been completed on January 1, 2015. The primary pro forma adjustments include: • The exclusion of acquisition-related and integration expenses of $10.8 million and $13.0 million for the three and nine months ended September 30, 2016, respectively , and the inclusion of acquisition-related and integration expenses of $13.0 million for the nine months ended September 30, 2015. • An increase in interest expense of $0.1 million and $13.7 million for the three and nine months ended September 30, 2016, respectively , and $6.5 million and $19.4 million for the three and nine months ended September 30, 2015, respectively , incurred on additional borrowings made to partially fund the Celator Acquisition as if the borrowings had occurred on January 1, 2015. The unaudited pro forma results do not assume any operating efficiencies as a result of the consolidation of operations and are as follows (in thousands, except per share data): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Revenues $ 374,181 $ 341,008 $ 1,091,497 $ 985,229 Net income attributable to Jazz Pharmaceuticals plc $ 94,137 $ 78,903 $ 261,452 $ 209,517 Net income attributable to Jazz Pharmaceuticals plc per ordinary share - basic $ 1.56 $ 1.28 $ 4.31 $ 3.43 Net income attributable to Jazz Pharmaceuticals plc per ordinary share - diluted $ 1.53 $ 1.25 $ 4.22 $ 3.32 Acquisition of Alizé Pharma II S.A.S. In March 2016, we acquired all of the outstanding shares of Alizé Pharma II S.A.S., a privately held biotechnology company, for an upfront payment of $8.8 million . In connection with the acquisition, we obtained intellectual property and know-how related to recombinant crisantaspase. The transaction includes contingent regulatory milestone payments of up to € 10 million . The transaction was accounted for as an asset acquisition and the upfront payment was charged to acquired IPR&D expense upon closing of the transaction. License and Option Agreement In July 2016, we entered into an agreement with Pfenex Inc., or Pfenex, under which Pfenex granted us worldwide rights to develop and commercialize multiple early stage hematology product candidates. The agreement also includes an option for us to negotiate a license for a recombinant pegaspargase product candidate with Pfenex. Under the agreement, Pfenex received upfront and option payments totaling $15.0 million and may be eligible to receive additional payments of up to $166 million based on the achievement of certain development, regulatory and sales milestones. Equity Method Investment In May 2016, we committed to invest $25.0 million in Arrivo Bioventures LLC, or Arrivo, over a five -year period. The first installment of $5.0 million was invested in the nine months ended September 30, 2016 . We account for our investment in Arrivo under the equity method of accounting. Our equity method investment is included within other non-current assets on the condensed consolidated balance sheet as of September 30, 2016 . We record our share of losses in our equity method investment in the condensed consolidated statements of income. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Cash, cash equivalents and investments consisted of the following (in thousands): September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 211,567 $ — $ — $ 211,567 $ 211,567 $ — Time deposits 214,418 — — 214,418 155,000 59,418 Totals $ 425,985 $ — $ — $ 425,985 $ 366,567 $ 59,418 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 274,945 $ — $ — $ 274,945 $ 274,945 $ — Time deposits 713,840 — — 713,840 713,840 — Totals $ 988,785 $ — $ — $ 988,785 $ 988,785 $ — Cash equivalents and investments are considered available-for-sale securities. We use the specific-identification method for calculating realized gains and losses on securities sold and include them in interest expense, net in the condensed consolidated statements of income. Our investments balance represents time deposits with original maturities of greater than three months. The following table summarizes, by major security type, our available-for-sale securities as of September 30, 2016 and December 31, 2015 that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands): September 30, 2016 December 31, 2015 Significant Other Observable Inputs (Level 2) Total Significant Total Time deposits $ 214,418 $ 214,418 $ 713,840 $ 713,840 As of September 30, 2016 , our available-for-sale securities included time deposits which were measured at fair value using Level 2 inputs and their carrying values were approximately equal to their fair values. Level 2 inputs, obtained from various third party data providers, 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. There were no transfers between the different levels of the fair value hierarchy in 2016 or in 2015. As of September 30, 2016 , the estimated fair value of our 2021 Notes was approximately $585 million . The fair value of the 2021 Notes was estimated using quoted market prices obtained from brokers (Level 2). The estimated fair value of our borrowings under our term loan and revolving credit facilities were approximately equal to their respective book values based on the borrowing rates currently available for variable rate loans (Level 2). |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 2,357 $ 2,608 Work in process 20,666 11,836 Finished goods 9,328 5,007 Total inventories $ 32,351 $ 19,451 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The gross carrying amount of goodwill was as follows (in thousands): Balance at December 31, 2015 $ 657,139 Goodwill arising from the Celator Acquisition 261,783 Foreign exchange 9,071 Balance at September 30, 2016 $ 927,993 The gross carrying amounts and net book values of our intangible assets were as follows (in thousands): September 30, 2016 December 31, 2015 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Acquired developed technologies 11.6 $ 1,542,813 $ (400,343 ) $ 1,142,470 $ 1,321,324 $ (324,044 ) $ 997,280 Manufacturing contracts 1.3 12,001 (8,073 ) 3,928 11,697 (5,676 ) 6,021 Trademarks — 2,890 (2,890 ) — 2,882 (2,882 ) — Total finite-lived intangible assets 1,557,704 (411,306 ) 1,146,398 1,335,903 (332,602 ) 1,003,301 Acquired IPR&D assets 1,964,041 — 1,964,041 182,305 — 182,305 Total intangible assets $ 3,521,745 $ (411,306 ) $ 3,110,439 $ 1,518,208 $ (332,602 ) $ 1,185,606 The increase in the gross carrying amount of intangible assets as of September 30, 2016 compared to December 31, 2015 reflects the acquisition of the Vyxeos IPR&D asset in the Celator Acquisition, as described in Note 2, and the capitalization of a $150.0 million milestone payment to Sigma-Tau Pharmaceuticals Inc. that was triggered by the FDA approval of Defitelio on March 30, 2016. Additionally, after receiving FDA approval of Defitelio, we reclassified $48.4 million of acquired IPR&D from an indefinite-lived intangible asset to an acquired developed technology finite-lived intangible asset. The Defitelio acquired developed technology asset will be amortized over its estimated useful life of 14 years. The increase in the gross carrying amount was also due to the positive impact of foreign currency translation adjustments due to the strengthening of the euro against the U.S. dollar. 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, 2016 , 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 2016 (remaining) $ 26,671 2017 106,683 2018 103,805 2019 103,582 2020 102,381 Thereafter 703,276 Total $ 1,146,398 |
Certain Balance Sheet Items
Certain Balance Sheet Items | 9 Months Ended |
Sep. 30, 2016 | |
Certain Balance Sheet Items [Abstract] | |
Certain Balance Sheet Items | Certain Balance Sheet Items Property and equipment consisted of the following (in thousands): September 30, December 31, Land and buildings $ 45,946 $ 1,775 Construction-in-progress 25,571 63,008 Manufacturing equipment and machinery 18,234 5,828 Computer software 17,198 15,797 Computer equipment 10,597 10,963 Leasehold improvements 9,245 9,301 Furniture and fixtures 2,770 2,580 Subtotal 129,561 109,252 Less accumulated depreciation and amortization (29,663 ) (23,680 ) Property and equipment, net $ 99,898 $ 85,572 The decrease in construction-in-progress, or CIP, from December 31, 2015 to September 30, 2016 is primarily due to the reclassification of building and equipment costs related to our Ireland manufacturing and development facility from CIP to the appropriate property and equipment category on the balance sheet following FDA approval of the facility in June 2016. Accrued liabilities consisted of the following (in thousands): September 30, December 31, Rebates and other sales deductions $ 71,472 $ 67,454 Employee compensation and benefits 39,768 35,595 Royalties 6,791 4,211 Clinical trial accruals 6,310 1,601 Sales returns reserve 5,010 6,110 Inventory-related accruals 4,746 1,017 Professional fees 4,615 3,038 Accrued interest 2,607 4,043 Accrued construction-in-progress 929 1,637 Contract claim settlement — 18,000 Other 30,170 21,364 Total accrued liabilities $ 172,418 $ 164,070 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the carrying amount of our indebtedness (in thousands): September 30, December 31, 1.875% exchangeable senior notes due 2021 $ 575,000 $ 575,000 Unamortized discount on 1.875% exchangeable senior notes due 2021 (105,829 ) (119,467 ) 1.875% exchangeable senior notes due 2021, net 469,171 455,533 Borrowings under revolving credit facility 1,000,000 — Term loan 714,302 732,398 Other borrowings — 513 Total debt 2,183,473 1,188,444 Less current portion 36,094 37,587 Total long-term debt $ 2,147,379 $ 1,150,857 Amendment of Credit Facility On June 18, 2015, Jazz Pharmaceuticals plc, as guarantor, and certain of our wholly owned subsidiaries, as borrowers, entered into a credit agreement, which we refer to in this report as the 2015 credit agreement, that provided for a $750.0 million principal amount term loan, which was drawn in full at closing, and a $750.0 million revolving credit facility, of which $160.0 million was drawn at closing and subsequently repaid. We used the proceeds from initial borrowings under the 2015 credit agreement to repay in full the $893.1 million principal amount of term loans outstanding under the credit agreement that we entered into in June 2012, as subsequently amended, which we refer to as the previous credit agreement, and to pay related fees and expenses. The previous credit agreement was terminated upon repayment of the term loans outstanding thereunder. On July 12, 2016 , Jazz Pharmaceuticals plc, as guarantor, and certain of our wholly owned subsidiaries, as borrowers, entered into the amended credit agreement. The amended credit agreement provides for a revolving credit facility of $1.25 billion , which replaces the revolving credit facility of $750.0 million provided for under the 2015 credit agreement, and a $750.0 million term loan facility, of which $721.9 million principal amount was outstanding as of September 30, 2016 . We used the proceeds of $1.0 billion of loans under the revolving credit facility, together with cash on hand, to fund the Celator Acquisition and expect to use the proceeds from future loans under the revolving credit facility, if any, for general corporate purposes, including corporate development activities. Please see Note 2 for additional information regarding the Celator Acquisition. Under the amended credit agreement, the term loan matures on July 12, 2021 and the revolving credit facility terminates, and any loans outstanding thereunder become due and payable, on July 12, 2021 . Borrowings under the amended credit agreement bear interest, at our option, at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 1.50% to 2.25% per annum, based upon our secured leverage ratio, or (b) the prime lending rate, plus an applicable margin ranging from 0.50% to 1.25% per annum, based upon our secured leverage ratio. The revolving credit facility has a commitment fee payable on the undrawn amount ranging from 0.25% to 0.35% per annum based upon our secured leverage ratio. Jazz Pharmaceuticals plc and certain of our wholly owned subsidiaries are borrowers under the amended credit agreement. The borrowers’ obligations under the amended credit agreement and any hedging or cash management obligations entered into with a lender are guaranteed on a senior secured basis by Jazz Pharmaceuticals plc and certain of our subsidiaries (including the issuer of the 2021 Notes as described below) and are secured by substantially all of Jazz Pharmaceuticals plc’s, the borrowers’ and the guarantor subsidiaries’ assets. We may make voluntary prepayments of principal at any time without payment of a premium. We are required to make mandatory prepayments of the term loan (without payment of a premium) with (1) net cash proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions), (2) net cash proceeds from issuances of debt (other than certain permitted debt), and (3) casualty proceeds and condemnation awards (subject to reinvestment rights and other exceptions). Principal repayments of the term loan, which are due quarterly, will begin in December 2016 and are equal to 5.0% per annum of the principal amount outstanding on July 12, 2016 of $721.9 million during the first two years, 7.5% per annum during the third year, 10.0% per annum during the fourth year and 12.5% per annum during the fifth year, with any remaining balance payable on the maturity date. The amended credit agreement contains financial covenants that require Jazz Pharmaceuticals plc and our restricted subsidiaries to not (a) exceed a maximum secured net leverage ratio or (b) fall below a cash interest coverage ratio. We were, as of September 30, 2016 , and are currently, in compliance with these financial covenants. In connection with our entry into the amended credit agreement, we recorded a loss on extinguishment and modification of debt of $0.6 million primarily related to new third party fees associated with modified debt. Exchangeable Senior Notes The 2021 Notes were issued by Jazz Investments I Limited, or the Issuer, a 100% -owned finance subsidiary of Jazz Pharmaceuticals plc. The Issuer’s obligations under the 2021 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Jazz Pharmaceuticals plc. No subsidiary of Jazz Pharmaceuticals plc guaranteed the 2021 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. As of September 30, 2016 , the carrying value of the equity component of the 2021 Notes, net of equity issuance costs, was $126.9 million . Maturities Scheduled maturities with respect to our long-term debt principal balances outstanding as of September 30, 2016 were as follows (in thousands): Year Ending December 31, Scheduled Long-Term Debt Maturities 2016 (remainder) $ 9,023 2017 36,094 2018 40,606 2019 58,652 2020 76,699 Thereafter 2,075,801 Total $ 2,296,875 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnification In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for general indemnification, including indemnification associated with product liability or infringement of intellectual property rights. Our exposure under these agreements is unknown because it involves future claims that may be made but have not yet been made against us. To date, we have not paid any claims or been required to defend any action related to these indemnification obligations. We have agreed to indemnify our executive officers, directors and certain other employees for losses and costs incurred in connection with certain events or occurrences, including advancing money to cover certain costs, subject to certain limitations. The maximum potential amount of future payments we could be required to make under the indemnification obligations is unlimited; however, we maintain insurance policies that may limit our exposure and may enable us to recover a portion of any future amounts paid. Assuming the applicability of coverage and 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, 2016 and December 31, 2015 . 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. Lease and Other Commitments We have noncancelable operating leases for our office buildings and we are obligated to make payments under noncancelable operating leases for automobiles used by our sales force. Future minimum lease payments under our noncancelable operating and facility leases as of September 30, 2016 were as follows (in thousands): Year Ending December 31, Lease Payments 2016 (remainder) $ 3,457 2017 15,465 2018 11,901 2019 10,375 2020 9,606 Thereafter 78,037 Total $ 128,841 In January 2015, we entered into an agreement to lease office space located in Palo Alto, California in a building to be constructed by the landlord. We expect to occupy this office space by the end of 2017. In connection with this lease, the landlord is providing a tenant improvement allowance for the costs associated with the design, development and construction of tenant improvements for the leased facility. We are obligated to fund all costs incurred in excess of the tenant improvement allowance. The scope of the planned tenant improvements do not qualify as “normal tenant improvements” under the lease accounting guidance. Accordingly, for accounting purposes, we have concluded we are the deemed owner of the building during the construction period. As of September 30, 2016 , we recorded project construction costs of $19.6 million incurred by the landlord as construction-in-progress in property and equipment, net and a corresponding financing obligation in other non-current liabilities in our condensed consolidated balance sheets. We will increase the asset and financing obligation as additional building costs are incurred by the landlord during the construction period. In the three and nine months ended September 30, 2016 , we recorded rent expense associated with the ground lease of $0.5 million and $1.4 million , respectively, in our condensed consolidated statements of income. In August 2016, we entered into an operating lease agreement for office space in Dublin, Ireland for a term of 20 years , with an option to terminate at the end of eight years with no less than one year ’s prior written notice and the payment of a termination fee, and a further option to terminate at the end of 15 years with no less than one year ’s prior written notice. We are obligated to make minimum lease payments totaling $20.8 million in connection with this lease. As of September 30, 2016 , we had $23.1 million of noncancelable purchase commitments due within one year, primarily related to agreements with third party manufacturers. Legal Proceedings We are involved in legal proceedings, including the following matters: Xyrem ANDA Matters. On October 18, 2010, we received a notice of Paragraph IV Patent Certification, or Paragraph IV Certification, from Roxane that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. Roxane’s initial notice alleged that all five patents then listed for Xyrem in the FDA’s publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” or Orange Book, on the date of the notice are invalid, unenforceable or not infringed by Roxane’s proposed generic product. On November 22, 2010, we filed a lawsuit against Roxane in response to Roxane’s initial notice in the U.S. District Court for the District of New Jersey, or the District Court, seeking a permanent injunction to prevent Roxane from introducing a generic version of Xyrem that would infringe our patents. In accordance with the Drug Price Competition and Patent Term Restoration Act of 1984, or Hatch-Waxman Act, as a result of our having filed a timely lawsuit against Roxane, FDA approval of Roxane’s ANDA was stayed for 30 months , or until April 2013. That stay has expired. Additional patents covering Xyrem have been issued since December 2010, and after receiving Paragraph IV Certification notices from Roxane with respect to those patents, we have filed additional lawsuits against Roxane to include these additional patents in the litigation. All of the lawsuits filed against Roxane between 2010 and 2012 were consolidated by the District Court into a single case, which we refer to as the first Roxane consolidated case. In the first Roxane consolidated case, we allege that 10 of our patents covering Xyrem are or will be infringed by Roxane’s ANDA and seek a permanent injunction to prevent Roxane from launching a generic version of Xyrem that would infringe these patents. After receiving additional Paragraph IV Certification notices from Roxane, we filed three actions against Roxane in the District Court on February 20, 2015, June 1, 2015 and January 27, 2016 that were consolidated by the District Court into a second case, which we refer to as the second Roxane consolidated case. In the second Roxane consolidated case, we allege that five of our patents covering Xyrem are or will be infringed by Roxane’s ANDA and seek a permanent injunction to prevent Roxane from introducing a generic version of Xyrem that would infringe those patents. In December 2013, the District Court permitted Roxane to amend its answer in the first Roxane consolidated case to allege certain equitable defenses, and the parties were given additional time for discovery on those new defenses. In addition, in March 2014, the District Court granted our motion to bifurcate and stay the portion of the first Roxane consolidated case regarding patents related to the distribution system for Xyrem. In April 2015, Roxane moved in the second Roxane consolidated case to dismiss claims involving our patent covering a part of the Xyrem label that instructs prescribers on adjusting the dose of Xyrem when it is being co-administered with divalproex sodium (also known as valproate or valproic acid) on the grounds that this patent does not cover patentable subject matter. In October 2015, the District Court administratively terminated this motion to dismiss (without prejudice) pending the outcome of IPR proceedings before the PTAB, relating to the patent that was the subject of Roxane’s motion. Such IPR proceedings were filed by Par, Ranbaxy and Amneal and are discussed below. In July 2016, the District Court determined that it would try all of the patents at issue in the first and second Roxane consolidated cases together, including patents that were previously bifurcated and stayed, and set trial in this consolidated case for the second quarter of 2017. On August 12, 2016, we filed a lawsuit against Roxane in the District Court alleging that an additional later-issued distribution patent is or will be infringed by Roxane’s ANDA and seeking a permanent injunction to prevent Roxane from introducing a generic version of Xyrem that would infringe that patent. In September 2016, Roxane moved to dismiss the lawsuit. This motion is pending. The actual timing of events in our litigation with Roxane may be earlier or later than we currently anticipate. We cannot predict the specific timing or outcome of events in these matters or the impact of these matters on other ongoing proceedings with any ANDA filer. On December 10, 2012, we received notice of Paragraph IV Certification from Amneal Pharmaceuticals, LLC, or Amneal, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On January 18, 2013, we filed a lawsuit against Amneal in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Amneal’s ANDA and seeking a permanent injunction to prevent Amneal from introducing a generic version of Xyrem that would infringe these patents. On November 21, 2013, we received notice of Paragraph IV Certification from Par Pharmaceutical, Inc., or Par, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On December 27, 2013, we filed a lawsuit against Par in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Par’s ANDA and seeking a permanent injunction to prevent Par from introducing a generic version of Xyrem that would infringe these patents. In April 2014, Amneal asked the District Court to consolidate its case with the Par case, stating that both cases would proceed on the schedule for the Par case. The District Court granted this request in May 2014. The order consolidating the cases provides that Amneal’s 30 -month stay period will be extended to coincide with the date of Par’s 30 -month stay period. The stay expired on May 20, 2016. Additional patents covering Xyrem have issued since April 2014 and have been listed in the Orange Book for Xyrem. Amneal and Par have given us additional notices of Paragraph IV Certifications regarding such patents, and we have filed additional lawsuits against Amneal and Par in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Amneal’s and Par’s ANDAs and seeking a permanent injunction to prevent Amneal and Par from introducing a generic version of Xyrem that will infringe these patents. In March 2016, Par moved to dismiss claims involving our patents covering a part of the Xyrem label that instructs prescribers on adjusting the dose of Xyrem when it is being co-administered with divalproex sodium (also known as valproate or valproic acid). On June 4, 2014, we received a notice of Paragraph IV Certification from Ranbaxy Laboratories Limited, or Ranbaxy, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On July 15, 2014, we filed a lawsuit against Ranbaxy in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Ranbaxy’s ANDA and seeking a permanent injunction to prevent Ranbaxy from introducing a generic version of Xyrem that will infringe these patents. Since June 2014, we have received additional notices of Paragraph IV Certification from Ranbaxy regarding newly issued patents for Xyrem listed in the Orange Book, and we have filed additional lawsuits against Ranbaxy in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Ranbaxy’s ANDA and seeking a permanent injunction to prevent Ranbaxy from introducing a generic version of Xyrem that will infringe these patents. In May 2016, the Ranbaxy litigation was settled as described below. On October 30, 2014, we received a notice of Paragraph IV Certification from Watson Laboratories, Inc., or Watson, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On December 11, 2014, we filed a lawsuit against Watson in the District Court alleging that our patents covering Xyrem are or will be infringed by Watson’s ANDA and seeking a permanent injunction to prevent Watson from introducing a generic version of Xyrem that would infringe these patents. In March 2015, Watson moved to dismiss the portion of the case based on our Orange Book ‑ listed patents covering the distribution system for Xyrem on the grounds that these patents do not cover patentable subject matter. In November 2015, the District Court administratively terminated this motion to dismiss (without prejudice) pending the outcome of IPR proceedings before the PTAB relating to the patents that were the subject of Watson’s motion. Since March 2015, we have received an additional notice of Paragraph IV Certification from Watson regarding newly issued patents for Xyrem listed in the Orange Book, and we have filed an additional lawsuit against Watson in the District Court alleging that our patents covering Xyrem are or will be infringed by Watson’s ANDA and seeking a permanent injunction to prevent Watson from introducing a generic version of Xyrem that would infringe these patents. In April 2015, the District Court issued an order that consolidated all then-pending lawsuits against Amneal, Par, Ranbaxy and Watson into one case. On June 8, 2015, we received a Paragraph IV Certification from Wockhardt Bio AG, or Wockhardt, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On July 17, 2015, we filed a lawsuit in the District Court alleging that our patents covering Xyrem were or would be infringed by Wockhardt’s ANDA and seeking a permanent injunction to prevent Wockhardt from introducing a generic version of Xyrem that would infringe our patents. On November 26, 2015, we received an additional notice of Paragraph IV Certification from Wockhardt regarding newly issued patents listed in the Orange Book, and we filed an additional lawsuit against Wockhardt in the District Court alleging that our patents covering Xyrem were or would be infringed by Wockhardt’s ANDA and seeking a permanent injunction to prevent Wockhardt from introducing a generic version of Xyrem that would infringe these patents. In April 2016, the Wockhardt litigation was settled as set forth below. On July 23, 2015, we received a Paragraph IV Certification from Lupin Inc., or Lupin, that it has submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On September 2, 2015, we filed a lawsuit in the District Court alleging that our patents covering Xyrem are or will be infringed by Lupin’s ANDA and seeking a permanent injunction to prevent Lupin from introducing a generic version of Xyrem that would infringe our patents. In January 2016, the District Court issued an order consolidating all of the cases then pending against Amneal, Par, Ranbaxy, Watson, Wockhardt and Lupin into a single case for all purposes. In April 2016, the District Court issued orders consolidating two cases against Amneal and Ranbaxy relating to later-issued patents with the previously consolidated case against Amneal, Par, Ranbaxy, Watson and Lupin. In June 2016, the District Court issued an order consolidating a case against Watson relating to a later-issued patent with the previously consolidated case against Amneal, Par, Watson and Lupin. We entered into settlement agreements with Wockhardt and Ranbaxy on April 18, 2016 and May 9, 2016, respectively, that resolved our patent litigation against Wockhardt and Ranbaxy. Under the settlement agreements, we granted each of Wockhardt and Ranbaxy a license to manufacture, market, and sell its generic version of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. The specific terms of the settlement agreements are confidential. The settlements with Wockhardt and Ranbaxy do not resolve the litigation against Amneal, Par, Watson and Lupin, which is ongoing. We cannot predict the specific timing or outcome of events in this matter with respect to the remaining defendants or the impact of developments involving any specific parties or patents on other ongoing proceedings with any ANDA filer. Xyrem Post-Grant Patent Review Matters . In January 2015, certain of the ANDA filers filed petitions for IPR with respect to the validity of six patents covering the distribution system for Xyrem. In July 2015, the PTAB issued decisions instituting IPR trials with respect to these petitions. In July 2016, the PTAB issued final decisions that the claims of these six patents are unpatentable; if the United States Court of Appeals for the Federal Circuit upholds those decisions or if the time for appeal expires, these claims will be canceled. We expect to appeal these decisions to the United States Court of Appeals for the Federal Circuit. In September 2015, certain of the ANDA filers filed a petition for IPR with respect to the validity of an additional patent covering the distribution system for Xyrem. In March 2016, the PTAB issued a decision instituting an IPR trial with respect to three claims of the patent subject to this petition, and we expect the PTAB to issue a final decision on the validity of these claims in March 2017. The PTAB denied the petition with respect to the other 25 claims of the patent. In October 2015, Ranbaxy and Par filed petitions for IPR with respect to the validity of one of our patents covering a method for prescribing Xyrem when it is being co-administered with divalproex sodium, and Amneal filed an IPR petition on the same patent in February 2016. In April 2016, the PTAB denied Par’s petition in its entirety and issued a decision on Ranbaxy’s petition, instituting an IPR trial with respect to 16 of the claims under the patent subject to this petition and denying the petition with respect to the other 18 claims. In July 2016, the PTAB denied Amneal’s petition in its entirety. In March 2016, Ranbaxy filed a petition for IPR with respect to the validity of the second of our patents covering a method for prescribing Xyrem when it is being co-administered with divalproex sodium. In connection with settlement of our litigation with Ranbaxy, both of the IPR petitions filed by Ranbaxy were terminated. In December 2015, Wockhardt filed a petition for IPR with respect to the validity of one of our patents covering the formulation of Xyrem. In connection with settlement of our patent litigation with Wockhardt, this IPR petition was terminated. We cannot predict whether additional post-grant patent review challenges will be filed by any of the ANDA filers or any other entity, the outcome of any pending IPR or other proceeding, the outcome of any appeal or rehearing of the July 2016 IPR decisions with respect to six patents covering the distribution system for Xyrem or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings or other aspects of our Xyrem business. In September 2016, Jazz Pharmaceuticals, Inc., our wholly owned subsidiary, submitted a Citizen Petition to the FDA requesting that, for safety reasons, the FDA refuse to approve any sodium oxybate ANDA with a proposed label or REMS that omits the portions of the Xyrem label and the Xyrem REMS that instruct prescribers on adjusting the dose of the product when it is co-administered with divalproex sodium (also known as valproate or valproic acid). We cannot predict when or if the FDA will respond to, or otherwise take any action with respect to, the Citizen Petition, the effect of any such response or action on the ongoing patent litigation referenced above, whether the FDA will ultimately require any proposed generic form of Xyrem to include the relevant safety information in its label or REMS or whether we will be successful in maintaining the validity of the applicable patents and protecting the patents from infringement. However, if the FDA responds to our Citizen Petition by concluding that a proposed label or REMS for generic version of Xyrem does not need to include the portion of the Xyrem label relating to co-administration with divalproex sodium, it could potentially be easier for ANDA applicants to avoid infringement of our applicable patents. For more information, see the risk factor under the heading “ If generic versions of Xyrem or other sodium oxybate products that compete with Xyrem are approved and launched, sales of Xyrem would be adversely affected” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. Shareholder Litigation Matters Relating to Celator Acquisition. On June 21, 2016, a putative class-action lawsuit challenging the Celator Acquisition, captioned Dunbar v. Celator Pharmaceuticals, Inc., or the Dunbar action, was filed in the Superior Court of New Jersey. The complaint was filed against Celator, each member of the Celator board of directors, Jazz Pharmaceuticals plc and our wholly owned subsidiary Plex Merger Sub, Inc., or Plex. The complaint generally alleges that the Celator directors breached their fiduciary duties in connection with the Celator Acquisition, and that Jazz Pharmaceuticals plc and Plex aided and abetted these alleged breaches of fiduciary duty. The complaint also generally asserts that the Celator directors breached their fiduciary duties to Celator’s public stockholders by, among other things, (i) agreeing to sell Celator to us at an inadequate price, (ii) implementing an unfair process, (iii) agreeing to certain provisions of the merger agreement for the Celator Acquisition that allegedly favored us and deterred alternative bids, and (iv) failing to disclose purportedly material information in Celator’s Schedule 14D-9 filing with the SEC. The plaintiff sought, among other things, an injunction against the consummation of the Celator Acquisition and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Between June 27, 2016 and June 29, 2016, two putative class-action lawsuits challenging the Celator Acquisition, captioned Palmisciano v. Celator Pharmaceuticals, Inc., or the Palmisciano action, and Barreto v. Celator Pharmaceuticals, Inc. , or the Barreto action , were filed in the District Court. The complaints were filed against Celator and each member of the Celator board of directors. The complaints assert causes of action under sections 14 and 20 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, predicated on Celator’s and the Celator directors’ alleged failure to disclose purportedly material information in Celator’s Schedule 14D-9 filing with the SEC. The plaintiffs sought, among other things, an injunction against the consummation of the Celator Acquisition and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Neither Jazz Pharmaceuticals plc nor Plex were named defendants in these actions. On July 6, 2016, the defendants to the Dunbar action, the Palmisciano action and the Barreto action entered into a memorandum of understanding regarding settlement of these actions. The memorandum of understanding outlines the terms of the parties’ agreement in principle to settle and release all claims which were or could have been asserted in these actions. In consideration for such settlement and release, the parties to these actions agreed, among other things, that Celator would amend its Schedule 14D-9 to include certain supplemental disclosures. The Schedule 14D-9 was amended by Celator on July 6, 2016, and the Celator Acquisition was completed on July 12, 2016. The settlement remains subject to, among other items, confirmatory discovery, the execution of a stipulation of settlement by the parties, final approval of the settlement by the District Court in the Barreto action and dismissal with prejudice of the Dunbar action and the Palmisciano action. From time to time we are involved in legal proceedings arising in the ordinary course of business. We believe there is no other litigation pending that could have, individually or in the aggregate, a material adverse effect on our results of operations or financial condition. Other Contingencies We have not previously submitted pricing data for two radiopharmaceutical products, Quadramet ® (samarium sm 153 lexidronam injection) and ProstaScint ® (capromab pendetide), for Medicaid and the Public Health Service’s 340B drug pricing program, or 340B program. We engaged in interactions with the Centers for Medicare and Medicaid Services, or CMS, and a trade group, the Council on Radionuclides and Radiopharmaceuticals, or CORAR, regarding the reporting of Medicaid pricing data and paying Medicaid rebates for radiopharmaceutical products. In addition to the discussions with CMS as part of CORAR, we have had separate discussions with CMS directly regarding Quadramet. We sold Quadramet to a third party in December 2013, but we retained any liabilities related to sales of the product during prior periods. Similarly, we sold ProstaScint to a third party in May 2015, but we retained any liabilities related to sales of the product during prior periods. We are currently unable to predict whether price reporting and rebates will be required for Quadramet and ProstaScint for some or all of the period during which we were responsible for sales of these products. The initiation of any reporting of Medicaid pricing data for Quadramet or ProstaScint could result in retroactive 340B ceiling price liability for these two products. We are currently unable to reasonably estimate an amount or range of a potential contingent loss. Any material liability resulting from radiopharmaceutical price reporting would negatively impact our financial results. In May 2016, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to our support of 501(c)(3) organizations that provide financial assistance to Medicare patients, and, for Xyrem, documents concerning the provision of financial assistance to Medicare patients. In October 2016, we received a second subpoena updating and further specifying document requests regarding support to 501(c)(3) organizations that provide financial assistance to Medicare patients and the provision of financial assistance for Medicare patients taking drugs sold by us. Other companies have disclosed similar subpoenas and continuing inquiries. We are cooperating with this investigation. We are unable to predict how long this investigation will continue, whether we will receive additional subpoenas in connection with this investigation, or its outcome, but we expect that we will continue to incur significant costs in connection with the investigation, regardless of the outcome. For more information, see the risk factor under the heading “ We are subject to significant ongoing regulatory obligations and oversight, which may result in significant additional expense and limit our ability to commercialize our products” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity The following tables present a reconciliation of our beginning and ending balances in shareholders’ equity for the nine months ended September 30, 2016 and 2015, respectively (in thousands): Total Shareholders' Equity Shareholders' equity at January 1, 2016 $ 1,598,646 Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 17,951 Employee withholding taxes related to share-based awards (20,595 ) Share-based compensation 75,176 Shares repurchased (259,819 ) Other comprehensive income 32,096 Net income 272,548 Shareholders' equity at September 30, 2016 $ 1,716,003 Attributable to: Jazz Pharmaceuticals plc Noncontrolling interests Total Shareholders' Equity Shareholders' equity at January 1, 2015 $ 1,371,144 $ 64 $ 1,371,208 Acquisition of noncontrolling interests (5 ) (55 ) (60 ) Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 34,025 — 34,025 Employee withholding taxes related to share-based awards (25,402 ) — (25,402 ) Share-based compensation 67,729 — 67,729 Tax benefit from employee share options (320 ) — (320 ) Shares repurchased (21,302 ) — (21,302 ) Other comprehensive income (loss) (109,180 ) 6 (109,174 ) Net income (loss) 246,774 (1 ) 246,773 Shareholders' equity at September 30, 2015 $ 1,563,463 $ 14 $ 1,563,477 Share Repurchase Program In November 2015, our board of directors authorized a share repurchase program pursuant to which we were authorized to repurchase a number of ordinary shares having an aggregate purchase price of up to $300 million , exclusive of any brokerage commissions. In the nine months ended September 30, 2016 , we spent a total of $259.8 million to purchase 2.1 million of our ordinary shares under the share repurchase program at an average total purchase price, including commissions, of $125.65 per share. All ordinary shares repurchased by us were canceled. As of September 30, 2016 , we completed repurchases under this share repurchase program, and no authorized amounts remained under this program. In November 2016, our board of directors authorized a new share repurchase program pursuant to which we are authorized to repurchase a number of ordinary shares having an aggregate purchase price of up to $300 million , 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. The timing and amount of repurchases will depend on a variety of factors, including the price of our ordinary shares, alternative investment opportunities, restrictions under the amended credit agreement, corporate and regulatory requirements and market conditions. The new share repurchase program may be modified, suspended or discontinued at any time without prior notice. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss as of September 30, 2016 and December 31, 2015 were as follows (in thousands): Foreign Total Balance at December 31, 2015 $ (267,472 ) $ (267,472 ) Other comprehensive income 32,096 32,096 Balance at September 30, 2016 $ (235,376 ) $ (235,376 ) During the nine months ended September 30, 2016 , other comprehensive income reflects foreign currency translation adjustments, primarily due to the strengthening of the euro against the U.S. dollar. |
Segment and Other Information
Segment and Other Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment and Other Information | Segment and Other Information Our operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker, or CODM. Our CODM has been identified as our chief executive officer. We have determined that we operate in one business segment, which is the identification, development and commercialization of meaningful pharmaceutical products that address unmet medical needs. The following table presents a summary of total revenues (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Xyrem $ 285,907 $ 242,899 $ 816,412 $ 703,435 Erwinaze/Erwinase 42,986 56,317 143,907 152,821 Defitelio/defibrotide 28,137 19,639 79,280 52,259 Prialt ® (ziconotide) intrathecal infusion 8,783 6,042 23,065 19,944 Psychiatry 3,875 9,910 14,744 28,375 Other 1,933 3,947 7,239 21,061 Product sales, net 371,621 338,754 1,084,647 977,895 Royalties and contract revenues 2,560 2,118 6,705 6,027 Total revenues $ 374,181 $ 340,872 $ 1,091,352 $ 983,922 The following table presents a summary of total revenues attributed to geographic sources (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 United States $ 339,825 $ 305,585 $ 991,557 $ 877,397 Europe 25,788 26,076 79,557 82,837 All other 8,568 9,211 20,238 23,688 Total revenues $ 374,181 $ 340,872 $ 1,091,352 $ 983,922 The following table presents a summary of the percentage of total revenues from customers that represented more than 10% of our total revenues: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Express Scripts 76 % 71 % 75 % 71 % McKesson Corporation and affiliates 13 % 14 % 14 % 5 % The following table presents total long-lived assets, consisting of property and equipment, by location (in thousands): September 30, December 31, Ireland $ 63,388 $ 62,795 United States 27,587 12,794 Italy 7,181 7,928 Other 1,742 2,055 Total long-lived assets $ 99,898 $ 85,572 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense related to share options, RSUs and grants under our ESPP was as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Selling, general and administrative $ 19,511 $ 19,542 $ 60,664 $ 54,843 Research and development 4,056 2,786 10,867 10,137 Cost of product sales 1,307 786 2,959 2,253 Total share-based compensation expense, pre-tax 24,874 23,114 74,490 67,233 Tax benefit from share-based compensation expense (7,255 ) (6,658 ) (21,413 ) (19,722 ) Total share-based compensation expense, net of tax $ 17,619 $ 16,456 $ 53,077 $ 47,511 Share Options The table below shows the number of shares underlying options granted to purchase our ordinary shares, the weighted-average assumptions used in the Black-Scholes option pricing model and the resulting weighted-average grant date fair value of share options granted: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Shares underlying options granted (in thousands) 147 106 1,247 1,056 Grant date fair value $ 42.89 $ 60.34 $ 40.85 $ 57.85 Black-Scholes option pricing model assumption information: Volatility 37 % 40 % 39 % 39 % Expected term (years) 4.2 4.2 4.2 4.2 Range of risk-free rates 0.8-1.0% 1.3-1.4% 0.8-1.5% 1.1-1.4% Expected dividend yield — % — % — % — % Restricted Stock Units The table below shows the number of RSUs granted covering an equal number of our ordinary shares and the weighted-average grant date fair value of RSUs granted: Three Months Ended Nine Months Ended 2016 2015 2016 2015 RSUs granted (in thousands) 59 40 495 406 Grant date fair value $ 138.55 $ 179.10 $ 126.80 $ 175.22 The fair value of RSUs is determined on the date of grant based on the market price of our ordinary shares on that date. The fair value of RSUs is expensed ratably over the vesting period, generally over four years . As of September 30, 2016 , compensation cost not yet recognized related to unvested share options and RSUs was $80.3 million and $93.9 million , respectively, which is expected to be recognized over a weighted-average period of 2.6 years and 2.5 years, respectively. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the nine months ended September 30, 2016 , we recorded severance costs of $1.5 million for terminated employees in connection with the reorganization of our operations, primarily in France and Italy. These one-time termination benefits were recorded over the remaining service period where employees were required to stay through their termination date to receive the benefits and included within cost of product sales and selling, general and administrative expenses in our condensed consolidated statements of income. As of September 30, 2016 , we had incurred total termination benefit costs of $2.6 million in connection with these reorganizations. We do not expect to incur any additional material one-time termination benefit costs relating to these restructuring activities in 2016. The following table summarizes the amounts related to restructuring through September 30, 2016 (in thousands): Termination Benefits Balance at December 31, 2015 $ 1,105 Expense 1,520 Payments (2,305 ) Balance at September 30, 2016 $ 320 The balances as of September 30, 2016 and December 31, 2015 were included within accrued liabilities in our condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax provision was $29.1 million and $108.5 million in the three and nine months ended September 30, 2016, respectively , compared to $29.9 million and $92.7 million for the same periods in 2015 . The effective tax rates were 25.0% and 28.5% in the three and nine months ended September 30, 2016, respectively , compared to 25.4% and 27.3% for the same periods in 2015 . The decrease in the effective tax rate for the three months ended September 30, 2016 compared to the same period in 2015 was primarily due to changes in income mix among the various jurisdictions in which we operate, partially offset by a decrease in originating tax credits. The increase in the effective tax rate for the nine months ended September 30, 2016 compared to the same period in 2015 was primarily due to a decrease in originating tax credits, partially offset by changes in income mix among the various jurisdictions in which we operate. The effective tax rates for the three and nine months ended September 30, 2016 were higher than the Irish statutory rate of 12.5% primarily due to income taxable at a rate higher than the Irish statutory rate, uncertain tax positions, and various expenses not deductible for tax purposes, partially offset by originating tax credits and deductions available in relation to subsidiary equity. 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. The increase in our net deferred tax liability from December 31, 2015 to September 30, 2016 was primarily due to the Celator Acquisition, as described in Note 2. We maintain a valuation allowance against certain foreign and U.S. state deferred tax assets. Each reporting period, we evaluate the need for a valuation allowance on our deferred tax assets by jurisdiction and adjust our estimates as more information becomes available. We are required to recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. As a result, we have established a liability for certain tax benefits which we judge may not be sustained upon examination. Our most significant tax jurisdictions are Ireland, the U.S. (both at the federal level and in various state jurisdictions), Italy and France. Because of our net operating loss carryforwards and tax credit carryforwards, substantially all of our tax years remain open to federal, state, and foreign tax examination. Certain of our subsidiaries are currently under examination by the French tax authorities for the years ended December 31, 2012 and 2013 and by the Italian tax authorities for the year ended December 31, 2014. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes. In December 2015, we received proposed tax assessment notices from the French tax authorities for 2012 and 2013 relating to certain transfer pricing adjustments. The notices propose additional French tax of approximately $42.9 million , including interest and penalties through the date of the assessment, translated at the foreign exchange rate at September 30, 2016 . We disagree with the proposed assessment and intend to contest it vigorously. |
The Company and Summary of Si19
The Company and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited condensed consolidated financial statements have been prepared following the requirements of the U.S. Securities and Exchange Commission, or SEC, for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. 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 consolidated financial statements and accompanying notes included in our Annual Report on Form 10‑K for the year ended December 31, 2015 . The results of operations of the acquired Celator business, along with the estimated fair values of the assets acquired and liabilities assumed in the Celator Acquisition, have been included in our condensed consolidated financial statements since the closing of the Celator Acquisition on July 12, 2016, the closing date of the Celator Acquisition. In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual 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, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 , for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated. |
Significant Risks and Uncertainties | Significant Risks and Uncertainties Our financial results remain significantly influenced by sales of Xyrem. In the three and nine months ended September 30, 2016 , net product sales of Xyrem were $285.9 million and $816.4 million , respectively, which represented 77% and 75% of total net product sales, respectively. Our ability to maintain or increase sales of Xyrem in its approved indications is subject to a number of risks and uncertainties, including the potential introduction of generic competition or an alternative sodium oxybate or other product that competes with Xyrem; changed or increased regulatory restrictions or regulatory actions by the FDA; our suppliers’ ability to obtain sufficient quotas from the U.S. Drug Enforcement Administration, or DEA; any supply, manufacturing or distribution problems arising with any of our suppliers or distributors, most of whom are sole source providers for us; any increase in pricing pressure from or restrictions on reimbursement imposed by third party payors; changes in healthcare laws and policy; continued acceptance of Xyrem by physicians and patients; changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem; and operational disruptions at the central pharmacy or any failure to comply with our risk evaluation and mitigation strategy, or REMS, obligations to the satisfaction of the FDA. Seven companies have sent us notices that they have filed abbreviated new drug applications, or ANDAs, with the FDA seeking approval to market a generic version of Xyrem. We have filed lawsuits against each of these companies seeking to prevent the introduction of a generic version of Xyrem that would infringe our patents. In the second quarter of 2016, we settled two of these lawsuits, granting the settling ANDA applicants a license to manufacture, market and sell their generic versions of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. The court in which our ANDA litigation is ongoing has determined that all of our pending patent litigation (other than our lawsuit filed in August 2016) against the first ANDA filer, Roxane Laboratories, Inc., or Roxane, will be consolidated for trial and set trial in this consolidated case for the second quarter of 2017. We cannot predict the timing or outcome of this or the other ANDA litigation proceedings. Certain ANDA filers have also filed petitions for inter partes review, or IPR, by the Patent Trial and Appeal Board, or the PTAB, of the U.S. Patent and Trademark Office, or USPTO, with respect to the validity of certain distribution, method of use and formulation patents covering Xyrem. The PTAB instituted IPR trials with respect to patents and patent claims that are the subject of certain of these petitions. In July 2016, the PTAB issued final decisions that the claims of six distribution system patents that were the subject of certain IPR trials are unpatentable; as a result, if the United States Court of Appeals for the Federal Circuit upholds those decisions or if the time for appeal expires, these claims will be canceled. For a description of these matters, see “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q. We cannot predict whether additional post-grant patent review challenges will be filed by any of the ANDA filers or any other entity, the outcome of any pending IPR or other proceeding, the outcome of any appeal or rehearing of the July 2016 IPR decisions with respect to six patents covering the distribution system for Xyrem or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings or other aspects of our Xyrem business. We expect that the approval of an ANDA that results in the launch of a generic version of Xyrem, or the approval and launch of other sodium oxybate products that compete with Xyrem, would have a material adverse effect on our business, financial condition, results of operations and growth prospects. Approval of an ANDA with respect to a generic version of Xyrem will require a REMS, which may be either a single shared REMS with Xyrem or a separate REMS with differing but comparable aspects of elements to assure safe use, or ETASU, to those in the approved Xyrem REMS. We and the ANDA applicants had interactions with respect to developing a single shared REMS for several years. The ANDA applicants are not currently engaging in single shared REMS discussions with us, but we have been seeking to continue the interactions with the goal of developing a single shared REMS. However, we cannot predict whether, or to what extent, our interactions with the ANDA applicants will resume or whether we will develop a single shared REMS with the ANDA applicants. We are aware that, separate from the discussions with us, the FDA and ANDA applicants have exchanged communications regarding a REMS for sodium oxybate. If we and the ANDA applicants do not develop a single shared REMS, if we do not license or share intellectual property pertinent to our Xyrem REMS with generic competitors within a time frame or on terms that the FDA considers acceptable or if a generic competitor otherwise successfully petitions the FDA for a waiver of the shared REMS requirement, the FDA may assert that its waiver authority permits it to approve the ANDA of one or more generic competitors with a separate REMS that differs in some aspects from our approved Xyrem REMS. We also may face pressure to develop a single shared REMS with potential generic competitors for Xyrem that is different from the approved Xyrem REMS or to license or share intellectual property pertinent to the Xyrem REMS, or elements of the Xyrem REMS, including proprietary data required for safe distribution of sodium oxybate, with generic competitors. We cannot predict the outcome or impact on our business of any future action that we may take with respect to the development of a single shared REMS for sodium oxybate, licensing or sharing intellectual property pertinent to our Xyrem REMS or elements of the Xyrem REMS, or the FDA’s response to a request by one or more ANDA applicants for a waiver of the requirement for a single shared REMS, including in connection with a certification that the applicant had been unable to obtain a license. The FDA’s response to any such request could include approval of one or more ANDAs. In addition, the Federal Trade Commission, or FTC, other governmental authorities or others could claim or determine that we are using the Xyrem REMS in an anticompetitive manner (including in light of the FDA’s statement in the Xyrem REMS approval letter that the Xyrem REMS could be used in an anticompetitive manner inconsistent with applicable provisions of the Federal Food, Drug and Cosmetic Act, or FDCA) or have engaged in other anticompetitive practices. In August 2015, we implemented the final Xyrem REMS, which was approved by the FDA in February 2015, and we have submitted and expect to continue to submit ongoing assessments as set forth in the FDA’s Xyrem REMS approval letter. However, we cannot guarantee that our implementation and ongoing assessments will be satisfactory to the FDA or that the Xyrem REMS will satisfy the FDA’s expectations in its evaluation of the Xyrem REMS on an ongoing basis. Any failure to comply with the REMS obligations could result in enforcement action by the FDA; lead to changes in our Xyrem REMS obligations; negatively affect sales of Xyrem; result in additional costs and expenses for us; and/or take a significant amount of time, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects. Obtaining and maintaining appropriate reimbursement for Xyrem in the U.S. is increasingly challenging due to, among other things, the attention being paid to healthcare cost containment and prescription drug pricing, pricing pressure from third party payors and increasingly restrictive reimbursement conditions being imposed by third party payors. In this regard, we have experienced and expect to continue to experience increasing pressure from third party payors to agree to discounts, rebates or other pricing terms for Xyrem. Any such restrictive pricing terms or additional reimbursement conditions could have a material adverse effect on our Xyrem revenues. In addition, drug pricing by pharmaceutical companies is currently, and is expected to continue to be, under close scrutiny, including with respect to companies that have increased the price of products after acquiring those products from other companies. We expect that healthcare policies and reforms intended to curb healthcare costs will continue to be proposed, which could limit the prices that we charge for our products, including Xyrem, limit the commercial opportunities for our products and/or negatively impact revenues from sales of our products. Also, price increases on Xyrem and our other products, and negative publicity regarding pricing and price increases generally, whether with respect to our products or products distributed by other pharmaceutical companies, could negatively affect market acceptance of Xyrem and our other products. In the three and nine months ended September 30, 2016 , net product sales of our second largest product, Erwinaze/Erwinase (which we refer to in this report as Erwinaze unless otherwise indicated or the context otherwise requires), were $43.0 million and $143.9 million , respectively, which represented 12% and 13% of total net product sales, respectively. We seek to maintain and increase sales of Erwinaze, as well as to make Erwinaze more widely available, through ongoing sales and marketing and research and development activities. However, a significant challenge to our ability to maintain current sales levels and to increase sales is our extremely limited inventory of Erwinaze, past supply interruptions and our need to minimize or avoid additional supply interruptions due to capacity constraints, production delays, quality or regulatory challenges or other manufacturing difficulties. Erwinaze is licensed from and manufactured by a single source, Porton Biopharma Limited, or PBL. The current manufacturing capacity for Erwinaze is completely absorbed by demand for the product. We are working with PBL to evaluate potential expansion of its production capacity to increase the supply of Erwinaze over the longer term and to address the production delays, quality challenges and related regulatory scrutiny. As a consequence of constrained manufacturing capacity, we have had an extremely limited or no ability to build product inventory levels that can be used to absorb disruptions to supply resulting from quality, regulatory or other issues, and we have experienced product quality, manufacturing and inventory challenges that have resulted in disruptions in our ability to supply certain markets and caused us to implement batch-specific, modified product use instructions. Most recently, we experienced supply interruptions of Erwinaze in the U.S. late in the third quarter of 2016 and also during October 2016, and we expect to experience another supply interruption in the fourth quarter of 2016. We expect that we will continue to experience inventory and supply challenges, which have resulted, and may continue to result, in further temporary disruptions in our ability to supply certain markets, including the U.S., from time to time. As capacity constraints and supply disruptions continue, whether as a result of continued quality or other manufacturing issues, regulatory issues or otherwise, we will be unable to build a desired excess level of product inventory, our ability to supply the market may continue to be compromised, physicians’ decisions to use Erwinaze may continue to be negatively impacted and our sales of and revenues from Erwinaze, our potential future maintenance and growth of the market for this product, and/or our business, financial condition, results of operations and growth prospects could be materially adversely affected. Our ability to successfully and sustainably maintain or grow sales of Erwinaze is also subject to a number of other risks and uncertainties, including the limited population of patients with ALL and the incidence of hypersensitivity reactions to E. coli -derived asparaginase within that population, our need to apply for and receive marketing authorizations, through the European Union’s, or EU’s, mutual recognition procedure or otherwise in certain additional countries so we can launch promotional efforts in those countries, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. In the three and nine months ended September 30, 2016 , net product sales of Defitelio/defibrotide represented 8% and 7% of our total net product sales, respectively. We acquired this product in January 2014 in connection with our acquisition of Gentium S.r.l., or Gentium, which we refer to as the Gentium Acquisition, and secured worldwide rights to the product by acquiring rights to defibrotide in the Americas in August 2014. We launched Defitelio in certain European countries in 2014 and continue to launch in additional European countries on a rolling basis. On March 30, 2016, the FDA approved our NDA, for Defitelio for the treatment of adult and pediatric patients with VOD, also known as SOS, with renal or pulmonary dysfunction following HSCT. We launched Defitelio in the U.S. shortly after FDA approval, and our U.S. commercial launch is still at an early stage. Our ability to realize the anticipated benefits from our investment in Defitelio is subject to risks and uncertainties, including: • the acceptance of Defitelio in the U.S. by hospital pharmacy and therapeutics committees and the availability of adequate coverage and reimbursement by government programs and third party payors; • U.S. market acceptance of Defitelio at its commercial price now that it is no longer available to new patients under an expanded access treatment protocol; • the lack of experience of U.S. physicians in diagnosing and treating VOD, particularly in adults, and the possibility that physicians may delay initiation of treatment or terminate treatment before the end of the recommended dosing schedule; • our ability to successfully maintain or grow sales of Defitelio in Europe; • delays or problems in the supply or manufacture of the product; • the limited size of the population of VOD patients who are indicated for treatment with Defitelio (particularly if changes in HSCT treatment protocols reduce the incidence of VOD); • our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA for Defitelio; and • our ability to obtain marketing approval in other countries and to develop the product for additional indications. If sales of Defitelio do not reach the levels we expect, our anticipated revenue from the product will be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In furtherance of our growth strategy, we have made a significant investment in Vyxeos through the Celator Acquisition. Vyxeos is currently not approved as a marketed product in any jurisdiction. In September 2016, we initiated a rolling submission of an NDA to the FDA seeking marketing approval for Vyxeos. We expect to complete the NDA submission in the first quarter of 2017 and to make a regulatory submission for Vyxeos in Europe in the second half of 2017. Breakthrough Therapy designation has been granted for Vyxeos for the treatment of adults with therapy-related AML or AML with myelodysplasia-related changes. Breakthrough Therapy designation is a process designed to expedite the development and review of a drug that is intended to treat a serious or life-threatening disease or condition when preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on one or more clinically significant endpoints. Our ability to realize the anticipated benefits from this investment is subject to a number of risks and uncertainties, including: • our ability to successfully obtain marketing approval for Vyxeos in the U.S. and Europe; • risks associated with developing products based on the CombiPlex technology platform that we acquired in the Celator Acquisition, such as Vyxeos, the first injectable fixed ratio, drug delivery combination oncology product that the FDA would potentially be considering for approval; • our ability to differentiate Vyxeos from other liposomal chemotherapies and generically available chemotherapy combinations with which physicians and treatment centers are more familiar; • the need to establish pricing and reimbursement support for Vyxeos in the event we are able to obtain marketing approval for Vyxeos in the U.S. or in other countries; • the acceptance of Vyxeos in the U.S. and other countries by hospital pharmacy and therapeutics committees and the availability of adequate coverage and reimbursement by government programs and third party payors; • delays or problems in the supply or manufacture of the product, including with respect to the requirement of the third parties upon which we rely to manufacture Vyxeos and its active pharmaceutical ingredients, or APIs, to obtain the approval of the FDA and/or other regulatory authorities to manufacture Vyxeos; and • the limited size of the population of AML patients who may potentially be indicated for treatment with Vyxeos. If we are unable to obtain regulatory approval for Vyxeos in the U.S. or in Europe in a timely manner, or at all, or if sales of an approved Vyxeos product do not reach the levels we expect, our anticipated revenue from Vyxeos would be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. For more information on risks and uncertainties relating to Erwinaze, Defitelio and Vyxeos, see the risk factor under the heading “While Xyrem remains our largest product, our success also depends on our ability to effectively commercialize our other products and, in the case of our newly acquired product candidate, Vyxeos, our ability to obtain regulatory approval in the U.S. and Europe and, if approved, to successfully launch and commercialize Vyxeos. Our inability to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. In addition to risks specifically related to Xyrem, Erwinaze, Defitelio and Vyxeos, we are subject to other challenges and risks specific to our business and our ability to execute on our strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with development and commercial operations. These risks and uncertainties include: • the challenges of protecting and enhancing our intellectual property rights; • the challenges of achieving and maintaining commercial success of our products; • delays or problems in the supply or manufacture of our products and product candidates, particularly with respect to certain products as to which we maintain limited inventories, and our dependence on single source suppliers for most of our products, product candidates and APIs; • the need to obtain and maintain appropriate pricing and reimbursement for our products in an increasingly challenging environment due to, among other things, the attention being paid to healthcare cost containment and other austerity measures in the U.S. and worldwide, including the need to obtain and maintain reimbursement for Xyrem in the U.S. in an environment in which we are subject to increasingly restrictive conditions for reimbursement required by government programs and third party payors; • our ability to identify and acquire, in-license or develop additional products or product candidates to grow our business; • the challenges of compliance with the requirements of the FDA, the DEA, and non-U.S. regulatory agencies, including with respect to product labeling, requirements for distribution, obtaining sufficient DEA quotas where needed, marketing and promotional activities, patient assistance programs, adverse event reporting and product recalls or withdrawals; • the difficulty and uncertainty of pharmaceutical product development, including the timing thereof, and the uncertainty of clinical success, such as the risk that results from preclinical studies and/or early clinical trials may not be predictive of results obtained in later and larger clinical trials planned or anticipated to be conducted for our product candidates; • the inherent uncertainty associated with the regulatory approval process, especially as we continue to undertake increased activities and make growing investment in our product pipeline development projects; • the risks associated with business combination or product or product candidate acquisition transactions, including risks associated with the Celator Acquisition, such as the challenges inherent in the integration of acquired businesses with our historical business, the increase in geographic dispersion among our centers of operation and the risks that we may acquire unanticipated liabilities along with acquired businesses or otherwise fail to realize the anticipated benefits (commercial or otherwise) from such transactions; and • possible restrictions on our ability and flexibility to pursue certain future opportunities as a result of our substantial outstanding debt obligations, which have increased as a result of, among other things, the Celator Acquisition. Any of these risks and uncertainties could have a material adverse effect on our business, financial condition, results of operations and growth prospects. All of these risks and uncertainties are discussed in greater detail, along with other risks and uncertainties, in Part II, Item 1A of this Quarterly Report on Form 10-Q. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, investments and marketable securities. Our investment policy permits investments in U.S. federal government and federal agency securities, corporate bonds or commercial paper issued by U.S. corporations, money market instruments, certain qualifying money market mutual funds, certain repurchase agreements, and tax-exempt obligations of U.S. states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities and issuers of investments to the extent recorded on the balance sheet. We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in the U.S., and to other international distributors and hospitals. Customer creditworthiness is monitored and collateral is not required. We monitor deteriorating 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 we do not expect to have write-offs or adjustments to accounts receivable which would have a material adverse effect on our financial position, liquidity or results of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
Net Income per Ordinary Share | Net Income Attributable to Jazz Pharmaceuticals plc per Ordinary Share Basic net income attributable to Jazz Pharmaceuticals plc per ordinary share is based on the weighted-average number of ordinary shares outstanding. Diluted net income attributable to Jazz Pharmaceuticals plc per ordinary share is based on the weighted-average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding. Basic and diluted net income per ordinary share were computed as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerator: Net income attributable to Jazz Pharmaceuticals plc $ 87,145 $ 87,960 $ 272,548 $ 246,774 Denominator: Weighted-average ordinary shares used in per share calculation - basic 60,437 61,435 60,692 61,145 Dilutive effect of employee equity incentive and purchase plans 1,207 1,719 1,291 1,927 Weighted-average ordinary shares used in per share calculation - diluted 61,644 63,154 61,983 63,072 Net income attributable to Jazz Pharmaceuticals plc per ordinary share: Basic $ 1.44 $ 1.43 $ 4.49 $ 4.04 Diluted $ 1.41 $ 1.39 $ 4.40 $ 3.91 Potentially dilutive ordinary shares from our employee equity incentive and purchase plans and our 1.875% exchangeable senior notes due 2021, or the 2021 Notes, 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, the assumed issuance of ordinary shares under our employee stock purchase plan, or ESPP, and the assumed issuance of ordinary shares upon exchange of the 2021 Notes. The potential issue of approximately 2.9 million ordinary shares issuable upon exchange of the 2021 Notes had no effect on diluted net income per ordinary share because the average price of our ordinary shares for the three and nine months ended September 30, 2016 and 2015 did not exceed the effective exchange price of $199.77 per ordinary share. The following table represents the weighted-average ordinary shares that were excluded from the calculation of diluted net income per ordinary share for the periods presented because including them would have an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 1.875% exchangeable senior notes due 2021 2,878 2,878 2,878 2,878 Options to purchase ordinary shares and RSUs 2,851 1,644 2,688 1,517 Ordinary shares under ESPP 45 — 72 — |
Adoption of New Accounting Standards and Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2016, the Financial Accounting Standards Board, or the FASB, issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” which requires an entity to recognize the income tax consequences of an intra-entity asset transfer, other than an intra-entity asset transfer of inventory, when the transfer occurs. The standard is effective for us beginning January 1, 2018. Early adoption is permitted. We are currently assessing our approach to the adoption of this standard and the impact on our results of operations and financial position. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for us beginning January 1, 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, statutory tax withholding requirements, accounting for forfeitures and classification on the statement of cash flows. ASU No. 2016-09 is effective for us beginning January 1, 2017. Early adoption is permitted. We are currently assessing our approach to the adoption of this standard and the impact on our results of operations and financial position. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. Under the new guidance, lessees will be required to recognize a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term, and a corresponding lease liability, which represents the lessee’s obligation to make lease payments under a lease, measured on a discounted basis. ASU No. 2016-02 is effective beginning January 1, 2019 and early application is permitted. ASU No. 2016-02 must be adopted on a modified retrospective transition basis for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. We are currently assessing our approach to the adoption of this standard and the potential impact on our results of operations and financial position. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”. The standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this, an entity will need to identify the contract with a customer; identify the separate performance obligations in the contract; determine the transaction price; allocate the transaction price to the separate performance obligations in the contract; and recognize revenue when (or as) the entity satisfies each performance obligation. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date”, which deferred the effective date of ASU No. 2014-09. ASU No. 2014-09 will now be effective for us beginning January 1, 2018 and can be adopted on a full retrospective basis or on a modified retrospective basis. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations”, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. We are currently assessing our approach to the adoption of these standards and the potential impact on our results of operations and financial position. Adoption of New Accounting Standard Effective January 1, 2016, we adopted Accounting Standards Update, or ASU, No. 2015-03 “Interest - Imputation of Interest”, or ASU No. 2015-03. ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability instead of as an asset. The standard requires retrospective application. |
The Company and Summary of Si20
The Company and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basic and Diluted Net Income per Ordinary Share Computation | Basic and diluted net income per ordinary share were computed as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerator: Net income attributable to Jazz Pharmaceuticals plc $ 87,145 $ 87,960 $ 272,548 $ 246,774 Denominator: Weighted-average ordinary shares used in per share calculation - basic 60,437 61,435 60,692 61,145 Dilutive effect of employee equity incentive and purchase plans 1,207 1,719 1,291 1,927 Weighted-average ordinary shares used in per share calculation - diluted 61,644 63,154 61,983 63,072 Net income attributable to Jazz Pharmaceuticals plc per ordinary share: Basic $ 1.44 $ 1.43 $ 4.49 $ 4.04 Diluted $ 1.41 $ 1.39 $ 4.40 $ 3.91 |
Weighted-Average Ordinary Shares Excluded from Computation of Diluted Net Income per Share | The following table represents the weighted-average ordinary shares that were excluded from the calculation of diluted net income per ordinary share for the periods presented because including them would have an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 1.875% exchangeable senior notes due 2021 2,878 2,878 2,878 2,878 Options to purchase ordinary shares and RSUs 2,851 1,644 2,688 1,517 Ordinary shares under ESPP 45 — 72 — |
Business Combination, Asset A21
Business Combination, Asset Acquisitions and Equity Method Investment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations And Equity Method Investments [Abstract] | |
Summary of assets and liabilities assumed in acquisition | The preliminary fair values of assets acquired and liabilities assumed at the closing date of the Celator Acquisition are summarized below (in thousands): Cash and cash equivalents $ 26,137 Other receivables 386 Prepaid expenses and deposits 151 Property and equipment 767 Intangible assets 1,825,000 Goodwill 261,783 Other non-current assets 43 Accrued liabilities (19,076 ) Deferred tax liability, net, non-current (565,609 ) Other non-current liabilities (1,002 ) Total acquisition consideration - cash paid $ 1,528,580 |
Summary of pro forma information | The unaudited pro forma results do not assume any operating efficiencies as a result of the consolidation of operations and are as follows (in thousands, except per share data): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Revenues $ 374,181 $ 341,008 $ 1,091,497 $ 985,229 Net income attributable to Jazz Pharmaceuticals plc $ 94,137 $ 78,903 $ 261,452 $ 209,517 Net income attributable to Jazz Pharmaceuticals plc per ordinary share - basic $ 1.56 $ 1.28 $ 4.31 $ 3.43 Net income attributable to Jazz Pharmaceuticals plc per ordinary share - diluted $ 1.53 $ 1.25 $ 4.22 $ 3.32 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Cash and Cash Equivalents and Investments | Cash, cash equivalents and investments consisted of the following (in thousands): September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 211,567 $ — $ — $ 211,567 $ 211,567 $ — Time deposits 214,418 — — 214,418 155,000 59,418 Totals $ 425,985 $ — $ — $ 425,985 $ 366,567 $ 59,418 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 274,945 $ — $ — $ 274,945 $ 274,945 $ — Time deposits 713,840 — — 713,840 713,840 — Totals $ 988,785 $ — $ — $ 988,785 $ 988,785 $ — |
Available-for-Sale Securities Measured at Fair Value on a Recurring Basis | The following table summarizes, by major security type, our available-for-sale securities as of September 30, 2016 and December 31, 2015 that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands): September 30, 2016 December 31, 2015 Significant Other Observable Inputs (Level 2) Total Significant Total Time deposits $ 214,418 $ 214,418 $ 713,840 $ 713,840 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 2,357 $ 2,608 Work in process 20,666 11,836 Finished goods 9,328 5,007 Total inventories $ 32,351 $ 19,451 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Gross Carrying Amount of Goodwill | The gross carrying amount of goodwill was as follows (in thousands): Balance at December 31, 2015 $ 657,139 Goodwill arising from the Celator Acquisition 261,783 Foreign exchange 9,071 Balance at September 30, 2016 $ 927,993 |
Gross Carrying Amounts and Net Book Values of Intangible Assets | The gross carrying amounts and net book values of our intangible assets were as follows (in thousands): September 30, 2016 December 31, 2015 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Acquired developed technologies 11.6 $ 1,542,813 $ (400,343 ) $ 1,142,470 $ 1,321,324 $ (324,044 ) $ 997,280 Manufacturing contracts 1.3 12,001 (8,073 ) 3,928 11,697 (5,676 ) 6,021 Trademarks — 2,890 (2,890 ) — 2,882 (2,882 ) — Total finite-lived intangible assets 1,557,704 (411,306 ) 1,146,398 1,335,903 (332,602 ) 1,003,301 Acquired IPR&D assets 1,964,041 — 1,964,041 182,305 — 182,305 Total intangible assets $ 3,521,745 $ (411,306 ) $ 3,110,439 $ 1,518,208 $ (332,602 ) $ 1,185,606 |
Estimated Future Amortization Costs | Based on finite-lived intangible assets recorded as of September 30, 2016 , 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 2016 (remaining) $ 26,671 2017 106,683 2018 103,805 2019 103,582 2020 102,381 Thereafter 703,276 Total $ 1,146,398 |
Certain Balance Sheet Items (Ta
Certain Balance Sheet Items (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Certain Balance Sheet Items [Abstract] | |
Property and Equipment | Property and equipment consisted of the following (in thousands): September 30, December 31, Land and buildings $ 45,946 $ 1,775 Construction-in-progress 25,571 63,008 Manufacturing equipment and machinery 18,234 5,828 Computer software 17,198 15,797 Computer equipment 10,597 10,963 Leasehold improvements 9,245 9,301 Furniture and fixtures 2,770 2,580 Subtotal 129,561 109,252 Less accumulated depreciation and amortization (29,663 ) (23,680 ) Property and equipment, net $ 99,898 $ 85,572 |
Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): September 30, December 31, Rebates and other sales deductions $ 71,472 $ 67,454 Employee compensation and benefits 39,768 35,595 Royalties 6,791 4,211 Clinical trial accruals 6,310 1,601 Sales returns reserve 5,010 6,110 Inventory-related accruals 4,746 1,017 Professional fees 4,615 3,038 Accrued interest 2,607 4,043 Accrued construction-in-progress 929 1,637 Contract claim settlement — 18,000 Other 30,170 21,364 Total accrued liabilities $ 172,418 $ 164,070 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table summarizes the carrying amount of our indebtedness (in thousands): September 30, December 31, 1.875% exchangeable senior notes due 2021 $ 575,000 $ 575,000 Unamortized discount on 1.875% exchangeable senior notes due 2021 (105,829 ) (119,467 ) 1.875% exchangeable senior notes due 2021, net 469,171 455,533 Borrowings under revolving credit facility 1,000,000 — Term loan 714,302 732,398 Other borrowings — 513 Total debt 2,183,473 1,188,444 Less current portion 36,094 37,587 Total long-term debt $ 2,147,379 $ 1,150,857 |
Schedule of Maturities of Long-Term Debt | Scheduled maturities with respect to our long-term debt principal balances outstanding as of September 30, 2016 were as follows (in thousands): Year Ending December 31, Scheduled Long-Term Debt Maturities 2016 (remainder) $ 9,023 2017 36,094 2018 40,606 2019 58,652 2020 76,699 Thereafter 2,075,801 Total $ 2,296,875 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments under Noncancelable Operating Leases | Future minimum lease payments under our noncancelable operating and facility leases as of September 30, 2016 were as follows (in thousands): Year Ending December 31, Lease Payments 2016 (remainder) $ 3,457 2017 15,465 2018 11,901 2019 10,375 2020 9,606 Thereafter 78,037 Total $ 128,841 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Reconciliation of Shareholders' Equity | The following tables present a reconciliation of our beginning and ending balances in shareholders’ equity for the nine months ended September 30, 2016 and 2015, respectively (in thousands): Total Shareholders' Equity Shareholders' equity at January 1, 2016 $ 1,598,646 Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 17,951 Employee withholding taxes related to share-based awards (20,595 ) Share-based compensation 75,176 Shares repurchased (259,819 ) Other comprehensive income 32,096 Net income 272,548 Shareholders' equity at September 30, 2016 $ 1,716,003 Attributable to: Jazz Pharmaceuticals plc Noncontrolling interests Total Shareholders' Equity Shareholders' equity at January 1, 2015 $ 1,371,144 $ 64 $ 1,371,208 Acquisition of noncontrolling interests (5 ) (55 ) (60 ) Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 34,025 — 34,025 Employee withholding taxes related to share-based awards (25,402 ) — (25,402 ) Share-based compensation 67,729 — 67,729 Tax benefit from employee share options (320 ) — (320 ) Shares repurchased (21,302 ) — (21,302 ) Other comprehensive income (loss) (109,180 ) 6 (109,174 ) Net income (loss) 246,774 (1 ) 246,773 Shareholders' equity at September 30, 2015 $ 1,563,463 $ 14 $ 1,563,477 |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss as of September 30, 2016 and December 31, 2015 were as follows (in thousands): Foreign Total Balance at December 31, 2015 $ (267,472 ) $ (267,472 ) Other comprehensive income 32,096 32,096 Balance at September 30, 2016 $ (235,376 ) $ (235,376 ) |
Segment and Other Information (
Segment and Other Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Summary of Total Revenues | The following table presents a summary of total revenues (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Xyrem $ 285,907 $ 242,899 $ 816,412 $ 703,435 Erwinaze/Erwinase 42,986 56,317 143,907 152,821 Defitelio/defibrotide 28,137 19,639 79,280 52,259 Prialt ® (ziconotide) intrathecal infusion 8,783 6,042 23,065 19,944 Psychiatry 3,875 9,910 14,744 28,375 Other 1,933 3,947 7,239 21,061 Product sales, net 371,621 338,754 1,084,647 977,895 Royalties and contract revenues 2,560 2,118 6,705 6,027 Total revenues $ 374,181 $ 340,872 $ 1,091,352 $ 983,922 |
Summary of Total Revenues Attributed to Geographic Sources | The following table presents a summary of total revenues attributed to geographic sources (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 United States $ 339,825 $ 305,585 $ 991,557 $ 877,397 Europe 25,788 26,076 79,557 82,837 All other 8,568 9,211 20,238 23,688 Total revenues $ 374,181 $ 340,872 $ 1,091,352 $ 983,922 |
Summary of Revenues from Customers Representing More Than 10% of Total Revenues | The following table presents a summary of the percentage of total revenues from customers that represented more than 10% of our total revenues: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Express Scripts 76 % 71 % 75 % 71 % McKesson Corporation and affiliates 13 % 14 % 14 % 5 % |
Total Long-Lived Assets by Location | The following table presents total long-lived assets, consisting of property and equipment, by location (in thousands): September 30, December 31, Ireland $ 63,388 $ 62,795 United States 27,587 12,794 Italy 7,181 7,928 Other 1,742 2,055 Total long-lived assets $ 99,898 $ 85,572 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Expense Related to Share Options, RSUs and Grants Under ESPP | Share-based compensation expense related to share options, RSUs and grants under our ESPP was as follows (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Selling, general and administrative $ 19,511 $ 19,542 $ 60,664 $ 54,843 Research and development 4,056 2,786 10,867 10,137 Cost of product sales 1,307 786 2,959 2,253 Total share-based compensation expense, pre-tax 24,874 23,114 74,490 67,233 Tax benefit from share-based compensation expense (7,255 ) (6,658 ) (21,413 ) (19,722 ) Total share-based compensation expense, net of tax $ 17,619 $ 16,456 $ 53,077 $ 47,511 |
Weighted-Average Assumptions Used in Black-Scholes Option Pricing Model which was Used to Estimate Grant Date Fair Value per Share | The table below shows the number of shares underlying options granted to purchase our ordinary shares, the weighted-average assumptions used in the Black-Scholes option pricing model and the resulting weighted-average grant date fair value of share options granted: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Shares underlying options granted (in thousands) 147 106 1,247 1,056 Grant date fair value $ 42.89 $ 60.34 $ 40.85 $ 57.85 Black-Scholes option pricing model assumption information: Volatility 37 % 40 % 39 % 39 % Expected term (years) 4.2 4.2 4.2 4.2 Range of risk-free rates 0.8-1.0% 1.3-1.4% 0.8-1.5% 1.1-1.4% Expected dividend yield — % — % — % — % |
Schedule of Restricted Stock Unit activity | The table below shows the number of RSUs granted covering an equal number of our ordinary shares and the weighted-average grant date fair value of RSUs granted: Three Months Ended Nine Months Ended 2016 2015 2016 2015 RSUs granted (in thousands) 59 40 495 406 Grant date fair value $ 138.55 $ 179.10 $ 126.80 $ 175.22 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes the amounts related to restructuring through September 30, 2016 (in thousands): Termination Benefits Balance at December 31, 2015 $ 1,105 Expense 1,520 Payments (2,305 ) Balance at September 30, 2016 $ 320 |
The Company and Summary of Si32
The Company and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, shares in Millions | Jul. 12, 2016USD ($) | Jun. 18, 2015USD ($) | Jul. 31, 2016patent | Sep. 30, 2016USD ($)Customercompany$ / shares | Jun. 30, 2016lawsuit | Sep. 30, 2015USD ($)$ / shares | Sep. 30, 2016USD ($)sharesCustomercompany$ / shares | Sep. 30, 2015USD ($)$ / shares | Dec. 31, 2015USD ($)Customer |
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Long term debt outstanding | $ 2,296,875,000 | $ 2,296,875,000 | |||||||
Product sales, net | $ 371,621,000 | $ 338,754,000 | $ 1,084,647,000 | $ 977,895,000 | |||||
Number of customers with significant accounts receivable | Customer | 5 | 5 | 5 | ||||||
Percentage of gross accounts receivable (as a percent) | 90.00% | 90.00% | 90.00% | ||||||
Express Scripts | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Percentage of gross accounts receivable (as a percent) | 71.00% | 71.00% | 69.00% | ||||||
Idis Limited | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Percentage of gross accounts receivable (as a percent) | 11.00% | ||||||||
Convertible Debt | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Long term debt outstanding | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | ||||||
Interest rate (as a percent) | 1.875% | 1.875% | 1.875% | 1.875% | 1.875% | ||||
Number of shares issuable from exchangeable senior notes (in shares) | shares | 2.9 | ||||||||
Debt conversion price (in dollars per share) | $ / shares | $ 199.77 | $ 199.77 | $ 199.77 | $ 199.77 | |||||
Xyrem | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Product sales, net | $ 285,907,000 | $ 242,899,000 | $ 816,412,000 | $ 703,435,000 | |||||
Number of ANDAs filed by third parties | company | 7 | 7 | |||||||
Number of claims settled | lawsuit | 2 | ||||||||
Xyrem | Pending Litigation | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Number of patents deemed unenforceable by PTAB | patent | 6 | ||||||||
Xyrem | Sales Revenue, Product Line | Product Concentration Risk | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Percentage of product sales, net (as a percent) | 77.00% | 75.00% | |||||||
Erwinaze and Erwinase | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Product sales, net | $ 42,986,000 | $ 56,317,000 | $ 143,907,000 | $ 152,821,000 | |||||
Erwinaze and Erwinase | Sales Revenue, Product Line | Product Concentration Risk | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Percentage of product sales, net (as a percent) | 12.00% | 13.00% | |||||||
Defitelio/Defibrotide | Sales Revenue, Product Line | Product Concentration Risk | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Percentage of product sales, net (as a percent) | 8.00% | 7.00% | |||||||
Accounting Standards Update 2015-03 | Deferred Financing Costs | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Reclassification of debt issuance cost | $ (16,100,000) | ||||||||
Accounting Standards Update 2015-03 | Long-term Debt | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Reclassification of debt issuance cost | $ 16,100,000 | ||||||||
Credit Agreement June 2015 Amendment | Term loan | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Long term debt outstanding | $ 721,900,000 | $ 721,900,000 | $ 721,900,000 | ||||||
Credit Agreement June 2015 Amendment | Revolving Credit Facility | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Line of credit, maximum borrowing capacity | 1,250,000,000 | ||||||||
Proceeds from revolving credit facility | 1,000,000,000 | ||||||||
Credit Agreement June 2015 | Term loan | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Face amount | 750,000,000 | $ 750,000,000 | |||||||
Credit Agreement June 2015 | Revolving Credit Facility | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Line of credit, maximum borrowing capacity | 750,000,000 | ||||||||
Proceeds from revolving credit facility | $ 160,000,000 | ||||||||
Celator Pharmaceuticals, Inc. | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Total acquisition consideration | $ 1,500,000,000 |
The Company and Summary of Si33
The Company and Summary of Significant Accounting Policies - Basic and Diluted Net Income (Loss) per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net income attributable to Jazz Pharmaceuticals plc | $ 87,145 | $ 87,960 | $ 272,548 | $ 246,774 |
Denominator: | ||||
Weighted-average ordinary shares used in per share calculation - basic (in shares) | 60,437 | 61,435 | 60,692 | 61,145 |
Dilutive effect of employee equity incentive and purchase plans (in shares) | 1,207 | 1,719 | 1,291 | 1,927 |
Weighted-average ordinary shares used in per share calculation - diluted (in shares) | 61,644 | 63,154 | 61,983 | 63,072 |
Net income attributable to Jazz Pharmaceuticals plc per ordinary share: | ||||
Basic (in dollars per share) | $ 1.44 | $ 1.43 | $ 4.49 | $ 4.04 |
Diluted (in dollars per share) | $ 1.41 | $ 1.39 | $ 4.40 | $ 3.91 |
The Company and Summary of Si34
The Company and Summary of Significant Accounting Policies - Weighted-Average Ordinary Shares Excluded from Computation of Diluted Net Income per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
1.875% exchangeable senior notes due 2021 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ordinary shares (in shares) | 2,878 | 2,878 | 2,878 | 2,878 |
Options to purchase ordinary shares and RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ordinary shares (in shares) | 2,851 | 1,644 | 2,688 | 1,517 |
Ordinary shares under ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ordinary shares (in shares) | 45 | 0 | 72 | 0 |
Business Combination, Asset A35
Business Combination, Asset Acquisitions and Equity Method Investment - Celator Acquisition Additional Information (Details) - USD ($) | Jul. 12, 2016 | Jun. 18, 2015 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Long term debt outstanding | $ 2,296,875,000 | $ 2,296,875,000 | |||
Credit Agreement June 2015 Amendment | Term loan | |||||
Business Acquisition [Line Items] | |||||
Long term debt outstanding | $ 721,900,000 | 721,900,000 | 721,900,000 | ||
Credit Agreement June 2015 Amendment | Revolving Credit Facility | |||||
Business Acquisition [Line Items] | |||||
Line of credit, maximum borrowing capacity | 1,250,000,000 | ||||
Proceeds from revolving credit facility | 1,000,000,000 | ||||
Credit Agreement June 2015 | Term loan | |||||
Business Acquisition [Line Items] | |||||
Face amount | $ 750,000,000 | $ 750,000,000 | |||
Credit Agreement June 2015 | Revolving Credit Facility | |||||
Business Acquisition [Line Items] | |||||
Line of credit, maximum borrowing capacity | 750,000,000 | ||||
Proceeds from revolving credit facility | $ 160,000,000 | ||||
Celator Pharmaceuticals, Inc. | |||||
Business Acquisition [Line Items] | |||||
Share price (in dollars per share) | $ 30.25 | ||||
Number of shares tendered during offer period in accordance with merger agreement (in shares) | 36,516,173 | ||||
Percentage of acquiree shares tendered during offer period (as a percent) | 81.00% | ||||
Offer condition, percentage of common shares tendered (more than 50%) (as a percent) | 50.00% | ||||
Number of acquiree shares delivered via notices of guaranteed delivery in accordance with merger agreement (in shares) | 2,016,237 | ||||
Percentage of acquiree shares delivered via notices of guaranteed delivery in accordance with merger agreement (as a percent) | 4.00% | ||||
Total acquisition consideration | $ 1,500,000,000 | ||||
Acquisition-related costs | 7,800,000 | 10,000,000 | |||
Revenue of acquiree since acquisition date | $ 0 | 0 | |||
Acquired IPR&D assets | |||||
Business Acquisition [Line Items] | |||||
In-process research and development acquired | $ 1,964,041,000 | $ 182,305,000 | |||
Acquired IPR&D assets | Celator Pharmaceuticals, Inc. | |||||
Business Acquisition [Line Items] | |||||
In-process research and development acquired | $ 1,800,000,000 |
Business Combination, Asset A36
Business Combination, Asset Acquisitions and Equity Method Investment - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jul. 12, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 927,993 | $ 657,139 | |
Celator Pharmaceuticals, Inc. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 26,137 | ||
Other receivables | 386 | ||
Prepaid expenses and deposits | 151 | ||
Property and equipment | 767 | ||
Intangible assets | 1,825,000 | ||
Goodwill | 261,783 | ||
Other non-current assets | 43 | ||
Accrued liabilities | (19,076) | ||
Deferred tax liability, net, non-current | (565,609) | ||
Other non-current liabilities | (1,002) | ||
Total acquisition consideration - cash paid | $ 1,528,580 |
Business Combination, Asset A37
Business Combination, Asset Acquisitions and Equity Method Investment - Pro Forma Financial Information (Details) - Celator Pharmaceuticals, Inc. - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||||
Pro forma adjustment, transaction-related expense | $ 10,800 | $ 13,000 | $ 13,000 | |
Pro forma adjustment, interest expense | 100 | $ 6,500 | 13,700 | 19,400 |
Revenues | 374,181 | 341,008 | 1,091,497 | 985,229 |
Net income attributable to Jazz Pharmaceuticals plc | $ 94,137 | $ 78,903 | $ 261,452 | $ 209,517 |
Net income attributable to Jazz Pharmaceuticals plc per ordinary share - basic (in dollars per share) | $ 1.56 | $ 1.28 | $ 4.31 | $ 3.43 |
Net income attributable to Jazz Pharmaceuticals plc per ordinary share - diluted (in dollars per share) | $ 1.53 | $ 1.25 | $ 4.22 | $ 3.32 |
Business Combination, Asset A38
Business Combination, Asset Acquisitions and Equity Method Investment - Asset Acquisitions Additional Information (Details) $ in Thousands, € in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2016EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Business Acquisition [Line Items] | |||||||
Acquired in-process research and development | $ 15,000 | $ 0 | $ 23,750 | $ 0 | |||
Alize | Upfront Payment | |||||||
Business Acquisition [Line Items] | |||||||
Acquired in-process research and development | $ 8,800 | ||||||
Alize | Milestone Payment | |||||||
Business Acquisition [Line Items] | |||||||
Maximum potential milestones payments (up to 10.0 million euro) | € | € 10 | ||||||
Pfenex | Upfront Payment | |||||||
Business Acquisition [Line Items] | |||||||
Upfront and option payments | $ 15,000 | ||||||
Pfenex | Milestone Payment | |||||||
Business Acquisition [Line Items] | |||||||
Potential payments under agreement for certain, development, regulatory, and sales related milestones | $ 166,000 |
Business Combination, Asset A39
Business Combination, Asset Acquisitions and Equity Method Investment - Equity Method Investment (Details) - Arrivo - USD ($) | 1 Months Ended | 9 Months Ended |
May 31, 2016 | Sep. 30, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||
Commitment to invest in equity method investment | $ 25,000,000 | |
Investment commitment period | 5 years | |
Installment payment for equity method investment | $ 5,000,000 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | $ 425,985 | $ 988,785 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 425,985 | 988,785 | ||
Cash and cash equivalents | 366,567 | 988,785 | $ 998,859 | $ 684,042 |
Investments | 59,418 | 0 | ||
Cash | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 211,567 | 274,945 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 211,567 | 274,945 | ||
Cash and cash equivalents | 211,567 | 274,945 | ||
Investments | 0 | 0 | ||
Time deposits | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 214,418 | 713,840 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 214,418 | 713,840 | ||
Cash and cash equivalents | 155,000 | 713,840 | ||
Investments | $ 59,418 | $ 0 |
Fair Value Measurement - Availa
Fair Value Measurement - Available-For-Sale Investments Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Estimated fair value | $ 425,985 | $ 988,785 |
Time deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Estimated fair value | 214,418 | 713,840 |
Time deposits | Recurring | Total Estimated Fair Value | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Estimated fair value | 214,418 | 713,840 |
Time deposits | Recurring | Significant Other Observable Inputs (Level 2) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Estimated fair value | $ 214,418 | $ 713,840 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) $ in Millions | Sep. 30, 2016USD ($) |
Convertible Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Fair value of exchangeable senior notes | $ 585 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,357 | $ 2,608 |
Work in process | 20,666 | 11,836 |
Finished goods | 9,328 | 5,007 |
Total inventories | $ 32,351 | $ 19,451 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Goodwill Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 657,139 |
Goodwill arising from the Celator Acquisition | 261,783 |
Foreign exchange | 9,071 |
Goodwill, end of period | $ 927,993 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Gross Carrying Amounts and Net Book Values of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,557,704 | $ 1,335,903 | |
Accumulated Amortization | (411,306) | (332,602) | |
Total | 1,146,398 | 1,003,301 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Gross Carrying Amount - Total Intangible Assets | 3,521,745 | 1,518,208 | |
Net Book Value - Total Intangible Assets | 3,110,439 | 1,185,606 | |
Acquired IPR&D assets | |||
Indefinite-lived Intangible Assets [Line Items] | |||
In-process research and development | 1,964,041 | 182,305 | |
Increase (decrease) in indefinite-lived intangible assets | $ (48,400) | ||
Sigma-Tau Milestone Payment | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Increase (decrease) in indefinite-lived intangible assets | $ 150,000 | ||
Acquired developed technologies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining Weighted-Average Useful Life (in years) | 11 years 7 months | ||
Gross Carrying Amount | $ 1,542,813 | 1,321,324 | |
Accumulated Amortization | (400,343) | (324,044) | |
Total | $ 1,142,470 | 997,280 | |
Increase in finite-lived intangible assets | $ 48,400 | ||
Acquired developed technologies | Defitelio | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining Weighted-Average Useful Life (in years) | 14 years | ||
Manufacturing contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining Weighted-Average Useful Life (in years) | 1 year 4 months | ||
Gross Carrying Amount | $ 12,001 | 11,697 | |
Accumulated Amortization | (8,073) | (5,676) | |
Total | $ 3,928 | 6,021 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining Weighted-Average Useful Life (in years) | 0 years | ||
Gross Carrying Amount | $ 2,890 | 2,882 | |
Accumulated Amortization | (2,890) | (2,882) | |
Total | $ 0 | $ 0 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets - Estimated Future Amortization Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Estimated Amortization Expense | ||
2016 (remaining) | $ 26,671 | |
2,017 | 106,683 | |
2,018 | 103,805 | |
2,019 | 103,582 | |
2,020 | 102,381 | |
Thereafter | 703,276 | |
Total | $ 1,146,398 | $ 1,003,301 |
Certain Balance Sheet Items - P
Certain Balance Sheet Items - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 129,561 | $ 109,252 |
Less accumulated depreciation and amortization | (29,663) | (23,680) |
Property and equipment, net | 99,898 | 85,572 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 45,946 | 1,775 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,571 | 63,008 |
Manufacturing equipment and machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18,234 | 5,828 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,198 | 15,797 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,597 | 10,963 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,245 | 9,301 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,770 | $ 2,580 |
Certain Balance Sheet Items - A
Certain Balance Sheet Items - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Certain Balance Sheet Items [Abstract] | ||
Rebates and other sales deductions | $ 71,472 | $ 67,454 |
Employee compensation and benefits | 39,768 | 35,595 |
Royalties | 6,791 | 4,211 |
Clinical trial accruals | 6,310 | 1,601 |
Sales returns reserve | 5,010 | 6,110 |
Inventory-related accruals | 4,746 | 1,017 |
Professional fees | 4,615 | 3,038 |
Accrued interest | 2,607 | 4,043 |
Accrued construction-in-progress | 929 | 1,637 |
Contract claim settlement | 0 | 18,000 |
Other | 30,170 | 21,364 |
Total accrued liabilities | $ 172,418 | $ 164,070 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Debt Instrument [Line Items] | |||
Long term debt outstanding | $ 2,296,875 | ||
Total debt | 2,183,473 | $ 1,188,444 | |
Less current portion | 36,094 | 37,587 | |
Total long-term debt | 2,147,379 | 1,150,857 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total debt | $ 1,000,000 | $ 0 | |
Convertible Debt 2021 Notes | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 1.875% | 1.875% | 1.875% |
Long term debt outstanding | $ 575,000 | $ 575,000 | |
Unamortized discount | (105,829) | (119,467) | |
Total debt | 469,171 | 455,533 | |
Term loan | |||
Debt Instrument [Line Items] | |||
Total debt | 714,302 | 732,398 | |
Other borrowings | |||
Debt Instrument [Line Items] | |||
Total debt | $ 0 | $ 513 |
Debt - Schedule of Maturities (
Debt - Schedule of Maturities (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2016 (remainder) | $ 9,023 |
2,017 | 36,094 |
2,018 | 40,606 |
2,019 | 58,652 |
2,020 | 76,699 |
Thereafter | 2,075,801 |
Total debt | $ 2,296,875 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Jul. 12, 2016 | Jun. 18, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||||||
Long term debt outstanding | $ 2,296,875,000 | $ 2,296,875,000 | |||||
Loss on extinguishment and modification of debt | 638,000 | $ 0 | 638,000 | $ 16,815,000 | |||
Convertible Debt 2021 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt outstanding | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | ||||
Percentage of ownership (as a percent) | 100.00% | 100.00% | |||||
Carrying value of the equity component | $ 126,900,000 | $ 126,900,000 | |||||
Credit Agreement June 2015 | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing capacity | $ 750,000,000 | ||||||
Proceeds from revolving credit facility | 160,000,000 | ||||||
Credit Agreement June 2015 | Term loan | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 750,000,000 | 750,000,000 | |||||
Credit Agreement 2012 | Term loan | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of debt | $ 893,100,000 | ||||||
Credit Agreement June 2015 Amendment | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing capacity | 1,250,000,000 | ||||||
Proceeds from revolving credit facility | $ 1,000,000,000 | ||||||
Credit Agreement June 2015 Amendment | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage (as a percent) | 0.25% | ||||||
Credit Agreement June 2015 Amendment | Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage (as a percent) | 0.35% | ||||||
Credit Agreement June 2015 Amendment | Term loan | |||||||
Debt Instrument [Line Items] | |||||||
Long term debt outstanding | $ 721,900,000 | $ 721,900,000 | $ 721,900,000 | ||||
Percentage of principal amount repayment in years one and two | 5.00% | ||||||
Percentage of principal amount repayment in year three | 7.50% | ||||||
Percentage of principal amount repayment in year four | 10.00% | ||||||
Percentage of principal amount repayment in year five | 12.50% | ||||||
Loss on extinguishment and modification of debt | $ 600,000 | ||||||
Credit Agreement June 2015 Amendment | Term loan | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (as a percent) | 1.50% | ||||||
Credit Agreement June 2015 Amendment | Term loan | London Interbank Offered Rate (LIBOR) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (as a percent) | 2.25% | ||||||
Credit Agreement June 2015 Amendment | Term loan | Prime Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (as a percent) | 0.50% | ||||||
Credit Agreement June 2015 Amendment | Term loan | Prime Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (as a percent) | 1.25% |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments under Noncancelable Operating Leases (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Lease Payments | |
2016 (remainder) | $ 3,457 |
2,017 | 15,465 |
2,018 | 11,901 |
2,019 | 10,375 |
2,020 | 9,606 |
Thereafter | 78,037 |
Total | $ 128,841 |
Commitments and Contingencies53
Commitments and Contingencies - Lease and Other Commitments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Aug. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Operating Leased Assets [Line Items] | ||||
Other non-current liabilities | $ 106,101 | $ 106,101 | $ 69,253 | |
Minimum lease payments | 128,841 | 128,841 | ||
Noncancelable purchase commitments, due within one year | 23,100 | 23,100 | ||
Building | Palo Alto | ||||
Operating Leased Assets [Line Items] | ||||
Rent expense | 500 | 1,400 | ||
Building | Palo Alto | Property and Equipment, Net | ||||
Operating Leased Assets [Line Items] | ||||
Construction-in-progress | 19,600 | 19,600 | ||
Building | Palo Alto | Other Non-Current Liabilities | ||||
Operating Leased Assets [Line Items] | ||||
Other non-current liabilities | $ 19,600 | $ 19,600 | ||
Building | Dublin | ||||
Operating Leased Assets [Line Items] | ||||
Lease term | 20 years | |||
Early termination, lease term option 1 | 8 years | |||
Notice of termination period | 1 year | |||
Early termination, lease term option 2 | 15 years | |||
Minimum lease payments | $ 20,800 |
Commitments and Contingencies54
Commitments and Contingencies - Legal Proceedings and Other Contingencies (Details) | Jun. 29, 2016lawsuit | Jan. 27, 2016lawsuitpatent | Nov. 22, 2010 | Oct. 18, 2010patent | Jul. 31, 2016patent | Apr. 30, 2016litigation_caseclaim_under_petition | Mar. 31, 2016claim_under_petition | Apr. 30, 2015litigation_case | Jan. 31, 2015patent | Apr. 30, 2014 | Sep. 30, 2016product | Dec. 31, 2012patent |
Radiopharmaceutical Products | ||||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||||
Number of radiopharmaceutical products | product | 2 | |||||||||||
Celator Acquisition | Celator Pharmaceuticals, Inc. | ||||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||||
Number of claims filed during the period | lawsuit | 2 | |||||||||||
Pending Litigation | Xyrem | ||||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||||
Number of patents named in review petitions | 6 | |||||||||||
Number of patents deemed unenforceable by PTAB | 6 | |||||||||||
Number of petition claims accepted | claim_under_petition | 16 | 3 | ||||||||||
Number of petition claims PTAB denied | claim_under_petition | 18 | 25 | ||||||||||
Pending Litigation | Xyrem ANDA Matters | ||||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||||
Number of patents allegedly infringed upon | 5 | 5 | 10 | |||||||||
Court ordered stay period | 30 months | 30 months | ||||||||||
Number of claims filed | lawsuit | 3 | |||||||||||
Number of litigation cases after consolidation | litigation_case | 1 | |||||||||||
Number of patent litigation cases consolidated | litigation_case | 2 |
Shareholders' Equity - Equity C
Shareholders' Equity - Equity Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 1,598,646 | $ 1,371,208 | ||
Acquisition of noncontrolling interests | (60) | |||
Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans | 17,951 | 34,025 | ||
Employee withholding taxes related to share-based awards | (20,595) | (25,402) | ||
Share-based compensation | 75,176 | 67,729 | ||
Tax benefit from employee share options | (320) | |||
Shares repurchased | (259,819) | (21,302) | ||
Other comprehensive income (loss) | $ 14,612 | $ 16,779 | 32,096 | (109,174) |
Net income (loss) | 87,145 | 87,960 | 272,548 | 246,773 |
Ending balance | $ 1,716,003 | 1,563,477 | $ 1,716,003 | 1,563,477 |
Jazz Pharmaceuticals plc | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 1,371,144 | |||
Acquisition of noncontrolling interests | (5) | |||
Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans | 34,025 | |||
Employee withholding taxes related to share-based awards | (25,402) | |||
Share-based compensation | 67,729 | |||
Tax benefit from employee share options | (320) | |||
Shares repurchased | (21,302) | |||
Other comprehensive income (loss) | (109,180) | |||
Net income (loss) | 246,774 | |||
Ending balance | 1,563,463 | 1,563,463 | ||
Noncontrolling interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 64 | |||
Acquisition of noncontrolling interests | (55) | |||
Other comprehensive income (loss) | 6 | |||
Net income (loss) | (1) | |||
Ending balance | $ 14 | $ 14 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase Programs (Details) - USD ($) $ / shares in Units, shares in Millions | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Nov. 08, 2016 | Nov. 30, 2015 | |
Stock Activity [Line Items] | ||||
Shares repurchased | $ 259,819,000 | $ 21,302,000 | ||
Ordinary Options | ||||
Stock Activity [Line Items] | ||||
Shares repurchased | $ 259,800,000 | |||
Shares repurchased (in shares) | 2.1 | |||
Average price of shares repurchased (in dollars per share) | $ 125.65 | |||
Ordinary Options | November 2015 Share Repurchase Program | ||||
Stock Activity [Line Items] | ||||
Total amount authorized for repurchase of shares under share repurchase program | $ 300,000,000 | |||
Remaining authorized repurchase amount | $ 0 | |||
Ordinary Options | November 2016 Share Repurchase Program | Subsequent Event | ||||
Stock Activity [Line Items] | ||||
Total amount authorized for repurchase of shares under share repurchase program | $ 300,000,000 |
Shareholders' Equity - Componen
Shareholders' Equity - Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ 1,598,646 | $ 1,371,208 | ||
Other comprehensive income | $ 14,612 | $ 16,779 | 32,096 | (109,174) |
Ending balance | 1,716,003 | $ 1,563,477 | 1,716,003 | $ 1,563,477 |
Foreign Currency Translation Adjustments | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (267,472) | |||
Other comprehensive income | 32,096 | |||
Ending balance | (235,376) | (235,376) | ||
Total Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (267,472) | |||
Other comprehensive income | 32,096 | |||
Ending balance | $ (235,376) | $ (235,376) |
Segment and Other Information -
Segment and Other Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2016Segment | |
Segment Reporting [Abstract] | |
Number of operating business segment | 1 |
Segment and Other Information59
Segment and Other Information - Summary of Total Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue from External Customer [Line Items] | ||||
Product sales, net | $ 371,621 | $ 338,754 | $ 1,084,647 | $ 977,895 |
Royalties and contract revenues | 2,560 | 2,118 | 6,705 | 6,027 |
Total revenues | 374,181 | 340,872 | 1,091,352 | 983,922 |
Xyrem | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 285,907 | 242,899 | 816,412 | 703,435 |
Erwinaze and Erwinase | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 42,986 | 56,317 | 143,907 | 152,821 |
Defitelio | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 28,137 | 19,639 | 79,280 | 52,259 |
Prialt | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 8,783 | 6,042 | 23,065 | 19,944 |
Psychiatry | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 3,875 | 9,910 | 14,744 | 28,375 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | $ 1,933 | $ 3,947 | $ 7,239 | $ 21,061 |
Segment and Other Information60
Segment and Other Information - Summary of Total Revenues Attributed to Geographic Sources (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | $ 374,181 | $ 340,872 | $ 1,091,352 | $ 983,922 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 339,825 | 305,585 | 991,557 | 877,397 |
Europe | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 25,788 | 26,076 | 79,557 | 82,837 |
All other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | $ 8,568 | $ 9,211 | $ 20,238 | $ 23,688 |
Segment and Other Information61
Segment and Other Information - Summary of Revenues from Customers Representing at Least 10% of Total Revenues (Details) - Sales Revenue, Goods, Net - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Express Scripts | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues (as a percent) | 76.00% | 71.00% | 75.00% | 71.00% |
McKesson Corporation and affiliates | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues (as a percent) | 13.00% | 14.00% | 14.00% | 5.00% |
Segment and Other Information62
Segment and Other Information - Total Long-Lived Assets by Location (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 99,898 | $ 85,572 |
Ireland | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 63,388 | 62,795 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 27,587 | 12,794 |
Italy | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 7,181 | 7,928 |
All other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 1,742 | $ 2,055 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | $ 24,874 | $ 23,114 | $ 74,490 | $ 67,233 |
Tax benefit from share-based compensation expense | (7,255) | (6,658) | (21,413) | (19,722) |
Total share-based compensation expense, net of tax | 17,619 | 16,456 | 53,077 | 47,511 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | 19,511 | 19,542 | 60,664 | 54,843 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | 4,056 | 2,786 | 10,867 | 10,137 |
Cost of product sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | $ 1,307 | $ 786 | $ 2,959 | $ 2,253 |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted-Average Assumptions and Resulting Grant Date Fair Value (Details) - Employee Stock Option - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | ||||
Shares underlying options granted (in shares) | 147 | 106 | 1,247 | 1,056 |
Weighted-average grant date fair value (in dollars per share) | $ 42.89 | $ 60.34 | $ 40.85 | $ 57.85 |
Weighted-average volatility (as a percent) | 37.00% | 40.00% | 39.00% | 39.00% |
Weighted-average expected term | 4 years 2 months | 4 years 2 months | 4 years 2 months | 4 years 2 months |
Range of risk-free rates, minimum (as a percent) | 0.80% | 1.30% | 0.80% | 1.10% |
Range of risk-free rates, maximum (as a percent) | 1.00% | 1.40% | 1.50% | 1.40% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Units (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs granted (in shares) | 59 | 40 | 495 | 406 |
Weighted average grand date fair value (in dollars per share) | $ 138.55 | $ 179.10 | $ 126.80 | $ 175.22 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Unrecognized compensation cost related to unvested stock option and RSUs | $ 93.9 |
Weighted-average period expected to be recognized | 2 years 6 months |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to unvested stock option and RSUs | $ 80.3 |
Weighted-average period expected to be recognized | 2 years 7 months |
Restructuring - Restructuring A
Restructuring - Restructuring Activities (Details) - One-time Termination Benefits $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring costs incurred | $ 2,600 |
Accrued Liabilities | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning of period | 1,105 |
Expense | 1,520 |
Payments | (2,305) |
Balance, end of period | 320 |
France and Italy | |
Restructuring Reserve [Roll Forward] | |
Expense | $ 1,500 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Taxes [Line Items] | ||||
Income tax provision | $ 29,120 | $ 29,945 | $ 108,482 | $ 92,651 |
Effective income tax rate (as a percent) | 25.00% | 25.40% | 28.50% | 27.30% |
Ireland | ||||
Income Taxes [Line Items] | ||||
Effective statutory income tax rate (as a percent) | 12.50% | 12.50% | ||
France | ||||
Income Taxes [Line Items] | ||||
Proposed additional tax including interest and penalties | $ 42,900 |