Avadel Pharmaceuticals at UBS Virtual CNS Day: Strategic Growth Insights

Avadel Pharmaceuticals (NASDAQ: AVDL) shared strategic insights on Monday, 17 March 2025, at the UBS Virtual CNS Day 2025. The company presented an optimistic outlook, emphasizing the strong market adoption of its LumRise product while acknowledging competitive pressures from potential generic entrants.

Key Takeaways

• Avadel expects approximately 50% revenue growth in 2025 compared to 2024.
• LumRise has been adopted by over 2,500 new patients, significantly outpacing competitors.
• The company is expanding its sales force and enhancing patient support to improve retention.
• Avadel is pursuing a Phase III trial for idiopathic hypersomnia and a lower sodium formulation of LumRise.
• The company anticipates no significant impact from Xyrem generics due to LumRise’s unique patient population.

Financial Results

• Revenue Growth Expectation: Avadel forecasts a robust 50% increase in revenue for 2025 compared to the previous year, driven by sustained quarter-over-quarter growth.
• Early 2025 Trends: Positive momentum in patient demand is aligning with or exceeding internal expectations.
• Q1 Seasonality: The company anticipates typical gross-to-net headwinds and seasonal softness in the first quarter.

Operational Updates

• Commercial Strategy: Avadel has increased investments in patient support and expanded its sales force to enhance engagement with healthcare providers.
• Prescriber Base Expansion: The company has added over 200 new prescribers for LumRise, aiming to convert more patients efficiently.
• Patient Retention: Improved retention rates, particularly in the first 90 days of treatment, are attributed to additional nurses and field support.
• Direct to Patient (DTP) Efforts: Investments in patient education and online activation are underway, focusing on social media and patient groups.

Future Outlook

• Pipeline Developments: Avadel is conducting a Phase III trial for LumRise in idiopathic hypersomnia and working on a lower sodium formulation.
• Market Dynamics: The company expects narcolepsy treatments to remain polypharmacy, with oxibates continuing to play a crucial role.
• Competitive Landscape: Avadel does not foresee a material impact from Xyrem generics, given LumRise’s unique value proposition and patient population.

Q&A Highlights

• Clinical Benefits: Patients have reported significant improvements with LumRise, particularly appreciating the once-at-bedtime dosing.
• Market Expansion: LumRise attracts not only new patients but also those switching from or discontinuing other oxibates, representing a broad market opportunity.
• Pricing Strategy: Avadel is confident that LumRise will maintain its pricing due to its differentiated offering, despite the introduction of generics.

In conclusion, Avadel Pharmaceuticals is positioning itself for significant growth in 2025, driven by strategic investments and a strong product offering. For further details, readers are invited to refer to the full conference call transcript.

Full transcript - UBS Virtual CNS Day 2025:

Operator: Welcome to the UBS virtual event. Ash Verma, you may begin.

Ash Verma, UBS: Hi. Good day, everybody. Welcome to UBS virtual CNS Day, March 17. So, our next company here is Avadel Pharmaceuticals. I’m really excited to host Greg Davis, who is the CEO, and Tom McHugh, who is the CFO.

Hey, guys. How are you doing?

Operator: Doing well, Ash. Thanks. Appreciate the opportunity to be here.

Ash Verma, UBS: Thanks, Mark. Yeah. Thanks. Thanks for joining us. Yeah.

I’m really looking forward to this discussion. So sort of like a twenty five minute fireside chat, and for the audience that that that are listening in, we will have a recording of this available. So if you wanna take a look at it later or if you have any questions as we are going through, feel free to send it my way, and I can sort of, like, weave that into our discussion. So maybe, like, with that, I guess, you know, Greg or Tom, if you can just kind of give a a a bit of a high level overview of the company, the LumRise product. I mean, you recently reported fourth quarter earnings and, where you, you know, reported the Lumrise sales and also provided an outlook for 2025.

So if you can just kind of give us a background for the context of the audience and then we can get started.

Operator: Certainly. Ash. We’re certainly delighted to be here and to share our progress we’ve made with LumRise. For those who aren’t aware, it’s our once at bedtime oxibate therapy really designed to improve the lives of people living with narcolepsy. Maybe before I get started, just a quick reminder for everyone, our remarks today may include some forward looking statements and to that extent, if that’s the case, we’ll just refer everyone to our most recent 10 ks and our subsequent SEC filings to understand the risks associated with those statements.

So Ash, since launching Lumerize just over eighteen months ago, I would say our team has achieved really a lot and really crossed a number of substantial milestones from navigating the regulatory challenges for the approval and then in record time approximately four weeks after approval launching LumRise into the market. And then now as of December 31, having added over 2,500 net new patients on to LumRise as patients on therapy, which for reference sake is nearly three times that more than our nearest competitor during the same time period. And it’s our view and our belief from all of our research and engagement physicians that this rapid LumRise adoption really is underscored by the strength of its clinical value proposition. Physicians and patients, they consistently highlight the benefits of our once at bedtime dosing. And of course, it’s a feature the FDA recognized by granting it and determining it to be clinically superior to the first generation twice nightly oxibate therapies with our Orphan Drug Exclusivity Award.

As launch has progressed, we’ve learned a lot. We’ve continued to refine and enhance our commercial strategy. We’ve talked a lot recently about the investments we’ve increased in patient support, expanding our sales force, enhanced engagement with healthcare providers. These targeted investments, Ash, are really designed to accelerate and improve patient growth and patient adherence. And we’re very pleased that already this early in the year, we’re seeing actually higher patient demand and improved patient retention, which really confirms our commercial focus is on Pinnock and we’re really aligned with the market needs.

So I would say lastly, not lastly, but additionally, I would characterize that our experience over the past eighteen months has really shown that Lumerise is not just competing within the existing oxalate market, it’s actually expanding it. So in addition to switch patients, we’re successfully reaching oxoBate naive patients, we’re reaching those who have previously discontinued on other oxoBates and we’re even drawing in new prescribers who have never written oxoBate before. Specifically, we’ve had over 200 healthcare physicians, healthcare providers new to prescribing oxubates already have chosen blue rights for their patients for the first time ever writing enoxubate, again highlighting our early success in broadening them all. So based on these early positive trends, we fully expect that these actions and the corresponding results will translate into really sustainable trends and durable revenue growth. And then maybe I’ll wrap on a couple of final comments and and then get to your questions.

Additionally, we have our lifecycle management efforts going on, which includes our Phase III REVITALYCE trial to evaluate and Lumerise for idiopathic hypersomnia. And we continue to work on our lower no sodium formulation as well, both of which we expect will further strengthen our position in the market. So maybe in summary, BlueRise is well positioned not only as a transformative therapy for patients, but also as a catalyst for significant market expansion. And we’re confident in our differentiated approach, our strategic investments we’re making and of course the unique product profile of Glumrines, all of which positions us for sustained growth in 2025 and beyond. So again, thanks for the opportunity to be here and look forward to the discussion.

Ash Verma, UBS: Yeah. That’s a great start. I guess maybe just like, you know, when we were, you know, seeing the early launch, right, I know like some some of the investors side were kind of worried that, would you have sort of like a period of efficacy, in the, you know, like the second half of the night, right, with LumRise. So to to the extent that and now we have seen, like, pretty decent growth growth, like, right out of the gate. So what is, like, the latest thought process, like, in terms of, like, the clinical benefit that Lumarize is providing to these narcolepsy patients?

How how does that compare to, you know, the standard of care that has been there? And maybe if you can just talk about, you know, like, some of these, like, worries about like early fate of the efficacy, is not really being seen as people had feared?

Operator: Yeah. I think, again, whether you’re looking at our pivotal trial or whether you’re looking or listening to patients who we talk to routinely, I just spoke to one just on Friday, a LUMRISE patient. Their experience as they go on to therapy and titrate up to a stable dose, their experience really has been remarkable, the feedback we received. So clearly, Lumerise isn’t for everyone, but the patients that we’ve spoken to and the feedback we’ve received from both the physician and the patient community who have gone on LumRise, who have transitioned to a stable dose. The benefits of the once at bedtime dosing, not forcibly having to awake in the middle of the night, not having to make a decision whether it’s too early or too late in the evening to take that second dose or even some of the adverse events that have evolved around mistiming of the middle of the night dose.

You couple that with just the AlumRise helps improve the nighttime aspects of narcolepsy all leading to improvement in the daytime. We’re pleased with the clinical experiences that we hear from patients and we get feedback received from physicians. And I think what we’ve seen in our pivotal Phase three data has replicated itself in the real world.

Ash Verma, UBS: Got it. Okay. That’s great. So maybe just like, you know, talking about the 2025 growth dynamics then, so, yeah, what what is the kind of the expectation? How confident are you that you can achieve the, you know, the guidance that you provided?

And if you can, just, like, get into some any kind of, like, nuances around the, the phasing of revenue? I know, like, typically for one q seasonally soft or for these therapies. I mean, we have a lot of historical data to prove that. But just, like, beyond that, how do you start to see more of a growth, quarter over quarter?

Operator: Yeah. Maybe I’ll talk generally and then a little bit more specifically. I would say given that we’re still early on in the launch and early in the year, I think the trends that we’ve seen based upon these commercial actions that we’ve executed that really went fully live in January, we expect 2025 to be a year of quarter over quarter, right? And as such, we’re very confident in the guidance we provided, which really represents approximately 50% revenue growth in 2025 versus 2024. And as we think about these investments, and we’ll talk maybe, you know, we can comment on Q1 in a minute, but we think about these investments to have a cumulative benefit throughout the year, right, with the impact really beginning to be seen much more in Q2 and beyond.

And that being said, we’re very pleased with the positive momentum, that we’ve experienced in our underlying patient demand metrics, especially when you compare them to how we were exiting in Q4 last year across all of these patient metrics and all of which are pacing at or ahead of our internal expectations. So I think in summary, although Q1, like everyone in our industry has some gross to net headwinds and some of those matters, which we have to work through, which we’re not immune to and we’ll have those as well. We do expect 2025 to be a year of quarter over quarter growth and a year in totality of strong continued strong growth.

Ash Verma, UBS: That’s great. And then in terms of the commercial efforts where you’re expanding, I know you’ve recently talked about, like, adding commercial leads, increasing the sales force and the, fill in nurse support program. If you can expand on those metrics a little bit, just, you know, what are some of the steps that you’ve taken?

Operator: Yeah. Although just a few months in, I think we’re really positive in totality with the momentum that we’ve seen. And maybe to just a level set a minute, you know, as we analyze the trends and what was happening in the back half of last year, we determined that there were clear actions and changes that we needed to make to expand our physician prescribing reach, to accelerate the pace of patient starts, and of course, make real progress in helping patients optimize their treatment experience, again, through our nurse and field support programs. So those changes again and those investments really went fully live. People are trained and onboard as of January 1.

And we’ve seen really positive signs across all these areas. And maybe I’ll give you some very specific commentary around that, right? First, we’ve seen an expansion of our prescriber base with growth coming from what we would describe as either marginal LumRise prescribers or even those who have not written LumRise in the early part of this year. So we’ve seen a nice growth from that cohort of prescribers, which is directly as a result of our expanded Salesforce investments, their reach and their focused execution on a broader prescriber universe. At the same time, we’ve done that.

We’ve seen patients actually convert more efficiently through our system and processes, which means in other words, they’re getting all minimized faster and that is a direct result of our expanded field support team. And then lastly, we’ve seen an improvement in patient retention, especially early in their treatment experience, right, first ninety days, which is really where we have focused a lot of our investments early in the actions that we’ve deployed with our additional nurses and our additional field support resources team. So I think we’re pleased with what we’ve seen so far and the early trends are positive relative to how we exited last year and how we think about it relative to our internal expectations.

Ash Verma, UBS: Yeah. I mean, in terms of, like, the the Salesforce, right, what gives you confidence that, you know, you’re at the right level? Would this require, like, additional expansion at at a later point of time? May maybe if you can just elaborate on that. I I don’t know.

I I don’t think we know, you know, how many sales rep like Jazz has behind, or some of your competitors if they have, like, openly talked about that. How do you sort of benchmark yourself to, to the other players?

Operator: Yeah. Yeah. We you do the best you can to try to benchmark through, you know, third party data sources to try to understand what other what other companies are doing and how they’re deploying. But at the end of the day, we have a very clear go to market strategy in terms of how we want to align our teams around those who are using Oxubates today. So when we look at that and we analyze that data, it allows us to pretty balanced territories to deploy the right number of reps relative to the number of positions we want them to have responsibility for.

So today, as we sit here today, you know, we’ll never not say that we shouldn’t invest incrementally in our field sales team or our field teams at large to make sure we have the right ratio of, you know, customers to, to our each of our individual field team members. But where we sit today, I think when you think about 4,000 or so high volume prescribers, our OxoBate prescribers in totality of which maybe 1,600 or so are really the highest volume targets that represent 80% of the oxoebate market. We think we’re well positioned today to cover that with the right sort of reach and frequency to ensure we’ve got the right sort of presence and the right sort of share of voice inside of those offices. But I’ll note again, given the importance and the value of every patient, we’re not immune or adverse to adding more people if it gives us better reach or better frequency, especially as we think about some of the market expansion opportunities we begin to realize. Some of that happening without promotion.

So now we’re expanding our reach into a broader audience. And as those results continue to come in, it may create an opportunity to expand in the future. But right now, we think we’re well positioned across all of our field teams, whether it be field sales or even our field reimbursement or field support teams.

Ash Verma, UBS: Yes. How much does the DTC investment play a role in this type of a market? Is it very promotion sensitive?

Operator: Yeah. I mean, it is a promotionally sensitive market in totality. I would characterize it that way for sure. But I’m not so sure if we think about it as DTC as much as we think about it as kind of direct to patient or DTP because our goal is to really try to meet not only through the physician actions we’re taking, but we really want to go direct to patients where we can. So our goal ideally is to meet patients or potential patients where they go to seek information, whether that’s online, through patient groups, through social media.

And we’ve spent a lot of time over the last number of months, eighteen plus months, continuing to refine our target audience patient education and activation efforts. And in 2025, we’ve actually made a meaningful increase in these investments as well. We’re doing this because, like all can appreciate, an educated patient is the most influential advocate we could have, because when a patient asks for LumRise, all of our data so far says they get LumRise. So it will be an area of continued focus, of continued investment and certainly assessment to ensure that we are successfully meeting patients where they are to seek information. We’re educating them in the most effective way possible.

And the goal is to activate more patients to proactively go to their physicians and seek out Lumeris themselves. So it is important and it’s something we will continue to do.

Ash Verma, UBS: Yeah. That’s great. Maybe just to, you know, start and talk about like different types of patients, right? So the naive versus the prior OXIBATE experience. So can you elaborate on this, like what percentage of Lumerise patients right now are from naive versus first generation?

And I know you’re trying to optimize that mix. And what does the persistency look like in each of that segment? So, like ultimately, like what’s your goal when you’re trying to optimize that split?

Tom McHugh, CFO, Avadel Pharmaceuticals: Yes. So Ash, thanks for the question. The maybe think about the first eighteen months of launch for LumRise. In the first twelve months, I would say very clearly the majority of patients were switch patients coming from first generation oxibates. And in the second half of twenty twenty four, we saw that patient mix begin to shift more towards new to oxibate patients.

So in the second half of the year, just for a reference point, about sixty percent of the patients were new to oxibate patients in the second half of the year. And persistency and the measurements persistency go hand in hand with that patient mix to a large extent. Discontinuations are really a function of a balance between efficacy and side effects for patients. And for new to OXIVATE patients, who have not been exposed to OXIVATE before or exposed to the side effects, discontinuation rates quite frankly just higher for that patient segment. By comparison, the patients who are switching from first generation OXIVATE have experienced side effects and the discontinuation rates are much, much lower.

The investments that Greg has mentioned, we’re focused on a lot of different things. Two particular focus items for us are continuing to drive patient demand across all patient segments, ideally improve the mix of switch patients and new to oxybate patients. And along with that will come improvements of persistency along with other improvements we’re making in our processes. The net effect of these, we’ve seen some really promising trends in Q1. We’re not really specifically comment on Q1 at this point, but we are seeing some early promising trends so far two months into the year.

And as these continue to improve and gain traction, it should lead to revenue improvements throughout the year as well.

Ash Verma, UBS: Alright. Okay. And then, like, in the long run, like, where do you want to take this, you know, split? And if you have any short term goals, I would love to hear that too, like, you know, the mix between the naive versus experience.

Tom McHugh, CFO, Avadel Pharmaceuticals: Yeah. It’s hard to think about an ideal patient mix, because all patients are important, quite frankly. If we we’ll drive demand and increase demand across all patient segments and coupled with our efforts around improving persistency and that patient experience on LumRise. So listen, I’d leave it that way for the time being, Ash, is all patients are important for us. And but as a patient mix improves more towards switch patients that will come with improved persistency and revenue improvements as well.

Operator: I think, Ash, the only thing I would add to that, I think it’s one of the unique things that makes LumRise such a unique opportunity from a market perspective because we’re not beholding or subject or restricted to just only the potential new to OXIBATE patients or naive patients who are coming the 4,000 or so patients who are coming into the market every year to potentially compete with the other OxoBates four. We do very well in that group, but we also source patients from switch patients, we source patients from previously been on OxoBate and have who have discontinued. And those two segments represent about 90% of our market opportunity. So I think for us, there’s a lot of patients out there. It is a large market opportunity and a lot of shots on goal to build a successful franchise.

Ash Verma, UBS: Alright. Okay. Alright. So maybe just like, I’ll ask a couple of, you know, questions around the other market dynamics that are playing out. I mean, one is that, you know, like, we are going to get some data from the Orexin.

Like, we have, Alkermes, Takeda, starting to report, like, Takeda phase three, Alkermes phase two. So what what is your assumption on this, you know, potential entrant? Like, does Oraxol impact like more the daytime sleep medication? Or can you continue to grow by taking share from first generation OXIBATE even when Oraxol is being introduced to the market?

Operator: I think the short answer to that is yes. And there’s clearly a lot of investor excitement about the prospects of Orexant. But for us, as we think about it, we’re most interested in what clinicians and prescribers think, right? And clearly, it offers a new mechanism of action for treating these serious sleep disorders, especially in particular with the daytime benefit that they demonstrated. It’s less clear now for us and for physicians as to whether the benefits at night are positive or whether there are actually some potential concerns about what may happen at the nighttime.

So according to physicians and it’s been confirmed a lot of key opinion leader discussions, you know, I would say that we believe there’s certainly a role for ongoing use of OxoBates as a nighttime agent that helps consolidate sleep. That also produces additional daytime benefits. Now we’ve done quite a bit of comprehensive research on this so far and we’ll continue to do so, not talking to two, three, five docs, but talking to well over 100 physicians and another large cohort we’re talking to currently. And I would say the takeaway we get from that is the following is that narcolepsy is and will remain a polypharmacy treatment. They like different mechanisms of actions.

Patients like to add mechanisms of actions to their therapy. There is the potential that the introduction of erections could potentially expand the patient population, but the role of oxibates from our research with physicians and their impact on nighttime sleep architecture are still expected to play important and relevant roles. And for us, our goal is to make sure LumRise is that oxibate of choice both today and into the future.

Ash Verma, UBS: Yeah. Okay. And then, just on the, you know, like 2026, like, dynamics. So we know that, you know, Xyrem, is going to go through, like, a full generic, market. Right?

So, and that may or may not form, but what I wanted to understand is, like, what what is your assumption on pricing in that scenario, in either scenario? Like, can can that impact, like, pricing not just for Xyrem but for other market participants like you? Or, you know, do you think that you you have some way to, like, defend your position in the market, if that happens?

Operator: Yeah. I mean, I think for us, you know, we have to be prepared. This is another area we’ve done a lot of work on and a lot of research on to be prepared for what what the potential scenarios could be. I would say generally in terms of, you know, pricing, we don’t see a material impact on pricing, in the future on LumRise or branded Oxibates for that matter overall, right? We remain highly confident of our growth potential even in the face of additional potential generics in large part because we have this unique patient population that we can continue to draw from of which again 90% of it comes from outside of where primarily these potential generics will source their business, which are new to OXOBATE our naive patients, right?

I would say given the challenges we’ve we’ve come to understand and appreciate of managing new to oxymate patients, some of the commentary that Tom made a few minutes ago, our view in a in a world of of additional generics is that the majority of those potential patients who may be asked to step through a first generation INXOBI to get to a branded, our LumRISE product will likely do so in large part probably because of the challenging issues of managing this patient with a whole lot of resources that companies like us offer, but you still see discontinuation. So from our viewpoint, we’ve got multiple segments of patients to grow and we do expect that if a patient is going to step through a 27 lead generic, whether it’s because they’ve had a troubled treatment experience or they just want to get to second generation oxalate, we think Lumines would be well positioned to capture a lot of those patients for us as well. So we don’t see pricing, eroding dramatically for us. Can’t comment on how it may may be impact by how the generics may be impacted by it.

Ash Verma, UBS: Yeah. Okay. Alright. That’s great. So maybe just, in the last couple of minutes, just quickly on a few of the, like, these legal proceedings.

I think the most, most near term, is, you know, this circuit court, like, reevaluated the district court’s decision on the idiopathic hypersomnia preliminary injunction. Sorry. That’s a mouthful. So, yeah, like, how are you sort of preparing for that? And I guess, and if you can, you know, like, elaborate on your position.

And the question that I’ve been getting from investors, like, in the event that, let’s say the, you know, Circuit Court actually overturns the District Court decision, then can Jazz through another Hail Mary at like in 2027 when you’re about to enter in the market potentially?

Tom McHugh, CFO, Avadel Pharmaceuticals: Yes. So Ash, I’ll take that one. Yes, I think you’re right. That is our expectation of the most near term event on litigation front. The appeals hearing was back on February 7.

We’d expect a decision sometime during Q2 out of that appeals hearing. And really, I’d summarize sort of the heart of the matter two things. You know, there’s more to it, but two things primarily. One is, you know, initiating new clinical studies for Lumerise. We’re currently enjoined from doing that.

And then also seeking FDA approval for indications for Lumaris beyond narcolepsy, which we’re also enjoined from even seeking FDA approval at this point. Those we believe very strongly in our arguments. We fully expect that this injunction is going to be overturned. And again expect the timing is probably Q2 for decision on that. With respect to your question on Jazz and what they may do next, better question for them of course, not going to come up with a legal strategy and what they may or may not do.

But our intent as it’s been since the beginning is we’ll vigorously defend our intellectual property rights and make obviously all our best efforts to make Lumarize available to patients who can benefit from it.

Ash Verma, UBS: Yeah. Alright. That’s great. With that, we can wrap this session up here. So we are almost out of time here, but thank you so much for taking the time today.

And, I look forward to learning more from you and good luck with the story.

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