JAZZ PHARMACEUTICALS PLC Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

The following discussion of our financial condition and results of operations
should be read in conjunction with the condensed consolidated financial
statements and the notes to condensed consolidated financial statements included
elsewhere in this Quarterly Report on Form 10­Q. This discussion contains
forward-looking statements that involve risks and uncertainties. When reviewing
the discussion below, you should keep in mind the substantial risks and
uncertainties that could impact our business. In particular, we encourage you to
review the risks and uncertainties described in "Risk Factors" in Part II, Item
1A in this Quarterly Report on Form 10-Q. These risks and uncertainties could
cause actual results to differ materially from those projected in
forward-looking statements contained in this report or implied by past results
and trends. Forward-looking statements are statements that attempt to forecast
or anticipate future developments in our business, financial condition or
results of operations. See the "Cautionary Note Regarding Forward-Looking
Statements" that appears at the end of this discussion. These statements, like
all statements in this report, speak only as of the date of this Quarterly
Report on Form 10­Q (unless another date is indicated), and we undertake no
obligation to update or revise these statements in light of future developments.

Insight


Jazz Pharmaceuticals plc is a global biopharmaceutical company whose purpose is
to innovate to transform the lives of patients and their families. We are
dedicated to developing life-changing medicines for people with serious diseases
- often with limited or no therapeutic options. We have a diverse portfolio of
marketed medicines and novel product candidates, from early- to late-stage
development, in neuroscience and oncology. Within these therapeutic areas, we
strive to identify new options for patients by actively exploring small
molecules and biologics, and through innovative delivery technologies and
cannabinoid science.

Our strategy for growth is rooted in executing commercial launches and ongoing
commercialization initiatives; advancing robust research and development, or
R&D, programs and delivering impactful clinical results; effectively deploying
capital to strengthen the prospects of achieving our short- and long-term goals
through strategic corporate development; and delivering strong financial
performance. We focus on patient populations with high unmet needs. We identify
and develop differentiated therapies for these patients that we expect will be
long-lived assets and that we can support with an efficient commercialization
model. In addition, we leverage our efficient, scalable operating model and
integrated capabilities across our global infrastructure to effectively reach
patients around the world.

At the 40th Annual J.P. Morgan Healthcare Conference in January 2022, we
announced our Vision 2025, which aims to deliver sustainable growth and enhanced
value, driving our continued transformation to an innovative, high-growth global
pharmaceutical leader. The three core components of our Vision 2025 focus on
commercial execution, pipeline productivity and operational excellence.

Commercial achievements


Our marketed products are approved in countries around the world to improve
patient care.

Product                       Indications                        Initial Approval Date           Markets
NEUROSCIENCE
                              Treatment of cataplexy or                                          U.S.
                              excessive daytime sleepiness, or   July 2020
Xywav® (calcium, magnesium,   EDS, in patients seven years of
potassium, and sodium         age and older with narcolepsy.
oxybates)
                                                                                                 U.S.
                              Treatment of idiopathic            August 2021
                              hypersomnia, or IH, in adults.
                              Treatment of cataplexy or EDS in   July 2002                       U.S.
                              patients seven years of age and
                              older with narcolepsy.
                                                                 August 2005                     Canada
                              For the treatment of cataplexy in

Xyrem® (sodium oxybate) patients with narcolepsy.

                              Treatment of narcolepsy with                                       EU, Great Britain, other
                              cataplexy in adult patients,       October 2005                    markets (through
                              adolescents and children from age                                  licensing agreement)
                              of 7 years.


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Epidiolex® (cannabidiol)         Treatment of seizures associated with  June 2018
                                 Lennox-Gastaut syndrome, or LGS,                                   U.S.
                                 Dravet syndrome, or DS, or tuberous
                                 sclerosis complex, or TSC, in patients
                                 1 year of age and older.

                                 For adjunctive therapy of seizures     September 2019
Epidyolex® (cannabidiol)         associated with LGS or DS, in            
                         EU, Great Britain, other
                                 conjunction with clobazam, for                                     markets
                                 patients 2 years of age and older.*
                                                                        April 2021
                                 For adjunctive therapy of seizures                                 EU, Great Britain, other
                                 associated with TSC for patients 2                                 markets
                                 years of age and older.**
                                 Improve wakefulness and reduce EDS in                              EU, Great Britain, other
                                 adult patients with narcolepsy (with                               markets
                                 or without cataplexy) or adult         January 2020
                                 patients with obstructive sleep apnea,
                                 or OSA, whose EDS has not been
Sunosi® (solriamfetol)***        satisfactorily treated by primary OSA
                                 therapy, such as continuous positive                               Canada
                                 airway pressure, or CPAP.              May 2021

                                 Treatment of EDS in adult patients
                                 with narcolepsy or OSA.
                                 Treatment for adult patients with
                                 moderate to severe spasticity due to
                                 multiple sclerosis, or MS, who have
                                 not responded adequately to other                                  U.K. (other markets through
Sativex® (nabiximols)            anti-spasticity medication and who     June 2010                   licensing agreements with
                                 demonstrate clinically significant                                 partners)
                                 improvement in spasticity related
                                 symptoms during an initial trial of
                                 therapy.
ONCOLOGY
                                 Treatment of adult patients with
                                 metastatic small cell lung cancer, or  June 2020                   U.S. (licensed from
                                 SCLC, with disease progression on or                               PharmaMar)****
Zepzelca® (lurbinectedin)        after platinum-based chemotherapy.

                                 Treatment of adults with Stage III or  September 2021              Canada (licensed from
                                 metastatic SCLC who have progressed on                             PharmaMar)*****
                                 or after platinum-containing therapy.
                                 A component of a multi-agent
                                 chemotherapeutic regimen for the
Rylaze® (asparaginase erwinia    treatment of acute lymphoblastic
chrysanthemi (recombinant)-      leukemia, or ALL, and lymphoblastic    June 2021                   U.S.
rywn)                            lymphoma, or LBL, in adult and
                                 pediatric patients 1 month or older
                                 who have developed hypersensitivity to
                                 E. coli-derived asparaginase.


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Vyxeos® (daunorubicin and       Treatment of newly-diagnosed               August 2017               U.S.
cytarabine) liposome for        therapy-related acute myeloid leukemia, or
injection                       t-AML or AML with myelodysplasia-related
                                changes (AML-MRC) in adults and pediatric
                                patients one year and older.
                                                                           August 2018               EU, Great Britain,
                                Treatment of adults with newly-diagnosed                             other markets

Vyxeos® liposomal 44 mg/100 mg LAM-t or LAM-MRC. powder for concentrate for solution for infusion

Vyxeos® Daunorubicin and Treatment of Newly Diagnosed Adults April 2021

                Canada
cytarabine liposome for         therapy-related t-AML or AML with AML-MRC.
injection Powder, 44 mg
daunorubicin and 100 mg
cytarabine per vial,
intravenous infusion
Defitelio® (defibrotide sodium) Treatment of adult and pediatric patients  March 2016                U.S.
                                with hepatic veno-occlusive disease, or
                                VOD, also known as SOS, with renal or
                                pulmonary dysfunction following
                                hematopoietic stem cell transplantation,
                                or HSCT.                                   October 2013              EU, Great Britain,
Defitelio® (defibrotide)                                                                             other markets
                                Treatment of severe hepatic VOD, also
                                known as SOS, following HSCT therapy.

*Clobazam restriction limited to EU and Britain

**TSC approval pending in some markets

***In May 2022we finished the WE sale of Sunosi to Axsome Therapeutics, or Axsome; we plan to complete the ex-WE sale to Axsome later this year. For more information, see Note 2, Disposition and License Agreements, in the Notes to the Condensed Consolidated Financial Statements, included in Part I of this Quarterly Report on Form 10Q.

****Expedited approval received from US Food and Drug Administrationor FDA

*****Conditional approval received from Health Canada

Neuroscience


We are the global leader in the development and commercialization of oxybate
therapy for patients with sleep disorders. Xyrem was approved by FDA in 2002,
and has become a standard of care for treating EDS and cataplexy in narcolepsy.
In 2020, we received FDA approval for Xywav for the treatment of cataplexy or
EDS, in patients seven years of age and older with narcolepsy. In August 2021,
Xywav became the first and only therapy approved by FDA for the treatment of IH
in adults. Xywav is an oxybate therapy that contains 92% less sodium than Xyrem.

Since there is no cure for narcolepsy and long-term disease management is
needed, we believe that Xywav represents an important new therapeutic option for
patients with this sleep disorder. Our commercial efforts are focused on
educating patients and physicians about the lifelong impact of high sodium
intake, and how the use of Xywav enables them to address what is a modifiable
risk factor.

In June 2021, FDA recognized seven years of Orphan Drug Exclusivity, or ODE, for
Xywav in narcolepsy. ODE extends through July 2027. In connection with granting
ODE, FDA stated that "Xywav is clinically superior to Xyrem by means of greater
safety because Xywav provides a greatly reduced chronic sodium burden compared
to Xyrem. "FDA's summary also stated that "the differences in the sodium content
of the two products at the recommended doses will be clinically meaningful in
reducing cardiovascular morbidity in a substantial proportion of patients for
whom the drug is indicated."

We view the adoption of Xywav in narcolepsy as a positive indication that physicians and patients appreciate the benefits of a low sodium oxybate option. We continue to see adoption of Xywav among existing Xyrem patients, as well as the majority of new patients with oxybate narcolepsy.

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On August 12, 2021, FDA approved Xywav for the treatment of IH in adults. Xywav
is the first and only FDA-approved therapy to treat IH. We initiated the U.S.
commercial launch of Xywav for the treatment of IH in adults on
November 1, 2021. In January 2022, FDA recognized seven years of ODE for Xywav
in IH that extends through August 2028. IH is a debilitating neurologic sleep
disorder characterized by chronic EDS, the inability to stay awake and alert
during the day resulting in the irrepressible need to sleep or unplanned lapses
into sleep or drowsiness. An estimated 37,000 people in the U.S. have been
diagnosed with IH and are actively seeking healthcare.

We now have agreements in place for Xywav with all three major pharmacy benefit
managers, or PBMs, in the U.S. To date, we have entered into agreements with
various entities and have achieved benefit coverage for Xywav in both narcolepsy
and IH indications for approximately 90% of commercial lives.

We have seen strong adoption of Xywav in narcolepsy since its launch in
November 2020, and increasing adoption in IH since its launch in November 2021.
Exiting the second quarter of 2022, there were approximately 8,700 patients
taking Xywav, including approximately 7,550 patients with narcolepsy and
approximately 1,150 patients with IH. With respect to Xywav and Xyrem in the
aggregate, the average number of active oxybate patients on therapy was
approximately 17,100 in the second quarter of 2022.

We acquired Epidiolex (Epidyolex outside the U.S.) in May 2021 as part of the
acquisition of GW Pharmaceuticals plc, or GW, which we refer to as the GW
Acquisition, which expanded our growing neuroscience business with a global,
high-growth childhood-onset epilepsy franchise. Epidiolex was approved in the
U.S. in June 2018 for the treatment of seizures associated with two rare and
severe forms of epilepsy, LGS and DS, in patients two years of age and older,
and subsequently approved in July 2020 for the treatment of seizures associated
with TSC in patients one year of age and older. FDA also approved the expansion
of all existing indications, LGS and DS, to patients one year of age and older.
The rolling European launch of Epidyolex is also underway following European
Commission approval in September 2019 for use as adjunctive therapy of seizures
associated with LGS or DS, in conjunction with clobazam, for patients two years
of age and older. The clobazam restriction is limited to EU and Great Britain.
Epidyolex was also approved for adjunctive therapy of seizures associated with
TSC for patients 2 years of age and older in the EU in April 2021 and Great
Britain in August 2021, and is approved or under review for this indication in
other markets. Outside the U.S. and Europe, Epidiolex/Epidyolex is approved in
Israel and Australia.

Sativex (nabiximols) is approved in more than 29 countries outside the U.S. for
the treatment of adult patients with moderate to severe spasticity due to MS who
have not responded adequately to other anti-spasticity medication. We market
Sativex directly in the U.K. and through licensing agreements with partners in
other countries. We are working toward potential approval of nabiximols in the
U.S. with multiple Phase 3 clinical trials in progress.

In addition to our currently-marketed products, we previously marketed Sunosi®
(solriamfetol) in the U.S. and, pending the completion of the ex-U.S.
divestiture of Sunosi to Axsome Therapeutics, or Axsome, we continue to market
Sunosi in Europe and Canada. In this regard, in March 2022, we entered into a
definitive agreement to divest Sunosi to Axsome. In May 2022, we completed the
U.S. divestiture of Sunosi to Axsome and we expect to complete the ex-U.S.
divestiture to Axsome later this year. Under the terms of the sale agreement
with Axsome, Axsome received the rights to Sunosi in all of the existing
territories available to us. We received an upfront payment of $53.0 million,
and will receive a high single-digit royalty on Axsome's U.S. net sales of
Sunosi in current indications and a mid-single-digit royalty on Axsome's U.S.
net sales of Sunosi in future indications. The divestiture of Sunosi to Axsome
is intended to enable us to sharpen our focus on our highest strategic
priorities designed to deliver sustainable growth and enhanced shareholder
value. In assessing the positioning of Sunosi in the overall treatment
landscape, we believe that Axsome is well positioned to deliver access to this
important medicine and to maximize the value of Sunosi to us through future
growth.

Oncology


We acquired U.S. development and commercialization rights to Zepzelca in early
2020, and launched six months thereafter, with an indication for treatment of
patients with SCLC with disease progression on or after platinum-based
chemotherapy. Our education and promotional efforts are focused on SCLC-treating
physicians. We are continuing to raise awareness of Zepzelca across academic and
community cancer centers, and see continued opportunities for growth in
second-line share and overall demand, reflecting the significant unmet need and
favorable Zepzelca product profile. In collaboration with F. Hoffmann-La Roche
Ltd (Roche), we have initiated a Phase 3 pivotal clinical trial in first-line
extensive stage SCLC of Zepzelca in combination with Tecentriq® (atezolizumab).
We are also developing Zepzelca in additional indications.
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Rylaze was approved by FDA in June 2021 under the Real-Time Oncology Review, or
RTOR, program, and was launched in the U.S. in July 2021 for use as a component
of a multi-agent chemotherapeutic regimen for the treatment of patients with ALL
or LBL in pediatric and adult patients one month and older who have developed
hypersensitivity to E. coli-derived asparaginase. Rylaze is the only recombinant
erwinia asparaginase manufactured product that maintains a clinically meaningful
level of asparaginase activity throughout the entire duration of treatment. We
developed Rylaze to address the needs of patients and health care providers for
an innovative, high-quality erwinia asparaginase with reliable supply. The
current indication is for an intramuscular, or IM, dosing regimen of 25 mg/m2
every 48 hours. We submitted a supplemental Biologics License Application, or
sBLA, with additional data in support of a Monday/Wednesday/Friday, or M/W/F, IM
dosing schedule in January 2022 and submitted a separate sBLA for intravenous,
or IV, administration in April 2022, both of which have been granted review
under the RTOR program with Prescription Drug User Fee Act, or PDUFA, action
dates in 2022 and 2023, respectively. We also completed a Marketing
Authorization Application, or MAA, submission to the European Medicines Agency,
or EMA, in May 2022 for M/W/F and every 48-hour dosing schedules and IV and IM
administration, with potential for approval in 2023. In addition, we submitted a
New Drug Submission, or NDS, to Health Canada in September 2021. We are also
advancing the program for potential submission, approval and launch in Japan, as
well as planning additional submissions in other markets.

Vyxeos is a treatment for adults with newly-diagnosed t-AML, or AML-MRC. In
March 2021, FDA approved a revised label to include a new indication to treat
newly-diagnosed t-AML, or AML with myelodysplasia-related changes in pediatric
patients aged one year and older. We have a number of ongoing development
activities and continue to expand into new markets internationally. Despite an
ongoing trend in the U.S. towards lower-intensity treatments and away from
Vyxeos that accelerated due to the COVID-19 pandemic, we continue to see
recovery in demand for Vyxeos and expect future demand for appropriate secondary
AML patients to remain steady. In Europe, we continue to expect a negative
impact on demand for and utilization of Vyxeos compared to historical periods
due to COVID-19.

Defitelio is the first and only approved treatment for patients with VOD
following HSCT. There was a significant decline in the number of patients
receiving HSCT due to the effects of the COVID-19 pandemic. We anticipate the
use of Defitelio will increase to the extent that hospital systems globally are
able to continue moving forward with HSCT procedures.

Research and development progress


Our research and development activities encompass all stages of development and
currently include clinical testing of new product candidates and activities
related to clinical improvements of, or additional indications or new clinical
data for, our existing marketed products. We also have active preclinical
programs for novel therapies, including precision medicines in hematology and
oncology and the GW cannabinoid platform. We are increasingly leveraging our
growing internal research and development function, and we have also entered
into collaborations with third parties for the research and development of
innovative early-stage product candidates and have supported additional
investigator-sponsored trials, or ISTs, that are anticipated to generate
additional data related to our products. We also seek out investment
opportunities in support of the development of early- and mid-stage technologies
in our therapeutic areas and adjacencies. We have a number of licensing and
collaboration agreements with third parties, including biotechnology companies,
academic institutions and research-based companies and institutions, related to
preclinical and clinical research and development activities in hematology and
in precision oncology, as well as in neuroscience.

With the approvals and launches of Rylaze for the treatment ALL or LBL in
pediatric and adult patients one month and older who have developed
hypersensitivity to E. coli-derived asparaginase and Xywav for IH in 2021, we
accomplished our goal to deliver five product launches through 2020 and 2021. We
have taken both Rylaze and Xywav from concept to commercialization.

Our neuroscience R&D efforts include the planned initiation of a pivotal Phase 3
clinical trial of Epidiolex for the treatment of Epilepsy with Myoclonic-Atonic
Seizures, or EMAS, also known as Doose syndrome. This trial is expected to
evaluate Epidiolex in a fourth childhood-onset epileptic encephalopathy with
high unmet need. EMAS is characterized by generalized myoclonic-atonic seizures,
and this trial is designed to provide the first randomized, controlled clinical
data with Epidiolex in this syndrome type. Seizure types including atonic,
tonic, clonic, tonic-clonic and partial onset seizures are seen in LGS, DS, and
TSC.

For nabiximols, we have multiple Phase 3 clinical trials in MS-related
spasticity in progress. Spasticity occurs in up to 84% of MS patients, and
approximately one-third of those who experience spasticity live with
uncontrolled symptoms. In June 2022, we announced top-line results from the
first and smallest trial, which evaluated the safety and efficacy of nabiximols
in 68 patients with MS spasticity. The trial did not meet the primary endpoint
of change in Lower Limb Muscle Tone-6, or LLMT-6, between baseline and Day 21,
as measured by the Modified Ashworth Scale, or MAS. The safety profile of
nabiximols in this trial was consistent with previously reported adverse events,
with no new safety signals attributable to
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buccal spraying of nabiximols observed in this population. We continue to evaluate the results of the trial, which will be presented at an upcoming medical meeting.


Additionally, in December 2021 we initiated Phase 2 clinical trials for
suvecaltamide, or JZP385, for essential tremor, or ET, and for JZP150 for
post-traumatic stress disorder, or PTSD. These are both patient populations that
suffer significant impacts to their quality of life and for whom there are
limited current treatment options. We are also pursuing early-stage activities
related to the development of JZP324, an extended-release low sodium, oxybate
formulation that we believe could provide a clinically meaningful option for
narcolepsy patients.

Within our oncology R&D program, there is a robust development plan being
executed for Zepzelca. We are collaborating with Roche on a pivotal Phase 3
clinical trial evaluating Zepzelca in combination with Tecentriq in first-line
extensive stage SCLC. In December 2021, our licensor PharmaMar initiated a
confirmatory trial in second-line SCLC. This is a three-arm trial comparing
Zepzelca as either monotherapy or in combination with irinotecan to
investigator's choice of irinotecan or topotecan. Data from this trial could
confirm the benefit of Zepzelca in the treatment of SCLC when patients progress
following first-line treatment with a platinum-based regimen.

In 2022, we initiated a Phase 2 basket trial to explore Zepzelca monotherapy in
patients with select advanced or metastatic solid tumors. Cohorts will include
advanced urothelial cancer, large cell neuroendocrine tumor of the lung and
homologous recombination deficient, or HRD, cancers. In addition, we have
initiated a Phase 4 observational study to collect real world safety and outcome
data in adult Zepzelca monotherapy patients with SCLC who progress on or after
prior platinum-containing chemotherapy.

For Rylaze, in January 2022 we submitted an sBLA with data in support of a M/W/F
IM dosing schedule and submitted a separate sBLA for intravenous administration
in April 2022, both of which have been granted review under the RTOR program. We
completed a MAA submission to the EMA in May 2022.

In June 2022, we announced the FDA had cleared our Investigational New Drug, or
IND, application for JZP815. JZP815 is an investigational, pre-clinical stage
pan-RAF kinase inhibitor that targets specific components of the
mitogen-activated protein kinase, or MAPK, pathway that, when activated by
oncogenic mutations, can be a frequent driver of human cancer.

In the second quarter of 2022, we acquired development and commercialization
rights to two early-stage molecules, consistent with our objective to expand our
pipeline. In April 2022, we announced that we had entered into a licensing
agreement with Werewolf Therapeutics, Inc., or Werewolf, to acquire exclusive
global development and commercialization rights to Werewolf's investigational
WTX-613, now referred to as JZP898. JZP898 is a differentiated,
conditionally-activated interferon alpha, or IFN?, INDUKINE™ molecule. Under the
terms of the agreement, we made an upfront payment of $15.0 million to Werewolf,
and Werewolf is eligible to receive development, regulatory and commercial
milestone payments of up to $1.26 billion. If approved, Werewolf is eligible to
receive a tiered, mid-single-digit percentage royalty on net sales of JZP898.
This transaction underscores our commitment to enhancing our pipeline to deliver
novel oncology therapies to patients, and also provides us with an opportunity
to expand into immuno-oncology.

In May 2022, we announced that we had entered into a licensing agreement with
Sumitomo Pharma Co., Ltd, or Sumitomo, to acquire exclusive development and
commercialization rights in the United States, Europe and other territories for
DSP-0187, now referred to as JZP441, a potent, highly selective oral orexin-2
receptor agonist with potential application for the treatment of narcolepsy, IH
and other sleep disorders. Under the terms of the agreement, we made an upfront
payment of $50 million to Sumitomo, and Sumitomo is eligible to receive
development, regulatory and commercial milestone payments of up to
$1.09 billion. If approved, Sumitomo is eligible to receive a tiered, low
double-digit royalty on Jazz's net sales of JZP441.

Below is a summary of our key ongoing and planned development projects related
to our products and pipeline and their corresponding current stages of
development:

Product Candidates       Description
NEUROSCIENCE
Phase 3
Epidiolex                EMAS, also known as Doose syndrome (planned study)
Nabiximols               MS Spasticity (multiple studies ongoing)
                         Spinal cord injury spasticity (planned study)
Phase 2b
Suvecaltamide (JZP385)   ET (ongoing study)
Phase 2
JZP150                   PTSD (ongoing study)


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Product Candidates                         Description
Additional cannabinoids                    Autism spectrum disorders (ongoing study)
Phase 1
JZP324                                     Oxybate extended-release formulation (planned study)
JZP441 (DSP-0187)                          Potent, highly selective oral orexin-2 receptor agonist
                                           (Japan)
Additional cannabinoids                    Neonatal hypoxic-ischemic

encephalopathy (study in progress)

                                           Neuropsychiatry targets (ongoing study)
Preclinical
Undisclosed targets                        Neuroscience
                                           Cannabinoids
ONCOLOGY
Regulatory Review
Rylaze                                     ALL/LBL
                                           FDA approval in June 2021;

submitted sBLA in January 2022

                                           seeking approval for M/W/F IM 

dosing schedule; submitted

                                           separate sBLA seeking approval 

for intravenous administration;

                                           completed MAA submission to EMA in May 2022
Phase 3
Zepzelca                                   First-line extensive stage SCLC in combination with Tecentriq
                                           (collaboration with Roche) (ongoing study)
                                           Confirmatory Study (PharmaMar study) (ongoing study)
Vyxeos                                     AML or high-risk Myelodysplastic Syndrome, or MDS (AML18)
                                           (cooperative group studies)

(ongoing study) Newly diagnosed

                                           adults with standard- and 

High-risk AML (AML Study Group

                                           cooperative group study) 

(ongoing study) Newly diagnosed

                                           pediatric patients with AML (Children's Oncology Group
                                           cooperative group study) (ongoing study)
Phase 2
Zepzelca                                   Basket trial including

large cell urothelial cancer

                                           neuroendocrine tumor of the 

lung cancers and HRD (ongoing

                                           study)
Vyxeos                                     High-risk MDS (European 

Myelodysplastic syndromes (cooperative

                                           group study) (ongoing study)

                                           Newly diagnosed older adults 

with high-risk AML (cooperative

                                           group study) (planned study)
Vyxeos + venetoclax                        De novo or relapsed/refractory, or R/R, AML (MD Anderson
                                           collaboration study) (ongoing study)
Phase 1
Vyxeos                                     Low intensity dosing for higher risk MDS (MD Anderson
                                           collaboration study) (ongoing study)
Vyxeos + other approved therapies          R/R AML or hypomethylating agent failure MDS (MD Anderson
                                           collaboration study) (ongoing study)

                                           First-line, fit AML (Phase 1b study) (ongoing study)

                                           Low intensity therapy for

First line AML, unfit (Phase 1b

                                           study) (ongoing study)

Preclinical

CombiPlex®                                 Hematology/oncology exploratory 

Activities

JZP341 (Erwinia asparaginase long-acting) ALL and other hematological malignancies (collaboration with

                                           Ligand)
JZP815/Pan-Raf inhibitor program           Raf and Ras mutant tumors (acquired from Redx)
JZP898                                     Conditionally-activated 

interferon alpha (IFN?) INDUKINE™

                                           molecule
Undisclosed target                         Ras/Raf/MAPK pathway 

(collaboration with Redx)

                                           Oncology
Exosome targets (up to 3 targets)          Hematological malignancies/solid tumors (collaboration with
                                           Codiak BioSciences, Inc., or Codiak)
Undisclosed targets                        Oncology


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Operational Excellence


We remain focused on continuing to build excellence in areas that we believe
will give us a competitive advantage, including building an increasingly agile
and adaptable commercialization engine and strengthening our customer-focused
market expertise across patients, providers and payors. We are refining our
approach to engaging our customers by strengthening alignment and integration
across functions and across regions.  This includes a more integrated approach
to brand planning, a heightened focus on launch and operational excellence and
multichannel customer engagement. We have fully adapted to virtual scientific
congresses designed to ensure we can continue to provide promotional and
non-promotional interactions and have supported our field-based teams with
virtual customer interaction tools, training and content. These initiatives mark
a significant operational evolution that is directly linked to our corporate
strategy and are designed to better enable our teams to work collaboratively on
an aligned and shared agenda through both virtual and in-person interactions. In
most geographies, our teams are increasing the frequency of in-person
interactions as medical congresses and healthcare practices begin to resume
in-person activities, taking into account applicable public health authority and
local government guidelines which are designed to ensure community and employee
safety.

COVID-19 Business Update

We have implemented a comprehensive response strategy designed to manage the
impact of the COVID-19 pandemic on our employees, patients and our business. The
prolonged nature of the pandemic is negatively impacting our business in a
varied manner due to the emergence of variants with increased transmissibility,
even in vaccinated people, including limited access to health care provider
offices and institutions and the willingness of patients or parents of patients
to seek treatment or change existing treatments. We expect that our business,
financial condition, results of operations and growth prospects may continue to
be negatively impacted by the pandemic on a limited basis that may vary
depending on the context. However, we have begun to observe, and expect to
continue to observe, a gradual normalization in patient and health care provider
practices, as providers and patients have adapted their behaviors and procedures
to the evolving circumstances and as COVID-19 vaccines continue to be
administered.

Workplace and employees


We support broad public health strategies designed to prevent the spread of
COVID-19 and are focused on the health and welfare of our employees. Our global
organization has mobilized to enable our employees to accomplish our most
critical goals through a combination of virtual and in-person work. In addition
to rolling out new technologies and collaboration tools, we have implemented
processes and resources to support our employees in the event an employee
receives a positive COVID-19 diagnosis. We have reopened our sites to enable our
employees to return to our global offices, which takes into account applicable
public health authority and local government guidelines, and which is designed
to ensure community and employee safety. We have moved to a more flexible mix of
virtual and in-person working designed to advance our culture, drive innovation
and agility and enable greater balance and well-being for our workforce. This
should also enable us to reconfigure our physical workspaces to optimize the
footprint of our company-owned or leased office spaces.

Marketing


There continues to be some negative impact on demand, new patient starts and
treatments for our products arising from the pandemic, primarily due to the
inherent limitations of telemedicine and a reprioritization of healthcare
resources toward COVID-19. As healthcare systems have adapted to cope with the
ongoing situation, we have seen improvements. We are utilizing technology to
continue to engage healthcare professionals and other customers virtually to
support patient care. As more clinics and institutions begin to allow in-person
interactions pursuant to local health authority and government guidelines, our
field teams continue to resume in-person interactions with healthcare
professionals and clinics combined with virtual engagement. The level of renewed
in-person engagement varies by account, region and country and may be adversely
impacted in the future as a result of the continuing impact of the COVID-19
pandemic. The lack of access to health care providers has caused, and may
continue to cause, delays in appropriate diagnosis, treatment and ongoing care
for some patients, which has negatively impacted, and could continue to impact,
prescribing and use of our products.

Supply Chain


Our manufacturing facilities in Athlone, Ireland, which produces Xywav and
Xyrem, Villa Guardia, Italy, which produces defibrotide, and Kent Science Park,
U.K., which produces Epidiolex/Epidyolex and Sativex, are operational with
essential staff onsite and office-based staff working onsite and virtually as
business needs require. We currently expect to have adequate global supply of
all of our products for 2022.

Research and Development

With respect to our clinical trial activities, we have taken measures to
implement remote and virtual approaches, including remote data monitoring where
possible, to maintain patient safety and trial continuity and to preserve study
integrity.
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We have seen some COVID-19-related impact to our mid- and late-stage clinical
trial activity. We rely on contract research organizations or other third
parties to assist us with clinical trials, and we cannot guarantee that they
will perform their contractual duties in a timely and satisfactory manner as a
result of the evolving effects of the COVID-19 pandemic. Similarly, our ability
to recruit and retain patients and principal investigators and site staff who,
as health care providers, have heightened exposure to COVID-19, is adversely
impacting our clinical trial operations. Supply chain disruptions related to the
pandemic have also impacted our ability to initiate clinical trials as
originally planned.

Company response


The COVID-19 pandemic has caused a significant burden on health systems globally
and has highlighted the need for companies to evaluate existing therapies to
assess if they can be utilized beyond their current indications to treat
COVID-19 as well as consider developing new therapies. To this end, we have
granted requests for several ISTs to evaluate the use of defibrotide in COVID-19
patients experiencing respiratory distress.

In addition, we are supporting our local communities and patient-focused
organizations in COVID-19 relief efforts including through corporate donations
to charitable organizations providing food and medical relief to communities in
which we operate, and other localities where the needs related to the impact of
COVID-19 are greatest. We are engaging with patient advocacy organizations to
better understand the impact of COVID-19 and working to enable patients living
with sleep disorders, epilepsies and oncology conditions with access to
treatments and that their other needs are addressed given the impact of COVID-19
on the healthcare system. We are committed to enabling our employees to give
back, including allowing licensed healthcare practitioners employed by us to
support local response efforts.

Other challenges, risks and trends related to our business


Our business has been substantially dependent on Xyrem. Our future plans assume
that Xywav, with 92% lower sodium compared to Xyrem, depending on the dose,
absence of a sodium warning and dosing titration option, will become the
treatment of choice for patients who can benefit from oxybate treatment,
including current Xyrem patients and patients who previously were not prescribed
Xyrem for whom sodium content is a concern. In June 2021, FDA recognized seven
years of ODE for Xywav in narcolepsy through July 21, 2027 stating that Xywav is
clinically superior to Xyrem by means of greater safety due to reduced chronic
sodium burden. While we expect that our business will continue to be
substantially dependent on oxybate product sales from both Xywav and Xyrem,
there is no guarantee that we can maintain oxybate sales at or near historical
levels, or that oxybate sales will continue to grow.

Our ability to successfully commercialize Xywav will depend on, among other
things, our ability to maintain adequate coverage and reimbursement for Xywav
and acceptance of Xywav by payors, physicians and patients, including of Xywav
for the treatment of IH in adults. In an effort to support strong adoption of
Xywav, we are focused on providing robust patient copay and savings programs and
facilitating payor coverage for Xywav. Moreover, we have increasingly
experienced pressure from third party payors to agree to discounts, rebates or
restrictive pricing terms, and we cannot guarantee we will be able to agree to
commercially reasonable terms with PBMs and other third party payors, or that we
will be able to ensure patient access and acceptance on institutional
formularies. Entering into agreements with PBMs and payors to ensure patient
access has and will likely continue to result in higher gross to net deductions.
In addition to the COVID-19-related impacts described above, we expect our
oxybate products to face near-term competition from generic and authorized
generic versions of sodium oxybate pursuant to the settlement agreements we have
entered into with multiple abbreviated new drug application, or ANDA, filers.
Generic competition can decrease the prices at which Xywav and Xyrem are sold
and the number of prescriptions written for Xywav and Xyrem. Xywav and Xyrem may
also face increased competition from new branded products for treatment of
cataplexy and/or EDS in narcolepsy in the U.S. market.

Our financial condition, results of operations and growth prospects are also
dependent on our ability to maintain or increase sales of Epidiolex/Epidyolex in
the U.S. and Europe, which is subject to many risks and there is no guarantee
that we will be able to continue to successfully commercialize
Epidiolex/Epidyolex for its approved indications. The commercial success of
Epidiolex depends on the extent to which patients and physicians accept and
adopt Epidiolex as a treatment for seizures associated with LGS, DS and TSC, and
we do not know whether our or others' estimates in this regard will be accurate.
Physicians may not prescribe Epidiolex and patients may be unwilling to use
Epidiolex if coverage is not provided or reimbursement is inadequate to cover a
significant portion of the cost. Additionally, any negative development for
Epidiolex in the market, in clinical development for additional indications, or
in regulatory processes in other jurisdictions, may adversely impact the
commercial results and potential of Epidiolex. Thus, significant uncertainty
remains regarding the commercial potential of Epidiolex.

In addition to our neuroscience products and product candidates, we are
commercializing a portfolio of oncology products, including Defitelio, Vyxeos,
Rylaze and Zepzelca. An inability to effectively commercialize Defitelio,
Vyxeos, Rylaze and Zepzelca and to maximize their potential where possible
through successful research and development activities could have a material
adverse effect on our business, financial condition, results of operations and
growth prospects.
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A key aspect of our growth strategy is our continued investment in our evolving
and expanding research and development activities. If we are not successful in
the clinical development of these or other product candidates, if we are unable
to obtain regulatory approval for our product candidates in a timely manner, or
at all, or if sales of an approved product do not reach the levels we expect,
our anticipated revenue from our product candidates would be negatively
affected, which could have a material adverse effect on our business, financial
condition, results of operations and growth prospects.

In addition to continued investment in our R&D pipeline, we intend to continue
to grow our business by acquiring or in-licensing, and developing, including
with collaboration partners, additional products and product candidates that we
believe are highly differentiated and have significant commercial potential.
Failure to identify and acquire, in-license or develop additional products or
product candidates, successfully manage the risks associated with integrating
any products or product candidates into our portfolio or the risks arising from
anticipated and unanticipated problems in connection with an acquisition or
in-licensing, such as the GW Acquisition, could have a material adverse effect
on our business, results of operations and financial condition.

The success of the GW Acquisition will depend, in part, on our ability to
realize the anticipated benefits from our and GW's businesses. Nonetheless,
Epidiolex and the other products and technologies acquired may not be successful
or continue to grow at the same rate as if our companies operated independently
or they may require significantly greater resources and investments than
originally anticipated. As a result, the anticipated benefits of the GW
Acquisition may not be realized fully within the expected timeframe or at all or
may take longer to realize or cost more than expected, which could materially
and adversely affect our business, financial condition, results of operations
and growth prospects.

Our industry has been, and is expected to continue to be, subject to healthcare
cost containment and drug pricing scrutiny by regulatory agencies in the U.S.
and internationally. If healthcare policies or reforms intended to curb
healthcare costs are adopted or if we experience negative publicity with respect
to pricing of our products or the pricing of pharmaceutical drugs generally, the
prices that we charge for our products may be affected, our commercial
opportunity may be limited and/or our revenues from sales of our products may be
negatively impacted. We are also subject to increasing pricing pressure and
restrictions on reimbursement imposed by payors. If we fail to obtain and
maintain adequate formulary positions and institutional access for our products
and future approved products, we will not be able to achieve a return on our
investment and our business, financial condition, results of operations and
growth prospects would be materially adversely affected.

While certain preparations of cannabis remain Schedule I controlled substances,
if such products are approved by FDA for medical use in the U.S. they are
rescheduled to Schedules II-V, since approval by FDA satisfies the "accepted
medical use" requirement; or may be removed from control under the Controlled
Substances Act entirely. If any of our product candidates receive FDA approval,
the U.S. Drug Enforcement Administration, or DEA, will make a scheduling
determination. If any foreign regulatory authority determines that Epidyolex may
have potential for abuse, or if DEA makes a similar determination for
nabiximols, it may require us to generate more clinical or other data than we
currently anticipate to establish whether or to what extent the substance has an
abuse potential, which could increase the cost, delay the approval and/or delay
the launch of that product. In addition, there are non-FDA approved cannabidiol
preparations being made available from companies through the state-enabled
medical marijuana industry, which might attempt to compete with Epidiolex and,
if approved by FDA, nabiximols. If we are unable to compete successfully, our
commercial opportunities will be reduced and our business, results of operations
and financial conditions may be materially harmed.

Finally, business practices by pharmaceutical companies, including product
formulation improvements, patent litigation settlements, and risk evaluation and
mitigation strategy, or REMS, programs, have increasingly drawn public scrutiny
from legislators and regulatory agencies, with allegations that such programs
are used as a means of improperly blocking or delaying competition. If we become
the subject of any future government investigation with respect to our business
practices, including as they relate to the Xywav and Xyrem REMS, the launch of
Xywav, our Xyrem patent litigation settlement agreements or otherwise, we could
incur significant expense and could be distracted from operation of our business
and execution of our strategy. From June 2020 to May 2022, a number of lawsuits
were filed on behalf of purported direct and indirect Xyrem purchasers, alleging
that the patent litigation settlement agreements we entered with certain generic
companies violate state and federal antitrust and consumer protection laws. For
additional information on these lawsuits, see Note 10, Commitments and
Contingencies-Legal Proceedings of the Notes to Condensed Consolidated Financial
Statements, included in Part I of this Quarterly Report on Form 10­Q. It is
possible that additional lawsuits will be filed against us making similar or
related allegations. We cannot predict the outcome of these or potential
additional lawsuits or government action; however, if the plaintiffs were to be
successful in their claims, they may be entitled to injunctive relief or we may
be required to pay significant monetary damages.

Any of the foregoing risks and uncertainties could have a material adverse
effect on our business, financial condition, results of operations and growth
prospects. In addition, to the extent the COVID-19 pandemic continues to
adversely affect our business and results of operations, it may also have the
effect of heightening many of the other risks and uncertainties described above.
All of these risks and uncertainties are discussed in greater detail, along with
other risks and uncertainties, in "Risk Factors" in Part II, Item 1A of this
Quarterly Report on Form 10-Q.
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Results of Operations

The following table presents our revenues and expenses (in thousands, except
percentages):

                                               Three Months Ended                                               Six Months Ended
                                                    June 30,                       Increase/                        June 30,                         Increase/
                                             2022             2021(1)             (Decrease)                2022               2021 (1)             (Decrease)
Product sales, net                       $ 928,300          $ 748,340                      24  %       $ 1,738,137          $ 1,351,871                      29  %
Royalties and contract revenues              4,578              3,471                      32  %             8,462                7,521                      13  %
Cost of product sales (excluding
amortization of acquired developed
technologies)                              124,208            119,194                       4  %           239,492              159,383                      50  %
Selling, general and administrative        366,473            429,031                     (15) %           675,286              689,539                      (2) %
Research and development                   139,047            132,696                       5  %           269,028              209,269                      29  %
Intangible asset amortization              148,456            140,480                       6  %           320,550              208,672                      54  %

Acquired in-process research and
development                                 69,148                  -                     N/A(2)            69,148                    -                     N/A(2)
Interest expense, net                       63,189             69,420                      (9) %           133,873               96,796                      38  %
Foreign exchange loss (gain)                 1,343             (2,950)                    N/A(2)            11,883               (3,893)                    N/A(2)

Income tax expense (benefit)               (16,112)           228,621                     N/A(3)           (15,576)             246,640                     N/A(3)
Equity in loss (gain) of investees           2,461             (1,365)                   (280) %             6,603               (5,530)                   (219) %


____________________________
(1)The results of operations of the GW business have been included from the
closing of the acquisition of GW on May 5, 2021.
(2)Comparison to prior period not meaningful.
(3)The fluctuations in the income tax expense (benefit) for the three and six
months ended June 30, 2022 and 2021 are as a result of changes in the mix of
pre-tax income and losses across our jurisdictions and the impact of the change
in the statutory tax rate in the U.K. on the 2021 periods.

Revenue

The following table shows our net product sales, royalties and contract revenues, as well as total revenues (in thousands, except percentages):


                                                      Three Months Ended                                               Six Months Ended
                                                           June 30,                       Increase/                        June 30,                         Increase/
                                                    2022             2021(1)             (Decrease)                2022               2021(1)              (Decrease)
Xyrem                                           $ 269,421          $ 334,182                     (19) %       $   516,918          $   669,732                     (23) %
Xywav                                             235,025            124,164                      89  %           421,105              199,580                     111  %
  Total Oxybate                                   504,446            458,346                      10  %           938,023              869,312                       8  %
Epidiolex/Epidyolex                               175,289            109,481                     N/A(3)           333,182              109,481                     N/A(3)
Sunosi2                                            12,966             12,124                       7  %            28,844               23,730                      22  %
Sativex                                             4,142              1,961                     N/A(3)             8,884                1,961                     N/A(3)
Total Neuroscience                                696,843            581,912                      20  %         1,308,933            1,004,484                      30  %
Zepzelca                                           68,285             55,924                      22  %           127,623              110,258                      16  %
Rylaze                                             72,954                  -                     N/A(3)           127,174                    -                     N/A(3)
Vyxeos                                             33,890             31,453                       8  %            67,647               64,608                       5  %
Defitelio/defibrotide                              54,696             48,096                      14  %           104,185               97,715                       7  %
Erwinaze/Erwinase                                       -             28,314                     N/A(3)                 -               69,382                     N/A(3)
Total Oncology                                    229,825            163,787                      40  %           426,629              341,963                      25  %
Other                                               1,632              2,641                     (38) %             2,575                5,424                     (53) %
Product sales, net                                928,300            748,340                      24  %         1,738,137            1,351,871                      29  %
Royalties and contract revenues                     4,578              3,471                      32  %             8,462                7,521                      13  %
Total revenues                                  $ 932,878          $ 751,811                      24  %       $ 1,746,599          $ 1,359,392                      28  %


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_____________________________
(1)The results of operations of the GW business have been included from the
closing of the acquisition of GW on May 5, 2021.
(2)Net product sales for Sunosi U.S. are included until the date of divestment
to Axsome of May 9, 2022.
(3)Comparison to prior period not meaningful.

Product sales, net


Total oxybate product sales increased by $46.1 million and $68.7 million in the
three and six months ended June 30, 2022, respectively, compared to the same
periods in 2021. Total oxybate revenue bottle volume increased by 5% and 4% in
the three and six months ended June 30, 2022, respectively, compared to the same
periods in 2021. Average active oxybate patients on therapy were approximately
17,100 in the second quarter of 2022, an increase of approximately 8% compared
to the same period in 2021. Xyrem product sales decreased in the three and six
months ended June 30, 2022 compared to the same periods in 2021 primarily due to
a decrease in sales volume, reflecting the continued adoption of Xywav by
existing Xyrem patients, partially offset by a higher average net selling price.
Price increases were instituted in January 2021 and January 2022. Xywav product
sales increased in the three and six months ended June 30, 2022 compared to the
same periods in 2021 primarily due to higher sales volume, with bottle volume
increasing by 81% and 106%, respectively. Xywav product sales were positively
impacted by the launch of Xywav for IH and continued strong adoption in
narcolepsy driven by educational initiatives around the benefit of lowering
sodium intake. Epidiolex/Epidyolex product sales in the three and six months
ended June 30, 2022 were $175.3 million and $333.2 million, respectively. On a
pro forma basis, Epidiolex/Epidyolex product sales increased by 12% and 10% in
the three and six months ended June 30, 2022, respectively, compared to the same
periods in 2021, primarily due to an increase in commercial sales volume and a
higher average net selling price, partially offset by higher gross to net
deductions. Price increases were instituted in January 2021 and January 2022. We
completed the U.S divestiture of Sunosi in May 2022. Sunosi product sales
increased in the three months ended June 30, 2022 compared to the same period in
2021 primarily due to lower gross to net deductions, driven by the release of
the product returns reserve upon completion of the U.S. divestment, partially
offset by lower sales volume, and increased in the six months ended
June 30, 2022 compared to the same period in 2021 primarily due to lower gross
to net deductions.

Zepzelca product sales increased in the three and six months ended June 30, 2022
compared to the same periods in 2021 primarily due to an increase in sales
volume resulting from continued adoption of Zepzelca in the treatment of
second-line SCLC and a higher average net selling price. Price increases were
instituted in July 2021 and January 2022. Rylaze product sales were
$73.0 million and $127.2 million in the three and six months ended
June 30, 2022, respectively, following its U.S. launch in July 2021. Vyxeos
product sales increased in the three and six months ended June 30, 2022 compared
to the same periods in 2021 primarily due to an increase in sales volume,
partially offset by the negative impact of foreign exchange rates.
Defitelio/defibrotide product sales increased in the three and six months ended
June 30, 2022 compared to the same periods in 2021 primarily due to a higher
average net selling price and an increase in sales volume, partially offset by
the negative impact of foreign exchange rates. We distributed our final Erwinaze
inventory in June 2021 following expiration of our license and supply agreement.

We expect total product sales, net will increase in 2022 over 2021, primarily
due to an increase in product sales of Xywav partially offset by a decrease in
Xyrem, as patients continue to transition to Xywav, expected growth in, and the
inclusion of a full year sales of, Epidiolex and Rylaze and expected growth in
Zepzelca, partially offset by a reduction in Erwinaze following expiration of
our license and supply agreement and a reduction in Sunosi following completion
of the sale to Axsome.

Cost of Product Sales

Cost of product sales increased in the three and six months ended June 30, 2022
compared to the same periods in 2021 primarily due to the cost of product sales
acquired in the acquisition of GW, including increases in the acquisition
accounting inventory fair value step-up expense, or fair value step-up expense,
of $2.3 million and $66.3 million in the three and six months ended
June 30, 2022, respectively. Gross margin as a percentage of net product sales
was 86.6% and 86.2% for the three and six months ended June 30, 2022 compared to
84.1% and 88.2% for the same periods in 2021. The increase in our gross margin
percentage in the three months ended June 30, 2022 was primarily due to a change
in product mix. The decrease in our gross margin percentage in the six months
ended June 30, 2022 was primarily due to the impact of the fair value step-up
expense. We expect our cost of product sales to increase in 2022 compared to
2021 primarily driven by the inclusion of a full year of fair value step-up
expense.

Selling, general and administrative expenses


Selling, general and administrative expenses decreased in the three and six
months ended June 30, 2022 compared to the same periods in 2021, primarily due
to lower transaction and integration expenses related to the acquisition of GW
and lower Sunosi U.S. marketing related costs in the 2022 periods, offset by the
loss on disposal of Sunosi and an increase in compensation related expenses
driven by the inclusion of GW related headcount costs for the full periods in
2022. We expect
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selling, general and administrative expenses in 2022 to decrease compared to
2021, primarily due to a reduction in transaction and integration expenses,
together with synergies expected to be realized in connection with the
acquisition of GW, partially offset by the inclusion of a full year of expense
related to the acquired GW business.

Research and development costs


Research and development expenses consist primarily of costs related to clinical
studies and outside services, personnel expenses, and other research and
development costs. Clinical study and outside services costs relate primarily to
services performed by clinical research organizations, materials and supplies,
and other third party fees. Personnel expenses relate primarily to salaries,
benefits and share-based compensation. Other research and development expenses
primarily include overhead allocations consisting of various support and
facilities-related costs. We do not track fully-burdened research and
development expenses on a project-by-project basis. We manage our research and
development expenses by identifying the research and development activities that
we anticipate will be performed during a given period and then prioritizing
efforts based on our assessment of which development activities are important to
our business and have a reasonable probability of success, and by dynamically
allocating resources accordingly. We also continually review our development
pipeline projects and the status of their development and, as necessary,
reallocate resources among our development pipeline projects that we believe
will best support the future growth of our business.

The following table provides a breakdown of our research and development expenses by major expense category (in thousands):

                                              Three Months Ended             Six Months Ended
                                                   June 30,                      June 30,
                                             2022           2021           2022           2021
Clinical studies and outside services     $  57,150      $  67,165      $ 113,579      $  98,211
Personnel expenses                           56,304         47,929        111,605         84,155
Milestone expense                             5,500          2,000          5,500          2,000
Other                                        20,093         15,602         38,344         24,903
Total                                     $ 139,047      $ 132,696      $ 269,028      $ 209,269


Research and development expenses increased by $6.4 million and $59.8 million in
the three and six months ended June 30, 2022, respectively, compared to the same
periods in 2021. Clinical studies and outside services costs decreased in the
three months ended June 30, 2022 compared to the same period in 2021 primarily
due to a reduction in costs related to JZP458 (Rylaze) and JZP385 and increased
in the six months ended June 30, 2022 compared to the same period in 2021
primarily due to the addition of costs related to clinical programs for
Epidiolex, nabiximols and cannabinoids and an increase in costs related to
JZP150. Personnel expenses increased in the three and six months ended
June 30, 2022, compared to the same periods in 2021 due to the inclusion of
GW-related headcount costs for the full periods in 2022.

For 2022, we expect that our research and development expenses will continue to
increase from previous levels due to the inclusion of a full year of expense
with respect to the acquired GW business and as we prepare for anticipated data
read-outs from clinical trials, initiate and undertake additional clinical
trials and related development work and potentially acquire rights to additional
product candidates.

Amortization of intangible assets


Intangible asset amortization increased by $8.0 million and $111.9 million in
the three and six months ended June 30, 2022, respectively, compared to the same
periods in 2021 primarily due to the inclusion of the amortization of the
intangible assets arising from the acquisition of GW, primarily related to
Epidiolex, offset by a decrease relating to the Erwinaze intangible asset that
was fully amortized in June 2021. Intangible asset amortization is expected to
increase in 2022 compared to 2021 primarily as a result of the inclusion of a
full years amortization on the intangible assets acquired in the acquisition of
GW.

Research in progress acquired and development


Acquired in-process research and development, or IPR&D, expense in the three and
six months ended June 30, 2022 primarily related to the upfront payments made in
connection with our licensing agreements with Sumitomo and Werewolf
of $50.0 million and $15.0 million, respectively.
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Interest expense, net


Interest expense, net in the three months ended June 30, 2022, was in line with
the same period in 2021. Interest expense, net, increased by $37.1 million in
the six months ended June 30, 2022, compared to the same periods in 2021,
primarily due to higher interest expense from the seven-year $3.1 billion term
loan B facility, or the Dollar Term Loan, the seven-year €625.0 million term
loan B facility, or the Euro Term Loan, together with the Dollar Term Loan known
as the Term Loan, and the 4.375% senior secured notes, due 2029, or the Secured
Notes. We expect interest expense, net for 2022 to be broadly in line with 2021.

Exchange loss (gain)

The foreign exchange loss (gain) is mainly related to the translation of net monetary liabilities denominated in pounds sterling and euros, mainly intercompany balances, held by subsidiaries having a WE dollar functional currency and related forward foreign exchange contracts not designated as hedging instruments.

Income tax expense (benefit)


Our income tax benefit was $16.1 million and $15.6 million for the three and six
months ended June 30, 2022, respectively, compared to an income tax expense of
$228.6 million and $246.6 million for the same periods in 2021. Our income tax
expense for the three and six months ended June 30, 2021 included an expense of
$251.4 million arising on the remeasurement of our U.K. net deferred tax
liability, which arose primarily in relation to the GW Acquisition, due to a
change in the statutory rate in the U.K. following enactment of the U.K. Finance
Act 2021. Excluding this impact, the increase in the income tax benefit resulted
primarily from the mix of pre-tax income and losses incurred across tax
jurisdictions. We do not provide for Irish income taxes on undistributed
earnings of our foreign operations that are intended to be indefinitely
reinvested in our foreign subsidiaries.


Cash and capital resources


As of June 30, 2022, we had cash, cash equivalents and investments of
$771.3 million, borrowing availability under our revolving credit facility of
$500.0 million and long-term debt principal balance of $6.1 billion. Our
long-term debt included $3.1 billion in aggregate principal amount of the Dollar
Term Loan, $1.5 billion in aggregate principal amount of the Secured Notes,
$1.0 billion principal amount of the 2.00% exchangeable senior notes due 2026,
or the 2026 Notes and $575.0 million principal amount of the 1.50% exchangeable
senior notes due 2024, or the 2024 Notes. We generated cash flows from
operations of $512.0 million during the six months ended June 30, 2022, and we
expect to continue to generate positive cash flows from operations which will
enable us to operate our business and de-lever our balance sheet over time.

In the first quarter of 2022, we repaid €208.3 million, or $251.0 million which
represents the remaining principal amount of the Euro Term Loan. We have made
voluntary repayments of €625.0 million, or $753.0 million, relating to Euro Term
Loan and mandatory repayments of $31.0 million relating to the Dollar Term Loan
since the closing of the acquisition of GW in May 2021.

We have a significant amount of debt outstanding on a consolidated basis. For a
more detailed description of our debt arrangements, including information
relating to our scheduled maturities with respect to our long-term debt, see
Note 9, Debt, of the notes to the condensed consolidated financial statements,
included in Part I, Item 1 of this Quarterly Report on Form 10­Q. This
substantial level of debt could have important consequences to our business,
including, but not limited to the factors set forth in "Risk Factors" of this
Quarterly Report on Form 10-Q under the heading "We have incurred substantial
debt, which could impair our flexibility and access to capital and adversely
affect our financial position, and our business would be adversely affected if
we are unable to service our debt obligations."

We believe that our existing cash, cash equivalents and investments balances,
cash we expect to generate from operations and funds available under our
Revolving Credit Facility will be sufficient to fund our operations and to meet
our existing obligations for the foreseeable future. The adequacy of our cash
resources depends on many assumptions, including primarily our assumptions with
respect to product sales and expenses, as well as the other factors set forth in
in Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q under
the headings "Risks Related to our Lead Products and Product Candidates" and "To
continue to grow our business, we will need to commit substantial resources,
which could result in future losses or otherwise limit our opportunities or
affect our ability to operate and grow our business." Our assumptions may prove
to be wrong or other factors may adversely affect our business, and as a result
we could exhaust or significantly decrease our available cash resources, and we
may not be able to generate sufficient cash to service our debt obligations
which could, among other things, force us to raise additional funds and/or force
us to reduce our expenses, either of which could have a material adverse effect
on our business.
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To continue to grow our business over the longer term, we plan to commit
substantial resources to product acquisition and in-licensing, product
development, clinical trials of product candidates and expansion of our
commercial, development, manufacturing and other operations. In this regard, we
have evaluated and expect to continue to evaluate a wide array of strategic
transactions as part of our strategy to acquire or in-license and develop
additional products and product candidates. Acquisition opportunities that we
pursue could materially affect our liquidity and capital resources and may
require us to incur additional indebtedness, seek equity capital or both. We
regularly evaluate the performance of our products and product candidates to
ensure fit within our portfolio and support efficient allocation of capital. In
addition, we may pursue new operations or continue the expansion of our existing
operations. Accordingly, we expect to continue to opportunistically seek access
to additional capital to license or acquire additional products, product
candidates or companies to expand our operations or for general corporate
purposes. Raising additional capital could be accomplished through one or more
public or private debt or equity financings, collaborations or partnering
arrangements. However, global economic conditions have been worsening, with
disruptions to, and volatility in, the credit and financial markets in the U.S.
and worldwide resulting from the effects of COVID-19 and otherwise. If these
conditions persist and deepen, we could experience an inability to access
additional capital or our liquidity could otherwise be impacted, which could in
the future negatively affect our capacity for certain corporate development
transactions or our ability to make other important, opportunistic investments.
In addition, under Irish law we must have authority from our shareholders to
issue any ordinary shares, including ordinary shares that are part of our
authorized but unissued share capital. Moreover, as a matter of Irish law, when
an Irish public limited company issues ordinary shares to new shareholders for
cash, the company must first offer those shares on the same or more favorable
terms to existing shareholders on a pro-rata basis, unless this statutory
pre-emption obligation is dis-applied, or opted-out of, by approval of its
shareholders. At our recent annual general meeting of shareholders in July 2022,
our shareholders voted to approve our proposal to dis-apply the statutory
pre-emption obligation on terms that are substantially more limited than our
general pre-emption opt-out authority that had been in effect prior to August 4,
2021. This current pre-emption opt-out authority is due to expire in December
2023. If we are unable to obtain further pre-emption authorities from our
shareholders in the future, or otherwise continue to be limited by the terms of
new pre-emption authorities approved by our shareholders in the future, our
ability to effectively use our unissued share capital to fund in-licensing,
acquisition or other business opportunities, or to otherwise raise capital,
could be adversely affected. In any event, an inability to borrow or raise
additional capital in a timely manner and on attractive terms could prevent us
from expanding our business or taking advantage of acquisition opportunities,
and could otherwise have a material adverse effect on our business and growth
prospects. In addition, if we use a substantial amount of our funds to acquire
or in-license products or product candidates, we may not have sufficient
additional funds to conduct all of our operations in the manner we would
otherwise choose. Furthermore, any equity financing would be dilutive to our
shareholders, and could require the consent of the lenders under the Credit
Agreement and the indenture for the Secured Notes for certain financings.

The following table presents a summary of our cash flows for the periods
indicated (in thousands):

                                                              Six Months Ended
                                                                  June 30,
                                                           2022            2021
Net cash provided by operating activities               $ 512,015      $   

326,692

Net cash used in investing activities                    (126,454)      

(5,175,238)

Net cash (used) provided by financing activities (260,034) 4,682,312 Effect of exchange rates on cash and cash equivalents (5,710)

(135)

Net increase (decrease) in cash and cash equivalents $119,817 ($166,369)



Operating activities

Net cash provided by operating activities increased by $185.3 million in the six
months ended June 30, 2022 compared to the same period in 2021, primarily due to
decreased transaction and integration-related costs associated with the GW
Acquisition.

Investing activities


Net cash used in investing activities decreased by $5,048.8 million in the six
months ended June 30, 2022 compared to the same period in 2021, primarily due to
the following:

•Disbursements of $6,234.8 million related to the net cash paid for Acquisition of GW within six months June 30, 2021; and

• Upfront payment of $53.0 million from Axsome regarding Sunosi WE
disposal during the six months ended June 30, 2022; offset by

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•Decrease of $1,129.6 million in net proceeds from maturing investments, primarily term deposits during the six months ended June 30, 2022;


•$69.1 million in upfront payments for acquired IPR&D primarily driven by the
$50.0 million and $15.0 million payments to Sumitomo and Werewolf, respectively,
in connection with our licensing agreements in the six months ended
June 30, 2022; and

• $25.0 million milestone payment to PharmaMar in connection with our first sales-based milestone for Zepzelca during the six months ended June 30, 2022.

Fundraising activities

Net cash (used in) provided by financing activities decreased by
$4,942.3 million within six months June 30, 2022 compared to the same period in 2021, mainly due to:

• Net proceeds from the issuance of loans under the credit agreement of $3,719.9 million and the guaranteed notes of $1,471.5 million within six months
June 30, 2021;

•A decrease of $55.7 million proceeds from employee incentive and stock purchase plans; and

• An augmentation of $12.9 million in payment of employee withholding taxes related to share-based awards; offset by

• Repayment of the long-term debt of $266.5 million within six months
June 30, 2022compared to $584.3 million within six months June 30, 2021.

Debt


The summary of our outstanding indebtedness under our financing arrangements is
included in Note 9, Debt, of the Notes to Condensed Consolidated Financial
Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
During the six months ended June 30, 2022, there were no changes to the credit
agreement, as set forth in Note 12, Debt, of the Notes to Consolidated Financial
Statements included in our Annual Report on Form 10-K for the year ended
December 31, 2021.

Contractual obligations


During the six months ended June 30, 2022, there were no material changes to our
contractual obligations as set forth in Part II, Item 7 "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in our Annual
Report on Form 10-K for the year ended December 31, 2021.


Critical accounting estimates


To understand our financial statements, it is important to understand our
critical accounting estimates. The preparation of our financial statements in
conformity with U.S. generally accepted accounting principles requires us to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant estimates and assumptions are required
in determining the amounts to be deducted from gross revenues and also with
respect to the acquisition and valuation of intangibles and income taxes. Some
of these judgments can be subjective and complex, and, consequently, actual
results may differ from these estimates. For any given individual estimate or
assumption we make, there may also be other estimates or assumptions that are
reasonable. Although we believe our estimates and assumptions are reasonable,
they are based upon information available at the time the estimates and
assumptions were made.

Our critical accounting policies and significant estimates are detailed in our
Annual Report on Form 10­K for the year ended December 31, 2021. Our critical
accounting policies and significant estimates have not changed substantially
from those previously disclosed in our Annual Report on Form 10­K for the year
ended December 31, 2021.


Caution Regarding Forward-Looking Statements


This Quarterly Report on Form 10­Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which are
subject to the "safe harbor" created by those sections. Forward-looking
statements are based on our management's current plans, objectives, estimates,
expectations and intentions and on information currently available to our
management. In some cases, you can identify forward-looking statements by terms
such as "may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "estimate," "project," "predict," "propose," "intend,"
"continue," "potential," "possible," "foreseeable," "likely," "unforeseen" and
similar expressions intended to identify forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance, time frames or
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achievements to be materially different from any future results, performance,
time frames or achievements expressed or implied by the forward-looking
statements. We discuss many of these risks, uncertainties and other risk factors
in greater detail under Part II, Item 1A of this Quarterly Report on Form 10-Q.
Given these risks, uncertainties and other factors, you should not place undue
reliance on these forward-looking statements. Also, these forward-looking
statements represent our plans, objectives, estimates, expectations and
intentions only as of the date of this filing. You should read this Quarterly
Report on Form 10­Q completely and with the understanding that our actual future
results and the timing of events may be materially different from what we
expect. We hereby qualify our forward-looking statements by our cautionary
statements. Except as required by law, we undertake no obligation to update or
supplement any forward-looking statements publicly, or to update or supplement
the reasons that actual results could differ materially from those anticipated
in these forward-looking statements, even if new information becomes available
in the future.

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Ada J. Kenney