Avadel Pharmaceuticals plc (AVDL) Earnings Call Transcript & Summary

Hi. Good morning, everybody, and welcome to the Virtual Jefferies Healthcare Conference. Very pleased to be hosting a fireside chat with the next company, Avadel. And on behalf of the company, we have both Greg, the CEO; and of course, Richard Kim, I believe the new joiner, right?

Thank you, Chris. Appreciate the opportunity to be here and spend some time together. Thank you.

Thank you.

Absolutely. All right. So let's -- maybe let's just kind of level set here. So for those that are not totally familiar with the story, what is FT218? And what is the indication that you're trying to go after here?

Yes. Thanks. FT218 is our once-nightly sodium oxybate treatment using our proprietary drug delivery technology designed to treat and indicated for a rare orphan condition called narcolepsy and, specifically, 2 cardinal symptoms related to narcolepsy and -- excessive daytime sleepiness and cataplexy. So currently on the market today, there's a couple of agents approved for both excessive daytime sleepiness and cataplexy. Sodium oxybate has been a standard-of-care molecule for quite a bit of time for nearly 2 decades in the marketplace for these patients. And we're seeking to get approval and bring to market what we believe is substantial improvement and innovation in our delivery of our once-nightly FT218.

Okay. All right. I mean that's pretty clear There's like -- there's an incumbent on the market that's twice nightly. A lot of people have used it. And you have a dosage form that I think a lot of people would say is better, including this guy. So for the -- I guess let's quit beating around the bush here. So there's some controversy, let's say, out there or discrepancy in terms of what people believe might be possible. So I guess where are you at with your NDA submission? And then we can find out what the lawsuit with Jazz might mean about that.

Yes. So we're -- technically, we're almost 6 months, a little over 5.5 months, since we've submitted. We're over 3.5 months since the official acceptance from an NDA perspective. I would say, generally, we're very pleased with where we are to date on the NDA, the progress we've made, the types of questions both in terms of context and in quantity or, in that regard, the comments we've received to date from the agency, right? I think generally, there's not a lot we can share from a specific perspective on the NDA. But for those who aren't familiar with the story in great detail, FT218, we filed was accepted as a 505(b)(2). There's been no Paragraph IV patent certification included nor has one been requested of us at this stage of the game. So I think we're really pleased with kind of where the NDA stands at this point, knowing we still got a little less than half of the review period left. But where we are, let's call it midway through the review cycle, we're very pleased. And -- with both kind of the way the review has gone and the fact that, again, there's been no PIV patent certification request.

Yes. And so I mean maybe I'll just be slightly pedantic here. So I guess let's -- if there was a Paragraph IV certification, what would that mean?

Well, as a 505(b)(2), we certainly have to -- any relevant Orange Book-listed patents, we have to effectively navigate and deal with. What it would mean if we did have to certify was the references to drug holder could assert their rights under Hatch-Waxman and potentially seek a 30-month stay of our approval -- of our formal full approval, which could potentially create a delay in our launch. From our perspective, our -- again, our NDA does not have a Paragraph IV certification as part of our submission strategy. And as we've gone through nearly halfway the review, to date, we haven't had one asked and -- asked of us by the FDA. And we're quite confident that the FDA has looked at all aspects of our NDA so far.

Okay. All right. Very good. So then I guess, basically, the -- and that was kind of put to bed pretty recently, right? Like we definitively knew that it was accepted and all that. So certainly, from a public perspective, we've been able to track that to some degree. Okay. So then -- so what -- I guess then what is Jazz doing now with their lawsuit? What are they asserting that you guys are doing?

So Jazz, the reference as a drug holder, recently filed a lawsuit for us and, again, asserting one of their Orange Book-listed patents and a handful of additional, what we'll just call kind of extended-release patents that don't apply to the current end market products that they've asserted. I would say that there's little we can say specifically on our view, our strategy or even their merits given it's in the middle of the litigation. But I think a couple of comments that are important for us to make: First, as it relates to this specific action that they've taken, I think it's important to note that we're not surprised by this lawsuit nor are we surprised by any of the allegations that have been made, right? We're quite confident in the fundamental differences between the technology behind our revolutionary once-nightly FT218, sodium oxybate product and the patents that are being asserted by the other company. I think it's also important to note that we've disclosed intensely very little about certain aspects of our program. And it's important to note that the allegations that are in the suit are based on what's known as information and belief, which means that the lawsuit is somewhat of an exploratory mission to determine if there's any basis to maintain the suit with respect to any of the patents that are being asserted, right, from that standpoint. So we've been long aware of all the intellectual property and the other company's portfolio, including some of the newer patents that have been asserted that aren't being practiced in the market today. And we have been and we'll continue to be very well prepared to address all of these allegations, and we will vigorously defend them for sure. And I think the last thing to just state, Chris, so I don't forget is that it's important because we started this conversation off on the 30-month stay, this lawsuit cannot trigger -- it cannot trigger a potential 30-month stay on FDA approval of FT218. So as we sit here today, we feel, again, very confident in our regulatory filing strategy. And we're prepared to vigorously defend our position in this lawsuit.

Okay. Yes. So that's -- I mean that's interesting. There's, I guess, a couple of things that were interesting to me about that. One was the timing, I guess, of the lawsuit. It sounds like you guys weren't surprised at all. But I think I had this story in my mind that they would wait until after you were approved and then file a lawsuit and potentially try and throw some roadblocks with that methodology. But I guess the interpretation of doing it now is what? That is more exploratory in your view?

Well, I think the question of timing and why now versus another time is probably a better question for the other party for sure. But I mean we can really comment on the rationale for timing or whatnot. I think they've been fairly public that they intended to defend their intellectual property. We weren't surprised by it. I think -- when you believe that a lawsuit is coming, I think what you're very confident in what you do know, you're a little uncertain about what you don't know. And I think from our perspective, there's been nothing asserted in the case to date that we aren't very familiar with and we're surprised by.

Okay. So you -- do you have a game plan for Everything you've observed thus to date?

Absolutely.

Okay. It's fantastic. I mean that's great news. So then, I guess, remind us of when the potential approval or PDUFA date is and, I guess, what's your commercial readiness upon that date.

Yes. So maybe I'll take the first part, and I'll turn it over to Richard from that standpoint. So our action date is October 15, 2021. So we're, again, 4 or so -- 4 or 5 months away from that time period. And again, everything -- as far as we're concerned, all of our regulatory filing strategy remains on track and feel good about where the NDA review process sits today. So Richard, maybe you can comment on kind of commercial readiness?

Sure. Thanks, Greg and Chris. And Chris, it's good to see you again. I think I spoke to you like a couple of weeks since starting with Avadel. And it's been really awesome to be part of this team. We've been, first and foremost, exceptionally lucky to really attract just absolute top-tier talent at Avadel. So actually, in the last week alone, I think what we've announced 4 new hires to join our team here in pivotal roles for our launch. But if you think about what we've done, we've done a lot to really do a few things. One, learn about this marketplace and connect with physicians, connect with payers and also connect with patients and groups as well. I personally had the benefit of being involved in a couple of advisory boards and actually now even meeting thought leaders face-to-face over the last couple of weeks as well, both with the physicians and also with several Webex calls with patients as well. But we've also been doing a lot to build our infrastructure to get ready. We've made decisions already on our REMS provider, on our special -- on our hub services here and in the process of doing that for our specialty pharmacy distribution. So a lot of the mechanics that we have to have ready to be ready for a world-class launch, we have already set in motion for quite some time. And now we're really focusing on enhancing our customer engagement for the upcoming months as well. So what I can say in short, it's been a lot of fun, a lot of long days but really been exciting to really hear directly from our customers, who we are really looking to serve throughout this launch as well.

Okay. And so then what about supply? Is that -- is the drug product ready to go at this point and, I assume, just waiting for the final label?

Yes. From a supply perspective, we have a primary CMO. They've been making this product for -- since really the beginning. That CMO, for instance, we have -- we've been making it for so long that we filed with 3 years of stability data. We'll tick over the 4-year period during the review process. So we'll have great stability data. And from a supply perspective and timing of launch, which is, I think, one of the questions you're inherently asking is, there's some work we have to do post-approval when we have a final label, right? So from that standpoint, by the time we get to an approval and are getting close to being ready to launch, we'll have all the bulk product really done, right? What we'll have to do then is blend those and put those into our daily stick packs. And the rate limiter, if you will, on that is just getting the final -- that final packaging printed, which will require the final label. So there's a little bit of time post-approval before we will come to the market. But there's always going to be time -- we knew there was always going to be some time because we have to finish building our REMS based upon our final label. We have to get physicians certified to be able to prescribe our drugs. So there will be some time post-approval, pre-launch. But we're well down -- as Richard noted, we're well down the path on a number of those work streams, making really, really good progress.

Yes. Okay. All right. Maybe before we go too far down the commercial road, I did -- there was a question that came through here that I think might be pertinent to ask here. So could you just remind us of like when is the -- I assume we're going to have a Markman hearing at some point and then oral proceedings. What is the time line of those -- the court case?

Yes. So I think it's a little bit early to be able to really give specificity around what's going to happen next. But I'll tell you what's going to happen next that we can give specificity to. So you'll see our response filed, which is this week, right? So we have a deadline to respond by a certain date. You'll see that going from us later this week. Our expectation is that upon receipt of that and the judge reviewing all the relevant information, our expectation is he'll -- that judge will require us to come together and lay out a scheduling, right? So that's how we view what will likely happen next. When a Markman hearing is or what will happen next, I think, is still TBD. But I think the next important milestone in the litigation is our response, which people should expect to see...

This week? Okay. All right. And so I get -- but there is another outcome also, right? Like instead of going right to scheduling, there could be a summary judgment for dismissal, right? Like that is another possible outcome?

Yes. Again, I think it's really too early to speak on specific outcomes or potential timings and any of those that really matters at this point there's a number of different ways it can go for sure. And again, I think we stand really firm in our belief of our position in this case. And we're prepared and have been for quite some time to defend our position.

Okay. Great. And then I guess just to put a bow on that, the follow-up question that I got here is that do you expect that to impact launch timing or anything like that? Is there any outcome that you can foresee that would impact your ability to launch as expected?