Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jazz Pharmaceuticals First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Andrea Flynn, Vice President, Head of Investor Relations. Andrea, you may begin your conference.

Thank you, operator, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its first quarter 2024 financial results. The slide presentation accompanying this webcast is available on the Investors section of our website. Investors may also refer to the press release we issued earlier today, which is also posted to our website. On the call today are Bruce Cozadd, Chairman and Chief Executive Officer; Renee Gala, President and Chief Operating Officer; Rob Iannone, Executive Vice President and Global Head of R&D; and Phil Johnson, Executive Vice President and Chief Financial Officer. On Slide 2, I'd like to remind you that today's webcast includes forward-looking statements, such as those related to our future financial and operating results, growth potential and anticipated development and commercialization milestones and goals, which involve risks and uncertainties that could cause actual events, performance and results to differ materially from those contained in these forward-looking statements. We encourage you to review the statements contained in today's press release and our slide deck and the risks and uncertainties described in our SEC filings, which identify certain factors that may cause the company's actual events, performance and results to differ materially from those contained in the forward-looking statements made on today's webcast. We undertake no duty or obligation to update our forward-looking statements. As noted on Slide 3, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the Investors section of our website. I'll now turn the call over to Bruce.

Thanks, Andrea. Good afternoon, everyone, and thank you for joining us today to review our first quarter results. I want to begin by welcoming Phil Johnson, who joined Jazz in March as our Chief Financial Officer. We're very excited to have Phil on our executive team and look forward to his contributions to delivering value for patients and shareholders. Beginning on Slide 5, we made important progress during the first quarter, including year-over-year combined double-digit revenue growth from our key growth drivers, Xywav, Epidiolex and Rylaze along with meaningful advances in our pipeline. I'm also pleased to report that we are affirming our 2024 financial guidance. On the commercial front, we generated more than $900 million in total revenues across our growing and diversified portfolio of medicines. Xywav revenues increased 14% year-over-year reinforcing our confidence in its trajectory and durability. Epidiolex demand remains strong, and we continue to be confident in its blockbuster potential. Our oncology therapeutic area delivered another strong quarter with 13% year-over-year revenue growth. This continues the momentum we established last year when we surpassed $1 billion in annual oncology revenue for the first time. Moving to our R&D and pipeline efforts. 2024 is an important year for Jazz with multiple late-stage catalysts for therapies targeting substantial market opportunities. We achieved a significant milestone for Zanidatamab in March with the completion of our rolling BLA submission for the treatment of HER2-positive biliary tract cancer or BTC, and we expect commercial launch in 2025 or earlier. If approved, Zanidatamab would be the first HER2-targeted treatment, specifically for BTC in the U.S. We also expect important clinical data readouts in the near future for suvecaltamide in essential tremor, Zanidatamab in gastroesophageal cancer, Epidiolex in Japan, and Zepzelca in first-line small cell lung cancer. On the operational front, we are…

Thank you, Renee. 2024 represents an exciting time for our pipeline. And we anticipate multiple meaningful catalysts across oncology and neuroscience. On Slide 13, we provided an overview of the key clinical programs in our diversified pipeline. And I'll highlight several milestones we expect to reach in the near term. Starting with oncology and Zanidatamab. We have completed our BLA submission for second-line biliary tract cancer or BTC, in the U.S. with potential for accelerated approval. Additionally, we are targeting late this year to report top line data from the ongoing Phase III first-line gastroesophageal adenocarcinoma, or GEA trial. If positive, we expect this trial would support registration. I'll speak more to our Zanidatamab development plan in just a moment. We're also pleased with the progress of the Zepzelca first-line trial, which completed enrollment in January. Top line progression-free survival data for Zepzelca in combination with Tecentriq in first-line extensive-stage small cell lung cancer is expected at the end of 2024 or early 2025. If approved, this new indication would enable more patients with small cell lung cancer to potentially benefit from longer duration of therapy with Zepzelca. Turning to neuroscience. We expect top line data from our Phase III trial of Epidiolex in Japan in the second half of 2024. We also have ongoing trials for suvecaltamide or JZP385 in both essential tremor or ET and Parkinson's disease tremor. With top line data from the ET trial expected late in the first half of 2024. If trial findings are positive, we believe this trial could serve as part of the pivotal regulatory package. I'd also like to provide an update on JZP441, our clinical stage RX2 orexin-2 receptor agonist. We paused the JZP441 Phase I trial last November after observing a signal for QTC interval prolongation on automated ECG…

Thanks, Rob. First, I'd like to express how excited I am to join Jazz. I came to the company because of his history of success innovating to transform the lives of patients and their families. And because of the quality, integrity and enthusiasm of its people, which Jazz has accomplished since its founding, is impressive, and we have great opportunities ahead of us to enhance our impact on the lives of the patients we serve and to create significant shareholder value. Turning now to our first quarter 2024 financial performance. Slide 18 summarizes the highlights. As a reminder, more information on our financial results is available in our press release and 10-Q. We saw continued top line growth in the first quarter of 2024 with $902 million in total revenues, representing a 1% increase over the same period in 2023. As Renee noted, our first quarter revenues have historically been affected by several factors, including reauthorizations, which drive the use of patient support programs and inventory build in the latter part of the prior year, which leads to inventory burn in Q1. Our Q1 results are in line with our expectations and we are affirming our full year revenue guidance of $4.0 billion to $4.2 billion. including our expectation for combined double-digit growth from our key growth drivers, Xywav, Epidiolex and Rylaze and double-digit growth in our oncology therapeutic area. Moving to Slide 19. A non-GAAP adjusted SG&A reflected investments dedicated to our key growth drivers, including the Xywav IH commercial initiatives, commercial support for Epidiolex in the U.S. where the market is promotionally sensitive, geographic expansion of Epidiolex outside the U.S. and educational efforts for Rylaze and AYA. Non-GAAP adjusted R&D expense for the quarter was driven by investment in multiple late-stage programs, which we view as critical to…

Conclude our prepared remarks on Slide 21. We've made important progress towards delivering on our 2024 guidance and objectives and are pleased to be affirming our guidance today. On the commercial side, we expect continued growth of our key products in 2024. And on the R&D front, we continue to advance our pipeline and to invest in long-term growth. We see multiple catalysts in the near term, including data readouts for suvecaltamide, Zanidatamab, Epidiolex and Zepzelca. That concludes our prepared remarks. I would now like to turn the call over to the operator to open the line for Q&A.

[Operator Instructions] Your first question comes from the line of Jessica Fye with JPMorgan.

2-part question on oxybate narcolepsy dynamics in the quarter. First, can you quantify the headwind to 1Q from the increase in use of patient support programs as the Xyrem patients transition to Xywav? And second, do you have an understanding of how many Xyrem patients losing coverage transition to generic Xyrem or once nightly and not to Xywav?

And Renee, maybe I'll let you take both parts of that. Renée Galá: Sure. So Jess, in terms of the -- I'll take the second question first. We're not disclosing a breakdown of those patients in part because that AG data is not our data to share. But with respect to being able to quantify how many patients came over. I would say there was a good portion of patients that made the decision along with their HCPs to adopt low sodium Xywav and we did see and establish those patient support programs to ensure that we have uninterrupted access for those patients to be able to go from Xyrem directly to Xywav. So what we'll see in future quarters is you should see a better representation of those patients in the revenue and the net sales that come from Xywav.

Your next question comes from Jason Gerberry with Bank of America.

My question is about your Phase IIb essential tremor study. So if this trial is successful, I'm wondering how you're thinking about the subsequent second confirmatory trial. Would it look something like this trial, which took roughly 2.5 years from start to data? Or could there be some sort of more abbreviated randomized withdrawal study that you could run to get yourself to goal line in a more expeditious manner?

Rob, you want to jump in on that?

Yes, happy to. So first of all, Jason, remember, this is a Phase IIb trial. It would count, we believe, or contribute to the pivotal regulatory package. But we call the Phase IIb because we included 3 dose levels of suvecaltamide. And when we would move to, let's call it the confirmatory Phase III trial, we wouldn't necessarily have to bring all those levels forward. And then ideally, we expect we would choose one dose level. So that creates a more streamlined design. And to your point, when we have data in hand and we engage regulatory authorities, we certainly, with compelling data, we'll be looking for the fastest path to approval and look at all possible trial designs to support that.

Your next question comes from the line of Marc Goodman with Leerink.

Bruce had a lot of discussions with investors over the past 6 months about what Jazz wants to be and what it's transitioning from and to and just the whole big picture discussion and a lot of investors believe you want to become an oncology company, at least that's the perception out there. Just curious, can you talk about just what is it that you expect Jazz to become what you're looking for Jazz to be in 5 years, 6 years, 7 years, just because all the investments you're making today are obviously going to be reflected in 5 or 6 years and just talk about that and how maybe it's evolved since what Jazz was 5, 10 years ago?

Yes. Thanks, Marc. So we're in a nice position of having growing assets on the neuroscience side of our business in Xywav and Epidiolex, which we believe, promise in front of us, including pipeline programs like the 385 program, we were just talking about. We're also excited about what's going on, on the oncology side of the business with double-digit growth coming from our current portfolio, led by Rylaze, but also opportunities in front of us with Zanidatamab, where we've already got the submission complete and looking forward to a launch in '25 or earlier. Zepzelca data upcoming, but also an earlier stage pipeline, including particular expansion opportunities with Zanidatamab and beyond. So we're excited about both those franchises. While there has been a lot of focus on oncology and certainly the single largest program in our R&D pipeline right now is Zanidatamab, I would not say we're trying to turn the company into an oncology company. We'd like to have strength in both of our franchises. The investments we're making, and I think Phil described it nicely in his comments are designed to both help the short term particularly some of our commercial investments that we think can continue to generate great growth from our commercial portfolio and R&D investments that will continue to broaden that pipeline and provide growth over the -- both the near term and the medium and long term, but then also those corporate development opportunities, fueled by our strong cash flow and balance sheet and a history of doing transactions that continue to add to our portfolio allow us to impact more patients in more diseases, in more territories around the world. So I think about it as having to make smart investment decisions, which we're in a position to do given the financial strength of the company to fuel both the short and the long term to create value for our shareholders. So execution in the short term important, investment decisions are always important, but I think that should give you a better sense for where we're headed.

Your next question comes from the line of Annabel Samimy with Stifel.

I had a 2-part on Zani. I guess the first is, how should we think about the opportunity for Zani in GEA in light of the better KEYNOTE data, OS that they announced today on KEYTRUDA? And I guess, secondly, where would Zani sit into this paradigm. Separately, for launch of Zani and as we think about all these indications, how should we think about how rapidly new cancer drugs with superior efficacy profiles can disrupt mainstay standard of care? I guess, in other words, are these ramps going to be more rapid or just as challenging as, say, in other nonfatal conditions? So I just wanted to get some characterization there.

Yes, Annabel, thanks for the question. And on the Zanidatamab, first question, GEA, we had been expecting positive OS results at some point out of that trial, I think most people had. So I don't think that changes the landscape, but I'll let Rob comment on where Zani could fit into the GEA landscape. And then on your second question, it's all about results and uniqueness of mechanism of action and benefit relative to other therapies that determine how fast you can make progress from launch. And when we have the opportunity to bring something really new to patients in terms of benefit, particularly in the oncology space, where I think things can move sometimes even ahead of a regulatory approval, if there's strong data that's been presented that's picked up in the NCCN Guidelines and allows for reimbursement, you can get fairly rapid traction with a better option. Rob, you want to talk about the landscape in GEA?

Yes. So in the context of HER2 positive over expressed gastroesophageal adenocarcinoma, we think Zanidatamab has the potential to be the HER2 antagonist of choice because of its differentiated mechanism action and because of the differentiated efficacy and safety profile. Certainly in the PD-L1 negative population, which we think is sizable, there is no approved PD-1 agents. And so the comparator there is Herceptin chemotherapy. But even in the PD-L1 positive population, where we think PD-1 agents are essentially interchangeable, we have the opportunity in combination with Tislelizumab to show the benefit of Zanidatamab, again, has a differentiated HER2 antagonist in combination with backbone chemotherapy and a PD-1 antagonist.

Your next question comes from the line of Akash Tewari with Jefferies.

Just going on the Horizon GEA study, how should we really interpret the JACOB trial. Here, we saw the addition of PERJETA didn't provide any OS benefit in GEA on top of tras-chemo and this is a large base -- large-scale Phase III. What gives your team confidence that ZW25's early data will hold up in this setting? And then maybe just on essential tremor, JZP385 effectively showed no benefit on an accelerometer measurement in its Phase II trial. Do you feel like there was something about how the [ kits ] were administered in that study that may have skewed those results and how confident do you feel like -- how confident do you feel in your ability to show a signal on the accelerometer endpoint with your upcoming data?

Yes, Akash, thanks for the questions. And maybe I'll start on the essential tremor and then I'll let Rob add anything he'd like on the ongoing trial and then comment on your Zani question. Just to remember that the prior TCOM study for essential tremor did demonstrate a nice benefit on TETRAS 80 activities of daily living, which we believe is a measure that's actually more important to patients than the measurement of the quantity of tremor. What patients want is to be able to live their life to do the things they need to do to be able to drink out of a cup, to be able to button and unbutton clothes, to be able to apply makeup, to do the things they care about. And we were very pleased that, that became more of a focus for the pivotal endpoints in later-stage trials. I think FDA too understands you want to do what's really going to provide a benefit to patients. Rob, you want to talk a little bit about our ongoing trial and then pivot to Zani?

Yes, happy to. And so I would agree, Bruce, that the endpoints that we prioritize as primary, not only the most meaningful to patients, but endorsed by FDA. And on those endpoints, we have confidence from the TCOM trial. And I would just add to that, in the current Phase IIb trial with a new once-daily formulation, we've been able to push that dose to exposures that would be higher than in the TCOM trial itself because we have 10, 20 and 30-milligram doses in that trial. So we think based on that, we're positioned for success. And then coming back to the question on JACOB and GEA, the key point I'd like to make is we really believe that Zanidatamab is differentiated from even the combination of Herceptin and PERJETA. As we presented at our R&D Day, we stepped through some important data that were published in Nature Communications, showing how Zanidatamab is differentiated with 2 epitopes necessarily buying to distinct receptors, causing more effective receptor clustering and internalization and have demonstrated better immune function, for example, complement fixation. And so in that paper head-to-head and preclinical experiments better than Herceptin and PERJETA and the clinical data bear that out without going into great detail, if you look at the BTC data, where the response rates are over 40% and duration of response greater than 12 months, that compares very favorably to prior data with the combination of Herceptin and PERJETA. And of course, we have data in breast cancer showing activity of Zanidatamab even after patients have failed frontline therapy with Herceptin and PERJETA as part of a [ CLIA patch ] regimen. So that in combination with the data that you referred to, Zani, chemo and then separately, a cohort of Zani, chemo, tislelizumab shown very promising not only response rates, but very, very durable responses. That's what gives us confidence that our Phase III trial will be successful.

Your next question comes from the line of Ami Fadia with Needham & Company.

Perhaps I had a question for Phil, just with regards to his comments around business development. And that's a question that we get often from investors as well. Can you talk about some of the metrics that you would use to really evaluate potential deals in terms of kind of what really could meet the bar in terms of what Jazz would be interested in executing on? And also, can you talk about capital -- use of capital across R&D, business development, but also perhaps buyback of shares?

Thanks, Ami. Phil, go ahead and jump right in.

Great, Ami. Thank you for the question. My first one on Jazz earnings call and even though I've been around while my mom is to listen to these. So thanks for giving her early Mother's Day present. In terms of our corporate development evaluation, first and foremost, there are a number of nonfinancial criteria that we would look at. Primarily, these are things like is there an area with significant unmet need with the medicine that we're looking at acquiring our medicines really meaningfully impact patients. Is there an efficient commercial call point. We do have a relatively focused business and want to make sure that we're set up for success to commercialize the assets that we're bringing in. Will allow us to leverage the expertise we've got in-house, the commercial footprint we've been built out and continue to build out, for example, with Japan coming soon. And we'll stay largely focused as we talked in the past, and neuroscience as well as oncology, but we have looked at things in the rare orphan space as well given the kinds of capabilities that we built up selling products with these types of limited patient populations. From a financial perspective, it really, I think, some of the traditional things that you would expect. We do want to have line of sight to getting a good return on the investment. We'll look at things that would vary some of the key assumptions, not only draft launch label and competitive landscape, but also time line to continue to make a return on investment in the marketplace, different options for exclusivity, be that through orphan drug exclusivity through patent life or other extensions. So I think find nothing unusual in terms of the financial evaluation that we have there. But first and foremost, we need to figure out is just a Jazz asset and one where there can be a significant value proposition for patients. In terms of capital priorities, I'd say, first and foremost, very consistent with what you've heard in the past from Bruce, Renee and the team were focused on driving the commercial opportunities for the in-market products that we have are dedicating significant monies to get those to as many patients as possible that can benefit from those medicines. We then are looking to rapidly progress the existing pipeline that we have. Obviously, we're making significant investments behind Zanidatamab, given the data that we generated post the licensing deal and then looking at business development to further augment our growth prospects for the future. Once we've exhausted those possibilities, then we look to return excess cash to shareholders. So I hope that gives you a sense for how we're looking at prioritizing capital going forward.

Your next question comes from the line of Joseph Thome with TD Cowen.

Maybe one on the upcoming essential tremor readout. What is sort of the bar for clinical meaningfulness on the TETRAS endpoint? Or I guess what is your internal bar, you think, for kind of taking the program forward. And then one just point of clarification because I think in response to one of the earlier questions, the Phase III for essential tremor was referred to as a confirmatory trial. So I just want to make sure that was actually confirming the dose and not that Phase IIb could potentially be used for approval and then you would do a Phase III confirmatory study?

Yes. Thanks for giving me the opportunity to clarify. I didn't mean to imply that we would get approval based on the Phase IIb just that it will be part of a package and typically in the space, FDA will be looking for independent studies to confirm efficacy. I did want to point out that when we go to that second efficacy study, we're likely to only use 1 dose, which would be a streamlined design because I think the earlier question had to do with, could you move more quickly than you did with the Phase IIb study. We haven't said, in particular or specifically, what level of difference on the [ ADS ] or the performance scale that would be meaningful enough for approval or for patients. But I would just highlight that there really hasn't been any therapies for this disease, almost ever, even though things like propranolol and primidone are used. They really have minimal efficacy. So there's a substantial unmet need. And I would just say, based on what we saw from the TCOM study, we think that suvecaltamide really has an opportunity to make a meaningful difference on the endpoints that matter to patients. And overall, in terms of its provability, it will be based on that -- the effect size of those primary and secondary endpoints as well as the overall tolerability, which we think will be good given the once-daily extended release and the titration that we did in the trial.

Your next question comes from the line of Ash Verma with UBS.

I just wanted to get a sense like in the long term for narcolepsy. I understand from your perspective that you believe that Xywav will remain an oxybate choice. But in your view, like what percentage of patients do you think may ultimately switch to a once-nightly or generic Xyrem? And then as you're trying to extend your leadership in the sleep arena, are you committed to potentially pursuing another orexin or try to internally develop once-a-day candidate?

Yes. Ash, maybe I'll take the second part of your question first. And then, Renee, maybe you can hop in on the narcolepsy side. Rob gave you a little bit of an update on the 441 program. We're doing a little more work there and conferring with our partner before we announce next steps. We have previously said we have other backup programs behind that as well. We find this an interesting area, certainly with a lot of promise, though development remains early in the orexin space. But in terms of a new mechanism of action, it already has proof of concept, and we're definitely interested in the benefit that can bring to patients. Renee? Renée Galá: Yes. Thanks, Bruce. So I would say with respect to Xywav, clearly, we saw both strong patient growth and net sales growth year-over-year, that was 14% in terms of net sales growth. And we believe that reflects Xywav as being a differentiated therapy, the only low sodium oxybate on the market and the #1 treatment for narcolepsy. I would say with respect to people trying a fixed-dose high sodium oxybate, we've said we do expect some patients to try that branded therapy. We do expect that certain patients and HCPs will want to get experience with a fixed-dose regimen. What we are hearing anecdotically and also seeing with respect to patients is that we are seeing some patients not get a full night's coverage. We believe that there is benefit to being able to have a full night coverage in terms of sleep. And the flexibility that comes with the twice-nightly dosing. But more importantly, as the only low sodium oxybate on the market, we are seeing that educating on the benefits of low sodium, publishing and investing in evidence generation on this front. That message is resonating with HCPs. We have seen data showing the faster than expected negative impact from a cardiovascular perspective that patients have when they start a high sodium oxybate therapy, and we believe that patients and HCPs will ultimately continue to prioritize long-term health when it comes to their oxybate therapy with respect to [ narcolepsy ]. These are both chronic conditions, and that gives us continued confidence in the long-term growth and durability of Xywav.

Next question comes from Joon Lee with Truist Securities.

You had a lot of presentations at AN and one in particular was on the efficacy of Epidiolex in focal-onset seizures in the context of an expanded access program. And the study showed a median seizure reduction in the mid-70% range. How prevalent is the off-label use of Epidiolex? And what sort of growth opportunities do you think you have there? There's a lot of investor interest in focal-onset seizures these days.

Renee, do you want to take that? Renée Galá: Sure. Well, clearly, with respect to our promotional activities, we focus our promotional activities on those indications where we are approved, that being LGS, Dravet and TSC, However, we do see continued use based on seizure type. And we do see continued use in other refractory epilepsies, and that is an area that we assume will continue to provide growth for Epidiolex. The reality, when you think about the overall benefits of Epidiolex in terms of being a highly differentiated treatment, it has broad spectrum efficacy working through a novel MOA and in an area, which is characterized by polypharmacy having a favorable and well-characterized safety profile means that the product lends itself well to being combined with multiple other therapies, in particular, for physicians that see patients that are refractory with respect to seizures. And on top of that, they're really starting to appreciate even more based on the data that we continue to generate and present around the benefits beyond seizures and also underpins our further investment in generating additional data such as the EpiCoM study that we're getting underway. So we do believe we'll continue to see growth with Epidiolex, both in our approved indications and also in other refractory epilepsies, which, again, we do not promote for. This is a long-lived durable asset for us that we will continue to look at as a global growth product with additional growth opportunities outside the U.S.

Your next question comes from the line of Gregory Renza with RBC Capital Markets.

Bruce, we certainly appreciate all the color you and Philip provided on the strategic thinking as well as capital allocation, especially when it comes to internal investments. And just aside from the diversification of top line when it comes to neuroscience and sleep as well as the oncology portfolios, can you just speak to the synergies, the benefits and even the cross talk that you think is important for us to know when it comes to keeping both portfolios under the Jazz umbrella?

Well, Greg, we're fortunate to have growth opportunities on both sides, places that are worth investing whether that's commercial or R&D. And I also believe there is benefit in being able to look across these 2 therapeutic areas on the corporate development side as we've all seen over the past few decades there are times when an area heats up and valuations get high. And if you can look more broadly across therapeutic categories and across stages of development, I think you're often more likely to find an opportunity that's both a strategic fit, but also offers a nice return profile. There are a number of services we provide across the company that are centralized and may provide some marginal benefit by not having to reproduce things across multiple therapeutic areas. I would say that's the strategic driver. But again, we're in a position where we've got nice opportunities in front of us short and long term on both sides of the business.

Your next question comes from the line of David Amsellem with Piper Sandler.

Just have a quick question on the balance sheet and the cap structure. Can you talk to any potential long-term leverage targets that you have. You've done a lot of deleveraging in the year since the GW transaction. Obviously, you're active on biz dev. But are you thinking about perhaps accelerating debt paydown as a means of potentially supporting the equity? Is that something you're contemplating? And just help us better understand how you're thinking about leverage ratios over time?

Phil, do you want to take that?

Yes, happy to. So David, as you mentioned, when we had the GW acquisition, there was a really strong interest and communication that we would rapidly delever down to about 3.5 turns by the end 2022. You saw us actually beat that by about 6 months. We currently sit with about 2.5x net leverage. I think still a very strong position at this point in time. We feel very good about the overall debt complex that we've got with about 60% of that being fixed, only about 40% of that being variable exposed to interest rate movements, with a weighted average cost of debt of south of 5.5% at this point in time. As you're probably aware, we do have an upcoming maturity of our 2024 convert, we're in active planning as you'd expect, looking at some alternatives for how we might approach that particular financing opportunity or repayment opportunity. I would say if we were to engage in additional business development, we have the debt increase in the near term, I think like we did with GW, we have a strong plan to reduce that quickly to get back into the kind of levels that we currently got or below where we've got significant flexibility to continue to look at ways to build the business through business development or CorpDev opportunities. To date, we have not specified any kind of a specific target below where we're currently sitting and where we'd like to get to but this will be actively discussed and work through as we move forward, looking at the investment opportunities in front of us, both internal as well as external. Bruce, if you want to comment additionally?

No, Phil, I think you covered it well. I think we've seen some recent positive commentary from the rating agencies in general about the financial profile of the company. We've used leverage to do transactions when we thought that was the best thing for shareholders. But as Phil said, we've always tried to delever rapidly after that.

Your next question comes from the line of Gary Nachman with Raymond James.

So on Xywav, understanding that the patient support program was the key factor for the lower revenue in 1Q. Is Xywav also still getting a lot of the oxybate-naive patients in narcolepsy? And is that a factor that can impact revenue in coming quarters to consider? And then NIH, are physicians staying strictly on label? Or are you hearing there could be some off-label use with LUMRYZ, if it's with younger patients, I guess, in particular? And maybe talk about the competitive dynamics in IH going forward since that space is going to get a lot more crowded, I guess, in the coming years. Renée Galá: Yes. Thanks for the question. I'll hop right in there. So with respect to oxybate-naive patients starting on Xywav for narcolepsy, while we don't have full visibility into the new to oxybate patient numbers, based on our estimates, we do believe we continue to capture more of those new to oxybate narcolepsy patients and any other available therapy. And I would say that speaks to the differentiation of the product. It speaks to our host of patient support services more broadly and being a leader in sleep, the high overlap when we're looking at narcolepsy and IH of being in front of physicians and continuing to be able to educate them on the benefits of low sodium. With respect to IH, we don't -- we're not really seeing much if any off-label use with LUMRYZ, given the payer restrictions on these products and the need for a validated sleep test for either narcolepsy or for IH, we tend to see -- we tend to see that being required in order to receive a prescription. And so it would be pretty unusual to be able to see a prescription for the AG or for LUMRYZ for idiopathic hypersomnia. And then with respect to competitive dynamics I think we'll continue to probably see wake-promoting agents studied for idiopathic hypersomnia. Keep in mind, we had a rather large percentage of patients that came into our idiopathic hypersomnia study on wake-promoting agents and continue to see meaningful benefit while on therapy with Xywav in addition to being on that wake-promoting agent as part of their baseline. Very much like we've seen the wake-promoting agents end up being complementary to Xywav in narcolepsy, we would expect a very similar dynamic in idiopathic hypersomnia. For example, with WAKIX coming on to the market for narcolepsy. We saw little to no impact to our oxybate franchise and would expect the same -- largely the same dynamic with respect to IH.

Your next question comes from the line of Charles Duncan with Cantor Fitzgerald.

Congrats on the BLA submission being completed with Zani. That said, the next data read is actually neuro with suvecaltamide and essential tremor. And so I'm going to ask for a little bit more granularity. I know others have tried, but I'm really wondering what would you like to see out of the Phase IIb to move forward? Is it -- if it's supportive of a registrational strategy, definitely seems like [ static ] is important, but will you be looking at certain effect sizes and responder analysis? And of the 2 composites, which of the 2 are important to you?

Yes. Charles, I'll start with the dangerously general comments and then let Rob jump in if he wants to provide more specifics. What we want aside from a package that would generate a regulatory approval is something that really adds value, something that is of value to patients that patients and prescribers and payers will all see as providing a really meaningful benefit. And certainly, our trials are designed with prospective key endpoints that we need to hit. But -- we measure lots of things in these trials that really go to establishing that benefit profile for patients against the backdrop, as Rob said, of really nothing that's currently available that's providing that kind of benefit. Rob, do you want to talk about anything specific?

Well, again, I don't want to necessarily specify an effect size that we think is meaningful because it really is the holistic picture that matters. But what I would say is when you look at the TCOM data, we thought there was an important effect there. We've optimized our trial in many respects honing the primary endpoint in agreement with FDA, optimize the dose, made some changes to how we measure to be sure we get more accurate measurements. And I think all of that would bode well for the trial. I think the other reference point you have is other T-type calcium channel inhibitors in development. We certainly think suvecaltamide is differentiated in a couple of respects. It's a state-dependent inhibitor, which means it really targets the hyperactive iron channels that are pathologic in the essential tremor condition. And with that, we think it potentially gives us a better therapeutic index, which is why we've been able to push the dose even to doses and exposures that are higher than we would have achieved in TCOM. So again, it's the totality of the data around the primary and secondary endpoints that we've included that will be meaningful to patients and we know acceptable to FDA.

Your next question comes from Balaji Prasad with Barclays.

Just a couple for me. On Epidiolex, can you comment on the adult opportunity either quantify it or qualify it? Primarily asking because I'm curious at most, I thought the primary indications approved were childhood diseases that patients tend to outgrow and also when do you expect to see this additional data and what is the data that you're expecting? Secondly, on the 2024 guide, can you help us understand the double-digit per stage growth that you provided for Xywav, Epidiolex and Rylaze combined since all 3 are in different categories, it would be helpful if you could dissect this further.

Yes. Balaji, on the first part of your question, we often refer to these childhood onset seizure disorders. To point out, they're not only childhood disorders. They do persist into adulthood, and we think there's substantial opportunity there that I'm going to let Renee jump in on if she wants to. But let me also hit the second part of your question and say we were emphasizing the double-digit combined growth of our key growth drivers, Xywav, Epidiolex and Rylaze just because we don't provide single product guidance for the year, as you know, and that's not different this year from any other year. That's why we do it on that basis. Obviously, each quarter, we're reporting actual results for each of those products. Renee, anything you want to add on adult opportunity for Epidiolex? Renée Galá: Yes. I'm not sure if we'll quantify it here, Balaji, but I would just say that as we look at the broader growth drivers, we do see the adult population, the long-term care environment one that is currently underserved. With respect to Epidiolex. Epidiolex is weight-based dosing. So you do end up with higher dosing when it comes to that population. But at times, when you move from an environment of pediatric care into long-term care -- there is, I would say, perhaps less attention placed on the actual indication of what the adult has, you would have heard in my prepared remarks, a focus on ensuring that we have the right diagnostic tools with respect to long-term care centers and continuing to ensure whether it's getting the right diagnosis or getting to the right level of dosing where you can optimize results or better educating on the combined impact of Clobazam and Epidiolex, those are all opportunities that we see going forward.

Ladies and gentlemen, that concludes our question-and-answer session. And I will now turn the call over to Bruce Close for closing remarks.

Thanks, operator. As always, I'd like to close today's call by recognizing our Jazz colleagues for their efforts on behalf of patients and their families and thank our partners and shareholders for their continued confidence and support. Thank you all for joining us today.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.