Avadel Pharmaceuticals plc (AVDL) Earnings Call Transcript & Summary

Understood. Okay. I'm glad to see Richard Kim, who recently -- who joined you as Chief Commercial Officer. Welcome.

Hi.

I wanted to -- there was a question from one of the investors here. So they wanted to know if you've had time to review in-depth marketing reports on FT218 as you did your due diligence. And what's your opinion and on the market potential of FT218?

It's an excellent question that Richard will -- we'll certainly love to have Richard answer. Just maybe a couple of comments, right, I just want to share, right? The prospects of where we are as a company really creates an opportunity to track the type of experience and leadership that Richard brings, right? His impact in just a short amount of time has been incredibly positive. And the talent that him coming along to us has created who want to join us as well is really, really high. So we're excited about the prospects of Richard and some of the new team members we're bringing on. And I'll certainly let him speak to his assessment of the market potential of FT218.

Hey. Thanks, Ami, and Greg. It's really great to be here with everyone today. And Greg, yes, really to that point, and Ami, I came to Avadel because I absolutely see the potential of what FT218 can bring as a real game-changing therapy for patients who are living with narcolepsy. And obviously, I love the team already. I've known several members before I joined last week as well. And I'm joining at a time, as Greg said, that's really important as we really think about all the major milestones around completing REST-ON, the application hopefully very soon, the -- receiving confirmation of our application. But to your very point, yes, I did a lot of due diligence before I came here. And in fact, Greg was gracious enough under [ CD8 ] to allow me to review a lot of the materials to come. And what I can say is, I've been thoroughly impressed by the foundational work, the market research, the insights, the plans. To be very candid, it's actually better and deeper than I thought it was going to be. And I think it really gives us a great springboard to move forward from. So I have the pleasure of actually having built something up in my previous lives as well. And I can say I feel really good about joining here. And I will also sort of say I did ask Greg to speak to our Jerad from our legal group to really understand our position around impediment to our marketplace. That was the last important conversation I had to have to sort of say, yes, I'm all in. And I really believe what we can do is transformative because, Ami, for me, there's very few times I can come at this point to a company where we can grow and maybe help a lot of patients suffering from narcolepsy. And also, my humble opinion is we absolutely have the best-in-class treatment in oxybates in what's really an almost multibillion-dollar market. So I'm really thrilled to be here.

Great. Maybe a question with -- in reference to what's happening in the market right now. Jazz has launched Xywav, and yesterday they reported that about 12% of patients on sodium oxybates are on Xywav. How do you think about your strategy to position the product a year from now or less than a year from now? If more and more patients get switched on to a low-sodium product, how do you think about navigating that landscape when you come to market? And what is it that you need to do over the next couple of months to prepare for a successful launch?

Yes. Great question. And maybe, Richard, if you want to make a few remarks in terms of kind of your commentary on what you've seen so far and the work we've done to date on this, and then I'm happy to add in some more context.

Yes. Thanks, Greg. And I'd say, Ami, 2 things really struck me about this marketplace before I joined. The first is really understanding that the standard of care in the oxybate marketplace today, a treatment that's supposed to help patients get restorative sleep to really help them address their EDS and cataplexy, is given twice a night. You take your second dose 2.5 to 4 hours later to really get your full therapeutic dose. And I have to say that one really just surprised the heck out of me as I was doing my research. Now the second one is really to your point, is that after being on the marketplace for almost 20 years with Xyrem, that it's really only upon the time of introducing a mixed-salt therapy that sodium is now a potential issue. So to me, it just seemed a little bit unusual that it really hadn't been an issue until probably last year. The good news is, we've done a ton of research really looking at assessing patients, assessing the attributes that are needed and wanted for a treatment of them. And the single most important attributes from both physicians and patients is really around having a once-nightly option as well. Now these insights have been compiled over the last several months with over 200 treating physicians, over 200 narcoleptic patients, caregivers, office staff and insurers as well. And our research does take into account new options like mixed salts being in the marketplace as well. So at this point in time, we know there are dynamics going in the marketplace, but I can say I'm really pleased to hear this initial feedback because even though we haven't really fully ramped up our messaging, our publications are coming as well, there's a really strong belief around what a once-nightly therapy would do to transform patients' treatment. So Greg, maybe you could add a little bit more on to that as well.

Yes. Again, I think that we certainly are aware of the dynamics that are emerging in the marketplace, and we've got to think about what it looks like 12 months from now or whatever that may be. And part of that is obviously doing a lot more market awareness of FT218 and educating the scientific community about the potential benefits of what a once-nightly product could be and most notably just around our data, right, and building awareness around our data. Because the one thing we know, when patients and physicians see our product profile, there's no -- it's clear they prefer our formulation. And we're not -- we're talking to hundreds of physicians, not single or 2 or 3 docs here or there. But I think relative to the sodium matter, right, what we've tried to do is really think about it much more from an evidence-based standpoint, right? We certainly understand that there are patients who have comorbidity issues who can benefit from ultimate therapy options from that standpoint. It's one of the reasons why a once-nightly is such an attractive option for patients who would rather have a once-nightly. But when you think about the sodium matter, right, we wanted to talk -- we wanted to look at it from an evidence standpoint. We wanted to see what the data told us. We wanted to see what the data of the twice-nightly product told us with regards to the risk of really cardiovascular risk as a result of taking sodium oxybate. And that's why we supported extensive research that was done by 2 sleep experts, drs. Avidan and Kushida, out in California who were supported by an expert in salt and cardiovascular risk. Dr. [ Alderman ] from New York. They did an extensive peer-reviewed analysis of publications, really assessing both hypertension and cardiovascular-related risk of sodium oxybate-treated patients but also sodium intake and cardiovascular risk overall, right? And when -- and really, to no surprise, their conclusion was that sodium content and sodium oxybate, based upon the data of the twice-nightly product, did not create additional CV risk for narcolepsy. This is not our data. This is the twice-nightly product state, right, from that standpoint. And over -- nearly 2 decades of use, the CV risk profile is very well demonstrated and very well safe relative to -- for narcolepsy patients relative to the general patient population overall. So for us, it comes down to the evidence and the data and what the data tells us, right? And it's just not this research that we're talking about that was published late last year. The European Society of Cardiology has recently come out talking about sodium intake risk overall and recently have come to similar positions about where really risk lies relative to sodium intake overall. And that was supported by a number of cardiologists from U.S. institutions. So I think broadly speaking from our viewpoint, right, the data that assesses the twice-nightly product, it doesn't support large market-wide need for mixed salts formulation, but it -- and it's still a twice-nightly product, and ours is a once-nightly product that, clearly from our research, would tell us that's where patients certainly prefer for sure. There will always be a cohort of patients who can benefit from other formulations. That's why we believe having options like once-nightly FT218 available, that can really help a larger segment of the market that are having to -- for the last 2 decades or so, tolerate the middle-of-the-night dosing or for those who have decided not to seek oxybate treatment because of the challenges associated with the middle-of-the-night dosing. All of those, I think, bode extremely well for us to be able to enter the market and have a meaningful impact on patients and have a meaningful product in the marketplace.

Sounds good. Can you talk about how you're going to pursue an orphan drug exclusivity designation? And do you expect that to be granted? I know that, that decision comes much later post approval. But how do we think about that? And what data points have you collected through the trials and then potentially even the switch study that's ongoing to support that?

Yes. So the original Orphan Drug Designation was granted on the, if you will, the plausible hypothesis that FT218 may be safer than the currently available products really due to ramifications associated with the twice-nightly dosing regimen and the middle-of-the-night dosing, right? So we have -- in our NDA submission from December, we have to provide all of the supportive evidence as the basis of why we should be granted that orphan drug exclusivity, right? So we have a compilation of research and data. We've generated what we would say clearly are, particularly in the case of not only identifying the magnitude of the problems and the risks associated with the middle-of-the-night dosing, which isn't -- there's been no incentive for anybody to talk about up until this point in time, but also the clinical benefits of why we believe FT218 has the ability to potentially be a superior product from a safety standpoint over the twice-nightly products. So that is the basis of our submission. And what -- we won't talk about the data because it's part of our submission and it's proprietary at this point in time. And it's not likely to make sense for us to really get ahead of the FDA and talk about it. But from that standpoint, we're -- we've submitted a very robust rationale. We look forward to the agency engaging on it, which we understand will likely come sometime post approval from that perspective. But when you combine that with both that and the intellectual property portfolio we're developing, we believe we're going to have very adequate market protections through at least mid-2037, possibly out to 2040, but will really allow us to maximize the true value of once-nightly FT218 not only for patients but also for our shareholders, of course.

I know we are coming up to the end of the time, and I want to ask a question that was asked by one of the investors here. "What are your plans for leveraging a technology platform for additional drug development? And also, if you could talk about exploring idiopathic hypersomnia indication with FT218."

Yes. Again, the company was founded on that technology platform. We have the global rights. We have all the know-how. We built the right sort of team around it with a lot of experience that can capitalize on both improving the technology and potentially considering in other areas. As we think about kind of the next -- no, the lens for our success and one of the reasons why we've made such great progress and the team has in the last 2 years is our ability to stay very focused on the opportunity at hand to really write and get 218 moving in the right direction. As that begins to prostitute to the NDA and we get to that potential commercial launch and everything else, the what's next question becomes important. And we've done a lot of work in planning and preparing for that. And we'll pull the trigger as we go forward at the right time. But I would think of it in kind of 3 steps, right? The first kind of leg of the stool is things that you mentioned, like where are the opportunities to have a pipeline within the product, right? Is there life cycle management opportunities in other indications? We certainly get asked about idiopathic hypersomnia. We've done some research on that for sure. We're looking at other areas as well that we'll talk about when and if it's appropriate. There's also alternate formulation strategies that our technology can potentially afford as well. All of that -- and others. All of that, I would say, are kind of Tier 1 in terms of what's next, really leveraging the infrastructure and the capabilities we've built. Kind of another leg of the stool clearly is our technology platform from that standpoint, but it's really important that the first lens we look at that through is, is there opportunities within sleep to leverage that? Or do we have to go to an adjacency, right? Leveraging it in sleep and building that portfolio is our priority, which may take us to the third leg of the stool in the future, if necessary, and that would be other opportunities to bring synergistic products. But rest assured that we've done extensive work in the preparation aspects and the evaluation of where we go next within this product -- this pipeline and the product concept. And there'll be more details on that in the future while we remain very laser focused on seeing the success around FT218, both NDA prosecution, if you will, and of course, our commercial prep and all of the externalization of our data.

Okay. I think we have just about a minute. Maybe a quick question. Would you consider a potential licensing of partnership deal on FT218?

An excellent question, another one we get all the time. And I think we've been -- we've tried to be very clear, I think, publicly on this as well, is that most importantly, the lens at which we look through creating value for our shareholders through FT218 is just that. It's what is in the best interest of our shareholders to maximize the value of FT218 to bring -- and if there is an opportunity to bring it to market faster through a better resource organization that we can add value to, that can create more value faster and maybe potentially derisk for our shareholders, we'll have to seriously consider that. We have a duty to consider that. But we can't rely on that as the sole strategy or the sole option. We have to be fully prepared. There's a lot of stories or examples of companies who thought that would happen and then they find themselves an improved drug and no plans. That's not who we are. We've prepared ourselves to be maximize full optionality, and we believe that between the opportunity to switch patients, the opportunity to expand the market, to create a very valuable and be a market leader in this space for a company today that has a $500 million market cap that we're now prosecuting through the NDA, we're very bullish about those prospects, and we certainly want to make sure our shareholders are rewarded appropriately for that.

All right. Very good. We are out of time, but this was a great discussion. I enjoyed it. Thank you so much and hope you have a great rest of the day.

Thank you, Ami. Yes, thank you again for the opportunity to participate.

Thank you. Thanks, everyone.