ZYME - Updated View On Jazz Pharmaceuticals' 2025 Goals

2024-01-29 15:17:00 ET

Summary

• Jazz Pharmaceuticals is likely to fall short of its 2025 revenue goal of $5 billion unless it makes a bold M&A move.
• Despite this, the stock looks undervalued and has the potential to re-rate higher, driven by the growth of Xywav, Rylaze, and Epidiolex, as well as upcoming pipeline readouts and business development.
• The fears over the oxybate franchise's demise are overblown and Xywav is likely to retain a good portion of its sales despite increasing competition and availability of generic Xyrem.
• Several pipeline readouts are expected in the next 12 months, including the very important phase 3 results of zanidatamab in GEA patients.

Shares of Jazz Pharmaceuticals ( JAZZ ) have traded flat to somewhat lower since my November 2022 article and this was largely in line with what the average biotech stock was doing until early November of last year, the time when biotech stocks began to recover and Jazz's share price made no progress.

My view at the time was that the stock was worth approximately $190 per share and more if the company could execute well against its 2025 and long-term goals of reaching $5 billion in revenue, but my view was also that the company would come up short of that goal as my revenue estimate was $3.9 billion at the low end of the range and $4.95 billion at the high end of the range, or around $4.4 billion at the mid-point....

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