Investor urges Avadel shareholders to vote against directors

GREENWICH, Conn. - ASL Strategic Value Fund, a significant shareholder of Avadel Pharmaceuticals plc (NASDAQ:AVDL), has called on fellow shareholders to vote against all director nominees at the company’s annual meeting scheduled for July 29, 2025. The company, currently valued at approximately $891 million, is trading below its InvestingPro Fair Value, with analyst price targets ranging from $13 to $22 per share.

In an open letter issued Monday, ASL Managing Partner Steven Braverman criticized Avadel’s board and management for what he described as a failure to maximize shareholder value and properly execute the launch of LUMRYZ, the company’s sodium oxybate treatment.

The activist investor proposed distributing a contingent value right to shareholders for proceeds from six pending lawsuits against Jazz Pharmaceuticals. According to the letter, Avadel’s CEO recently stated at a healthcare conference that one lawsuit alone could potentially recover over $1 billion.

ASL also urged Avadel to retain an investment bank to "monetize" LUMRYZ, which recently received orphan drug designation from the FDA for idiopathic hypersomnia. The fund claimed this additional indication could add between $500 million and $1 billion to annual revenues.

The letter criticized Avadel’s current management for "constant mis-steps" with the LUMRYZ launch, noting that after two years, the company has only about 1,000 switch patients instead of the 6,000 to 8,000 that ASL believes should have been achieved. Despite these challenges, InvestingPro data shows impressive revenue growth of 252% over the last twelve months, with a robust gross profit margin of 90%. The company maintains strong liquidity with a current ratio of 2.73, indicating solid financial health.

ASL also expressed concerns about executive compensation, noting that despite shareholders losing "hundreds of millions of dollars of market capitalization," Avadel’s CEO received $7.4 million in total compensation in 2024.

The fund called for an impartial election monitor, referencing a previous incident where it claims its votes against directors were initially not counted properly.

According to Avadel’s proxy statement, shareholders can change their votes until 10:00 a.m. Irish Standard Time on July 28, 2025, by submitting a proxy with a later date.

This article is based on a press release statement from ASL Strategic Value Fund.

In other recent news, Avadel Pharmaceuticals has been granted Orphan Drug Designation by the U.S. Food & Drug Administration for its drug LUMRYZ, aimed at treating Idiopathic Hypersomnia (IH). This designation offers several benefits, including seven years of market exclusivity upon approval. Additionally, Avadel has received a favorable ruling from the United States Court of Appeals, allowing the company to pursue FDA approval for LUMRYZ beyond its current indication for narcolepsy. The court’s decision also permits Avadel to initiate new clinical trials for additional conditions. Meanwhile, Avadel faces a board challenge from investor ASL Strategic Value Fund, which plans to vote against the company’s entire board of directors due to concerns over the management of LUMRYZ’s launch. Furthermore, Avadel has appointed Susan Rodriguez as Chief Operating Officer to enhance its commercial strategy, especially for LUMRYZ. Lastly, Avadel provided an update at the Needham Virtual Healthcare Conference, though specific details of the update were not disclosed. These developments highlight Avadel’s ongoing efforts in expanding its drug portfolio and addressing investor concerns.

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