Does Jazz Pharmaceuticals Have a Fibromyalgia Blockbuster on their Hands?

It sure might if their Phase 3 Trials pan out. The company is presenting at the Associated Professional Sleep Societies (APSS) 2009 Annual Meeting in Seattle, Washington.

At APSS on June 11, 2009 at 9:00 am in Ballroom 6E, Dr. Swick will also deliver an oral presentation entitled "Sodium Oxybate Improves Pain, Fatigue, and Sleep in Fibromyalgia: Results from a 14-week Randomized, Double-blind, Placebo-controlled Study."

You would think that Fibromyalgia would be quite a market because it is a chronic illness and hits from 0.5% - 5% of adults worldwide. That means that as many as 326 million people could have their symptoms lessened by this drug. If they can pull in even a 10th of that number then that will equate to several billion in revenue per year.

On looking over their financials this is the main thing that jumped out at me:

Jazz Pharmaceuticals' cash and cash equivalents as of March 31, 2009 were $17.0 million. On March 31, 2009, Jazz Pharmaceuticals did not pay $5.1 million in interest due to the holders of the $119.5 million principal amount of its senior secured notes due June 2011, and Jazz Pharmaceuticals remains in default on the notes. The total overdue interest due on the notes through March 31, 2009 is $9.6 million.

This precarious cash position sounds like something that could be a big problem in the next few quarters. So if these Phase 3 Trials don't pan out (or if there is any kind of delay with the FDA) then they probably won't be able to roll this debt over. If that happens then they might not be a going concern unless they seriously cut costs.

Dendreon always had a decent cash position when they were going through all their troubles. This company does not have that luxury. So it really is a gamblers stock any way you look at it.