Avadel licenses once-at-bedtime oxybate therapy from XWPharma

DUBLIN/REDWOOD CITY - Avadel Pharmaceuticals plc (NASDAQ:AVDL), a pharmaceutical company with impressive gross profit margins of 89.6% and strong liquidity metrics according to InvestingPro data, has entered into an exclusive global licensing agreement with XWPharma Ltd. to develop and commercialize valiloxybate, a salt-free and artificial sweetener-free oxybate therapy for sleep disorders.

Under the agreement announced Wednesday, Avadel will pay XWPharma $20 million upfront, with potential development and regulatory milestone payments of up to $30 million. The deal also includes sales milestone payments of up to $155 million for annual net sales achievements up to $750 million, plus additional payments for sales exceeding that threshold. The company’s solid financial position, with a current ratio of 2.79 and moderate debt levels, suggests it’s well-positioned to handle these financial commitments.

Valiloxybate, a GABAB receptor agonist, is designed to deliver oxybate therapy benefits through a once-at-bedtime formulation. Avadel plans to initiate an initial pharmacokinetic study in the fourth quarter of 2025, followed by a pivotal trial in the second half of 2026.

The company aims to develop the therapy for narcolepsy and idiopathic hypersomnia (IH), potentially following a bioequivalence regulatory pathway that could streamline development if the drug demonstrates equivalence to Avadel’s LUMRYZ.

"The addition of valiloxybate, the only once-at-bedtime, salt-free and artificial sweetener-free, extended-release oxybate, into our portfolio further reflects Avadel’s position as a leader in sleep medicine," said Greg Divis, Chief Executive Officer of Avadel Pharmaceuticals, in a press release statement.

LUMRYZ is currently approved as the first and only once-at-bedtime treatment for cataplexy or excessive daytime sleepiness in patients seven years of age and older with narcolepsy.

The licensing agreement grants Avadel exclusive global rights to develop, manufacture and commercialize valiloxybate worldwide, excluding mainland China, Hong Kong, and Macau. XWPharma will also receive tiered royalties ranging from high-single digit to mid-teens percentages on net sales.

In other recent news, Avadel Pharmaceuticals reported its financial results for the second quarter of 2025, significantly surpassing earnings and revenue forecasts. The company achieved earnings per share of $0.10, exceeding the forecasted $0.03, and marking a 233.33% surprise. Revenue reached $68.1 million, surpassing the expected $61.4 million. Additionally, UBS raised its price target on Avadel Pharmaceuticals to $20.00 from $13.00, maintaining a Buy rating on the stock. This adjustment followed Avadel’s impressive second-quarter results, with Lumryz sales of $68 million, which exceeded UBS estimates of $59 million and consensus expectations of $61 million. These developments highlight Avadel’s strong performance in recent times.

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