JAZZ PHARMACEUTICALS INC - S-1/A - 20070517 - PROSPECTUS_SUMMARY
PROSPECTUS SUMMARY
The
following summary is qualified in its entirety by, and should be read together with, the more detailed information and financial statements and related notes thereto appearing elsewhere in this prospectus. This summary highlights what we believe is
the most important information about us and this offering. Before you decide to invest in our common stock, you should read the entire prospectus carefully, including the “Risk Factors” section and the financial statements and related
notes included in this prospectus.
JAZZ PHARMACEUTICALS,
INC.
Corporate Overview
We are a specialty pharmaceutical company focused on identifying, developing
and commercializing innovative products to meet unmet medical needs in neurology and psychiatry. Our goal is to build a broad portfolio of products through a combination of internal development and acquisition and in-licensing activities and to
utilize our specialty sales force to promote our products in our target markets. We apply novel formulations and drug delivery technologies to known drug compounds, and compounds with the same mechanism of action or similar chemical structure as
marketed products, to improve patient care by, among other things, improving efficacy, reducing adverse side effects or increasing patient compliance relative to existing therapies. By working with these drug compounds, we believe that we can
substantially mitigate the risks and reduce the costs and time associated with product development and commercialization of new therapies with significant market opportunities. Through the application of novel formulations and drug delivery
technologies available from third parties, we also explore potential new indications for known drug compounds. Since our inception in 2003, our experienced executive management team has built a commercial operation and assembled a portfolio of
products and product candidates that currently includes two marketed products that generated net product sales of $41.9 million in 2006, one product candidate for which an approvable letter has been issued by the U.S. Food and Drug Administration,
or FDA, and five product candidates in various stages of clinical development. We also have additional product candidates in earlier stages of development.
Our marketed products and late-stage product candidates are:
•
Xyrem (sodium oxybate) oral solution
. Xyrem is the only product approved by the FDA for the treatment of both cataplexy and excessive
daytime sleepiness in patients with narcolepsy. Narcolepsy is a chronic neurologic disorder caused by the brain’s inability to regulate sleep-wake cycles normally. According to the National Institutes of Health, 150,000 or more individuals in
the United States are affected by narcolepsy. Cataplexy, the sudden loss of muscle tone, is the most well-recognized symptom of narcolepsy. Excessive daytime sleepiness is the most common symptom of narcolepsy and is present in all narcolepsy
patients. We promote Xyrem in the United States to neurologists, psychiatrists, pulmonologists and sleep specialists through our 55 person specialty sales force. We have significantly increased domestic net product sales of Xyrem since our
acquisition of Orphan Medical, Inc. in June 2005. Our net product sales of Xyrem were $29.0 million in 2006 and $8.6 million in the first quarter of 2007. We have licensed the rights to commercialize Xyrem in 54 countries outside of the United
States to UCB Pharma Limited, or UCB, and in Canada to Valeant Canada Limited, or Valeant. UCB has commercially launched Xyrem in 12 countries.
•
Antizol (fomepizole)
. Antizol is the only FDA-approved antidote for suspected or confirmed ethylene glycol or methanol poisonings in
humans. We market Antizol primarily to hospitals and emergency rooms. Antizol is distributed to wholesalers in the United States, and we retain the services of a third party to promote the product. Antizol is marketed by our distributors in Canada
and Israel. Our net product sales of Antizol were $12.5 million in 2006 and $2.6 million in the first quarter of 2007. We also market Antizol-Vet, an injectable formulation of fomepizole approved as an antidote for suspected
or confirmed ethylene glycol poisonings in dogs. Net product sales of Antizol-Vet were $313,000 in 2006 and $65,000 in the first quarter of 2007.
•
Luvox CR (fluvoxamine maleate extended release capsules).
Our most advanced product candidate is Luvox CR, an extended release
formulation of fluvoxamine, a selective serotonin reuptake inhibitor, which has been developed for the treatment of obsessive compulsive disorder and social anxiety disorder. Selective serotonin reuptake inhibitors are a class of antidepressants
used in the treatment of depression, anxiety disorders and some personality disorders. According to the National Institute of Mental Health, obsessive compulsive disorder and social anxiety disorder affect approximately 2.2 million and
15 million adults in the United States, respectively. Luvox CR was developed by Solvay Pharmaceuticals, Inc., or Solvay, in collaboration with Elan Pharma International Limited, or Elan. We obtained the exclusive rights to market and distribute
Luvox CR in the United States from Solvay in January 2007. Solvay retains the rights to market and distribute Luvox CR outside of the United States. In addition, Solvay has assigned to us its rights and obligations under its license and supply
agreement with Elan. Under this agreement, Elan has the right and obligation to manufacture the worldwide commercial requirements of Luvox CR. Under the terms of our license agreement with Solvay, we made an initial payment to Solvay, and we are
required to make additional payments to Solvay if various development and commercial milestones are achieved. We have also agreed to pay royalties to Solvay at specified rates based on net product sales and to pay to Elan development and commercial
milestone payments, royalties on net product sales and supply price payments for the supply of Luvox CR.
Solvay submitted a new drug application, or NDA, to the FDA for Luvox CR in April 2006, and, in February 2007, the FDA issued an approvable letter to Solvay. The requirements set
forth in the approvable letter include the completion of certain toxicology studies on the impurities that are generated by fluvoxamine maleate, the active pharmaceutical ingredient in Luvox CR, the submission of additional information relating to
the chemistry, manufacturing and controls section of the NDA and the re-analysis by Solvay of certain data set forth in the NDA. Under our agreement with Solvay, Solvay has primary responsibility for the NDA for Luvox CR and communications with the
FDA until after such time, if ever, as the FDA approves the NDA for Luvox CR. Subject to the satisfaction of the requirements set forth in the approvable letter and receipt of FDA approval, we expect to commence promotion of Luvox CR in the United
States in the first quarter of 2008 through a significantly expanded specialty sales force. During 2007, we expect to make significant expenditures relating to the planned commercial launch of Luvox CR.
•
JZP-6 (sodium oxybate).
We are developing a liquid dosage form of sodium oxybate, the active pharmaceutical ingredient in Xyrem, for
the treatment of fibromyalgia syndrome. Fibromyalgia syndrome is a chronic pain condition that affects between two and four percent of the U.S. population, according to the American College of Rheumatology. There are currently no products approved
by the FDA for the treatment of fibromyalgia syndrome. We have successfully completed a Phase II clinical trial of this product candidate for the treatment of fibromyalgia syndrome. We are currently conducting two Phase III pivotal clinical trials,
and we expect preliminary data from the first Phase III pivotal clinical trial in the second half of 2008. We have granted UCB the commercialization rights to JZP-6 in 54 countries outside of the United States.
In addition to our product candidates in late-stage development, our clinical
development pipeline consists of the following product candidates:
•
JZP-4 (type IIa sodium channel antagonist)
. JZP-4, a controlled release formulation of an anticonvulsant that is in the same chemical
class as Lamictal (lamotrigine), an antiepileptic drug marketed by GlaxoSmithKline, is being developed for the treatment of epilepsy and bipolar disorder. According to the Epilepsy Foundation, approximately 2.7 million people in the United
States suffer from epilepsy and, according to the National Institute of Mental Health, approximately 5.7 million
people in the United States are affected by bipolar disorder. We have planned two proof of concept clinical trials designed to provide evidence of
therapeutic activity of JZP-4. A proof of concept study is performed in a small group of subjects to test whether a product candidate is likely to have the desired therapeutic effect. The results from the first proof of concept clinical trial
indicate potential central nervous system activity of JZP-4, and the second proof of concept clinical trial is expected to commence in the third quarter of 2007. Subject to satisfactory results from the second proof of concept clinical trial,
long-term toxicology studies, formulation studies and certain drug-drug interaction studies, we plan to commence a Phase II clinical trial of JZP-4 for the treatment of epilepsy beginning in the fourth quarter of 2007.
•
JZP-8 (benzodiazepine)
. JZP-8, a novel formulation incorporating a benzodiazepine, is being developed for the treatment of recurrent
acute repetitive seizures in epilepsy patients who have been unresponsive to previous treatments. Recurrent acute repetitive seizures are bouts of multiple seizures occurring over a short period of time. According to an article published in the
New England Journal of Medicine
, approximately 30% of epilepsy patients are unresponsive, or refractory, to treatment despite being on an effective dose of an antiepilepsy regimen, and a subset of these refractory patients experience
recurrent acute repetitive seizures. We have completed development activities to select the active pharmaceutical ingredient for this product candidate and are conducting further development activities related to formulation, safety and tolerance.
We plan to commence a Phase II clinical trial of JZP-8 for the treatment of recurrent acute repetitive seizures in refractory epilepsy patients in the fourth quarter of 2007.
•
JZP-7 (dopamine agonist)
. JZP-7, a novel formulation incorporating a dopamine agonist, is being developed for the treatment of
restless legs syndrome. Dopamine is naturally produced by the human body, and in the brain, dopamine functions to help nerve cells communicate. A dopamine agonist is a drug compound that mimics the effects of dopamine. According to the Restless Legs
Syndrome Foundation, up to 10% of the U.S. population suffers from restless legs syndrome. We have completed development activities to select the active pharmaceutical ingredient for this product candidate and are conducting further development
activities related to formulation, safety and tolerance. We intend to conduct an additional pharmacokinetic study, or a study designed to assess how the body processes a drug once the drug is delivered to the body, in 2007 prior to commencing Phase
II clinical trials for the treatment of restless legs syndrome.
•
JZP-2 (benzodiazepine)
. JZP-2, a formulation of a benzodiazepine that is designed to enter the bloodstream faster than a dose from a
conventional tablet form, is being developed for the acute, or short-term, treatment of panic attacks associated with panic disorder. Benzodiazepines are a class of psychoactive drugs with varying hypnotic, sedative, anti-anxiety, anticonvulsant,
muscle relaxant and amnesic properties. According to the National Institute of Mental Health, approximately six million people in the United States suffer from panic disorder in any given year. We have developed a target formulation for JZP-2 and
plan to commence one or more clinical trials of JZP-2 with this formulation in 2007.
We have an ongoing program for generating, identifying and conducting feasibility studies for new product candidates. Our JZP-2, JZP-7 and JZP-8 product
candidates resulted from this program. Several other product candidates identified through this program are in various stages of early development, including the use of sodium oxybate, the active pharmaceutical ingredient in Xyrem, for the treatment
of movement disorders. We are working on ways to expand our Xyrem franchise by developing improvements to Xyrem, such as new dosage forms that could be more convenient for patients. These activities are in the early stages of development.
Our executive management team has substantial experience
in developing and commercializing novel therapeutic products. During their time working together as part of the executive management team at ALZA Corporation, a pharmaceutical company acquired by Johnson & Johnson in 2001, our executive
management team participated in the successful development and commercialization of a broad portfolio of products and product candidates to address specialized markets.
Our goal is to be a leading specialty pharmaceutical company developing and commercializing new medicines in neurology and psychiatry and, over the longer
term, in additional specialty therapeutic areas. Key elements of our strategy to achieve this goal include:
•
focusing on specialty markets, particularly neurology and psychiatry, in which a relatively small number of healthcare providers write a large percentage of
prescriptions for the indications we target;
•
expanding and leveraging our U.S. specialty sales force to promote our growing portfolio of commercial products;
•
mitigating risks and reducing the costs and time associated with the development and commercialization of our products by focusing on known drug compounds, and
compounds with the same mechanism of action or similar chemical structure as marketed products, and structuring our development and commercial relationships to minimize financial risk;
•
expanding our portfolio to include additional products and product candidates that we believe have significant commercial potential through our internal research
and development efforts and our acquisition and in-licensing activities; and
•
leveraging the expertise of our experienced executive management team in developing and commercializing novel therapeutic products.
Risks Associated with Our Business
We are a specialty pharmaceutical company with historical net operating
losses, and our operations to date have generated substantial and increasing needs for cash. Our business and our ability to execute on our business strategy are subject to many risks that you should be aware of before you decide to buy our common
stock. These risks are discussed more fully in “Risk Factors” beginning on page 9. For example:
•
Our clinical trials may fail to adequately demonstrate the safety and effectiveness of our product candidates. If a product candidate fails at any stage of
development, we will not have the anticipated revenues from that product candidate to fund our operations, and we will not receive any return on our investment in that product candidate.
•
The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our partners from obtaining regulatory approvals for the
commercialization of some or all of our product candidates. If we receive regulatory approval for our product candidates, we will be subject to ongoing significant regulatory obligations and oversight, which may result in significant additional
expense and limit our ability to commercialize our products.
•
Even if approved for sale by the appropriate regulatory authorities, our products may not achieve market acceptance. Market acceptance is dependent upon, among
other things, the availability of adequate reimbursement by third parties and acceptance by physicians and patients of each of our products as a safe and effective treatment.
•
We face competition from both generic and branded pharmaceutical products and if we are unable to demonstrate to physicians that, based on experience, clinical
data, side-effect profiles and other factors, our products are preferable to other therapies, we may not generate meaningful revenues from sales of our products.
•
Our ability to grow our business is dependent on our ability to successfully develop, acquire or in-license new products and product candidates.
From our inception in 2003 through March 31, 2007, we incurred net losses of $191.5 million, and we expect to continue to incur net losses for the next several
years. We are unable to predict with certainty the extent of any future losses or when we will become profitable. We will also need to raise additional funds to support our operations, and such funding may not be available to us on acceptable terms,
if at all. If we are unable to raise additional funds when needed, we may not be able to continue development of our product candidates or we could be required to delay, scale back or eliminate some or all of our development programs and other
operations.
Corporate Information
We were incorporated in California in March 2003, and we reincorporated in
Delaware in January 2004. Our principal executive office is located at 3180 Porter Drive, Palo Alto, California 94304. Our telephone number is (650) 496-3777. Our website address is www.jazzpharmaceuticals.com. Information contained in, or
accessible through, our website does not constitute a part of this prospectus.
Unless the context indicates otherwise, as used in this prospectus, the terms “Jazz Pharmaceuticals,” “we,” “us” and “our” refer to Jazz Pharmaceuticals, Inc., a Delaware
corporation, and its subsidiaries. We use Jazz Pharmaceuticals™, Xyrem
®
, Antizol
®
,
Luvox
®
and the Jazz Pharmaceuticals logo as
trademarks in the United States and other countries. We have licensed the right to use the registered trademarks Antizol
®
from Mericon Investment Group, Inc. and Luvox
®
from Solvay Pharmaceuticals, Inc. All other trademarks or trade names referred to in this prospectus are the property of their respective owners.
Market Data
This prospectus contains market data and industry forecasts that were
obtained from industry publications. We have not independently verified any of this information.
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