BofA Raises Jazz Pharma Estimates After Zepzelca Update

Jazz Pharmaceuticals PLC JAZZ provided encouraging updates on its commercial efforts in a recent conference call on the lung cancer drug Zepzelca, according to BofA Securities.

The Jazz Pharma Analyst

Jason Gerberry maintained a Buy rating on Jazz Pharmaceuticals and raised the price target from $165 to $167.

The Jazz Pharma Thesis

Zepzelca received accelerated FDA approval for the treatment of metastatic small cell lung cancer. 

Gerberry named three takeaways from the conference call:

• Launch readiness: Jazz Pharma expects to commercially launch Zepzelca by early July. The company submitted data to the National Comprehensive Cancer Network for preapproval and expects price compendium listing by late June or early July, the analyst said. 
• Prescriber focus: Jazz Pharma will initially focus on commercialization among the top 1,500 prescribers versus a total of 6,000. The company already has group purchasing organization contracts in place, with the government and commercial book of business representing 64% and 32%, respectively.
• Confirmatory approval: While originally not planned as confirmatory, the FDA has indicated that ATLANTIS can be used for confirmatory purposes. “JAZZ does not consider confirmatory approval as a gating factor for uptake of Zepzelca, given high unmet need,” Gerberry said. 

BofA Securities raised its estimate for Zepzelca peak year sales from $500 million to $593 million to reflect higher penetration.

JAZZ Price Action

Shares of Jazz Pharmaceuticals were up 0.4% at $110.93 at the time of publication Thursday. 

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