Share price of JAZZ Pharmaceuticals JAZZ hit $102.82 on Tuesday, close to its 52-week low of $99.06.
This decline is attributable to the significant downturn in the broader biotech/drug sector due to the dynamic shifts in the regulatory landscape. While pharmaceuticals were initially exempted from tariffs in Trump’s ‘Liberation Day’ speech, he recently mentioned at an event that he will soon announce a ‘major’ tariff on pharmaceutical imports. With Trump's push to bring drug manufacturing back to the United States, companies like Jazz that have manufacturing sites outside the country could face added pressure.
Adding to this headwind, the sector is feeling the pressure from the resignation of a senior FDA official instrumental in driving biotech innovation, which has raised alarms around the agency’s ability to maintain momentum on innovation and regulatory clarity.
Shares of JAZZ Pharmaceuticals have lost 10% in the past year compared with the industry’s 18% decline, as seen in the chart below. Shares of the company are currently trading below their 50-day and 200-day moving averages.
JAZZ Stock Performance
Zacks Investment Research
Image Source: Zacks Investment Research
Let’s delve into the company’s strengths and weaknesses to gain a better understanding of how to play the stock amid this price decline.
JAZZ’s Neuroscience Portfolio Drives Growth
Jazz derives a substantial portion of its revenues from the sale of its neuroscience drugs, especially the sleep disorder drug Xywav and the cannabidiol drug Epidiolex.
Xywav is approved to treat three conditions, including cataplexy and excessive daytime sleepiness (EDS) in patients with narcolepsy. While Jazz also markets Xyrem, which is approved for the same indications, Xywav offers a significant advantage as a low-sodium formulation. Unlike Xyrem, it does not carry the warnings and precautions associated with high sodium intake, making it the only approved oxybate therapy without such precautions.
Additionally, Xywav is the only FDA-approved treatment for the full spectrum of idiopathic hypersomnia (IH). This drug is currently Jazz’s most extensive product by net sales.
Jazz entered the cannabidiol space after acquiring GW Pharmaceuticals, which added Epidiolex. This addition has not only strengthened the company’s neuroscience portfolio but also reduced its reliance on the oxybate franchise. With expanding global launches and a growing prescriber base, demand for Epidiolex continues to rise. The drug is performing ahead of expectations and is on track to achieve blockbuster status in 2025.
JAZZ’s Oncology Drugs Aid Strong Growth
Jazz also markets multiple oncology drugs. Its oncology portfolio includes five drugs: two older drugs, Defitelio and Vyxeos, and three newer drugs, Zepzelca, Rylaze/Enrylaze and Ziihera.
The oncology portfolio accounted for 29% of Jazz’s 2024 product revenues. These products not only bring additional revenues but also diversify Jazz’s marketed portfolio. Sales are being driven by growth across both older and newer drugs, with the latter’s contribution consistently increasing over time. Jazz is also focused on expanding the labels of these marketed drugs.
Last month, Jazz announced its intent to buy clinical-stage biotech Chimerix CMRX for $935 million. If this deal goes through, it will add Chimerix’s lead candidate, dordaviprone, which is nearing approval from the FDA (PDUFA date Aug. 18, 2025) for certain glioma (brain tumor) patients. The transaction is expected to be completed in second-quarter 2025.
As part of this deal, Jazz will likely acquire a financial interest in Emergent BioSolutions’ EBS smallpox drug Tembexa. Chimerix sold this drug to EBS in 2022.
Pipeline Setbacks: A Woe for JAZZ Stock
Jazz has had its share of pipeline setbacks. Earlier this year, it decided to stop developing suvecaltamide across both essential tremors and Parkinson's disease tremors after the drug failed to achieve the primary and key secondary endpoints in separate mid-stage studies. It is currently exploring options for the drug’s future. In December 2023, Jazz announced similar disappointing results from a mid-stage study on its FAAH inhibitor, JPZ150, in adults with post-traumatic stress disorder (PTSD).
JAZZ Stock’s Valuation & Estimates
From a valuation standpoint, JAZZ Pharmaceuticals is trading at a discount to the industry. Going by the price-to-sales value (P/S) ratio, the company’s shares currently trade at 1.55, lower than 1.88 for the industry. The stock is also trading below its five-year mean of 2.71.
Zacks Investment Research
Image Source: Zacks Investment Research
Estimates for JAZZ’s 2025 earnings per share (EPS) have risen from $22.11 to $23.33 in the past 60 days. During the same timeframe, EPS estimates for 2026 have increased from $23.23 to $23.35.
Zacks Investment Research
Image Source: Zacks Investment Research
Here’s How to Play JAZZ Stock
We advise investors to use the price dip as a buying opportunity for this Zacks Rank #2 (Buy) stock, supported by Jazz’s healthy cash position of $3.0 billion at the end of 2024 and a robust portfolio of marketed drugs. The company has made commendable progress in diversifying beyond its oxybate portfolio and expanding into the oncology space — moves that receive a thumbs-up from our side.
While the broader biotech and pharma sectors have come under pressure due to proposed tariffs from former President Trump, reports indicate that U.S. trade partners are in active discussions with the White House to ease these concerns. The consistently rising estimates highlight analysts’ optimistic outlook for the stock. JAZZ’s shares are also currently trading at a discount to the industry.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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