Avadel Pharmaceuticals Plc Q1 FY2024 earnings call

• LUMRYZ launch progress: Over 2,800 patients enrolled in RYZUP and over 1,700 initiated therapy since launch. Early uptake among patients and physicians shows strong progress in the narcolepsy treatment landscape.
• Expansion opportunities: Progress in expanding into idiopathic hypersomnia and pediatric narcolepsy. Supplemental new drug application for pediatric narcolepsy accepted by FDA with a target action date of September 7. Progress on pivotal Phase III trial for IH in the second half of 2024 and preclinical development of low-sodium oxybate formulation.
• Commercial progress: Over 2,100 HCPs completed REMS certification, payer coverage with 3 largest PBM-owned GPOs and Prime Therapeutics, and improved reimbursement process with over 700 new starts in Q1.

In the first quarter of 2024, Avadel Pharmaceuticals generated $27.2 million in net revenue. The key product segment is LUMRYZ. Since the launch of LUMRYZ, over 2,800 patients have enrolled in the RYZUP Patient Support Services program and over 1,700 patients have initiated LUMRYZ therapy.

• Recurring quarterly cash operating expenses expected to be in the range of $40 million to $45 million for the remainder of 2024.
• Comfort with current consensus of approximately $162 million for full-year 2024 revenue, with potential for higher revenue if reimbursed patients and net pricing outperform assumptions.
• Aim to achieve breakeven when there are approximately 1,300 to 1,500 commercially reimbursed patients during 2024.

• Litigation: APA hearing scheduled for May 31 in the D.C. Federal Court and a Delaware Patent Litigation hearing on June 4.

Q: Congrats on the progress and the slope of the curve and such. My question is around the patient additions in treated patients this quarter, seemingly grew faster than the actual sales number. So can you help us reconcile the reported sales number? Was it driven more by onetime headwinds like higher gross to net or maybe even free drug use? Or was it more driven by 'permanent patient discontinuation rates increasing?' A: Yes. So I think overall, to your point, we're very pleased with our early launch metrics, having another 900 patient adds in to RYZUP in 700 patient initiations. At this stage of the launch, the most important thing we really focused in on is getting patients on therapy, a, for that patient experience and b, to get ACP offices used to prescribing and hearing those patient experiences as well. So that's really been our focus. To your point, there are some headwinds that we experienced as an industry in Q1 with higher deductibles and other things that impact our co-pay. So we expect those to have settled down. And maybe one last comment on your discontinuation rates. We're pleased with our early discontinuation rates that we see. They are numerically lower than what we see historically with the price net lease.

Q: So I was just wondering, in terms of RYZUP, that metric, do you ever see -- I know it just for to know exactly how quickly patients move from RYZUP to on therapy. But are there cases where they just -- they do not. They enter RYZUP and they never get the therapy? If so, what would be the reasons for that?

A: Yes, sure. I'll take that, Greg. Yes. So great question, Frank. Yes, as far as RYZUP is concerned and I would say any new therapy that comes to marketplace. There are patients who 'abandoned the process along so that they do not ever get to initiate therapy'. That embedment rate for us is very low and has stayed relatively consistently low throughout our entire launch. So we've seen very good sticktoitiveness. And Frank, it's the same reasons for almost any product. Sometimes the patients lose interest, it could be insurance, it could be something else has come up in their life. We don't really get all out all of those details. But once again, our abandonment rate has been relatively low for patients entering RYZUP.

Q: Congrats on the quarterly results. Given your success in terms of adding prior Xywav patients to LUMRYZ, how important is it to have a low sodium offering in the market. And I guess second part of that question is how difficult will it be to create a low sodium bioequivalent LUMRYZ?

A: Yes. I think our view has been very consistent on this topic from the beginning, which is that we think all patients should have the opportunity to have an uninterrupted night sleep. And for the subset of patients who are at risk for sodium, if we have the ability to formulate and develop and bring that opportunity, to the marketplace, then we're certainly going to do the work to try to accomplish that. So from our perspective, it isn't a requirement to have a successful once-nightly LUMRYZ franchise because we do believe that data on sodium speaks for itself. That being said, we certainly know there's patients out there who could benefit from both a lower sodium version and once-at-bedtime LUMRYZ. So therefore, we're doing the work. In terms of the difficulty of it, it's a formulation challenge in and of itself, given how the active moiety performs in this sort of situation, but we certainly have our best and brightest working with our third-party partners on this, and we look forward to giving you an update later this year.