Avadel Pharmaceuticals Plc Q4 FY2023 earnings call

• 2023 was a monumental year with final FDA approval of LUMRYZ, enabling launch within a month of approval. - As of January 31, 2024, there were over 2,200 patient enrollments to RYZUP and over 1,200 patients who had initiated LUMRYZ therapy. - Approximately 1,900 HCPs were REM certified by January 31. - Secured all three GPO contracts and had coverage policies with over 80% of commercially covered lives. - 2023 GAAP operating expenses were $165 million, with cash operating expenses for full year 2023 approximately $145 million excluding certain non-cash items. - Balance sheet had $105 million in cash, cash equivalents, and marketable securities as of December 31, 2023.

The key product segment is LUMRYZ. In the fourth quarter of 2023, LUMRYZ generated $19.5 million in net revenue. For the seven months ended December 31, 2023, LUMRYZ revenue was $28 million. Revenue contribution is primarily from LUMRYZ as it's the main product launched.

• During 2024, cash operating expenses before consideration of cash receipts from sales of LUMRYZ are expected to be in the range of $40 million to $45 million per quarter. - Believes operating breakeven can be achieved during 2024 when there are approximately 1,300 to 1,500 commercially reimbursed patients on therapy. - Currently comfortable with the sell-side consensus of approximately $155 million for full year 2024 revenue, with potential for higher if actual results outperform assumptions.

• Ongoing patent trial in Delaware; Avadel won't provide commentary on the trial, underlying dispute, or pending decision during the call and will update when the trial concludes.

Q: Francois Brisebois asked about granularity on top 500 prescribers prescribing LUMRYZ and reimbursement impact.

A: Richard Kim responded that over 70% of top 500 prescribers are repeat writers, and reimbursement matters as patients covered and meeting prior auth criteria get product in hand quicker.

Q: Ami Fadia asked about Anthem and United Healthcare coverage percentage and growth drivers.

A: Richard Kim said Anthem and United Healthcare are significant, covering about 30% and similar for MSR lives respectively, and growth drivers include HCP speaker programs and patient brand ambassador program.

Q: Andrew Tsai asked about conversion rates, discontinuation rates, and when the Street should consider change in slope.

A: Richard Kim said discontinuation rates are below historical twice nightly benchmark, and Greg Divis mentioned a large oxybate market opportunity with no flattening of slope seen yet.

Q: David Amsellem asked about pediatric market capture and IH opportunity.

A: Gregory Divis talked about pediatric patients having a smaller but significant market and IH having over 30,000 uniquely diagnosed patients with significant opportunity.

Q: Ashwani Verma asked about switch patients from Xyrem vs Xywav and off-label use.

A: Richard Kim said more switch patients from Xywav, and no promotion of off-label use but seen requests for it.

Q: Myriam Belghiti asked about patient type in RYZUP and KOL led speaker program.

A: Richard Kim said RYZUP process is similar across patient types, and KOL led speaker program involves trained experts doing speaker programs for peer-to-peer education.

Q: Chase Knickerbocker asked about patients in RYZUP program for longer.

A: Richard Kim said some patients in RYZUP for longer due to prior auth or coverage issues, but team is tenacious in getting them on therapy.

Q: RudyLi asked about oxy market expansion and IH opportunity.

A: Richard Kim said oxy market could expand with new patient starts, and IH has significant opportunity with few approved drugs.

Q: Matt Kaplan asked about low sodium formulation and IH study timeline.

A: Richard Kim and Gregory Divis talked about low sodium formulation being for patients with sensitivities, and IH study to be initiated in second half of 2023.

Q: Oren Livnat asked about patent trial, market growth, and net pricing.

A: Gregory Divis said won't comment on patent trial, Richard Kim talked about market growth with new prescribers, and Thomas McHugh mentioned $120,000 net revenue per patient per year goal.