Avadel Pharmaceuticals at Wells Fargo Conference: Strategic Growth and Challenges

On Friday, 05 September 2025, Avadel Pharmaceuticals (NASDAQ:AVDL) presented at the Wells Fargo 20th Annual Healthcare Conference 2025. CEO Gregory Divis highlighted the company’s transition to profitability, driven by the successful launch of LUMRYZ, their narcolepsy treatment. While Avadel boasts strong growth metrics, they are also preparing for potential market challenges, including the entry of generic competitors.

Key Takeaways

• Avadel has transitioned to a profitable stage, with LUMRYZ driving revenue growth.
• The company is expanding LUMRYZ adoption among physicians and patients.
• Financial results show strong net patient additions and higher reimbursement rates.
• Avadel is preparing for generic competition in the oxybate market.
• Future growth includes opportunities in idiopathic hypersomnia and new product developments.

Financial Results

• Growth Drivers:

- Net patient additions are increasing, driven by demand for LUMRYZ.

- Higher reimbursement rates are achieved, enhancing revenue per patient.

- Focus on patient retention is helping to maintain therapy continuity.

• Pricing and Revenue:

- Annualized net revenue per patient in Q2 was approximately $92,000.

- The company expects steady pricing with room for improvement.

• Cash Flow:

- Avadel’s operations are funded by existing cash reserves and projected cash flow.

Operational Updates

• LUMRYZ Adoption:

- Broad-based adoption across multiple levels, with 1,600 writers accounting for 80% of the narcolepsy treatment market.

- Patient requests for LUMRYZ are increasing due to direct-to-patient efforts.

• Patient Sources:

- Approximately half of LUMRYZ patients are switch patients.

- The remainder includes new oxybate therapy patients and those returning to treatment.

• Market Size:

- There are about 160,000 narcolepsy patients, with 50,000 eligible for oxybate therapy.

Future Outlook

• Billion-Dollar Goal:

- Avadel aims to reach 8,000 reimbursed patients on therapy.

• Idiopathic Hypersomnia (IH) Opportunity:

- Over 40,000 patients are diagnosed with IH, presenting additional growth potential.

• Orexin Impact:

- While orexin receptor agonists are exciting, oxybates remain crucial for nighttime treatment.

• Bexil Oxybate Strategy:

- The new API will enhance the oxybate portfolio, with initial formulation expected by Q1 next year.

Q&A Highlights

• Generic Xyrem Impact:

- Avadel is confident in maintaining market share despite generic alternatives.

• REMS Program:

- Investments in REMS and patient services are crucial as generics enter the market.

• Bexil Oxybate Development:

- A streamlined regulatory path is planned, leveraging existing data and FDA dialogue.

Readers are invited to refer to the full transcript for more detailed insights.

Full transcript - Wells Fargo 20th Annual Healthcare Conference 2025:

Ben Burnett, Biotech Analyst, Wells Fargo: Okay. Thank you guys for joining us for our next Fireside Chat. My name is Ben Burnett. I’m a biotech analyst at Wells Fargo. Pleased to be here with the Avadel Pharmaceuticals team. We have with us Gregory J. Divis, CEO, Thomas S. McHugh, CFO, and Susan Rodriguez, COO. Thank you all for being here.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Thank you. Appreciate the opportunity.

Ben Burnett, Biotech Analyst, Wells Fargo: Maybe we could kick it off. Just give us kind of an overview of the company and maybe flag for us some of the near-term events we should be focused on.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, it’s very dynamic and exciting right now for Avadel. We’ve really transformed our business and our company over the last number of years to a fully commercial stage, profitable business on the back of the launch of what we believe is a very innovative and positively disruptive product in LUMRYZ, the first and only once-at-bedtime, extended-release oxybate for the treatment of narcolepsy for both adults and children. From that standpoint and that launch, we’re now in our ninth quarter of continually adding more patients, adding new prescribers, building a strong foundation, and really making significant progress in our launch with LUMRYZ, which we’re very pleased with. There’s a lot more that’s been evolving as well. We’re well advanced in our idiopathic hypersomnia study, which will complete enrollment by the end of this year, which we’re excited about.

We announced a licensing transaction two days ago to expand our oxybate portfolio, our extended-release oxybate portfolio, with Bexil Oxybate, which has the potential to be the first and only no salt, no artificial sweetener, extended-release oxybate product for patients. We’re really excited about that. In the near term, key milestones for us, again, besides the launch metrics, which we’re pleased with the progress we continue to make on launch, we’ll certainly see our IH trial complete enrollment this year. We would expect our initial formulation work on Bexil Oxybate to happen in Q1 of next year. We’ll read out our IH trial mid-next year, and we’ll head towards an NDA filing on IH in the back half of next year. A lot of things are happening and really pleased with the progress we’ve made.

Ben Burnett, Biotech Analyst, Wells Fargo: Okay. Lots of impact there. I definitely want to get into the new announcement you made about Bexil Oxybate. Let’s start with the LUMRYZ launch. Multiple quarters under your belt. I guess, where are you seeing kind of the greatest adoption of LUMRYZ within the narcolepsy space?

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, we’re actually seeing quite broad-based adoption on multiple levels. First, on a writer basis, about 1,600 writers account for 80% of the total opportunity. We reached those physicians very early, and they became writers early in the launch cycle for LUMRYZ. What we’re finding now, tracking them longitudinally, clearly, they are all persistently expanding their use. Additionally, in parallel, we continue to generate new writers as we extend out to the rest of the potential oxybate writers that account for the remaining 20% of the business. What we’re finding is that those lower volume offices are even more receptive; they’re eager to start a patient on LUMRYZ. They see it as an easier drug to initiate. With the volume of patients they have, they prefer to just be a LUMRYZ office. We’re really having success with writer penetration.

We now have a very strong base of writers penetrating this market. At the same time, the highest volume writers are increasing their depth of use as we’re continuing to grow writers. The writer dynamic is clearly foundational and speaks to continued growth in the future. In addition to that, if you look at the adoption pattern, clearly we get switch patients very early when a writer begins writing LUMRYZ, which really reinforces the extent to which there was an unmet need in this space. Every new writer has patients in mind that they know are not doing well on the older therapies because of some of the shortcomings. What we’re finding is that we get those switch patients early. Physicians are very pleased with their clinical experience with LUMRYZ and then go to expand their use to new to oxybate patients, as well as previously discontinued patients.

This has been quite persistent across the writer base, which speaks to our commercial execution, as well as the delivery of the product results in the real world for these patients. This is real. They’re coming back to the office with very positive feedback to the physician, which is further encouraging them to expand their use. If you think about a set writer base that continues to grow, expanding their use across multiple patient types, these are all very strong growth drivers that are behind the momentum that we’re demonstrating in our results quarterly. On top of that, we’re also seeing, as the word is getting out and as a result of our direct-to-patient efforts, that more and more patients are coming into offices requesting LUMRYZ. Because we have established ourselves so strongly within the writer base, they’re very amenable to putting the patient on LUMRYZ upon request.

These patient requests are coming in. Doctors are fulfilling that request. With our direct-to-patient efforts, we anticipate that will only grow stronger. The last thing, which we shouldn’t underestimate from a performance level, is the whole fulfillment side of doing the right thing for offices and patients. Our in-office presence is really helping the offices get through the prior authorization process so that you drive an enrollment to a conversion, to a reimbursed conversion, to engage with the patient to ensure that they stay on therapy. You drive compliance. You minimize discontinuations, especially in that first 30-day period, which is quite where the patient’s really vulnerable because it’s a difficult initiation process. We are there with our patient services to help them through that process so that they persist on therapy and get their refills in on time. All of those things further boost our performance quarterly.

If you think about on the demand side, what’s happening, and on the fulfillment side, all of these things are very positive dynamics.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, Ben, maybe just one other comment to that. That is, if you look at our business today, all of that great work has resulted in patients on therapy today, about half are switched. Of the other half, probably a little bit more than a majority of the other half would be new to oxybate, and the balance being returned to oxybate or previously discontinued. When you think about how all that plays up in terms of source of patients, that’s kind of how the mix goes. The good news is every quarter we’ve seen that mix continue, quarter after quarter after quarter.

Ben Burnett, Biotech Analyst, Wells Fargo: Do you have a trend that’s really interesting? Do you have a trend in terms of where you see the most growth kind of near term? Is it from that switch group? I guess, do you know what they’re—is this mostly kind of a Xyrem switch versus Xywav?

Susan Rodriguez, COO, Avadel Pharmaceuticals: It really comes from any twice-nightly therapy.

The reason they moved to LUMRYZ is for that once-at-bedtime, full therapeutic dose delivery, uninterrupted sleep benefit, and daytime efficacy of LUMRYZ. I would say it’s really the mix of patients that’s really the underlying growth dynamic because then the writer is not being discerning on what patient is right for LUMRYZ. They’re actually really just choosing LUMRYZ as a product that any patient can benefit from, whether it’s a patient on the older therapies that now the physician has seen could potentially have a better experience with LUMRYZ, whether it’s a new patient, and they’re increasingly seeking out previously discontinued patients. I really think it’s the mix of patients that is important in terms of a growth driver for the franchise.

Ben Burnett, Biotech Analyst, Wells Fargo: Okay, fantastic. Also, just like thinking about kind of the overall market, I think when we think about just narcolepsy in general from sort of a diagnosed prevalence perspective, a lot of us have sort of 100,000 patients roughly in mind. Let me know if you agree with that. What proportion of that do you see is now kind of being good candidates for Bexil Oxybate or for LUMRYZ?

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, so actually our claims data tells us that there’s about 160,000 or more narcolepsy patients. 80% of those are on some kind of treatment, so wake-promoting treatment. Of that, we estimate around 50,000 patients are eligible for oxybate therapy. It’s a sizable opportunity, of which today about 15,000 are on therapy. These would be our potential switch patient opportunities. Another 14,000 to 15,000 are previously discontinued. That’s also a pool that we draw from for LUMRYZ. The balance are new to oxybate patients, so about 25,000 coming in. We estimate around 4,000 to 5,000 new patients get treated every year. There is clearly room to expand treatment in those patients that are eligible for oxybate therapy, but for some reason not getting it. We do see a notable and growing segment of writers that are writing LUMRYZ that historically have not written oxybate.

Because of the profile of the drug, physicians report back to us that it’s an easier product to initiate, to work with patients to get started. As a result, they’re writing oxybate for the first time.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, I’ll just add to that. When you think about that patient pool of potentially eligible oxybate patients in the context of the total market, the total treated pool of patients, if you will, understanding the switch patient pool and the previously treated patient pool is very clear. What we’ve tried to do longitudinally is look at patients who became a new to oxybate patient and look at their demographics, the characteristics of that patient historically. What agents were they on? How did they step through those therapies? When did they become an oxybate-treated patient? If you take that analysis and then apply it to a cohort of other patients who look a lot like them, you can create a market of potential new to oxybate patients by looking at that demographic. That’s where we come up with the analysis, right?

Ben Burnett, Biotech Analyst, Wells Fargo: Okay, fantastic. I think another thing that we think about a lot when we think about some of the other oxybate is sort of this notion of persistence, like how long patients are actually, you know, what’s the duration of therapy? I guess, what are you seeing with LUMRYZ? Do you see a difference whether or not they’re switched or new to oxybate?

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, I mean, the landscape overall clearly includes the dynamic of patients going on and off therapy. That’s good news and bad news. It’s good news for us now because all of those patients that went off therapy are now potential LUMRYZ patients. The profile of LUMRYZ, the patient-friendly profile of LUMRYZ, and the performance results of once at bedtime dosing, full therapeutic dose, is clearly driving, we believe, will drive better persistence in the marketplace. We seek to have market-leading persistence in this marketplace. If we look at where we are today, again, our execution on the fulfillment side, the engagement with the office on initiating the therapy, that transition with the specialty pharmacy and shipping the product, and with the nursing engagement on the initiation, is key to driving persistence. That doesn’t stop there.

Once they’re on the therapy, making sure they refill it on time and stay on therapy chronically, because that’s really what’s in the best interest of patients. We made investments to really expand that kind of engagement at the end of last year. We saw results right away. We continue to see better and better results. We continue to drive for better and better. We are very pleased with the metrics and the direction the persistency is going and how discontinuation rates are actually trending down.

Ben Burnett, Biotech Analyst, Wells Fargo: Great. That’s a really good point I want to dive into. Talk about some of those investments. I think you guys just reported a nice quarter with some really good growth. What do you think led to that growth?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: It is a combination of a few things, right? You know, both in the form of net patient adds in totality, which is a byproduct of demand at the top of the funnel and pulling those patients through and pulling them through at a higher reimbursed rate. As Susan described, once they go on therapy, how do you keep them on therapy, right? This is not a tough treatment. These are challenging patients who deserve to have the sort of customized intervention that they need to help them work through and be supported through their treatment experience.

It is multifactorial for us in terms of the first half of this year and the improvements we’ve seen in Q1 that have carried over to Q2, both in terms of mix of patients, demand at the top of the funnel, pulling them through at a higher reimbursed rate, and keeping them on therapy. All of those things cumulatively are really what’s driving the incremental benefit and the improvements we’re seeing in the business.

Susan Rodriguez, COO, Avadel Pharmaceuticals: That’s all driven by the investments. We had a very good base of performance, and then adding capacity to our sales force, we’re reaching more of those writers and reaching them more frequently, adding capacity on the fulfillment side. We’re present in the office to drive that conversion, drive to reimburse patients, start getting the right documentation in to make that happen, doubling the number of nurses we have engaged with our patients so they could engage more frequently in a more customized way. All of those investments clearly are fueling the growth momentum as well.

Ben Burnett, Biotech Analyst, Wells Fargo: Would you expect to continue to invest in that sales force?

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, I mean, we’re always looking at that. We would never rule it out. Right now, we have a really nice coverage of the narcolepsy space and the opportunity for oxybate. If we look at our hit rates, activity rates, we’re getting to all of the writers at exactly the frequency that we seek to get them, and they’re responding with increasing breadth of use and depth of use. We’re in a good spot now, but are always looking at that and very much willing to expand our investment. We did expand our investment in our direct-to-patient initiatives because we’re seeing clearly that those are effective and patients are coming in and asking for LUMRYZ. That’s a lever that we pulled earlier this quarter. We’re really enthusiastic about that. We’re constantly looking at what’s driving the growth of the business and whether an incremental investment would pay off.

We’re always making those decisions.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, I always think about it as an and and not an or, right? An and to the extent that we don’t want to compromise the important reach and impact and coverage of the highest value targets. How do we, in addition to that, expand to create more opportunity, whether that’s within the oxybate prescriber universe or even as we’ve seen every quarter since launch, we’ve added physicians who have never written an oxybate before. When you study those clinicians and what are their characteristics, endemic behaviors, and then find the next best 500 physicians who look like that, you can do an investment and an expansion to try to capitalize on those landscape dynamics as well.

Ben Burnett, Biotech Analyst, Wells Fargo: OK, great. Just on price, in terms of gross net discounting and so forth, where do you see that kind of going steady state?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, maybe just starting with Q2, when we report our numbers, we of course have net revenue. We report total patients on therapy, which always includes patients on free drug. In Q2, what it annualized to is about $92,000 per year per patient, taking all that into account. At this point, while we’re looking at the remainder of 2025, I view that as a steady state sort of number with opportunity for improvement. Some of the metrics we’ve talked about so far around persistency and compliance and other things, these are revenue boosters, if you will. Aside from the patient adds themselves, which is critically important, the other metrics we work on every day, which is keeping them on therapy longer, take LUMRYZ more frequently, also help to drive the revenue numbers.

Susan Rodriguez, COO, Avadel Pharmaceuticals: Converting to reimbursed patients.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: That’s right.

Ben Burnett, Biotech Analyst, Wells Fargo: Yeah, maybe talk about that. What goes into that?

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, it’s really, really critical because we really have a nice access position across the payer mix. It’s really all about working hand in hand with the office to make sure that they’re providing the proper information and documentation to clear that PA as quickly as possible. Our success rate in then driving a % reimbursed conversion is moving in the right direction, and our time to conversion is also moving in the right direction. It is a very hands-on in-office partnership with our fulfillment team. That’s something where we invested at the end of last year to expand that group, recognizing they do a lot of work on the back end with the payer on the transaction.

What we added capacity on was in addition to that, to really be present in the office, to service the office so that that documentation is submitted correctly in the beginning because that’s where you lose time and where you get a rejection.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, the other thing I’ll add to that is we spend a lot of time as well with some of our, we’ve hired some really exceptional leaders and experts in the space where patients who go on our patient assistance program doesn’t mean that they cannot become a reimbursed patient in the future. We’re constantly evaluating patients inside of our patient assistance program to see if coverage has changed or if the step has been met and an opportunity to convert that patient who’s already on LUMRYZ into a reimbursed patient.

Ben Burnett, Biotech Analyst, Wells Fargo: OK, fantastic. I guess the other thing I want to ask about in terms of price is like how should investors think about either price or just demand or just the potential impact of traditional generics for Xyrem coming in? How do you think?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, we spent a lot of time over the last couple of years knowing this could be a phenomenon coming up in early 2026. We’re clear. The most important feedback we have on this is our engagement with payers and our approach to our coverage policy approach and where we want to be from a coverage standpoint. Our policy going into this year and going into next year, which continues to be the place, is that the way we contract for coverage is not to be disadvantaged to any oxybate, right? We expect that to be the case going forward based upon the discussions we’ve had to date. Equally as important is that we’ve got a very good real-life case study inside of the oxybate category today with the launch of the authorized generic a few years ago. What the authorized generic did was cannibalize the original Xyrem business.

It has had really no impact on LUMRYZ at all. Even in the few plans who just have generic first policies, because there are plans who have generic first policies where the AG is first, our performance in that plan looks exactly like it looks at any other plan. We don’t pay any discounts on it. It’s a much higher margin business for us from that standpoint. Our view as we think about the role of Xyrem generics in the future doesn’t change a lot from how we see it with the authorized generic today. I think what’s equally as important is that if plans decide that they have a generic first policy for new to oxybate patients only, and that will be the only place where they could possibly happen, it just means the switch market gets bigger.

We just got done talking about how hard it is to manage these patients and the risk of discontinuation. We invest millions and millions of dollars to do that, as does our counterparty. We think that the opportunity for patients to step through a twice nightly generic to go to a branded oxybate, LUMRYZ is incredibly well positioned as it is today to capture the lion’s share of that and continue to build business even despite this potential market dynamic or landscape dynamic in the future.

Ben Burnett, Biotech Analyst, Wells Fargo: Excellent. If there’s any questions, let me know. We’ll work it in. I guess one thing I would love to ask about this is does the REMS create any sort of, does that dissuade at all traditional generics? Do they have to pay more to kind of get into this market?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: You have to build it, right? You have to build a REMS and you have to support the REMS from that standpoint. That isn’t free from that standpoint. It does cost money to do that, and you have to operationalize it at standards that the FDA describes to ensure safe use. Those are all things that have to happen. I’ll just remind the audience that the Xyrem generic is not substitutable for LUMRYZ or any other branded oxybate, right? Do I think it’ll impact the AG and the branded Xyrem business? Yes, I do from that standpoint. I don’t see it having a material impact on LUMRYZ. Yeah.

Ben Burnett, Biotech Analyst, Wells Fargo: Maybe I’ll add to that. It’s not just the REMS program. It’s patient services as well. It’s a high-touch business. We invest a lot of money in it to support our patients. It’s not an inexpensive endeavor, if you will. It’s something else that the generics would certainly have to consider as they’re entering this market. OK. Excellent. I want to go on and just ask a few questions about IH. Just to kind of finish the narcolepsy discussion, talk about, so you kind of put out some interesting numbers around sort of your vision for sort of peak sales and the number of patients that could ultimately be on LUMRYZ. How do you get to that long-term growth?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, I think this market has demonstrated that this oxybate market has demonstrated consistent growth quarter over quarter over quarter across any product that has come into the category in the treatment landscape, treating patients with NT1 or NT2 patients. It is a market that continues to be robust and continues to grow. We don’t see that phenomenon changing from that perspective. How we think about getting to the billion-dollar goal is really tied back to patients on therapy, right? We know to do that today, we need 8,000 patients on therapy, 8,000 reimbursed patients. We’re well on our way. We’re two years into launch. We’re at 3,100 patients total on therapy today, and we’re growing consistently every quarter. What’s good for us and why we’re confident in that is that we are not beholden to just the new to oxybate patient as the source of our patient growth.

We have the largest opportunity across our three patient segments in switch and in previously treated who have been discontinued, which is a segment that continues to repopulate itself every quarter with patients who are dropping off the twice nightly first generation oxybate. Collectively, as Susan talked about, there is a 50,000 patient pool that at the end of the day, do you believe LUMRYZ can have 8,000 of those patients reimbursed? We think yes. We’re on our way to continue to build toward that.

Ben Burnett, Biotech Analyst, Wells Fargo: Awesome. Actually, just one other question. Just around the orexin receptor agonists, I think Takeda is going to have some phase three data this weekend. Under the scenario where that’s ultimately on the market for NT1, how does that impact the calculus?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, I mean, we spent a lot of time on trying to understand, at least in today’s on the knowledge base of HCPs today, their view of orexins in the future and in particular, and most importantly, the view of the oxybate landscape in the future. That’s what we’re most interested in from that standpoint. We just finished a project that read out last Monday because we wanted to do a large physician research project on the back of the top-line data being announced by both the two companies who’ve announced kind of top-line data so far. I think the feedback continues to be consistent. There’s excitement about orexins and the wakefulness aspect of what they offer from that standpoint. There are equally as many questions about them around durability of effect, around long-term exposure and adverse events, and all the things that everyone knows.

The one thing that is very clear when you talk to physicians, and as much as I know the street, so to speak, is interested in what orexins may become, we are most concerned with what physicians think who treat these patients every single day. We talk to them extensively. We’ve talked to hundreds of physicians in different research projects to try to get our arms around what this looks like. They’re very clear and consistent, which is what the KOLs say when you do interviews with them, which is that oxybates are here to stay. The important treatments for the nighttime, which is a big component of the challenge of these patients, is the disruption at night and what that means and the durable benefits that oxybates have demonstrated over nearly two decades now of effectively treating these patients. We’re quite bullish on the role of oxybates long term.

Every physician we’ve talked to will say that the future should be the complementary combination of an orexin and an oxybate. Between LUMRYZ and what we think we’re going to be able to deliver with Bexil Oxybate in an oxybate category that’s moving to extended release and once at bedtime dosing, we believe we’ll have the oxybate portfolio of choice.

Ben Burnett, Biotech Analyst, Wells Fargo: OK, fantastic. Let’s talk about the idiopathic hypersomnia opportunity. You have a study that’s ongoing here. What do you see these LUMRYZ fitting in within that market?

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, so our claims data indicates that there’s over 40,000 patients diagnosed with idiopathic hypersomnia. It’s really a notable opportunity for us. Since we launched, we’ve been receiving questions from physicians, from KOLs, and eagerness using LUMRYZ in IH, seeing that the value proposition for LUMRYZ in terms of once at bedtime, full therapeutic dosing is even more important for an IH patient since their condition is defined by their disrupted sleep and inability to wake up. There’s a high level of interest in LUMRYZ for IH. We already, you know, there’s a big overlap of writers, the writers at this broad writer base we have today, this group of physicians quite familiar with LUMRYZ who continue to expand their use, are the same physicians who treat IH patients. At the same time, there’s going to be other physicians who see IH patients that maybe haven’t written oxybate before.

That’s a potential opportunity for us as well. We see this opportunity as a 40,000-plus patient. It’s great that there’s now the first approved agent out there and that there’s a company starting to prime this space and getting physicians, when there’s a treatment, become much more alert around diagnosing and taking action. All of that’s happening. It’ll be a great environment for us to launch with a drug that really is designed to address the needs of the IH patient.

Ben Burnett, Biotech Analyst, Wells Fargo: Just to clarify, when you talked earlier about this sort of 8,000 patient number, the idiopathic hypersomnia opportunity would be in addition to that. Is that?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, that’s how we think about it.

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah.

Ben Burnett, Biotech Analyst, Wells Fargo: OK.

Susan Rodriguez, COO, Avadel Pharmaceuticals: This is within our current LUMRYZ claim, is where the 8,000 reimbursed patients come from, which is narcolepsy.

Ben Burnett, Biotech Analyst, Wells Fargo: OK. You have LUMRYZ, which is once nightly. You have Xywav, which is twice nightly, but low sodium. Now enter Bexil Oxybate. Walk us through how you see that asset and the potential role it could have.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, we’re really excited about the prospects of Bexil Oxybate. We’ve been looking at it and studying it for quite some time and have been actively diligencing it for a number of months now from that standpoint. Maybe just a little bit of background in that we’ve been working on our own program for quite some time. We’ve learned a lot, right? We spent a lot of time trying to take the original sodium oxybate molecule. We continue to have a pathway potentially for this and manipulating or modifying it inside the manufacturing process, right? Our formulation scientists felt, let’s try to develop a novel API that you start with that. As we began that work, we obviously have been following the XW team. We actually had connected with them four-plus years ago to talk about collaborating. At that point, they weren’t interested in it. We reached back out.

They had a new chairman of the board recently and some new business leaders. We had constructive discussion. For us, the most important thing is that when we think about this opportunity, we think about it not through the lens of doing this at the end of the life of our franchise and trying to extend it. What we’re trying to do at the beginning of the life of our franchise is create an oxybate portfolio, an oxybate portfolio where we believe the oxybate category is moving to extended release and once at bedtime because clinicians and patients are seeing the benefits of consistently night after night getting a full therapeutic dose and how that translates to how they’re doing from that standpoint.

We believe Bexil Oxybate expands and offers our portfolio to potentially in the future be an oxybate portfolio of choice in a very efficient, high probability of success use of capital, an efficient clinical program, and an efficient regulatory strategy that we think gives an opportunity for us to offer something else to more patients to build on the foundation we’re building as we head towards continuing to advance our business.

Ben Burnett, Biotech Analyst, Wells Fargo: I think that’s great. I think that asset we were looking at has some data from XW Pharma from a few years ago. I guess the question would be, what did you see in that data that gave you the confidence? When you mentioned that Avadel was doing some diligence internally, what were you guys looking forward to kind of get comfortable to move on?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: There were a few things because there’s been more development work that has occurred since the 2021 readout of data. We got to see all of that. We got to see all of their exchange with the FDA on their proposed kind of regulatory strategy and how the FDA was responding to that, which gave us a lot of confidence in terms of the approach we’re contemplating here. We got to work with the molecule for the last couple of months. Some of our formulation team got to see it firsthand. They got to be involved. They got to see their process and how they do it and what they’re doing and how they’re modifying and delivering it in a once at bedtime dosing and get very confident relative to the data we’ve seen that we think it’s nearly bioequivalent to LUMRYZ now.

We can immediately move into what we’re characterizing as our initial PK work by the end of this year that will carry on into next year as a key next milestone for us. We should have insight on that as we get through Q1 of next year. That will lead us to what we would view as our final formulation, that we will then take two different paths. One is to engage with the FDA to get alignment around our pivotal registration PK approach, as well as beginning the work to manufacture registration or sellable commercial product that we then put up on stability for 12 months. During that 12-month period, we will execute our pivotal registration approach at trial.

That should lead us in a position to potentially be filing for an NDA submission 12 months after that, a little after 12 months after that product comes off of the 12-month stability test in 2027.

Ben Burnett, Biotech Analyst, Wells Fargo: OK. You have obviously a lot of experience working with the FDA through LUMRYZ, both the initial indication, pediatric indication. I guess what gives you the confidence that the FDA will support kind of this path that you just outlined?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: There is a lot of precedent for it in other therapeutic areas and other products. The most important thing is what has been the exchange between our partners at Xywav and the FDA to date, right? Ultimately, we have to go to the FDA and get alignment on what that looks like from a registration PK trial standpoint. There is a lot of historical precedent for it and a good detail in terms of what Xywav dialogued with the FDA on.

Ben Burnett, Biotech Analyst, Wells Fargo: OK. The PK work, so the PK work you’re doing now to kind of get to this next point where you sort of get the confidence to then go to the FDA, these are in patients, have you said?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: These are being healthy volunteers.

Ben Burnett, Biotech Analyst, Wells Fargo: Have you said what the scope of that’s going to be?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: We haven’t described what that protocol looks like at this point, other than that between now and when we start later this year, we’ve got to manufacture clinical supply, right? The whole process to do that happens first, and then we initiate our protocols for our initial PK work. Because of the holiday period, that will carry you over into Q1, and we should have a clear pathway on our final formulation at that point.

Ben Burnett, Biotech Analyst, Wells Fargo: OK, great. Do you envision going into narcolepsy first, followed by idiopathic hypersomnia, or maybe both at the same time?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, it will all be dependent upon what approvals LUMRYZ has at the time when Bexil Oxybate receives its approval. If it’s narcolepsy in adults and peds, if it’s that plus IH, we would expect currently in our current thoughts and plans that all of those indications would transfer into Bexil Oxybate.

Ben Burnett, Biotech Analyst, Wells Fargo: OK, great. I guess just one last question for me. I think you had a sort of an inflection point in terms of profitability in the last quarter. Now with kind of this new R&D project, I guess how much cash do you believe that you have on hand? I guess through what catalysts is the business funded through?

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Yeah, so with respect to Bexil Oxybate, as we’re referring to, yeah, so with the cash we have on hand and our expectations for cash flow being generated from LUMRYZ, we’ll fund everything off of the balance sheet. It’s one of the nice things about this asset for Avadel.

Ben Burnett, Biotech Analyst, Wells Fargo: OK, great. Any other questions? Guys, thank you so much.

Gregory J. Divis, CEO, Avadel Pharmaceuticals: Appreciate it, Ben. Thank you.

Susan Rodriguez, COO, Avadel Pharmaceuticals: Yeah, right on time. Very good job.

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