Avadel Pharmaceuticals plc (Nasdaq: AVDL), a biopharmaceutical
company focused on transforming medicines to transform lives, today
provided a corporate update and announced its financial results for
the second quarter ended June 30, 2023.
“This past quarter has been transformative for our organization,
underscored by U.S. FDA approval of LUMRYZ, the first and only
once-at-bedtime oxybate therapy for the treatment of cataplexy or
EDS in adults with narcolepsy, and subsequent U.S. commercial
launch. We are pleased to have completed our first patient
enrollments and commercial sales of LUMRYZ within weeks of
receiving FDA approval,” said Greg Divis, Chief Executive Officer
of Avadel Pharmaceuticals. “We are also encouraged with the high
level of interest from sleep specialists and the initial demand
observed across all patient segments. We believe the promising
initial launch results we are seeing, combined with our strong
commercial capabilities and robust market research, positions us to
command a meaningful share of the estimated greater than fifty
thousand patients who are eligible for LUMRYZ. In addition to
continuing our commercialization efforts, we are focused on
expanding the potential of LUMRYZ, with a supplemental NDA filing
planned in the second half of 2023 for LUMRYZ in the pediatric
narcolepsy population. The fundamentals of our business are strong,
and we are poised for long-term growth and value creation, with
potential expansion opportunities and a robust cash position to
support our mission.”
Second Quarter and Recent Company
Highlights
LUMRYZ Commercial Updates:
- During the first two months of the U.S. commercial launch of
LUMRYZ:
- Initiated sales of LUMRYZ to the specialty pharmacies in the
Company’s distribution network.
- Greater than 1,000 health care providers have completed the
LUMRYZ REMS certification process, which enables them to prescribe
LUMRYZ to patients.
- Greater than 400 patients have enrolled in Avadel’s RYZUP™
patient support services to begin the process of getting LUMRYZ
prescriptions fulfilled and shipped.
- Secured Express Scripts (ESI) coverage on the National
Preferred Formulary, effective July 1.
Clinical Updates:
- With final approval on May 1, the FDA also found LUMRYZ to be
clinically superior to currently marketed twice-nightly oxybate
products and granted LUMRYZ seven years of Orphan Drug Exclusivity.
- In particular, FDA found that LUMRYZ makes a major contribution
to patient care over currently available, twice-nightly oxybate
products by providing a once-nightly dosing regimen that does not
disrupt or fragment sleep, whereas twice-nightly oxybates
necessitate a nocturnal awakening to take a second dose, which
disrupts sleep architecture in patients with known sleep disorders.
The seven-year market exclusivity for LUMRYZ began on the date of
FDA approval, May 1, 2023.
- In June, announced publication of data describing clinician
preferences among oxybate treatments for patients with narcolepsy.
- The discrete choice experiment indicated that among sleep
clinicians, the frequency of oxybate treatment dosing was the most
important driver for overall product choice, improved patient
quality of life, and reduced patient anxiety and stress.
- Once-nightly dosing was preferred over twice-nightly dosing,
and these data underscore the unmet need for an oxybate treatment
that does not require middle-of-the-night dosing.
- In May, announced new data supporting the clinical profile for
LUMRYZ at SLEEP 2023, the 37th annual joint meeting of the American
Academy of Sleep Medicine and the Sleep Research Society.
- With 12 posters presented, including 6 oral presentations, the
Company highlighted its leadership in the narcolepsy space, and the
data adds to the growing body of evidence demonstrating positive
clinical benefit and patient preference of once-at-bedtime
LUMRYZ.
- In June, for the third year in a row, Avadel was the lead
sponsor of the Academy of Sleep Medicine Foundation’s 2023 Young
Investigators Research Forum.
- In May, post-hoc analysis of Phase 3 REST-ON Trial of LUMRYZ
(sodium oxybate) published in SLEEP. The paper, titled “Efficacy of
Once-Nightly Sodium Oxybate (FT218) in Narcolepsy Type 1 and Type
2: Post Hoc Analysis From the Phase 3 REST-ON Trial,” can be
accessed here. By stratifying NT1 and NT2 at baseline in the
study design, the REST-ON data provides insight that LUMRYZ
improves excessive daytime sleepiness and disrupted nighttime sleep
in either narcolepsy type.
Upcoming Milestones:
- On track to submit sNDA for LUMRYZ in pediatric narcolepsy
population for treatment of cataplexy or excessive daytime
sleepiness (EDS) in the second half of 2023.
Overview of Second Quarter Results
Recognized $1.5 million in net product revenues for the second
quarter 2023. Net product revenue consists of LUMRYZ product sales,
which was launched in the U.S. on June 5, 2023.
R&D expenses were $4.2 million in the quarter ended June 30,
2023, compared to $4.5 million for the same period in 2022. R&D
expense in the current period includes $1.5 million of commercial
inventory that was purchased prior to FDA approval of LUMRYZ.
Commercial inventory purchased subsequent to FDA approval will be
capitalized and expensed through cost of product sales as LUMRYZ is
sold.
SG&A expenses were $46.8 million in the quarter ended June
30, 2023, compared to $21.8 million for the same period in 2022.
This increase was driven by higher costs for legal fees of $6.9
million, marketing and market research activities of $5.5 million,
commercial launch activities of $2.6 million and compensation costs
of $3.0 million. Selling, general, and administrative expense in
the quarter ended June 30, 2023, also includes a $7.8 million
cumulative adjustment for certain compensation awards tied to the
achievement of performance conditions.
Net loss for the quarter ended June 30, 2023, was $64.4 million,
or ($0.83) per diluted share, compared to net loss of $63.4
million, or ($1.07) per diluted share, for the same period in
2022.
Cash, cash equivalents and marketable securities were $160.5
million as of June 30, 2023. In May 2023, the Company exercised its
option to exchange $106.3 million in senior convertible notes due
2027 for approximately 12.3 million American Depositary Shares and
cash payment of $1.5 million for accrued interest. The Company has
$21.2 million of convertible notes remaining, which will mature in
October 2023.
About
LUMRYZ™ (sodium oxybate) for
extended-release oral suspension
LUMRYZ, is an extended-release sodium
oxybate medication approved by the FDA on May 1, 2023, as the first
and only once-at-bedtime treatment for cataplexy or excessive
daytime sleepiness (EDS) in adults with narcolepsy. The FDA
approval of LUMRYZ was supported by results from REST-ON, a
randomized, double-blind, placebo-controlled, pivotal Phase 3 trial
in adults with narcolepsy. LUMRYZ demonstrated statistically
significant and clinically meaningful improvements in the three
co-primary endpoints: EDS, clinicians’ overall assessment of
patients’ functioning (CGI-I) and cataplexy attacks, for all three
evaluated doses when compared to placebo. With its approval,
the FDA also granted seven years of Orphan Drug Exclusivity to
LUMRYZ for the treatment of cataplexy or EDS in adults with
narcolepsy due to a finding of clinical superiority of LUMRYZ
relative to currently available oxybate treatments. In particular,
the FDA found that LUMRYZ makes a major contribution to patient
care over currently available, twice-nightly oxybate products by
providing a once-nightly dosing regimen that avoids nocturnal
arousal to take a second dose.
About Avadel Pharmaceuticals
plc
Avadel Pharmaceuticals plc (Nasdaq:
AVDL) is a biopharmaceutical company focused on transforming
medicines to transform lives. Our approach includes applying
innovative solutions to the development of medications that address
the challenges patients face with current treatment options.
Avadel’s commercial product, LUMRYZ, was approved by the U.S. Food
& Drug Administration (FDA) as the first and only
once-at-bedtime oxybate for the treatment of cataplexy or excessive
daytime sleepiness (EDS) in adults with narcolepsy. For more
information, please visit www.avadel.com.
IMPORTANT SAFETY INFORMATION
WARNING: Taking LUMRYZ™ (sodium oxybate) with other central
nervous system (CNS) depressants, such as medicines used to make
you fall asleep, including opioid analgesics, benzodiazepines,
sedating antidepressants, antipsychotics, sedating anti-epileptic
medicines, general anesthetics, muscle relaxants, alcohol or street
drugs, may cause serious medical problems, including trouble
breathing (respiratory depression), low blood pressure
(hypotension), changes in alertness (drowsiness), fainting
(syncope) and death.The active ingredient of
LUMRYZ (sodium oxybate) is a form of gamma hydroxybutyrate (GHB), a
controlled substance. Abuse or misuse of illegal GHB alone or with
other CNS depressants (drugs that cause changes in alertness or
consciousness) have caused serious side effects. These effects
include seizures, trouble breathing (respiratory depression),
changes in alertness (drowsiness), coma and death. Call your doctor
right away if you have any of these serious side
effects.Because of these risks, LUMRYZ is
available only by prescription and filled through certified
pharmacies in the LUMRYZ REMS. You must be enrolled in the LUMRYZ
REMS to receive LUMRYZ. Further information is available
at www.LUMRYZREMS.com or by
calling 1-877-453-1029. |
INDICATIONSLUMRYZ (sodium oxybate) for
extended-release oral suspension is a prescription medicine used to
treat the following symptoms in adults with narcolepsy:
- sudden onset of weak or paralyzed muscles (cataplexy)
- excessive daytime sleepiness (EDS)
It is not known if LUMRYZ is safe and effective in people less
than 18 years of age.
Do not take LUMRYZ if you take other sleep
medicines or sedatives (medicines that cause sleepiness), drink
alcohol or have a rare problem called succinic semialdehyde
dehydrogenase deficiency.
Keep LUMRYZ in a safe place to prevent abuse and misuse. Selling
or giving away LUMRYZ may harm others and is against the law. Tell
your doctor if you have ever abused or been dependent on alcohol,
prescription medicines or street drugs.
Anyone who takes LUMRYZ should not do anything that requires
them to be fully awake or is dangerous, including driving a car,
using heavy machinery or flying an airplane, for at least six (6)
hours after taking LUMRYZ. Those activities should not be done
until you know how LUMRYZ affects you.
Falling asleep quickly, including while standing or while
getting up from the bed, has led to falls with injuries that have
required some people to be hospitalized.
LUMRYZ can cause serious side effects, including the
following:
- Breathing problems, including slower
breathing, trouble breathing and/or short periods of not breathing
while sleeping (e.g., sleep apnea). People who already have
breathing or lung problems have a higher chance of having breathing
problems when they take LUMRYZ.
- Mental health problems,
including confusion, seeing or hearing things that are not
real (hallucinations), unusual or disturbing thoughts (abnormal
thinking), feeling anxious or upset, depression, thoughts of
killing yourself or trying to kill yourself, increased tiredness,
feelings of guilt or worthlessness and difficulty concentrating.
Tell your doctor if you have or had depression or have tried to
harm yourself. Call your doctor right away if you have
symptoms of mental health problems or a change in weight or
appetite.
- Sleepwalking. Sleepwalking can cause
injuries. Call your doctor if you start sleepwalking.
Tell your doctor if you are on a salt-restricted diet or if you
have high blood pressure, heart failure or kidney problems. LUMRYZ
contains a lot of sodium (salt) and may not be right for you.
The most common side effects of LUMRYZ in adults include nausea,
dizziness, bedwetting, headache and vomiting. Your side effects may
increase when you take higher doses of LUMRYZ. LUMRYZ can cause
physical dependence and craving for the medicine when it is not
taken as directed. These are not all the possible side effects of
LUMRYZ.
For more information, ask your doctor or pharmacist.
Call your doctor for medical advice about side
effects.
You are encouraged to report negative side effects of
prescription drugs to the FDA. Visit www.fda.gov/medwatch, or
call 1-800-FDA-1088.
Please see full Prescribing
Information, including BOXED Warning.
Cautionary Disclosure Regarding Forward-Looking
StatementsThis press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements relate to our future expectations,
beliefs, plans, strategies, objectives, results, conditions,
financial performance, prospects or other events. Such
forward-looking statements include, but are not limited to,
expectations regarding the potential therapeutic benefit of LUMRYZ;
the Orphan Drug Exclusivity for LUMRYZ and potential benefits
resulting from such designation; the success of the
commercialization for LUMRYZ; expectations regarding the potential
market impact of LUMRYZ; the anticipated market availability and
sales opportunity of LUMRYZ; the potential expansion of LUMRYZ into
the pediatric narcolepsy population and expected timing thereof;
the Company’s anticipated financial condition, expenses, uses of
capital and other future financial results. In some cases,
forward-looking statements can be identified by the use of words
such as “will,” “may,” “could,” “believe,” “expect,” “look
forward,” “on track,” “guidance,” “anticipate,” “estimate,”
“project,” “next steps” and similar expressions and the negatives
thereof (if applicable).
The Company’s forward-looking
statements are based on estimates and assumptions that are made
within the bounds of our knowledge of our business and operations
and that we consider reasonable. However, the Company’s business
and operations are subject to significant risks, and, as a result,
there can be no assurance that actual results and the results of
the company’s business and operations will not differ materially
from the results contemplated in such forward-looking statements.
Factors that could cause actual results to differ from expectations
in the Company’s forward-looking statements include the risks and
uncertainties described in the “Risk Factors” section of Part I,
Item 1A of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2022, which was filed with the Securities and
Exchange Commission (SEC) on March 29, 2023, and subsequent SEC
filings.
Forward-looking statements speak only
as of the date they are made and are not guarantees of future
performance. Accordingly, you should not place undue reliance on
forward-looking statements. The Company does not undertake any
obligation to publicly update or revise our forward-looking
statements, except as required by law.
Investor Contact:Courtney TurianoStern Investor
Relations, Inc.Courtney.Turiano@sternir.com (212) 698-8687
Media Contact:Lesley StanleyReal
Chemistrylestanley@realchemistry.com(609) 273-3162
AVADEL PHARMACEUTICALS PLC |
CONDENSED CONSOLIDATED STATEMENTS OF LOSS |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net product revenue |
|
$ |
1,496 |
|
|
$ |
— |
|
|
$ |
1,496 |
|
|
$ |
— |
|
Cost of products sold |
|
|
36 |
|
|
|
— |
|
|
|
36 |
|
|
|
— |
|
Gross profit |
|
|
1,460 |
|
|
|
— |
|
|
|
1,460 |
|
|
|
— |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development expenses |
|
|
4,223 |
|
|
|
4,541 |
|
|
|
8,053 |
|
|
|
11,532 |
|
Selling, general and administrative expenses |
|
|
46,778 |
|
|
|
21,804 |
|
|
|
71,246 |
|
|
|
43,439 |
|
Restructuring expense |
|
|
— |
|
|
|
3,592 |
|
|
|
— |
|
|
|
3,592 |
|
Total operating expense |
|
|
51,001 |
|
|
|
29,937 |
|
|
|
79,299 |
|
|
|
58,563 |
|
Operating loss |
|
|
(49,541 |
) |
|
|
(29,937 |
) |
|
|
(77,839 |
) |
|
|
(58,563 |
) |
Investment and other income, net |
|
|
623 |
|
|
|
192 |
|
|
|
816 |
|
|
|
88 |
|
Interest expense |
|
|
(2,295 |
) |
|
|
(3,506 |
) |
|
|
(5,554 |
) |
|
|
(5,523 |
) |
Loss on extinguishment of debt |
|
|
(13,129 |
) |
|
|
— |
|
|
|
(13,129 |
) |
|
|
— |
|
Loss before income taxes |
|
|
(64,342 |
) |
|
|
(33,251 |
) |
|
|
(95,706 |
) |
|
|
(63,998 |
) |
Income tax provision (benefit) |
|
|
90 |
|
|
|
30,193 |
|
|
|
(490 |
) |
|
|
25,870 |
|
Net loss |
|
$ |
(64,432 |
) |
|
$ |
(63,444 |
) |
|
$ |
(95,216 |
) |
|
$ |
(89,868 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share – basic |
|
$ |
(0.83 |
) |
|
$ |
(1.07 |
) |
|
$ |
(1.35 |
) |
|
$ |
(1.52 |
) |
Net loss per share – diluted |
|
|
(0.83 |
) |
|
|
(1.07 |
) |
|
|
(1.35 |
) |
|
|
(1.52 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding - basic |
|
|
77,246 |
|
|
|
59,037 |
|
|
|
70,603 |
|
|
|
58,931 |
|
Weighted average number of shares outstanding - diluted |
|
|
77,246 |
|
|
|
59,037 |
|
|
|
70,603 |
|
|
|
58,931 |
|
AVADEL PHARMACEUTICALS PLC |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands, except per share data) |
|
|
|
June 30, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
49,985 |
|
|
$ |
73,981 |
|
Marketable securities |
|
|
110,525 |
|
|
|
22,518 |
|
Accounts receivable, net |
|
|
1,775 |
|
|
|
— |
|
Inventories |
|
|
1,439 |
|
|
|
— |
|
Research and development tax credit receivable |
|
|
974 |
|
|
|
2,248 |
|
Prepaid expenses and other current assets |
|
|
6,532 |
|
|
|
2,096 |
|
Total current assets |
|
|
171,230 |
|
|
|
100,843 |
|
Property and equipment, net |
|
|
715 |
|
|
|
839 |
|
Operating lease right-of-use assets |
|
|
1,235 |
|
|
|
1,713 |
|
Goodwill |
|
|
16,836 |
|
|
|
16,836 |
|
Research and development tax credit receivable |
|
|
420 |
|
|
|
1,232 |
|
Other non-current assets |
|
|
10,540 |
|
|
|
11,322 |
|
Total assets |
|
$ |
200,976 |
|
|
$ |
132,785 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
(DEFICIT) |
|
|
|
|
Current liabilities: |
|
|
|
|
Current portion of long-term debt |
|
$ |
20,851 |
|
|
$ |
37,668 |
|
Current portion of operating lease liability |
|
|
783 |
|
|
|
960 |
|
Accounts payable |
|
|
11,786 |
|
|
|
7,890 |
|
Accrued expenses |
|
|
17,582 |
|
|
|
7,334 |
|
Other current liabilities |
|
|
500 |
|
|
|
1,941 |
|
Total current liabilities |
|
|
51,502 |
|
|
|
55,793 |
|
Long-term debt |
|
|
— |
|
|
|
91,614 |
|
Long-term operating lease liability |
|
|
490 |
|
|
|
780 |
|
Other non-current liabilities |
|
|
5,792 |
|
|
|
5,743 |
|
Total liabilities |
|
|
57,784 |
|
|
|
153,930 |
|
|
|
|
|
|
Shareholders’ equity (deficit): |
|
|
|
|
Preferred shares, nominal value of $0.01 per share; 50,000 shares
authorized; 5,194 issued and outstanding at June 30, 2023 and
488 issued and outstanding at December 31, 2022 |
|
|
52 |
|
|
|
5 |
|
Ordinary shares, nominal value of $0.01 per share; 500,000 shares
authorized; 89,321 issued and outstanding at June 30, 2023 and
62,878 issued and outstanding at December 31, 2022 |
|
|
893 |
|
|
|
628 |
|
Additional paid-in capital |
|
|
848,626 |
|
|
|
589,783 |
|
Accumulated deficit |
|
|
(680,436 |
) |
|
|
(585,220 |
) |
Accumulated other comprehensive loss |
|
|
(25,943 |
) |
|
|
(26,341 |
) |
Total shareholders’ equity (deficit) |
|
|
143,192 |
|
|
|
(21,145 |
) |
Total liabilities and shareholders’ equity (deficit) |
|
$ |
200,976 |
|
|
$ |
132,785 |
|
AVADEL PHARMACEUTICALS PLC |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
(Unaudited) |
|
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net loss |
|
$ |
(95,216 |
) |
|
$ |
(89,868 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
1,189 |
|
|
|
506 |
|
Amortization of debt discount and debt issuance costs |
|
|
2,460 |
|
|
|
2,229 |
|
Changes in deferred taxes |
|
|
— |
|
|
|
25,870 |
|
Share-based compensation expense |
|
|
9,166 |
|
|
|
3,163 |
|
Loss on extinguishment of debt |
|
|
13,129 |
|
|
|
— |
|
Other adjustments |
|
|
42 |
|
|
|
1,206 |
|
Net changes in assets and liabilities |
|
|
|
|
Accounts receivable |
|
|
(1,775 |
) |
|
|
— |
|
Inventories |
|
|
(1,439 |
) |
|
|
— |
|
Prepaid expenses and other current assets |
|
|
(4,400 |
) |
|
|
13,305 |
|
Research and development tax credit receivable |
|
|
2,127 |
|
|
|
30 |
|
Accounts payable & other current liabilities |
|
|
2,470 |
|
|
|
(4,457 |
) |
Accrued expenses |
|
|
10,246 |
|
|
|
2,559 |
|
Other assets and liabilities |
|
|
(255 |
) |
|
|
(2,678 |
) |
Net cash used in operating activities |
|
|
(62,256 |
) |
|
|
(48,135 |
) |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Proceeds from sales of marketable securities |
|
|
25,618 |
|
|
|
56,501 |
|
Purchases of marketable securities |
|
|
(113,460 |
) |
|
|
(2,202 |
) |
Net cash (used in) provided by investing activities |
|
|
(87,842 |
) |
|
|
54,299 |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from April 2023 public offering, net of issuance
costs |
|
|
134,151 |
|
|
|
— |
|
Payments for February 2023 Notes |
|
|
(17,500 |
) |
|
|
— |
|
Payments for debt issuance costs |
|
|
(4,357 |
) |
|
|
(4,803 |
) |
Proceeds from issuance of shares off the at-the-market offering
program |
|
|
11,913 |
|
|
|
— |
|
Proceeds from stock option exercises and employee share purchase
plan |
|
|
1,779 |
|
|
|
2,009 |
|
Net cash provided by (used in) financing activities |
|
|
125,986 |
|
|
|
(2,794 |
) |
|
|
|
|
|
Effect of foreign currency exchange rate changes on cash and cash
equivalents |
|
|
116 |
|
|
|
50 |
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(23,996 |
) |
|
|
3,420 |
|
Cash and cash equivalents at January 1, |
|
|
73,981 |
|
|
|
50,708 |
|
Cash and cash equivalents at June 30, |
|
$ |
49,985 |
|
|
$ |
54,128 |
|
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