Jazz Pharmaceuticals plc (JAZZ) Q3 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to Jazz Pharmaceuticals 2026 Third Quarter Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to John Bluth, Head of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Today, Jazz Pharmaceuticals reported its third quarter 2026 financial results. The slide presentation accompanying this webcast is available on the Investors section of our website, along with the press release and quarterly report on Form 10-Q for the quarter ended September 30, 2026. On the call today are Renee Gala, President and Chief Executive Officer; Sam Pearce, Chief Commercial Officer; Robbie Iannone, Global Head of R&D and Chief Medical Officer; and Phil Johnson, 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, regulatory and commercial milestones, 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 these risks and uncertainties described in today's press release and under the caption Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2025, and quarterly report on Form 10-Q for the quarter ended September 30, 2026. We undertake no duty or obligation to update our forward-looking statements. Furthermore, 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 Renee. Renée Galá: Thank you, John. Good afternoon, everyone, and thank you for joining us today. Our third quarter results demonstrate the progress we are making as we build a more innovative and diversified Jazz. We delivered record revenues of $1.24 billion, an increase of 10% year-over-year, while advancing several important drivers of our future growth. Most notably, the FDA approval and launch of Ziihera in first-line HER2-positive metastatic GEA was a defining milestone for Jazz, establishing an important new source of growth and marking the beginning of what we believe could be a much broader opportunity across HER2-expressing cancers. And as you'll hear from Sam, the launch is off to a fantastic start. Longer-term data presented at ESMO further strengthen our conviction in Ziihera, and we continue to see peak sales potential of $3 billion to $5 billion. Our commercial portfolio is performing well with multiple products contributing to our growth. Oncology revenues grew 35% year-over-year, driven by the launches of Modeyso and Zepzelca in the first-line maintenance setting, while sustained demand for Xywav continued to underscore its durability and differentiation. Given our third quarter performance, we have increased our 2026 revenue guidance, as Phil will outline later in the call. Our sustained performance and disciplined approach to capital allocation place us in an excellent position to continue investing in our business today while further building new sources of growth for the future. One important example of how we are investing for the future is our acquisition of Actio Biosciences, which we completed during the quarter. This acquisition brings ABS-1230 into the Jazz pipeline and builds on our leadership in rare epilepsy. ABS-1230 is a clinical stage novel small molecule precision therapy designed to selectively inhibit the KCNT1 ion channel. In early proof-of-concept trials, ABS-1230 demonstrated meaningful seizure reductions that provide a high degree of confidence in the mechanism and molecule. We look forward to presenting initial patient data at a medical meeting this quarter, which we believe will generate shared excitement for the program. As outlined on Slide 5, the Actio acquisition illustrates the type of rare disease opportunities we are seeking, highly differentiated assets in areas of significant unmet medical need, where we believe Jazz can create meaningful value. And the cash flow generated by our commercial portfolio gives us the flexibility to pursue additional opportunities with the same disciplined approach. Before turning the call over to Sam, I want to take a moment to recognize the tremendous contributions she has made to Jazz. Under her leadership, our commercial teams have achieved major milestones, including propelling Epidiolex to blockbuster status, executing key oncology launches and further establishing our leadership in sleep medicine. Equally important, Sam has built a highly capable commercial leadership team that is driving our performance today and is well positioned to carry it forward. She will remain with Jazz through the appointment of her successor to support a seamless transition. Sam, we are deeply grateful for your leadership and contributions, and we wish you a wonderful well-deserved retirement. With that, I'll turn the call over to Sam to review our commercial performance.

Thank you for those kind words, Renee. It has been an absolute privilege to lead this exceptional commercial team during a transformative period of growth for Jazz. I came into this role looking to accomplish 3 key things: to drive strong growth in the commercial portfolio, to build out the team's capabilities to ensure long-term success and to build a high-performing cohesive leadership team. I can say with certainty that we've achieved all of those things. While I will miss my time at Jazz, and I'm certainly looking forward to my retirement, I will be here to ensure a smooth transition over the coming months. With that, I'll now jump into the quarter. The commercial team delivered another quarter of record revenues. These results reflect our sharp operational focus, which continues to yield commercial momentum across our expanding portfolio, headlined by the outstanding early launch of Ziihera in GEA. To kick off our third quarter commercial performance update, I'll begin with our rare sleep portfolio on Slide 7. Xywav net product sales increased 12% to $483 million. We added approximately 425 net patients in the quarter across narcolepsy and idiopathic hypersomnia, demonstrating the sustained clinical value physicians and patients place on this medicine. We believe that truly addressing rare sleep disorders requires a restorative approach that connects night and day. Recently updated findings from our DUET trial demonstrate Xywav's profound impact on consolidating disrupted nighttime sleep, which directly translates to a meaningful reduction in debilitating daytime symptoms for both narcolepsy and idiopathic hypersomnia patients. These data reinforce Xywav's critical dual role, optimizing sleep architecture overnight to maximize patient functioning during the day. Furthermore, our Xywav study showed that patients switching to this low-sodium formulation achieved a clinically meaningful reduction in blood pressure, reinforcing Xywav's crucial cardiovascular safety profile. Our dedication to patient well-being also extends to our best-in-class JazzCares patient services, including our field-based nurse educators. These programs drive patient persistence and ensure appropriate use and long-term adherence to treatment. As the NT1 landscape evolves with the introduction of orexin 2 receptor agonists, we expect there could be near-term extension in the time it takes for some new patients to initiate therapy. However, we expect the clinical value of treating disruptive nighttime sleep to remain a priority for HCPs and patients, and we expect Xywav to remain a foundational therapy across NT1, NT2 and idiopathic hypersomnia. Our payer discussions for 2027 are well underway, positioning us favorably as we head into next year. We've consistently seen throughout 2026 that the low-sodium profile of Xywav is highly valued by physicians, patients and payers. We entered 2027 focused on maintaining this momentum, and we believe the strong clinical differentiation of Xywav will continue to support its durability. Turning to Epidiolex on Slide 8. Net product sales reached $295 million for the quarter, driven by solid underlying demand. Year-over-year growth was negatively affected by lower gross to net deductions in the third quarter of 2025 and lower levels of inventory build this quarter compared to the same quarter last year. A key driver of exceptional patient persistence for Epidiolex is our Nurse Navigator program within JazzCares. We see a direct correlation between program enrollment and improved treatment adherence. To further support long-term adherence, we are actively generating evidence to underscore Epidiolex's broad benefits beyond seizure control alone. Real-world insights from studies like EpiCom and our BECOME caregiver survey highlight meaningful improvements in daily cognitive functioning and reduced caregiver burden. Looking ahead, we have several key levers to drive long-term expansion. The FDA has accepted our NDA for a new cannabidiol oral capsule formulation with a PDUFA date of April 16, 2027, which will improve accessibility and compliance for patients, including certain segments of the adult patient population. We are also advancing a clinical trial exploring Epidiolex in developmental and epileptic encephalopathies as well as our ongoing focal onset seizure trial. Supported by robust patient durability into the very late 2030s, we remain highly confident in Epidiolex' ability to serve a broader patient population. Turning to our oncology portfolio on Slide 9. The early launch of Ziihera in GEA is delivering a truly transformative therapy to patients while establishing an expansion opportunity for our oncology business. In the third quarter, Ziihera generated $21 million in net product sales. Feedback from key opinion leaders and treating physicians has been exceptional, confirming our belief that Ziihera represents a new HER2-positive backbone therapy in this setting. Our early post-launch market research shows more than 3/4 of HCPs report a high likelihood to prescribe Ziihera for GEA, which signals a positive reaction to our data. Our launch blueprint draws directly on Jazz's core strengths, identifying highly defined specialist patient populations and mobilizing a dedicated commercial infrastructure to serve them efficiently. To help frame the trajectory of the launch and model the uptake curve going forward, I want to highlight 2 core dynamics. First, our commercial strategy is focused on precisely identifying the specific population of 3,000 to 4,000 annual patients in the U.S. who are eligible to receive Ziihera in this indication. Because these patients are distributed across different clinical settings, we are deploying a comprehensive outreach strategy, broadening our reach beyond academic centers to mobilize community accounts where the majority of GEA patients are cared for. Within the first 2 weeks post approval, our field teams conducted more than 1,500 clinical interactions with oncologists and patient advocacy partners. This approach has resulted in strong brand awareness. We saw a threefold increase in new account ordering of Ziihera in September compared to August, with the vast majority coming from community accounts. This contributed to an approximately 40% month-over-month increase in average vial demand per selling day. Second, given there is no bolus of expanded access program or clinical trial patients waiting to transition to commercial drug, the demand we are seeing reflects new patient starts as community centers integrate this practice-changing regimen into their treatment protocols. As a result, we expect Ziihera's uptake to build as new patients present for treatment. Market access has been smooth, facilitated by Ziihera's existing permanent J-code and preferred NCCN guideline status, and we are seeing clinical pathways preferentially adopt the HERIZON regimen based on superior results that reached the longest median overall survival ever reported in this setting. Moving to Slide 10. The clinical data zanidatamab has generated to date has strengthened our conviction in its potential across HER2-driven cancers. Consequently, we recently updated our peak sales potential for Ziihera to a range of $3 billion to $5 billion. Turning to Slide 11. Modeyso has generated approximately $200 million in net product sales since its launch in the third quarter of 2025, with approximately 725 patients treated as of the third quarter '26. The strong performance of Modeyso reflects the significant unmet need these patients face. We have observed strong patient persistence and continue to collect data to fully characterize average duration of treatment. Academic center adoption remains strong, and we are expanding our field efforts into the community setting through peer-to-peer programs and initiatives to increase biomarker testing. As we establish these community-focused strategies and ahead of overall survival data from our Phase III ACTION trial, we anticipate a more measured revenue pace in the near term. Of note, our third quarter revenue includes a $14 million partner inventory build following Modeyso's recent approval in Japan. We look forward to sharing top line results from the ACTION trial in the first half of 2027. On Slide 12, Zepzelca net product sales increased 32% to $104 million, driven by strong adoption of the Zepzelca and atezolizumab combination in first-line maintenance small cell lung cancer. In alignment with the FDA, the second-line indication was removed from the label at the end of the third quarter. Small cell lung cancer has been an area of high unmet need for many years. Two years ago, data from the IMforte trial showed the Zepzelca and atezolizumab combination delivered improved overall survival benefit and a favorable safety profile. The IMforte regimen brought a new maintenance option to patients for the first time in decades. Recently, at the ESMO Congress in October, we saw strong new competitor data in first-line maintenance extensive stage small cell lung cancer. This is positive news for patients as innovative science continues to evolve the treatment landscape. Our focus remains on maintaining Zepzelca's role as an established and practical option for patients with extensive stage small cell lung cancer. We are focused on driving adoption in the first-line maintenance setting for patients who need an effective treatment option today ahead of the anticipated competitor launch in 2027, which is likely to pose a future headwind to Zepzelca sales. Our commercial execution this quarter has been exceptional, giving us strong momentum with which to finish the year. We are fully confident in our trajectory with the continued strength of Xywav and successful early launch of Ziihera. I'll now turn the call over to Rob to discuss our upcoming pipeline milestones. Rob?

Thanks, Sam. The FDA approval of Ziihera is a pivotal moment for Jazz and represents a paradigm shift for the treatment of first-line HER2-positive metastatic GEA. Slide 14 illustrates how we expect the HERIZON regimen to transform legacy standards of care and reshape the management of this aggressive cancer. Unlike prior regimens that restricted immunotherapy to PD-L1 positive cases, Ziihera-based regimens provide a consistent survival benefit across both PD-L1 positive and PD-L1 negative populations. At the ESMO Congress in October, we presented the final formal analysis for the HERIZON-GEA-01 trial. At this analysis, the results showed Ziihera plus chemotherapy delivered a statistically significant and clinically meaningful OS benefit, reducing the risk of death by 24% versus trastuzumab plus chemotherapy. Nearly 40% of patients treated with the triplet regimen compared to 23% who were treated with Tras and chemo were alive at 3 years, and this was irrespective of PD-L1 status, achieving a median OS of 27 months, representing the longest survival outcomes ever reported in this setting. In addition, the longer follow-up of the triplet regimen showed an improved OS hazard ratio of 0.65, further supporting Ziihera plus tislelizumab and chemotherapy as the new standard of care. Slide 15 highlights the expansion of our pipeline, leveraging both internal discovery and strategic business development to deliver our next horizon of innovation. We continue to progress our development program for zanidatamab. One of the most exciting areas is breast cancer, where we have the ongoing EmpowHER-303 trial in metastatic breast cancer patients who have progressed on or are intolerant to T-DXd. We expect top line data from this trial late next year or in early 2028. At the same time, we are actively expanding into earlier-stage breast cancer through the EmpowHER-BC-208 trial and the I-SPY and MD Anderson Cancer Center collaborations. Beyond breast cancer, we are continuing to enroll patients with colorectal cancer and non-small cell lung cancer in the PAN-Tumor-206 trial. FDA granted breakthrough therapy designation for zanidatamab in adults with previously treated locally advanced unresectable or metastatic HER2-positive colorectal cancer. Moving to our early-stage pipeline. We recently initiated a Phase I first-in-human trial of JZP269, our differentiated orexin 2 receptor agonist to evaluate the safety, tolerability and wake-promoting effects in sleep-deprived healthy participants. Expanding the breadth of our research in epilepsy treatment, the acquisition of Actio adds a highly differentiated asset with promising early data to our pipeline. Regulatory agencies have recognized the potential of ABS-1230 by granting fast track, rare pediatric disease and orphan drug designations. ABS-1230 is advancing in the Phase Ib/II KYRON trial, which is structured as a registrational trial and could support future NDA submission. We look forward to sharing initial patient efficacy data at a medical meeting this quarter. We are making steady progress across our pipeline and R&D organization, positioning us to share additional developments and milestones in the months ahead. Now I will turn the call over to Phil for a financial update. Phil?

Thanks, Rob. Turning to our financial results for the quarter. I'll start with high-level comments on our non-GAAP adjusted P&L as shown on Slide 17. Please note that full financial results are available in today's press release and 10-Q. The outstanding execution of our field-based teams was reflected in record quarterly revenue of $1.24 billion, an increase of 10% over the third quarter of 2025, driven by 35% growth in our oncology portfolio and 12% growth in Xywav. As a reminder, in the third quarter of 2025, we had 14 shipping weeks for our U.S. oncology products, while this year, we had a normal 13 weeks. This provided a 9 percentage point headwind to our U.S. oncology revenue growth. Moving down the P&L. Our non-GAAP adjusted gross margin declined by 110 basis points year-on-year, primarily due to royalties on higher sales of Modeyso and Zepzelca as well as tech transfers for manufacturing of several products. Non-GAAP adjusted SG&A decreased by $132 million, driven by the inclusion in last year's quarter of $151.5 million in charges for Avadel and Xyrem antitrust litigation settlements. Excluding these charges, non-GAAP SG&A expenses increased $19 million or 6%, driven by higher expenses for Ziihera first-line GEA and investments in key commercial capabilities. Non-GAAP adjusted R&D expenses grew 11%, primarily due to higher expenses for evidence generation studies and advancing our early-stage portfolio. Our non-GAAP effective tax rate of negative 40% and loss per share of $3.88 reflect the Actio acquired IPR&D charge of $754 million or $11.03 per share. Excluding this charge, our non-GAAP ETR would have been approximately 13% and non-GAAP EPS would have been positive at $7.15 per share. Beyond the income statement, I'd highlight that we generated operating cash flow of $1.3 billion in the first 9 months of the year. During the third quarter, we issued $1.25 billion in convertible notes, reduced the interest rate and extended the maturity of our term loan and invested $820 million to acquire Actio. We finished the quarter with $2.9 billion of cash and investments and are well positioned to continue to invest in our currently marketed products, our existing pipeline and corporate development to drive even greater value for shareholders and patients. Turning to Slide 18 and our 2026 financial guidance. I'm pleased to report that we're raising and narrowing our total revenue guidance to a range of $4.775 billion to $4.85 billion. At the midpoint, this represents nearly 13% growth over 2025. This is the second quarter in a row that outstanding execution by our field teams across multiple products in the U.S. and Europe is driving an increase in our revenue guidance that sets the low end of our revised revenue outlook above the high end of our prior outlook. A special call out and thanks to our Jazz colleagues across the globe for their unwavering commitment to bring our highly differentiated products to those patients who can benefit from them. In addition, we now expect rare sleep revenue of $2.125 billion to $2.175 billion, led by Xywav growth of low double digits to low teens. Xywav's unique benefits as the only low sodium oxybate continue to resonate with patients, physicians and payers and uptake of high sodium generics to date continues to be limited. Our increased revenue outlook is also driving a 50 basis point increase in our non-GAAP gross margin guidance to a range of 90.5% to 91.5%. Our guidance for non-GAAP SG&A and R&D expenses is unchanged as we continue to exercise disciplined capital allocation while achieving our commercial and R&D objectives. We've updated our non-GAAP effective tax rate to a range of 19.5% to 21.5% to reflect the effect of the nontax deductible acquired IPR&D charge from the Actio acquisition. Finally, our share count guidance is unchanged at 69 million to 70 million shares. I'll now turn the call back to Renee for closing remarks. Renée Galá: Thank you, Phil. I'll conclude our prepared remarks on Slide 20. Jazz's outstanding results this quarter demonstrate our continued focus on high performance and the disciplined execution of our strategy. We raised our revenue guidance, launched Ziihera in first-line GEA, advanced our key pipeline programs and strengthened our rare epilepsy portfolio through the acquisition of Actio. Looking ahead, the next important inflection points are already in view. Initial patient data from ABS-1230 this quarter, the ACTION readout in the first half of 2027 and top line data from the EmpowHER breast cancer 303 study in late 2027 or early 2028. As we enter 2027, we have clear priorities, the financial strength to invest behind them and a strong track record of execution. Together, these give us confidence in the Jazz we are building for the future and the meaningful value we can create for patients, employees and shareholders. With that, I'll ask the operator to please open the line for questions.

[Operator Instructions] The first question is going to come from Jessica Fye with JPMorgan.

I was wondering if you could elaborate a little bit more on the factors behind the guidance update, including that increase to the rare sleep guidance, but it seems like that was not the only thing driving the upside.

Yes, Jess, happy to. This is Phil. So you're right, a little over half of that increase was coming from the rare sleep franchise. where we've seen outstanding execution across the first 9 months of the year for Xywav. And in the high sodium oxybate portion of our business, we really have seen very little impact from the high-sodium generics, something that we didn't originally anticipate might occur as we got later into the year, but just is not taking place at the pace that we had originally expected. And then we are seeing strong performance, not only in the U.S., but also in Europe on a host of other products in the Epidiolex and oncology parts of our business that sort of took away potential downside scenarios and allowed us to capitalize on the strong performance to date and raise that portion of our guidance as well. So I really feel extremely proud and thankful for the commercial execution Sam and her team have provided that's allowing us to raise guidance now for the second quarter in a row we did not increase the operating expense guidance. As I mentioned on the call, we continue to execute well, hitting on all our major milestones, both commercially and R&D while still maintaining the guidance from our prior quarter. So really strong financial execution here in the third quarter, setting us up for a strong finish to the year.

And our next question is going to come from Joseph Thome with TD Cowen.

Congrats on the progress. You did mention the community setting a couple of times, maybe specifically for zanidatamab. Can you talk about the experience of physicians in the community setting using HER2 targeted agents, maybe in general and kind of the overall diagnosis strategy there? Is this lagging behind the academic centers? And maybe how can Jazz make an impact here?

Yes. Thanks for the question, Joseph. Yes, I mean, I think we've highlighted previously the importance of the community setting when it comes to the launch of Ziihera. And we had a very specific focus on ensuring that we would see adoption not only in the academic centers of excellence where you would expect high brand awareness already, but also in the community setting, which will account for the majority of the use of Ziihera where patients will get treated there. And as you've seen from some of the KPIs that we've described, we're seeing already really strong uptake in the community in September, which was our first full operational month post launch. we achieved a threefold increase in new accounts ordering for Ziihera compared to August. And crucially, 80% of these new ordering accounts came directly from the community setting, demonstrating rapid penetration there, which obviously is very important for the ongoing momentum of the launch. And then when you couple that with some of the other KPIs such as the brand awareness, 43% unaided spontaneous physician awareness and 79% of surveyed oncologists reporting a high intent to prescribe Ziihera for first-line GEA. These are really good indicators of what we expect to see the momentum growing into the fourth quarter and beyond. And I think in just 1 month, seeing our expanding customer base translated directly into a 40% month-over-month increase in average vial demand per selling day is really extremely encouraging. So yes, good start in the community. Obviously, we continue to be highly focused there.

And the next question will come from Andrea Newkirk with Goldman Sachs.

On the quarter. And Sam, bless for your retirement. Maybe another one for you on Ziihera and GEA. I guess maybe across the threefold increase in ordering accounts that you mentioned, what proportion represents single patient orders versus clinics that have maybe already placed repeat orders? And then recognizing it's early, but what feedback are you seeing regarding treatment adherence and dose modifications?

Thanks for the question. Yes, the threefold increase in new ordering accounts that we saw, they were accounts ordering for the first time. And I mentioned that more than 80% of those accounts that were ordering first time were coming directly from the community setting. So that reflects, I think, the strong uptake and adoption that we're starting to see already in that space. In terms of -- it's obviously too early for us to talk about persistence. But what we're very pleased to see is the frictionless reimbursement and pathway adoption. And we've invested in ensuring that patients have a seamless experience coming on to the product. So our investment in the field force, clinical nurse educators, the starter kits are all actively supporting clinics to establish Ziihera as the default frontline choice. So some of those investments that we've made, I think, are really paying off. And we haven't encountered any issues in patients being kind of adopted onto the treatment.

And our next question is going to come from Ash Verma with UBS.

Congrats on the progress. Can you talk about the Ziihera addressable patient distribution for GEA? I think you mentioned that a lot of these patients are spread across different settings and it's more community heavy. How would the ramp here for GEA compared to how fast Ziihera got adopted in the DTC segment?

Yes. Thanks for the question, Ash. Yes, the distribution here for the GEA indication is going to be predominantly from the community setting, and that is different to BTC. And we don't report revenue broken down by individual tumor indication because we don't get vial level indication tagging from distribution channels. However, the vast majority of the month-over-month sequential growth was driven by new patient starts in first-line GEA following the approval in late August. I think one thing just to mention in terms of the ramp dynamics that you mentioned. There is no channel stocking or expanded access program bolus that was waiting to get transitioned over to commercial Ziihera. And as you know, Ziihera was already commercially stocked in institutional channels for second-line BTC. So the demand that we are now seeing represents newly presenting patient starts as community oncology clinics integrate the regimen into their practice protocols. And we can expect that continued momentum into 4Q and beyond as Ziihera is adopted as the new standard of care in this setting.

And our next question is going to come from Mohit Bansal with Wells Fargo.

This is Will Zhang on for Mohit. I guess like switching gears over to Xywav. I just want to understand, going into '27, how are you guys thinking about the pace of net patient adds on the narcolepsy side, given we could see greater build of these like generics, oxybate generics on top of orexin impact on the narcolepsy side? And then also on the IH side, I just want to understand the amount of runway for net patient adds you guys see for Xywav in that setting.

Yes. Thanks for the question. Yes, obviously, we're delighted with the performance of Xywav this year and this quarter, specifically an additional 12% growth 425 net patient adds in the quarter. So we now have 17,550 patients active on treatment at the end of the third quarter. Through 2026, we've obviously performed extremely well. I think the differentiation that Xywav offers has been very robust and durable. And we're not expecting the multisource generics to have any additional impact in the foreseeable future. When it comes to the orexins, the orexins obviously do offer an additional daytime wakefulness option for type 1 narcolepsy. And that may lengthen the period it takes before patients start on oxybate therapy. But we -- orexins do not treat disrupted nighttime sleep, and that is the foundational pathophysiology of narcolepsy. As we demonstrated in our DUET trial, Xywav consolidates fragmented nighttime sleep architecture and that directly resolves some of the debilitating daytime symptoms that patients experience. So feedback that we've had from prescribers indicate that they don't intend to switch that stable controlled Xywav patient base. And we believe that Xywav remains the foundational standard across not just NT1, but NT2 and idiopathic hypersomnia. So I believe we're entering 2027 in a commercially very strong position with good coverage from the payers, and we're extremely optimistic about the robust durable nature of our Xywav business.

And our next question will come from Marc Goodman with Leerink.

Rob, what's the strategy to play catch-up with respect to your orexin? Are you thinking about fast-forwarding into non-narcolepsy indications, or are you going to be doing narcolepsy, or doing both? What's the strategy?

Yeah. Hi, Marc. Just as a reminder, the approval currently is for NT1 only. Certainly, I think there's somewhat of a consensus that maybe the best in class hasn't appeared yet in terms of things like optimal half-life, et cetera. So I do think there's an opportunity for a best in class, and I do think that can be differentiated in the setting of a broader narcolepsy population, inclusive of NT2 and for idiopathic hypersomnia, where you're likely to need more exposure, more dose than you would in NT1. As we mentioned, we've entered the clinic now in healthy volunteers for this particular mechanism. You can learn quite a bit in healthy volunteers utilizing sleep deprivation models, for example. So I think there is an opportunity to go quickly in development. So, we're hopeful that 269 will turn into something that's competitive.

And our next question will come from Jason Gerberry with Bank of America Securities.

Hey, this is Chi on for Jason. Thanks for taking our question. I have a multi-part question on Ziihera. I did not hear Ziihera being called out as part of the guidance update. Is that performing in line with your expectation? In your prepared remark, you said you are seeing clinical pathways preferentially adopt the HERIZON regimen. Can you expand a little bit more on that comment? Is that in both academic and community? Is that over ToGA or KEYNOTE-811 or both? Lastly, can you talk about opportunity to upgrade the NCCN guideline to category 1 now that you have updated OS data? Thanks so much. Renée Galá: Phil, do you want to jump in on the guidance question, and then Sam can cover the question afterwards on community versus institution?

Absolutely. Yes, very much pleased with the initial uptake of Ziihera in first-line GEA, very much in line with our expectations and ambition for the molecule. Given the late in the year launch, effectively, it's not having a significant impact on our overall revenue guidance for 2026. Certainly look forward to continuing to expand the use of Ziihera in both second-line BTC and first-line GEA as we head into 2027, where we'd expect it to be an even more meaningful contributor to our revenue and revenue growth. Sam?

Yes. In relation to the question around formulary and pathway inclusion, as I mentioned, we've seen really frictionless reimbursement and pathway adoption, positive early formulary and EHR order set inclusion with preferred status on the leading oncology pathway. Still some work to be done with some of the other oncology pathways, but that's all happening as expected currently, and it's not introducing any kind of administrative lag there. In relation to your question around NCCN, yes, the NCCN preferred status today already provides broad frictionless reimbursement and pathway access. That was based on the initial category, the category 2A designation was based on the early interim data. As you're probably aware, at ESMO just a couple of weeks ago, we presented the final phase III HERIZON-GEA-01 analysis which showed an improvement in the median OS for the triplet arms to 27 months, which is the longest ever reported in a phase III trial in this setting, with a 35% reduction in the risk of death for the triplet. So, we've submitted these mature data now to NCCN for consideration of a category 1 update. Meanwhile, as I've mentioned previously, 80% of our new ordering accounts in September were from community clinics, just showing the category 2A status that we have today is not impeding clinical uptake.

And our next question will come from Gregory Renza with Truist Securities.

Congrats on the progress. Thanks for taking my question. Maybe for this one, just wanted to ask on Modeyso. I know that, Sam, you identified perhaps maybe a more measured pace when it comes to looking at how that should play out, especially ahead of the ACTION data next year. Just curious if you could talk about just your confidence in how Modeyso is faring with respect to your expectations, and maybe more importantly, how it sort of fares with your interest in external assets that pertain to the rare disease and even the rare oncology spaces. Thanks so much.

Yes, thanks for the question. Modeyso has achieved a really rapid uptake through the launch. We've had $200 million in sales and more than 725 patients treated since its August 2025 approval. Some of that was driven by patients transitioning from the expanded access program, as well as very rapid adoption by academic centers. We're now really in the next phase of the launch. We did see new patient additions experience a transient dip over the summer months, but initiation rates have since rebounded close to previous levels. The measured pace that I spoke about really reflects our commercial expansion as we move from the concentrated academic centers of excellence into broader community oncology networks. Our focus there really is on reaching those community prescribers, and it's being facilitated by a suite of peer-to-peer programs and our focus on supporting increasing testing rates in the community, as well as timely referral to academic centers of excellence as well. So, that measured pace I really just think reflects this next phase of the launch that we're in. Of course, we're looking forward to the ACTION study readout in the first half of next year, which will support that further growth rate. Renée Galá: Greg, just to answer the last part of your question in terms of how that impacts our interest in other external assets. I mean, the Chimerix transaction, which brought us Modeyso, was exactly the type of transaction that we are interested in today, and also quite similar to what we were looking for when we acquired Actio Biosciences. This is an area where there's a significant unmet need, where we think we can make a real meaningful impact for patients, where we can leverage our expertise, our commercial footprint, our global footprint, and create another durable revenue stream, putting capital to work in a way that is consistent with our strategy and consistent with generating value for patients and for shareholders. We're very pleased with the overall performance of Modeyso, and as Sam mentioned, with an upcoming inflection point with the ACTION study reading out in the first half of next year, we think we're well-positioned to continue that expansion, and certainly have continued confidence behind our $500 million peak expectation in the U.S.

And our next question is going to come from Sean Laaman with Morgan Stanley.

Hey, this is Mike on for Sean. Thank you for taking our questions. Any commentary on why the high sodium generics aren't causing that erosion? What are you learning about the market's willingness to accept high sodium regimens, and has anything changed your thinking of how you think Lumryz would perform in IH once it gets on market? Thanks so much.

I think what's being appreciated in the market is the benefits of the low sodium oxybate profile. We know that the vast majority of patients with narcolepsy and idiopathic hypersomnia have cardiovascular or cardiometabolic comorbidities, and so it makes sense for these patients to be offered a low sodium oxybate as opposed to a high sodium oxybate, which could exacerbate those complications. I also think that what is appreciated by HCPs and patients is the wraparound services that we provide to patients that really help smooth the onboarding of patients onto treatment. Our JazzCares program is highly regarded in the market. Of course, there's also the REMS associated with this treatment as well that it requires some significant investment and support to operationalize. I think all of those things have contributed to the fact that Xywav has really been uninterrupted by the availability of high sodium oxybate generics, and we expect that to continue.

And our next question will come from Etzer Darout with Barclays.

Great. Thanks for taking the question. Just one on ABS-1230. Just wondering ahead of this initial patient data that you expect this quarter, if maybe you could frame what you need to see on seizure reduction, durability, maybe consistency across patients to give you confidence that the KYRON can support registration. Thank you.

Yeah. So some context in this disorder. It is highly refractory to most anti-seizure medications, and it is a severe form of epilepsy coming from mutations all in the KCNT1 gene. What we find really promising about ABS-1230 is that it is targeted to essentially all of the known mutations in that particular gene, which cause a gain-of-function mutation. So targeting that with an inhibitor can normalize the function of that ion channel. That is well-established preclinically in preclinical models. It reverses the epilepsy phenotype. At the time of the deal, we had some insight into clinical data that were quite promising. So the bar is fairly low. However, we think this approach could actually be quite transformational, and we are excited to be able to share the data, as we said, later this year.

And our next question will come from Leonid Timashev with RBC.

Hey, thanks for taking my question. Maybe one for Renee. I think you recently sat down at a panel that included some FDA officials on rare disease. Maybe I wanted to ask, what were your key takeaways with respect to how the FDA is thinking about rare diseases? What would you take away back to Jazz on how you think about the development programs, especially in rare epilepsies, such as for ABS or for Epidiolex? Thanks. Renée Galá: Yeah, thanks for the question. Well, first of all, we were quite pleased to see the FDA's guidance come out in terms of their fit-for-purpose rare disease framework. I think there's a strong acknowledgment that when you're working in rare disease, you need to think about the studies differently, you need to think about patient finding differently, and there seems to be a lot of momentum coming out of that discussion as well as the public forum to receive comment on those topics. For us, having a strategy that is focused on rare disease and knowing that there are 30 million patients in the U.S. with rare disease, we have 10,000 rare diseases, 95% of which have no approved therapy, the need is just immense. So to both acknowledge the fact that we need both fit-for-purpose regulatory pathways and pathways that can be predictable is incredibly helpful. It's important for patients. When it comes to rare disease patients, they deserve the same level of confidence in the efficacy and the safety of the drugs that are being developed for them, but the pathways just often look different. So a number of topics that were covered. Importantly, a lot of momentum. Serious intent is what I took away from the discussion, and I'm incredibly optimistic about the opportunity going forward.

Leo, this is Phil. Maybe one thing I'd add, just broadly on policy, we continue to see support in D.C. for ensuring that incentives are in place for companies to pursue novel solutions for rare diseases, including the recent rules issued in October on the GLOBE Medicare Part B pilot program that exempted solely orphan disease indication drugs from that particular GLOBE program. Again, feel very good about the company's strategy where we've got capabilities to also feel very good about the continued support, patient advocacy groups, FDA, politicians broadly, I'd say, in D.C., and recognizing this is an important area for us to continue to innovate to bring new solutions to patients.

And our next question's going to come from David Hoang with Deutsche Bank.

Hi there. Congrats on the quarter, and thanks for taking my question. I wanted to drill down a little bit on the commentary about the threefold increase, I believe, in ordering accounts in September for Ziihera that you're seeing. How should we think about that step-up in accounts translating over to revenues, and what would be the timeframe that that would occur in? With the mix of patients that you're seeing on Ziihera, wondering if you could comment on, are these newly diagnosed patients, and maybe what percentage are coming from patients on KEYNOTE-811 regimen of KEYTRUDA and HERCEPTIN switching over to Ziihera regimens? Thank you.

Thank you for the question. Yes, so I think it's very encouraging that in September, our first full operational month post-launch, we did see such a significant increase in new ordering accounts. These are accounts, just to be clear, that are ordering for the first time. So, what we take from that is that they have patients, newly diagnosed patients, that they're ordering for to put on treatment. Of course, we're then seeing that directly correlate with a significant increase in the month-over-month increase in average vial demand per selling day, which also increased by 40%. We don't have the detail to share with you as to what the origin of those patients are. We don't get that level of detail from the distribution channels. However, we're not expecting this to be a market where we see significant switching of patients. It's much more likely that these are newly diagnosed patients, and I think that's what we can expect to see in the future. Obviously, this is a rare disease, and we would expect the pace of growth really to reflect the pace at which newly diagnosed patients are presenting at clinics. Of course, our job will be to ensure that when those patients, newly diagnosed patients present, that the physicians are equipped with all of the information that they need to consider Ziihera. Given the very significant strength of the data, we would expect Ziihera to be the standard of care and the choice for those patients.

And our next question will come from Annabel Samimy with Stifel.

Oh, hi. Thanks for taking my question. Just going back to Ziihera and GEA, for the 3,000 to 4,000 target population, you've mentioned in the past that it takes into account unresectable disease, first-line treatment rates, and testing. It seems like there are two factors there at least that you could potentially improve on, so utilization first line and testing. Given the pretty dramatic increase in efficacy over tras, is there any indication that you could drive higher HER2 testing and utilization upfront than historically? If not, what can you do to move that needle a little bit? Thanks.

Yeah. Thank you for the question. Yes, that's right. We've spoken about the 3,000 to 4,000 range being the true treatable frontline patient population aligned with our label. Those are the patients with unresectable, locally advanced, or metastatic disease who are eligible for systemic first-line treatment and have received HER2 testing. You're quite right. There are a number of things there that we will be very much focused on. First of all is to ensure that patients get a HER2 test. That level's quite high. What's surprisingly low is even those patients who are tested and are HER2 positive, many of those patients, not all of those patients actually do today get a HER2 treatment. So, that's an area, and it can be as low as actually 65%. So, that's an area that with obviously, as you mentioned, the very strong efficacy data for Ziihera and the fact that we have teams actively out there in the market, that's one area that we will very much be focused on. We do believe that all eligible patients should have the opportunity to use Ziihera.

And our next question is going to come from David Amsellem with Piper Sandler.

Thanks. I have a Zepzelca question. Just wanted to get your thoughts on the trajectory of the product longer term, given the presentation of Amgen's IMDELLTRA survival data in first-line extensive stage small cell lung. How are you thinking about the trajectory of the product, just given the data that was recently presented? Thanks.

Yeah. Thank you for the question. Yes, there are a few different dynamics in relation to Zepzelca. Obviously, we had the removal of the second-line monotherapy indication at the end of September that was aligned with the FDA. That does not affect our full approval in first-line maintenance segment, and that segment accounts for about 30%-40% of our total revenue. Now, we did see strong competitive data in first-line maintenance presented at ESMO, as you mentioned. IMDELLTRA, as we know, is very strong data. It's not yet approved or reimbursed in that maintenance setting. But once it is approved, we would anticipate that IMDELLTRA will represent a competitive headwind in 2027. There is not anticipated to be any impact on our raised 2026 revenue guidance that was mentioned on this call. We do believe Zepzelca remains an established, practical, and familiar standard for community oncologists particularly, who value the convenient administration and proven OS benefit without requiring some of the specialist inpatient monitoring. So, I think it's good news that there are more options. A couple of years ago, when the Imfinzi data came out, that was the first new data in this space for decades. So, it's good news for patients that there are more options, and I believe both treatments have a place for patients.

And our next question will come from Ami Fadia with Needham & Company.

Hi. Congratulations on the nice quarter, and thanks for taking my question. Maybe just on Epidiolex for the DEE trial. Can you tell us a little bit about the representation of the different DEE subtypes that you are enrolling in the trial, and what would success look like in the context of data from some competitors that's expected in the coming months as well? Thank you.

Yeah. The trial, Ami, is based on prior data we have where we see broad activity of Epidiolex, really regardless of the underlying syndrome, across a number of different seizure types and a number of different DEEs. The goal of this study is to ensure that we enroll a broad enough group of DEEs that ultimately the FDA is convinced that a broader label is appropriate beyond the specific indications that we currently have. As you know, it's a randomized phase III trial. It's one-to-one randomization between Epidiolex and placebo.

Thank you. At this time, I will now turn the call back over to Renee Gala for closing remarks. Renée Galá: Great. Thank you, operator. I would like to close today's call by thanking all our employees, as well as our partners and stakeholders, for their continued confidence and support. Thank you for joining us today.

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