Avadel Pharmaceuticals plc (AVDL) Earnings Call Transcript & Summary

First of all, thank you for everyone here in person and those on the webcast for joining us today for our LUMRYZ Commercial Day. We really appreciate you taking a few hours out of your Thursday morning to come and listen to a lot of the insights that we've gathered and garnered over the last couple of years as we frame out the early launch period and how we think about this unique opportunity. So before we get started, I'll remind all of you and point your attention toward our -- all of our risk factors. We certainly may make some forward-looking statements here today and point you to our SEC filing of our 10-K for December 31, 2022, which was filed earlier this year and can be found on the Investors section of our website at www.avadel.com. So although this is really the LUMRYZ Commercial Day, it really is, in our view, an ushering of a new oxybate therapy. It's an opportunity to not only transform Avadel into a high-growth commercial stage company, but also to transform the narcolepsy market. And today, we're going to spend quite a bit of time talking about our insights and how we view and value this opportunity and to hear from really important special guests as well. So from an agenda perspective, you will see that after my opening remarks, from Avadel's perspective, you'll hear from Richard Kim, our Chief Commercial Officer, on a few different occasions, start first with LUMRYZ and our view of the market. We'll then are very fortunate to have 2 important distinguished practitioners in sleep medicine and clinical researchers and Dr. Anne Marie Morse, and Dr. Tom Stern, who will respectfully talk about the disease state, the current treatment options, and of course, some of their patients who have gone on to LUMRYZ. But to really bring that to life, we're very blessed and fortunate to have a person with narcolepsy with us. Her name is [ Katie ], and we'll have an opportunity to hear her journey in this condition, but also how LUMRYZ has helped transform her life. So to our guests, we thank you for being with us today. At that point, we're going to take a little break and go to a Q&A for the KOLs, right? An opportunity to ask Dr. Morse and Dr. Stern questions based upon their presentations or other things that are on your mind. And then for the second half of the morning, we'll really dig deep into our launch plan, how we think about this opportunity and then give you some early metrics in terms of how the launch has gone now just a little bit less than 3 weeks into it. Closing remarks, and then we'll have a Q&A with management. So in summary, what you're going to really hear today is our view of the opportunity. Our view of the opportunity to transform the market and to transform Avadel. We are going to spend some time and introduce you to the capabilities of our team and the organization that we have built and then provide some early indicators of how the launch has gone, right? Again, we're only a few weeks in, but we feel really good about how we started and why these metrics that we're going to disclose, we believe are the most important ones in the early part of the launch. And then we'll do a brief review of our financial balance sheet, in particular, our cash position and then again, wrap up with some Q&A. So we really believe we're at an inflection point. We're entering into another growth area from where the company is today, and which has been transformational in the last 12 months. If you go back to where we were a year ago to where we are today, it's been a major, major transformation in all aspects, right, whether it's valuation or where we are from a launch standpoint. And -- but that opportunity of where we go from here is really built on a strong foundation. And that foundation begins with a very, very clear unmet need in the narcolepsy marketplace, and in particular, in the oxybate treated patient population, right? A need that was identified greater than 40 years ago. What does that need? 40 years ago when sodium oxybate was first being studied in narcolepsy, it was identified that as effective as it was, it needed to be delivered over a 7- to 8-hour period. And it's taken 40 years, and Avadel is unbelievably proud to be the first company to be able to deliver an extended-release sodium oxybate. But it's just not us saying that, that's important or what was said 40 years ago in the initial research around sodium oxybate. We've heard it from physicians and patients in our discrete choice experiment who, when they look at different product attributes to oxybate, have said -- once at bedtime dosing is the most important attribute. Patients in our open-label extension study have switched from the first-generation oxybate, have voted with their hands and their actions by saying 94% prefer the once at bedtime dosing of LUMRYZ versus the first-generation oxybate. And then most recently, FDA confirmed that. With our approval and our orphan drug exclusivity, granting us orphan drug exclusivity on the major contribution to patient care over all first-generation oxybate. So again, this foundation is critical to create the opportunity that we're going to talk to you about today. But equally important is to ensure we have the capabilities and the resources to execute and deliver on the full promise that LUMRYZ can offer. And it starts with our commercial leadership team, right, led by Richard, who's got over 25 years in the industry, tremendous track record of leading and building and executing commercial launches, but a team in total that has had over 50 rare and orphan disease launches. A team that's been in place for a couple of years now who have really built our plan and have generated all of the insights we're going to share with you today that has led to where we are at this point. The same team that has now deployed and experienced sales and customer-facing organization with deep sleep and rare disease experience. The same team that has built an industry-leading and category-leading reimbursement and product fulfillment strategy, which is already bearing fruit for us, which we'll talk about in a little bit. And all of you are aware of the cleanup and the actions we've taken on the balance sheet in the last few months, and now today, on a pro forma basis as of 3/31 between cash on hand and committed capital with $275 million. We feel we have all the components to really execute and deliver on the promise of LUMRYZ. And it's already happening, right? So as a company, the one thing we take a lot of pride in is delivering and doing what we say we're going to do. So whether it's navigating legal matters, filing an NDA, getting an approval with orphan drug exclusivity, launching within a month after product becomes -- gets approved, and then generating -- starting that promotion and demand shortly thereafter. All of those are things we said we were going to do, and we have done, right? And the early indicators, which we'll share with you a little later this morning, have all, we think, are promising, although we recognize it's early, only about 3 weeks in, we certainly are pleased with the progress that has been made early on, and we look forward to talking and sharing that with you. But that foundation needs to have a clear road map of where we're focused, where are we deploying our resources, the capital you've entrusted with us to deploy to build LUMRYZ going forward. And those priorities are very, very clear. First and foremost, and you're going to hear about all of these today, driving demand with high-volume oxybate prescribers, activating, educating patients to activate and initiate therapy. Secure and reimbursement. We talk a lot about payers, right, broad commercial coverage within 6 to 9 months post approval. Delivering product fulfillment, being able to ensure that patients can get access to the drug by building this best-in-class patient support and reimbursement programs. And then now with the approval in hand, we'll talk about life cycle management. What's next? Where -- how are we going to expand the patient population who could potentially benefit from LUMRYZ. So we'll cover all of these today, but the company is unbelievably focused on executing against these priorities and most importantly, initiating a successful launch of LUMRYZ. Why? Because we're proud of what we've developed and what we've innovated. We're proud of the 7 years of market exclusivity with orphan drug and the long runway we have from an intellectual property perspective with now 13 [ Orange Book-listed patents ] in the Orange Book and many more to come, that gives us the runway and the longevity to build a franchise that can create value for the community, for patients and for Avadel at large. But what's critical is that we build this plan on the foundation of insights that really matter, not on small subsets, not on small sample sizes, but on robust in-depth continuous research that as the market has continued to evolve over the last couple of years to ensure that we have our fingers on the pulse of what is going on and where there are opportunities for us to bring LUMRYZ to places where patients are today or even places where patients aren't being treated with an oxybate in the future. So the foundation of that is over 25 research projects, over 2,500 physicians and patients who have been interviewed or surveyed and at the core of how we value this opportunity financially has been 6 different demand-based forecast projects over the last 2.5 to 3 years, interviewing in-depthly over 700 -- about 700 physicians that have framed out how we think about this opportunity, right? And then overlaying that with our analysis of what's actually occurred in the marketplace, looking at the largest claims database that has great visibility to the narcolepsy market itself, we've been able to build all components of our plan around these insights and have thought about the value of this opportunity, which is something we're going to talk about today. We're going to talk about how we value this opportunity for Avadel and the significant peak revenue potential. We're not providing guidance. Let's be clear, I'll say that at least twice today that we're not providing guidance at this stage, but we are trying to articulate our interpretation of what has been extensive research and insights into how we are building our go-to-market plan to create a potential blockbuster product that we think offers over $1 billion in potential peak sales opportunity in the future. Starting with an addressable market based on some very recent insights that we think is probably over 50,000 patients over time. And when we do all this research with physicians and Richard will take this in more detail and build this up for you, so you get a good perspective of how these insights have informed us, but we certainly hear from physicians in these large research projects continuously that they expect to treat more patients with an oxybate than they are today, purely on the back of the introduction of LUMRYZ, so we see that 16,000 number growing to 20,000 to 25,000 plus. Those same physicians are telling us continuously time after time after time in our research that we would expect to command 50% to 60% of what the oxybate market looks like in the future, all resulting in 10,000 or greater potential oxybate LUMRYZ patients, and at today's pricing, certainly offers a greater than $1 billion opportunity. So we're really excited to be able to share some of these insights with you and our view of the opportunity at large. And as I wrap up, I think most importantly is that we've spent a lot of time and a lot of you have been very patient. And we're very blessed and appreciate that you've gone on this journey with us, but we have put the ingredients together to really drive a successful launch and truly create the next round of value creation for our investors and all of our partners and most importantly, the patients who are serving every single day, whether it's the innovation of LUMRYZ, the unmet need, a valuable growing market, a team that is although we may be knew as Avadel, a team that's unbelievably experienced and a plan that is focused on all the right things. So again, thank you for being with us today. We really appreciate it. And to get into some of the details, I'm going to turn it over to our Chief Commercial Officer, Richard Kim. Richard? Thanks.

All right. Good morning, everyone, and thank you so much, Greg. It's awesome to be here, just sort of 3 weeks into our launch. You're going to see me a couple of times here. But we really want to start with the unmet need and obviously focusing on LUMRYZ and the -- it's the high unmet need that LUMRYZ will address. So here's what I'm going to cover over the next few minutes. We're going to jump right into it. As Greg had mentioned, we have done extensive market research and insights with sleep specialists and people with narcolepsy. And we've taken the time to really understand what the treatment gaps are or goals are for people who treat the narcolepsy. So from this survey from 134 sleep specialist, there were several areas, but you can really group them into 4 key topics, clearly addressing excessive daytime sleepiness and cataplexy is always one of the goals for people with narcolepsy, but other key components of treatment goals include improving compliance, on the bottom, reducing adverse events, but very importantly, also avoiding night-time symptoms. And when we look deeper into this, addressing and controlling nighttime symptoms was rated as a second or third most important attribute by high and medium volume oxybate users as well. So the great news is clinicians clearly identify some of the gaps treatment goals today. Now narcolepsy, the disease itself disrupts nocturnal sleep. This is from the European guidelines estimating 65% of patients with narcolepsy experienced disturbances in nocturnal sleep, so the disease itself has that impact. Unfortunately, today's therapies that are approved can disrupt the night even further. Now let me orient you to this slide. This is adapted from the ASM narcolepsy practice guidelines. And on the Y-axis, you see currently approved classes and products for narcolepsy, all approved for either [ EDS ] or EDS and cataplexy. And across the x axis in the light blue, you see some of the most common side effects. And what you see -- and it's not a surprise when you think about the classes here, we generally we're talking about stimulants and [indiscernible] agents to keep people up and awake. But unfortunately, they can all disrupt the night through either creating insomnia or forcing people to wake up during the middle of the night to take a second dose. And as Greg had mentioned, to start off, the oxybate therapy was really thought of as an optimal therapy for narcolepsy over 40 years ago. But the thing we have to remind ourselves about [ GHB ], the active ingredient, is it only has [ a short half-life of ] about 30 minutes. But from a study from 1979, brought in [indiscernible] identified great opportunity for sodium oxybate, but unfortunately, it has a very short duration of action. And the hope was in the future there could be something with a much more extended or prolonged effect as well. Well, over the last 20 years, there was really no innovation as far as technology is concerned for delivering oxybate. Now on the left side, we know some of the challenges today already with first generations. There's a very narrow 90-minute window of opportunity for dosing a second middle of the nighttime dose, 2.5 to 4 hours after you take that initial dose. And we know consistently from the research that we've done and actually reported from the trend community earlier this year that 65% of patients report they've missed a second dose within just the last month as well. Now if you look at the right-hand side of this slide, this is really the advancement in technology. So in 2002, Xyrem was first approved. And it wasn't until 2023 when LUMRYZ is approved on May 1, where there was really an advancement in the delivery. Even when the [ mix salt ] version came out, [indiscernible] was using the same technology that was invented in -- that came out in the market in 2002. So we're here to talk about LUMRYZ. Here is LUMRYZ's fundamental positioning for the marketplace, and we believe it's very clear and intuitive if you think about the narcolepsy condition itself. LUMRYZ's positioning is better sleep, better days, full stop. Now that's aspirational, and we'll show how we're going to be messaging through that to the community as well, but it fundamentally addresses the unmet need in the marketplace overall. And it's backed by a plethora of amazing clinical data as well. From our pivotal study, [ REST-ON ], we achieved all 3 [indiscernible] endpoints with a [ stat sig ] of less than 0.001. I love saying that like 0.001, 3 co-primary endpoints. We also know one of the key secondary endpoints is the [ eProcepiness ] score because this is something that people do use clinically in today's world. Now patients there started with a baseline of around [ 16 ] and at the end of the 13-week period, the 9 gram dose, the median at per score was [ 9.5 ]. So that means over half the patients were in the normal range on the sleepiness scale as well. Greg had mentioned 94% of patients voted with their actions and told us they prefer being on LUMRYZ dosing after being in the -- on -- after switching after 3 months on first generation. And also from this free-choice experiments, consistently dosing is the preferred attribute around oxybate therapy. So May 1 was really important for us, not only [indiscernible] our final approval, but obviously, we also got orphan drug exclusivity, and I've actually -- this is going to be my 12th product launch. They get more interesting and more exciting. I am so excited about what we have to offer and also what we're going to be able to communicate about LUMRYZ as well. The fact that the FDA has determined that LUMRYZ is clinically superior to all twice-nightly oxybate, very powerful. It's something I wish I would have been able to see in some of my previous launches. It's a very powerful message for physicians and patients, but sometimes for us, we have to break down our belief of why we got this superiority claim. So I'm going to walk through a few key components of this because we believe that the FDA took the time to really understand this and break down the fundamentals is not only the condition in narcolepsy, but what LUMRYZ can offer to people with narcolepsy. So the first thing is the unmet need. Xyrem and Xywav necessitate a nocturnal awakening to take a second dose, which disrupts sleep architecture, the fundamentals of the condition again. Now what does LUMRYZ do? LUMRYZ, once a bedtime dosing does not involve disrupting or fragmenting sleep. Very simple, very clear. Additionally, the FDA recognized this is a chronic condition. You have to take these meds to have your functionality, so the fact that you don't have to wake up is easier and less burdensome, especially considering that narcolepsy is a chronic neurologic condition. Now when I joined the company, someone said "Richard, geez, [ is that a convenience thing ] once night versus twice" I'd say, "Hell, no." The FDA has clearly put that to bed. What LUMRYZ does is it addresses the fundamental issues and the gaps of current treatments in the marketplace today. All right. Let's build off of some of the constant validation work that Greg had [ teed ] up before here as well, so this is a slide that Greg showed earlier with a few more caveats to this. Super proud when I joined the company, one of the things we determined that we had to do as a small company was we wanted to have the best knowledge of the narcolepsy marketplace to help make the best decisions that we can make as well. So Greg talked about all the extensive research that we've done. We are working with one of the largest claims databases in the country that has access to 330 million American lives. They churn about 15 million health care encounters every single day, and it covers the vast majority of the current narcolepsy market and oxybate as well. But we don't just look at numbers. We actually talk to people as well. Thank goodness, Dr. Morse, Dr. Stern here because we listen to our experts. We listen to people with narcolepsy and we take all of their insights as well. And overall, if we sort of package all the insights that we've received together, here's what we consistently hear about why LUMRYZ is positioned to be the market leader. Clearly, oxybate are viewed as a standard of care for narcolepsy. As we saw from the FDA, the ability to minimize sleep disturbances and decrease the fragmentation is essential in this field. You do that by avoiding twice nightly dosing. People also recognize as the FDA did treatment is chronic, so compliance is important for people to have more consistency in their day-to-day activities as well. And maybe something we don't talk about a lot is our [ premetered ] pockets. They are actually, you know what, I got one right here. This is what it looks like now. You no longer have to carry 180-milliliter bottle around with you. These are [ pretty measured ] packets that have your entire dose in 1 pocket. And what's nice is you get that consistency and that reassurance that your -- the patients are going to get the full prescribed dose that the physician intended for them as well. So Greg mentioned that we have done deep research into demand around what we think physicians are telling us about where LUMRYZ will fit in this marketplace. So 6 studies done over the last 3 years, as recently as the last one finishing just a couple of weeks ago from almost 700 sleep providers as well, and here's what we have learned. Across these 6 studies, the share given to market to LUMRYZ within the oxybate marketplace is between 48% to 61% with an average of 54%. So lots of orange is good for us, and the pie in the middle is the variance here, of course. But what's really also interesting with this is this is done with 0 promotional effort from us, and without us messaging around our clinical security messaging, so we really consider this the foundation of where we're starting our journey. And now we're clearly in the process of communicating the value proposition, the full imbalance proposition to sleep providers across the country as well, so 48% to 61% with an average of 54%. Additionally, the market reach it shows that LUMRYZ will drive market expansion. We'll get into that a little bit more around the reasons why. But what the research has showed, physicians have told us, they would prescribe LUMRYZ to more oxybate patients growing the marketplace for new patients between 35% to 113% or an average of 58%. So consider today, there's about 3,000 new starts every year for oxybate for first generation. Physicians tell us that, that number should grow going forward as well. And once again, no promotion, no superiority claim that's been tested with this as well. So LUMRYZ, there's a huge unmet need. We believe that there's the ability to not only address daytime symptoms, but also to potentially give patients the chance in an uninterrupted night sleep. We're super proud of the clinical body of evidence that supports LUMRYZ and clearly having the orphan drug exclusively and the FDA declaring that LUMRYZ is clinically superior to all first generation oxybate doesn't hurt at all either. And as much as we believe in LUMRYZ and what it can do for people with narcolepsy, it's great to see the consistent validation that we've seen time after time when we ask physicians, where will LUMRYZ fit into your current practice today, and where will it fit in the future as well. So you'll see me again later on. But with that, I'm going to introduce Jennifer Gudeman, our Dr. Jennifer Gudeman, our Senior Vice President of Medical and Clinical Affairs.

Thank you, Richard, and good morning, everyone. I have the distinct pleasure of introducing our 3 distinguished guests, beginning with our first key opinion leader, Dr. Anne Marie Morse. Dr. Morse is the Director of Child Neurology and Pediatric Sleep Medicine at the Geisinger Health System in Pennsylvania. She consults to a number of companies in the narcolepsy space, including Avadel, [ Harmony and Jazz ]. Dr. Morse has significant clinical experience and interest in pediatric and adult patients with sleep weight disorders, particularly central disorders of hypersomnolence, which, of course, includes narcolepsy. Because of this expertise, Dr. Morse is also the medical adviser to a number of different patient advocacy groups. Dr. Morse is extensively involved in clinical research as a principal investigator in many studies, and she is passionate about ensuring the patient voice is heard and understood, which has led to her having quite a large social media following. With that, Dr. Morse, welcome.

[indiscernible] Thank you guys so much. I appreciate the opportunity to be able to speak with you in regards to what my clinical experience is as well as the participation in the study. So I always like to start off just giving some background as to how did I get here? Not really like my car, how did I get here. But how did I get to the point of standing here as an expert in front of all of you. The background that I have is as a neurologist and why did I become a neurologist. My mom has multiple sclerosis, which is diagnosed over 30 years ago. If you reflect on that disease state, it's one that you probably are all very familiar with. However, at that time, there were 0 treatments available. We now look at that field and there's an explosion of treatments. Why? Because when you heard the word multiple sclerosis, an image came into your mind. It was an individual who was disabled, obviously disabled. When you think of an individual who has narcolepsy, there probably is not that same image that comes to your mind. However, the same detriment that occurs for a person who has multiple sclerosis, which is marked by socioeconomic disability and physical disability is also present. It's an isolating, marginalizing disease that requires very specific attention and resource. And currently, what has been highlighted is that the current treatment landscape, although it's beneficial, still has tremendous inadequacies. And so therefore, I'm privileged to be standing in front of you today to talk about how the market is shifting, and we are now actually addressing the needs that patients are stating is necessary. We're going to discuss that narcolepsy is a 24/7 disease. Very frequently, when people think about it, they reflect on it moving [indiscernible] where these are individuals who just kind of are falling asleep in front of you and not necessarily having any type of normal interactions. This is a very inappropriate representation of what this condition looks like. As had been mentioned, [ sleep state and stability ] is an innate component of this disease. There are [indiscernible] during the day and wakefulness intruding during the night. And so therefore, there is a representation across the full 24/7, which we'll talk about in the next slide. I've already alluded to the fact that the current treatments are unsatisfactory. They all have very specific limitations, which I'm going to describe for you in many times when I'm speaking to my patients, we're discussing what are the trade-offs? What is the acceptable, unsatisfactory component of the treatment options that I'm offering you. And then finally, really digging into how LUMRYZ addresses these needs. So as I mentioned, LUMRYZ -- I'm sorry, as I mentioned, narcolepsy is a 24/7 disorder. And so when we're talking about this disorder, the most [indiscernible] , which is present in 100% of patients with narcolepsy is [indiscernible] You'll find that every single drug that we currently utilize, that's the main thing they focus on. However, it fails to recognize that there are 4 other major [indiscernible] symptoms, including cataplexy, which is a [ transient ] episode of loss of [ tone ]. Many people think about this as them collapsing to the ground. Unfortunately, that only is present at 10% to 15% of people, generalized cataplexy. The majority of partial cataplexy, which we don't think about as being so burdensome. But this is where people have difficulty [indiscernible] in their hands, they need a buckle, they triple over the own feet. These are individuals who are fearful of holding their own children after birth. They're fearful of giving birth because they're afraid of the compromised to detriment that their child might experience. When we look at the nocturnal symptoms, more than half of this [ pentad ] is represented by night. Disrupted nocturnal sleep, sleep paralysis. This is temporary episodes where you [indiscernible] frozen or stuck in [indiscernible] hallucinations. These are auditory, visual, and tactile hallucinations that people will experience. And many times, those 2 come together. One of the challenges when you have disrupted nocturnal sleep is it introduces more opportunity for sleep-related hallucination [ lipolysis ]. And so you may hear that and go, "Well, that business sounds so horrible." I have a patient where [indiscernible] paralysis and sleep-related hallucinations was quite impressive. She used to sleep at a sleep mask up until the night where her sleep-related hallucinations was that a man had broken into her house and was coming to rape her, and she was frozen and stuck in sleep paralysis and therefore, could not respond to it. You can see how that would propagate further disruptive nocturnal sleep. She no longer sleeps at a sleep mask. But these are things that become addressed in my opinion, as a clinician, when I'm able to introduce an oxybate and especially one that does not require a force awakening. I'm removing the opportunity of these things. Other features that are not included on here but are extraordinarily impactful in individual [indiscernible] is that because this is a condition marked by REM association, meaning that they're having very frequent REM sleep phenomenon, is that they have recurrent horrible nightmares, again, spilling into the [ lipolysis ] and [indiscernible]. They also can have dream and [indiscernible] behavior, [ run behavior disorder ], kicking, punching fighting. The same patient I had to [indiscernible] to you had tremendous [indiscernible] so much so that she broke a window with [indiscernible] trying to escape because many times, these are very frightening experiences. And so it is really important that when we look again at the current treatment landscape, the majority are focusing on excessive daytime sleepiness, completely neglecting the components of this disorder that are extraordinarily detrimental and burdensome. Now in addition, it is important to recognize when we look at the treatment landscape, there are innate limitations to some of these treatments. And so whether you're looking at the traditional stimulants, the alerting agents or the first-generation oxybate, these are conversations of trade-offs. As you can see, across all the current treatment landscape, I am trying to achieve better days while compromising their nights. For me as a sleep doctor, that makes more sense. So it's not that when we're looking at the traditional oxybate that I'm saying that this is a bad thing. We have a lot of experience since 2002. It has been transformative therapy for patients. It was first studied in the 1970s. And so we have over 20 years clinically since 2002, but since the '70s, it's been studied of the positive impact that it has in the marketplace for these individuals. However, there are unique disadvantages. There is a forced awakening in the middle of the night. In many patients, I can say clinically, I don't even want to hear about it because they say, "Doc, I don't think you understand. I have a sleep problem. I'm waking up frequent a night, and you want to give me something that puts me sleep. I'm already sleepy. And then you also want to wake me up in the middle of the night." They don't want to hear it. And I can also share with you, it's not patients alone. As an educator, I speak internationally on this disorder. Very frequently, I have physicians come to me and say, "I don't even offer this in my clinic because I have to think too much around the timing and the safety and how do they wake up, how do I figure out this dosing strategy." And so you're being met with an inmate limitation where patients don't want to hear about it because of having to wake up, and physicians don't want to offer it because it's too complicated to do. And because of this, it does create some anxiety in the household. So when you're looking out, what is the current strategy. Typically, we're having our first dose, 2.5 to 4 hours later. It's a second dose. And then you also have to be mindful that a person should engage in anything [indiscernible] 6 hours. You can see where the math is happening for a physician, okay, you're going to wake up at this time, and then I'm going to do this. There also is this innate challenge of either too early or too late, both which it's not a matter of that's inconvenient or that's a challenge. It's a matter of that the [indiscernible] safety concerns there. It's a [ CNS ] depressant. If I take it too early, I run the risk of overburning that person's central nervous system with too much of a depressant that carries the risk of respiratory compromise [ comatose ]. I take it too late, and now that's a person where I still have active drug in my system, and I have to get to work or better yet, I have to drive my kids to school. You don't want to be on the road with those people. So there was a very well designed study called a discrete choice experiment, asking physicians what are the top attributes based on the 3 different formulations of oxybate. If you're not familiar with this kind of study, it really is evaluating if you have to make these trade-offs, which one are the highest priority. The highest priority for physicians is that it's a once-nightly regimen. Why? Not for convenience and not even because I don't want to do math, but because we know it's going to improve adherence. When I have a greater consistency of night-to-night management, I have a better consistency of what the daytime experience looks like. So it is very important to understand the complexities of this condition. So I've already gone over with you the innate components and symptomatology associated with what narcolepsy is. However, what has been wonderful in the last few years is a tremendous amount of research that is really trying to understand what does this journey look like. What does the patient medical burden look like? And so in 2017, there was a [indiscernible] on looking at retrospective claims data that gave us our initial insights and recognizing that there is a suggestion of things like maybe there's increased risk for cardiovascular disease. Maybe there's an increased risk for obesity. Maybe there's an increase for [indiscernible] for other sleep disorders. However, claims data are limited because you don't know the full details of those individuals. It's based on what the [ coatings were put in ]. Just recently, there is this presentation of data, which is actually looking at the Mayo Clinic's electronic health records. The Mayo Clinic has one of the largest databases and one of the largest followings of people with narcolepsy. And so they were able to look from [ 2010 to ] 2020 to understand what are the other medical complexities that are there. The first call out is that the cardiovascular conditions were not replicated in this evaluation. So it's an important thing for us to think about, but there was -- and it's correlative, but we don't really have a clear causation or replication of it in clinical data. However, [indiscernible] we do see is [indiscernible] disorders are there. Again, it's important to recognize, insomnia is present there. Medications that we're using currently are propagating that versus [indiscernible] syndrome, medications we're using are propagating at and [indiscernible] [ obstructive ] sleep apnea as well. When we look at these other conditions, it's important to understand this because when we're talking about trade-offs and what is it that I want to treat and what I don't want to provoke, I have to think through all of these different capacities. So is there [indiscernible] in the room. Sodium is a hot topic, hot topic from the American Heart Association. It's a hot topic in many family practice and primary care and also hot topic in sleep. Xyrem and LUMRYZ contain identical amounts of sodium. It's an essential nutrient. Very frequently, we talk about it in regards to a mitigator for cardiovascular disease. However, there's very, very important components that you need to understand when you're talking about the oxybate market and when you're talking about individual narcolepsy. Number one, oxybate, gamma hydroxybutyrate, in order for it to be transported from your gut and into your brain, is it dependent on an [ SMT 1 ] transporter, is a sodium-dependent transporter. Sodium is not all that bad. The second thing is that when we're talking about all the medical complexity that comes along with narcolepsy, the reality is we don't fully understand it because of the fact that we're still understanding the [indiscernible] of where does [ orexin ] play a role. And what I can tell you is the innate deficiency of [ Orexo ], which is a neurotransmitter that is lost in individual narcolepsy type 1 and likely dysfunctional narcolepsy type 2, that itself has underpinnings for a whole myriad of different disease states. And so although we like to consider the idea of that if I apply general recommendations lower sodium, the American Heart Association says, "everyone in United States at least 1,000 milligrams [ less ] sodium." That may not be relevant or appropriate for patients with narcolepsy. And I'll further that example by stating because this is a neurologic disorder, these individuals are also very likely to have dysautonomia. My autonomic nervous system doesn't work. A primary symptom of that tends to be [ pots ], postural orthostatic [ tachycardia ] syndrome. The key stone treatment for POTS is 3 to 4 grams of sodium. You tell me what world it makes sense for me to remove sodium to give it to them in a different capacity. Now with that stated, I'm a big believer of the fact that we need to think through everything that passes our patient's lips. So these are patients who have high risk for obesity. They have high risk for a variety of other things. And so if we're going to talk about sodium, we should also talk about artificial sweeteners because that's our trade-off. Our current mix ops, their replacement in sucralose. And so when we're thinking -- if we want to have a conversation about cardiovascular, I'll engage in the cardiovascular conversation. But the reality is we need to be mindful of what are the risk factors for cardiovascular disease. The World Health Organization as of May 2023 as dated artificial sweeteners or an independent risk factor for cardiovascular disease. How much is too much? I don't know. I know I've stopped drinking diet soda and I'm watching how much [indiscernible]. So the reality is that we recognize this, and artificial sweeteners have been linked to a variety of different things, paradoxical, but it's -- so we see it increase [indiscernible] blood sugars, insulin resistance. So I try not to have sugar, but it's making it more likely for me to have diabetes. It also is associated with increased likelihood for having worsened inflammation, again, independent for cardiovascular disease. And then finally, it also can influence your microbiome. Now I'll tell you as a neurologist in this concept of the brain gut access, was first introduced to me is that there's no way in hell that is my stomach is tell them my brain what to do. I'll tell you I went through a complete [ 180 ] recently, and it's quite, quite impressive of the data that does support this. And in addition to that, there's very unique data that comes from my colleague in [indiscernible] that demonstrates that patients with narcolepsy actually have unique changes in the microbiome. And now we're risking the potential of aggravating that, and that could have this whole consequences. As mentioned, obesity is much more common. And so when you're talking about which risk factor do I want to treat, I'll tell you which one I do want to treat. I do want to treat obesity. Because I can tell you, when I see both kids and adults, I can tell the patient when you're onset of disease is just by looking at their growth chart because most typically, I can say, your [ 25 percentile, you're 50 percentile ] in this year, you went to [ 90th percentile. ] That's when you developed your symptoms of narcolepsy. We don't fully understand it. A lot of people think it's just a sleepiness. One of the things that I see as a value proposition in treatment of my patients with narcolepsy is that although weight loss is considered an adverse event for many of them, this is [ a welcome ]adverse event to experience. And so it is important to realize that in the studies, we see that 1 in 5 patients experienced a greater than 5% weight loss from baseline. That's huge. That is a risk mitigating factor for cardiovascular disease, diabetes and all [ chloroscause ] mortality. So in summary, we're evolving the status [indiscernible] in narcolepsy. We no longer are requiring, of course, awakening in the night. There is -- that obviously is a benefit. There's no long-term tolerance that is associated with it. There is now no longer the need for this 90-minute window of when you were going to take it. And there's not also the super [indiscernible] intake that you have to be concerned about. So I think the main take-home point that you can hear from me is that this is a medication that I am offering to my patients. It's a medication that even for my patients who I haven't seen in clinic recently are reaching out to me to ask if they're candidates for. And these are both patients who are our current oxybate users, and those who I have offered oxybate in the past, and they have told me, I'm not looking up for a second dose. So I do truly believe that there is a broadening of the market, not only in my clinic, but I can also share that when I was at the National Sleep Conference, speaking with a lot of different people because they do a lot of education, people have said I feel more comfortable thinking about offering this to my patients now because I don't have to do all those calculations.

Thank you so much, Dr. Morse. I learn something new every time you present, and I'm sure the audience very much appreciates your perspective. I'm delighted to introduce our second key opinion -- excuse me, second key opinion leader for today, Dr. Thomas Stern. Dr. Stern is a pulmonologist in private practice in Charlotte, North Carolina. Dr. Stern completed his fellowship in pulmonary and critical care medicine at [ Case Western Reserve ] University. He is board certified in 5 different areas of medicine. Like Dr. Morris, Dr. Stern is extensively involved in clinical research, including studies in narcolepsy for [ NLS, Takeda, Jazz ], most relevant for today's discussion as a principal investigator in our open-label study RESTORE. With that, I'm delighted to welcome Dr. Stern to the stage.

So before I get started, I just want to manage expectations. Dr. Morse is a tough act to follow. I am not an academic neurologist I'm a simple country doctor from North Carolina, who happens to treat some pulmonary and sleep disorders. I've also had the good fortune of working with Avadel since 2019. And so while the general market is just getting to learn LUMRYZ, we've had the good fortune of having lots of patients on it for 4 years. And I'm going to share some of those insights that we've had. So first thing, we're going to cover is the optimization of the [pharmacokinetic]indiscernible] profile, the reason LUMRYZ exists, which is optimization of the drug. We'll talk about the Phase III data, which was positive all around. And then finally, talk about my experience in clinic with LUMRYZ [ over ] 4 years. So these curves are classic curves that you'll see whenever you're comparing an [ extended release version of ] the drug to [ the immediate release ] version of the drug. And in my time in medicine, I've seen these curves and it applies to blood pressure medicines, it applies to COPD medicines and now thankfully applies to oxybate. In the blue is the pharmacokinetic profile of LUMRYZ, and the orange is the old fashioned to oxybate. And what you see when you have an instant [indiscernible] medicines is lots of [ peaks and troughs ], right? When you have peaks, you get side effects from medication. When you have troughs, you get symptoms of the disease. And so again, it doesn't matter what extended release versus instant release type of drug you're talking about. This is a very classic curve. The other thing that I want you to note about this curve or the LUMRYZ curve is that it very much reflects the typical curve of a human sleep drive. So everyone in here has sleep drive. It's likelihood you're going to fall asleep and stay asleep. And your sleep drive builds as the longer your awake. The longer wait, the more like [indiscernible] sleep and stay sleep. And so your -- the most sleepy time of the day is when you first fall asleep. And as you stay at sleep, your sleep drive decreases. And that's exactly what you see in people that take LUMRYZ. They're most likely to be asleep early in the night and the longer they're sleep, the less they're likely to stay asleep. And so this mimics a normal human sleep curve and so not as much of a peak, less trough is a benefit that you get to see in LUMRYZ . Another big step that a lot of you probably want to appreciate, but I certainly do and patients do as well is the packaging. And so old fashion oxybates to give you 90 grams in a bottle, you got to measure it out, mix it. And because humans are doing this, it causes error. Every month, I get a call from the REMS pharmacy, they're like, "Oh, Mr. [indiscernible] , so they're going to run out of their oxybate a day or 2 early. It's okay if we refill early?" And because of the [ controlled ] substance, they have to get permission for me, literally happens every month. And so a few more calls that I won't have to deal with will be great because now it's just a very consistent dosing. They have a package, they pour in a cup. It's hard -- it's much harder to miss a dose. And there's also some people that can -- you can unintentionally overdose with Xyrem if you're not paying attention. Anytime you do something routinely, you don't pay as much of attention and so that risk has definitely decreased when you use LUMRYZ. And so this highlights the results from the Phase III study, and it's broken down into 3. It was really the top is the main result, so that's the total population of people enroll in the study. And then there's what we call subgroup analysis. They break it down to narcolepsy type 1 narcolepsy type 2. And this trial is unique in that a lot of times, the [ NT1 versus NT2 is ] not differentiated and -- or they just include NT1. And so LUMRYZ works in any type of narcolepsy, [ anti-1 and T2. ] And they have different measures. The [ NWT ] -- as a pulmonologist, I like physiologic measures. I'd like to see physiologic data. And if you look at [ MWT ], sleep stage shifts and [indiscernible] ls, those are all seen on the EEG. It's right there in front of you. It's very objective. We also have a subjective data from clinicians to CGI. That's how we feel like it's working and also patients in sleep quality, refreshing nature of sleep in the [indiscernible] sales score. And you know you have a good drug when you see improvement in physiologic measures and also subjective measures. And so in the total population, there was significant improvement on all measures. When you break it down [ T1 and T2, NT1 ], the more severely symptomatic patients, again, had clinical significance in all measures. [ T2 ], there were, again, consistently positive. There are a few that weren't statistically significant, even though they showed improvement, and that's because the study wasn't powered to exclusive if you look at symptoms NT2. And when you have fewer symptoms, you need more people, right? And so we didn't have enough people, and I think we would if we had the right power to the study. So the one thing that I want everyone in this room to understand is narcolepsy is not a disease just of daytime sleepiness. Narcolepsy is complete disregulation of our sleep wake cycle. And so what we notice about people that have narcolepsy because we see them during the day, they're excessively sleepy. What we don't appreciate is because we're not with them at night as they don't sleep at night either. And so it's very rare that we optimally manage someone with just 1 drug. And the current conditions of the health care system make it difficult to get the newer medication. So in my clinic, the first time someone is diagnosed and I see them, everyone gets [indiscernible] t. Not everyone can stand the [indiscernible] because the side effects they all get started because they're cheap, I can get them immediately. They can go pick it up with the pharmacy. And it's going to make them feel better. I gain credibility when I make someone feel better. And then for most insurers, you have to show they're not optimally controlled on stimulants to even qualify them for an oxybate. And that will take weeks of fighting and then they have to get it [indiscernible] because of the controlled or the REMS program, and so most people with narcolepsy end up on multiple medications because one doesn't do the job. And so the interesting thing about the LUMRYZ study is that it showed improvement even in people when they're taking stimulants, so it's not an issue. Stimulants are not going to prevent the use of LUMRYZ. People on stimulants are going to benefit from the addition of LUMRYZ, and so it's something that is not always appreciated. And so the open-label study started back in March 2020. Current conditions of the world at that time required an extension, and good news is no safety signals. And so there's not any concern [indiscernible]. And we've got lots of safety data now over 20 years at [indiscernible] using oxybate. And often, the fear is not validated by the reality. In the open-label study, there were 3 types of participants. There are people that rolled over from the Phase III study. There were people that were switching from -- that have been on the old fashioned oxybate, and we're going to switch to LUMRYZ. And then people have never been on oxybate before. After they took the once-a-night dosing for a while, the switch patients filled out a questionnaire. And what we learned is that prior to switching to the once a night, 2/3 of them had missed a dose in the previous couple of months. And when those people miss a dose, they're symptomatic, 80% of those people complain with symptoms. And so twice-a-night dosing causes problems. And what -- it's either as bad or maybe worse, is that someone take it late. So again, it's still [indiscernible] the system when they wake up, not optimal either. You don't want a medication to causing anxiety. But when people worry about waking up to take their second dose, they can feel good the next day, it does. 30% of people report anxiety. And 1/4 of the people needed someone else in the house to help them get up and take the second dose. So it's not just disruptive to the patient, it's disruptive to the family. And after they had experience with both, they said, which would you prefer? 94% in [indiscernible] dosing. I don't think this is an overestimation. And if you look historically, the other indications for long versus instant release medications, everybody prefers the less dosing in not just narcolepsy, but lots of disease [ states ]. So as of earlier this month, I [ still had 9 ] patients in the extension study, anywhere from 16 to 31 months. We have young, we have senior citizens, men, women and type 1 type 2 narcolepsy, so a good variation of backgrounds. I'm going to tell you about one of my patients. I have known this kids and [indiscernible] kid. He was a [indiscernible] 13 years old. We diagnosed [indiscernible] with [ darclepsy ]. Starting on some stimulants. [indiscernible] was using some an antidepressant for cataplexy, not optimally controlled, we started them on Xyrem. He [indiscernible] a family with a single mom. Mom had to get up to help them take the second dose. And when people wake up for the second dose to do things like the bathroom and eat and especially when you're a teenage kids, [indiscernible] to stay in bed, they don't always listen to their doctor, and so his mom would find him in compromising situation. She found him on the toilet, she found him in the bathtub. And so those are not places as a teenage boy, you want your mom to find you. Switch to LUMRYZ in 2020, still own it and has done so well. His job is actually -- he gets up to make the donuts to Dunkin' Donuts. And so we love this kid because every time it comes in, we get a dozen, and it would be impossible for him to do that if he wasn't able to use an oxybate successfully. Switching to the other spectrum, our senior citizen, it's on the trial. Again, narcolepsy for a long time, always on stimulants [indiscernible] after controlled start her on the old-fashioned oxybate. And again, when you wake up to take a second dose, they don't stay in bed. She would always go to the bathroom, she wake up to go to the bathroom. People don't wake up the [indiscernible] , they [indiscernible] their wake. And so she would get up, she go to the bathroom and would not uncommonly fall. One time she fell, she hit her head, ended up an emergency room, but switched to LUMRYZ a couple of years ago and is much happier with our current treatment. And so in summary, like say, the PK profile, this is not another oxybate. This is a different oxybate. This is an improved oxybate that certainly has a better profile than what's available. The dosing -- the ability to dose with fixed doses, obviously, is improvement. 9 out of 10 -- over 9 out of 10 are going to improve or choose once a night if they can. And like I said, we've had a lot of experience that confirms this. Thank you very much.

Thank you, Dr. Stern. That was absolutely wonderful. As Greg mentioned in the beginning, we have a third special guest. And Katie, who is a person with narcolepsy really represents the center of all of our efforts at Avadel, where we're constantly thinking about the person who is living with this chronic and debilitating disorder and how we can help them along that journey. I've had the pleasure of knowing Katie for several years now, and she is kind begin to share some of her experience, both on the path to a diagnosis of narcolepsy as well as your treatment experience and probably what you all want to hear most about her experience with LUMRYZ specifically. With that, Katie, welcome. Can we put the slide back? Never mind. Sorry, sorry. Hi, Katie. So I'll stay what the slide says, which is how LUMRYZ transformed my life because I think that sets the stage for what Katie and I are going to discuss. So we talk about [ PWN ] people with narcolepsy because we want to think of this community as people first, patients second. And with that, I'd love to hear a little bit about your life, Katie, before you started experiencing any symptoms of narcolepsy.

Yes. So I was in my senior year of high school, and I was pretty unstoppable at that point. I, at that time, played 3 different instruments. I was an interpreter for our [ choral ] our traveling choral. It was a competitive robotics. And I also had a job on top of all of that. So.

My gosh. And academically, you were doing really well and all of these activities just balancing a ton of stuff. What started to change when you were in high school?

It started pretty steadily. I needed naps and it would happen maybe 30 minutes in between, and then it started -- thank you. It started to bleed more and more into those activities that I cared so much about. If I just skip a class, then I can go to robotics later. And then, well, if I skip robotics, maybe they won't notice. It started becoming more and more mandatory and I started missing more and more of the things that I was loving about life.

That must have been so devastating to have all of these hobbies and interests and to find yourself so sleepy and so tired that you weren't able to fully participate. So we hear so often that it's 8 to 15 years on average when people start to experience their symptoms before they receive that accurate diagnosis. What was the pathway for you to a diagnosis?

Yes. I'm actually extremely lucky in the sense that during one of those naps one day, I looked up on the TV and there was an ad that had excessive daytime sleepiness. And it was a life [ albumen ]. It was like I have excessive daytime sleepiness. And so I run downstairs and like "mom, dad, you will not believe what I just saw." And that's when my dad revealed that he also has narcolepsy and just haven't shared it before, so yes.

Well, so it was a lightbulb moment because you finally had a name to what you were experiencing and you found out that your dad had been diagnosed but had not shared this with you previously. Wow! So at least you were able to put a name to your symptoms and what happened next?

Yes so we -- both me and my dad ended up getting into a sleep specialist pretty quickly. And as I was explaining to my sleep specials at that time, what was happening, he was like, yes, but it does sound like narcolepsy in the sleep study not long after proved it.

So you are one of the fortunate ones as you said, because you were able to receive that diagnosis fairly early. We heard a lot about treatments from our 2 physicians who spoke earlier, what was your experience with treatment?

Yes. Dr. Stern explained my experience, pretty spot on, started with stimulants and went through multiple different treatments that would do nothing or would make me sick beyond belief or would keep me up at night until eventually, I was ask to consider going on in oxybate therapy.

Wow. And what did that conversation look like when they explained that you would need to take 1 dose at bed time and then wake up 2.5 to 4 hours later?

Didn't make a whole lot of sense to me, but I was willing to try after being through so many different treatments. And I had heard that it could be life changing at that point. So I was like, okay, I don't -- didn't it makes sense to wake up, but I'll do it.

Sure. That makes sense. You're probably desperate to find something that would work for you. How were those first few nights, weeks on Xyrem?

Incredible. I'll never forget waking up and just feeling alert. It's bright outside, and I want to go straight downstairs. I didn't need 30 minutes, 45 minutes to convince myself to get up, I was ready to go.

Wow, that sounds incredible. And so you were then taking Xyrem for a longer period of time. And I think you were still living at home at that time. Tell me some more about your treatment experience.

Yes. So as I was getting closer to my therapeutic dose, it was becoming more and more difficult to wake up, be alarmed that just comes on my phone wasn't loud enough. So I tried a different app with louder alarms and that did nothing for me, at least. I learned a little bit later on that it was actually waking up my sister, who I shared a wall with. So it wasn't the alarm waking me up. It was my sister hearing the alarm and then coming into my room to wake me up.

Wow, that's a good sister to do that for you. But you moved out, you were getting older and it was time to be in your own place. And so without having your sister to wake you up to take that second dose, what happened then?

Yes. So it would lead to me just waking up randomly, very unpredictable, but almost always pass that window when I should have taken it. And then at that point, it's the math Dr. Morse was talking about, except it's 4 or 5 a.m., and I'm half of sleep doing that math. If I take my second dose, will I be able to safely drive to school or get to school? Or should I just give it in risk feeling awful for the rest of the day?

It's not a good choice for anyone to make no matter what your age is, but especially when you're taking a medication chronically. So what led you to being able to try LUMRYZ in our clinical study?

Yes. So I was in a psychology class, not long after being diagnosed, and there's like a whole section about how clinical trials are extremely important in the medical field. And I was like, "Well, I have narcolepsy now there's something I can participate in." And so I actually came across a different trial that I wasn't eligible for, but it meant that I was put on the list to be like one of the first to try LUMRYZ in the trial, so I was ecstatic waiting for that to start.

That's fantastic. And for the audience, Katie has been taking LUMRYZ since September of 2020. So she was enrolled the first patient at the particular site that you were at and I would love -- I never get tired of hearing your experience with LUMRYZ. So tell us a little bit about how that has been going since that time.

Yes. I [ pull heartedly ] believe that LUMRYZ has changed in some way every aspect of my life. On the day-to-day basis, I have a much more consistent schedule. I don't have to play with my wake-up time anymore. I can guarantee every morning that I'm going to wake up at the same time because I'm not playing a game of chance with my second dose, which leads to small things like being able to have breakfast that sometimes the only time in the day I get to hang out to my family or just to see the sunrise, it's pretty remarkable. On a bigger scale, it means I get to do the things I love again. For example, now that I'm here in New York as a person who loves theater more than anything, it's pretty remarkable that I got to see 2 shows. In the past, I remember falling asleep during the one chance I got to see my favorite show ever and it was devastating. And now I'm at a point where I can watch the shows and not just watch these shows, I can go to them after a full day. I don't have to pick and choose what to do when I have those good times because now it's all kind of good times. I can go to dinner and a show. I can see my family and go hang out with friends after. I can do it all.

That's incredible. You're not making sacrifices. You're not having to make those trade-offs because you're not able to fully participate. So this has been a liberating experience for you. I'm so glad to hear that. So we had 2 of the country's top physicians who spoke a little bit about how they approach the care of narcolepsy. If you had the opportunity to speak with other physicians who are treating people with narcolepsy, now that there are 3 different oxybates that they could choose from and discussed with their patients, what would you want them to consider or maybe ask the patients that they're seeing?

I would ask that they start asking more questions. I -- as I said, I struggled greatly taking that second dose, and I never thought to bring it up to my physician because I felt like it was a personal fault. I felt like it was something I was doing wrong. I knew -- wow, there are so many people on this life-changing medication that I'm on. And obviously, well, it felt obvious to me that they could all wake up for their second dose. So I never brought it up, and I just kind of struggled with it until I got on LUMRYZ. But you know now that there's options I would encourage physicians to ask those questions that people like me might be too afraid to ask.

That is such good advice. And I have to thank [indiscernible] , I've known you for a couple of years. I've heard your story many times. I never ever get tired of it because it's so inspiring to us. But it was not until the last couple of days that I knew that you never brought up to your physician the fact that you were missing the second dose because you felt it was a failure on your part. And obviously, it was not, but it underscores that culture of silence where because the medication, the loyalty can be so transformational, people in the past have been willing to have not always optimal therapy. And your experience with LUMRYZ represents what's possible for the future. Thank you so much, Katie, for sharing your [indiscernible]

Okay. So we'll take a little break from the presentation, maybe open it up to Q&A with Dr. Stern and Dr. Morse and Jen.

Can you hear me Yes, it's Frank Brisebois with Oppenheimer. Thanks for the presentation. A lot of interesting things here that were said, and thank you, Katie, for sharing. So maybe a first question here. Just wondering to the clinicians, the size of your narcolepsy practice and maybe the percentage of patients that you have that are hypertensive. And with some of the very interesting comments today, I was wondering if you do have a hypertensive patient, would you ever still consider LUMRYZ as an option? That's the first question.

Sure. So I would say that I have one of the largest practices of patients with mental disorders of [indiscernible] in Pennsylvania. And I do have patients who fly from all over the country to see me, so not a small practice. In regards to hypertension, my practice does span all ages. So my youngest patient is 5, my oldest 75. In the pediatric population, it's less common. We can see incident development of hypertension with some of the stimulant therapy a close colleague of mine, [ Karen Mask ] at Harvard, actually has some of that data that has demonstrated also. She's going to be working on publishing this soon of the transition from stimulants to sodium oxybate and demonstrating a decrease in blood pressure. In terms of the patients who have preexisting hypertension. I am not going to withhold a treatment that's going to be transformational to the [indiscernible] because of the concern for sodium. I'd much rather see them being like Katie, being able to go and exercise, being able to be mindful. And I think it also is very important to recognize that there is a change in behavior. If I give you a -- something with a high sodium, you're unlikely to choose other foods that are also high sodium. Your body has a normal homeostasis that was going to help you [indiscernible]

And so if you include all disorders of [indiscernible] , including [indiscernible] , we have several hundred patients in my clinic. It's because those patients are [ sticky ]. This is a lifelong disorder. They don't leave. They come back every 3 months, 6 months, whatever. And I've been doing it for 20 years, and I've been using oxybate for a long time. I can tell you, I've literally never encountered hypertension from an oxybate ever. The stimulants, way more cardiovascular effect and certainly stimulants like at or all are -- we've had to adjust because of usually more [indiscernible] than high blood pressure, although they go hand in hand. And so that's been an issue using the stimulants in the cardiovascular toxicity, literally never been a problem with oxybate.

Okay. And then as the -- I think it's working. As the launch just started, I was just wondering, Xyrem, Xywav have been around for so long here. [indiscernible] as long. But oxybate have been around for a very long time at the sleep conference. Can you just talk about -- I know oftentimes, it's more KOLs, but this is a concentrated prescriber base. So can you just talk about the awareness between physicians -- amongst physicians. And then clearly, what's extremely important here is the awareness with the patients? And is there a tight network of patients? Just trying to get a feel.

So as Jen has shared, I'm a medical adviser for pretty much all of the organizations. So the main ones being wake up narcolepsy, Project Sleep Hypersomnia Foundation. If you want to talk about a tight network, they are the prototype, they're the epitome of a tight network. And they are probably also -- which is common in rare disease, incredibly well informed. And so you'll find most physicians will say, tell their patients don't use Google as your doctor, right? I encourage that from my patients. Why? Because they actually teach me more than I can teach them. And so when there are new drugs available, they know it many times before, even their doctors. Now when you're asking about how informed is the physician community or the medical community, everyone is waiting for the next new treatment, what else is there available. And as I had alluded to earlier, with the twice-nightly, there is a smaller market of prescribers in comparison to the number of possible prescribers. There does very much appear based on the research that has been done, but also I can say, again, I'm an educator, I speak internationally, that this is a question I get very commonly about the once nightly and how they plan to utilize it and enroll in the REMS program. So I do think that you're going to see not just a marginal increase, I think it's going to be a very sizable increase.

In echo, the narcolepsy patients are very well informed and often come with the questions of clinical trials and is it available yet. And so -- and there is a -- and I haven't gotten to say specifically for my clinic, but there's a large population that's waiting for the [indiscernible] night to come out. And I use this analogy because most of us cannot relate to being so tired, you literally fall sleep in a very awkward situation. I stayed up a few times, [indiscernible] hours where I was a resident. And so -- but I don't think even that is what these people do with [indiscernible] basis. But all of this can relate to being [indiscernible] , right? So we've all been [indiscernible] we've all had [indiscernible]. And so if I came to you and said, "Hey, I've got a great treatment for [ nausea ]. All you have to do is eat this [indiscernible]." You'd look at me and be like, "you're crazy." But if it made you feel better, you'd force yourself to do it, right? And the same thing is true with narcolepsy patients. When I tell them, it looks like [indiscernible] , "Oh, [indiscernible] you just have to wake up the [indiscernible] and take a dose." They watch they act like, "are you serious?" And so there is a big portion of patients that are very aware of what's going on with this drug, and there's waiting. And the other thing that most people don't appreciate is how difficult it is to get oxybate and has been for 20 years. You don't just try a prescription, [indiscernible] corner store. It's -- you have to get them enrolled in the REMS program, you have to fight with insurance. And so these are all -- have all been barriers, and it's going to be no different from LUMRYZ, but it's going to be easier. Greg and his team are setting up multiple pharmacies that you can interact with. And so that's going to make things easier than having to deal with one pharmacy.

Yes. And if I can just add to that. So I already have 6 patients in the process, 4 of them are already approved by insurance. So in regards to the challenge, it is a matter of also how you're able to kind of navigate that process. One other piece that I think is really important is that you don't have to take our word for what the buzz is, go to social media, you'll see it. And you also see comments like what Katie had described, they're not describing these issues to their physicians, but they're posting it all over social media of the miss doses and the consequences associated with it in the constant choices, so I do think that those are really important points to consider.

This is Ami Fadia from Needham. I've got 2. Firstly, I believe Greg mentioned earlier in the presentation that market research has indicated that the total number of patients taking an oxybate would expand with the availability of LUMRYZ. And I wanted to feedback from both the physicians, where do you see that growth coming from? Is it predominantly patients who had tried and oxybate in the past and now we'll come back and try this. And also, if you could talk about what are the common reasons for which they would have discontinued and oxybate in the past. And then I've got a second one later.

Sure. So I think that it's important to recognize several things about the disease [ state ], right? So it [indiscernible] to me that about 200,000 people in the United States have narcolepsy, and that's with the accompanying estimation that 50% of people with narcolepsy are walking around undiagnosed, okay? So the number is likely underestimated. The second piece -- so I think that with more drugs coming to market, it's going to increase awareness of the disease state, it's going to increase the number of people being diagnosed. And if you look at studies that have assessed claims data, it is showing that same trajectory, so there's increasing numbers of individuals being diagnosed. It's not that the diagnosis is happening more. It's just that it's increasing. The second piece is the market is going to come from 2 places. You're going to have people who have tried and discontinued and then you're going to have people who are completely naive, and the naive patients are going to be those who refuse in the past and then those who are new diagnosis, right? So you have a growing population, you have a growing number of people who are going to consider it, and then you're going to people who [ failed in past ]. Reasons people fail in the past. I would say that my experience in my clinic and then getting people a second opinions is that when I get them a second opinions, the titration was not appropriate. So the physician was not familiar with the drug enough where they either titrate them too quickly or didn't utilize things like asymmetric dosing, et cetera, to allow the patient to actually tolerate the drug, okay? There also were many patients who failed it because they couldn't get up for the second dose. And so therefore, they're only taking 1 dose. They're not getting really any benefit or only experiencing side effect, kind of the greasy pork sandwich example. And in my practice, I would say that it most commonly is that people will discontinue because of the missing of the doses. They just can't -- they can't make it fit their life. And so the conversation I got all my patients is I want to create a regimen [indiscernible] fit your life, not a life [indiscernible] at your regimen.

I think there's 3 groups. The ones that have never tried oxybate are going to try them. The ones that have tried and failed will probably try again. And the ones that are using them successfully are going to switch to [indiscernible]. I mean there's going to be 3 places that patients come from.

My second question is about patients who would switch. And it sounds like there's a lot of pent-up demand and broad-based awareness amongst physicians and patients about the availability of LUMRYZ. What is going to trigger that switch? Is it that patients are calling your offices? [indiscernible]

[indiscernible] They are already doing that. They were doing that even before the drug was actually clinically available. So I think our experience might be a little bit more unique because we're a research sites for it. And so patients who weren't eligible for the trial, definitely are reaching out. But yes, they're already doing that. So I think it's coming from a combination of things.

Well, and the other thing is, again, these are sticky patients. If they're on stimulus, they have to see that every 3 or 6 months, all of them. And so you get multiple touches a year. And one of the things I always ask is, hey, is there anything new? And I would say, yes, there's something new. So literally, I'll have this conversation with all my unfortunately, narcolepsy now hopefully [indiscernible] hypersomnia in near future at least once this year because they're just a very -- like I said, there we see them multiple times a year.

This is Oren Livnat from H.C. Wainright. Could you tell us where sodium oxybate is in your momentary and which line of therapy now? And why is it -- if it's not early line, is it primarily just for access issues, insurance, headaches. If there were no insurance barriers, would oxybate be theoretically a first-line therapy that you would offer to any new patients that comes in? And does that change meaningfully with twice versus once-nightly?

So there's so many ways I want to answer that question. So number one, not just for me, the 2021 guidelines for [indiscernible] a hypersomnias clearly positioned as a strong recommendation for use of sodium oxybate. So when you look at the approach of treatment, first-line therapy is alerting agents or sodium oxybate and second and third line is your traditional stimulants [indiscernible] and that means being third line. If you look at the European guidelines, you'll see the same positioning, especially for an individual has [indiscernible] sleep, it's really your only option, right? So that's first and foremost. In terms of when you look at all the other options that are available, most of them have tolerance associated with it. So although there has not been any systematic evaluation of tolerance in prescribed oxybate, what I can tell you is based on my international collaboration with other providers who have many, many, many more years of experience than I do, we don't see tolerance clinically. The third piece is that there was just a publication published earlier this year, which I think is building on historical evidence in literature that oxybate has more than just the clinical value. So what I mean by that is if you look back several -- back actually in early 2000s, there were initially data looking at [ animal models ] who suffer hypoxic ischemic encephalopathy in applied oxybate, sodium oxybate [indiscernible] . And what they had identified was that not only that there were obviously changes clinically, but that there actually was a neuro regenerative opportunity there. So the reason I bring that up is because most recently, there was a publication that was done. So in 2018, a research group had looked at the use of opiates in animal models and had demonstrated an increase in the number of [indiscernible], okay? But they were smaller in size. The same group looked at sodium oxybate in animal models. And what they had identified was it actually increased the size of [ Oroxine hypocretin neurons ]. So when I see that as a research or one of the things that I wonder about is, is there a salvaging of the phenotype by utilization of sodium oxybate, and do you actually do a life-long change in the trajectory of these patients. So what I mean is that if I find someone like Katie who we get her at early onset, and I expose her to oxybate, do I change her life. Not only did I transform her life, do I change her life because these patients develop this accumulating disease over time. And so the bigger question to ask is, do you actually mitigate some of those other development of other disease. And that's -- I think that's the big wildcard that we have right now. So I think that there's a lot of good science that demonstrates that this drug has benefit beyond even what Avadel is able to advertise on.

In an ideal world, I would introduce oxybate early and stimulants would be last. I prefer to use drugs that have been developed specifically for the disease. And so the [ histamine agonist ] hopefully when [indiscernible] that are really addressing the pathophysiology of narcolepsy. And so I would have almost, everybody on oxybate, if I could give them a prescription, they go to the store and pick it up. That's not reality. And like I said, in order to get the oxybate, they have to fail stimulants first. And so it's not ideal, but it's the reality of the health care system we're in. And so hopefully, adding LUMRYZ to the [ armamentarium ] will make it easier to get oxbates.

Maybe 1 more question, if we can.

That gentleman has been having his hand up for a long time.

Which one?

Him, right there.

Go ahead, [ Matt ].

Sorry. [indiscernible]

Just I want to see the -- obviously, it's early on in the launch of the product, but your experience with patient access. And specifically, how you help the patients and how much time it takes you to navigate, whether it's insurance reimbursement, getting access using, I guess, the programs that Avadel has put in place.

And so it's so early. I mean, it's been less than 3 weeks or about 3 weeks that we've been able to try. And so it's hard to speak specifically about this experience. So far so good, but it's learning to play the game, whether it's this or there's -- going through the prior authorization and fighting with insurance, it's a game you learn to play. And so you get your canned letters, you get your canned responses. You feel out how to correctly fill out the form, which is different for each insurance company. And so it's -- that's across the board for a lot of commercial medications, and so we'll figure it out. And like I said, it's really too early because we literally are just enrolling our first patient.

So as I mentioned, I have 6 patients who we already have enrolled in the REMS program and 4 of them who already have insurance approval, and that is including 1 patient who is 16 years old. And so just like any program, so REMS programs are not unique to oxybate as a neurologist or other drugs that I use the [indiscernible] program. And so it is a matter of just having a process in place in your office to be able. So irrespective of what the drug company has, there has to be a process in the office. But I would say that Avadel has done, and I think is intelligent, is that they talk to me and my office staff to understand how do they duplicate our success and they listen. So even when I may give hard feedback, they respond and they make changes that are meaningful and make it easier for the patient and for the provider. And I also think it's important for all of you to hear that although we, as physicians may sound like we're being cynical about like the process, the reality also is a very important process for the safety of our patients and the safety of my practice. And so REMS programs historically in the oxybate world and specifically in the past when -- and currently, I still use medications from Jazz. Those programs are quite useful for our patients. There's a lot of resources built in there. And so although we kind of will joke about like, "oh, it's just big burden" it actually -- once the process is in place, it's not overly burdensome. And I think that that's going to just continue to get more streamlined.

Yes. And Matt, I think we'll cover a little bit about that in the second half and have a chance to chat a little bit about our views of what it's going to look like early and what it has looked like early at this point. So -- but I know we're a little bit over in the Q&A. I think we're going to pause now. We'll have a chance to come back to you, John, don' worry. We'll pause now so we can keep going and try to keep reasonably on schedule. But Dr. Stern, Dr. Morse, Katie, thank you so much. Appreciate it. Okay. So we're going to spend the next part of the session really digging deeper into our plan, how we view the opportunity, the buildup that we referenced earlier and then introduce some early launch metrics from that standpoint. So I'm going to turn it over to Richard. Richard?

All right. Thanks, Greg. I'm back. All right. Here we go. I mean, that's a hard act to follow up after Dr. Morse, Dr. Stern and Katie, but we're going to get into a little more detail about what we're doing. And I think maybe in the next section, some of the early indicators to support the first few weeks of LUMRYZ launch. So let's talk about a little bit about the current marketplace. We're going to talk about the core elements, the decisions that we made going into this launch. And we've talked about 3 patient segments previously, those who are on -- currently on oxybate, discontinued patients and naive patients, as you heard from Dr. Morse and Dr. Stern and talk to you about some of the deeper insights that we have in each of those segments. All right. Let's start with where the marketplace is today. First generation oxybates for narcolepsy. The market has, in essence, plateaued at about $1.8 billion of sales and at any given time, around 16,000 patients on therapy, so this is over the last 5 years of data that we have. And very notably, even with the introduction of the mix salt version, it didn't grow the overall oxybate marketplace. It's in fact, probably decreased the growth if you look at the curve here as well. So unfortunately, as you've heard from Dr. Stern and Dr. Morse, it's -- there's a lot of patients. And unfortunately, maybe even some patients who have still haven't considered using [ oxybate ]. When we actually look at oxybate prescribers right now as well, so the left side of the graph is actually -- there are about 39,000 physicians who prescribe therapies for narcolepsy. Some of them are doing refills and primary care and other things like that, but there's currently about 4,500 active oxybate prescribers. So we have actually done a new claims analysis and slightly adjusted some of our numbers. But if you look on the right side of the page as well, once again there, the number of oxybate prescribers year-over-year has been flat. Some of the things that go on within the marketplace for first-generation oxybate, about half the patients who are eligible are not on them. And as some of the story -- the comments that we heard from Dr. Morse and Dr. Stern, unfortunately, a lot of eligible patients for oxybate, first-generation oxybate just refuse to take it for the reasons that we've heard. So that's sort of where the marketplace is. We took a lot of the insights from our market research, data and analytics and the ongoing conversations that we've had to really think about the pillars of how we build our launch plan. And we really think about 3 key areas when you think about a launch. Demand generation, how do we get people interested in prescribing and taking LUMRYZ. Reimbursement is absolutely critical, especially in this country. And then as some of the questions that have already come up, how do we help people actually get on once that prescription has been written. So I'm going to start with [ demand ] generation. So some of the things that we have done, super glad that our organization is built. Our sales representatives are now fully trained and out in territory. As of this week, the -- we have the coverage for our sales force as well. I'll share in a moment in a little bit our campaign once at bedtime for their [ paid ] time. That is our messaging that supports our positioning that we spoke about earlier. You will see that and hear that throughout our promotional campaigns, both in front of physicians and online as well and through our social media. And then the [ APSS ] meeting was the ideal time for us to announce that LUMRYZ was commercially available and have launched that occurred [ June 7 ]. And in fact, I got a few pictures here as well. So keep in mind, on June 5 is when we announced that LUMRYZ is commercially available. And here are a few pictures. You can see our booth. We were actually pretty popular. It was great to hang out and meet old friends and new friends at [ sleep as well ]. Remember, this is the largest congress for sleep medicine in the United States, and the majority of clinicians who attend are from the U.S. We had hundreds of scanned interactions, way more than we could probably actually scan. Jen and her team with the -- obviously, with the great input from thought leaders from across the country and around the world had 12 posters and 6 oral presentations of data supporting LUMRYZ. We hosted a product [ theater ]. You can see Dr. Morse speaking on the picture on the bottom there. She has lots of nice outfits, if you haven't noticed, Dr. Morse's attire in the past. But eloquently speaking about the need and Katie was actually there as well. On the bottom left, on my hand, I guess bottom right on your side, this was what was [indiscernible] the great wall of Avadel, all the posters sort of encompassing and [ golfing ] the poster sessions from all the data that generated. And actually, that term came from someone in our industry, not at Avadel as well, so we really appreciate their acknowledgment of the great clinical data that's been generated to support LUMRYZ as well. So our sales force is real now, like we have people. They're out there seeing customers. And I also remind myself, a lot of our customers are getting to know Avadel for the first time. So we don't win everyone on the first visit. Jen and I sort of joke you don't ask them to marry you on your first day. So we're building our credibility out there over calls over time here as well. But it was really important what we built and the characteristics that we needed for our team. So first and foremost, these are the skills that we look for, rare and orphan disease, sleep experience. But if they didn't have sleep, the vast majority of our team had experience with the types of clinicians, either neurologists or pulmonologists from the past, over 400 product launches. But the other very critical tangible things that we've offered -- or looked for is people who want to win for patients first. That's always #1 in our company. The second thing, they have to live up to our core values because it's the foundation around where a company grade has built our company. And the third thing is we want really competitive people who know how to win in complex competitive marketplaces, right? So we're super proud that our team is out there now sort of fully as of this week, our sales force has our full coverage. So the next component, of course, was our strategy around payers. So we believe that the coverage and the channel for LUMRYZ is going to be predominantly commercial, about 80% to 90% of our future business. So we've made great progress, and I'll give you a few of those insights in the next section here with the [ PBMs and the GPOs ] that are over top of them as well. So the 3 major GPOs will account for about 85% of the commercially covered lives for LUMRYZ. So that's with Ascent, that's with [indiscernible] and that's what [ MSR ]. And one of the fundamental decisions that we made, and I'm glad that Dr. Stern said, this is a good thing around the specialty pharmacies is we have each of the specialty pharmacies with those GPOs in our network. So sometimes people say, why did you guys do that? Well, here's why. First and foremost, the payers like to dispense with their own specialty pharmacy network, so it's good for payers. What's also important, as you heard from Dr. Stern and Dr. Morse, a lot of people with narcolepsy are on multiple therapies. And if you have an in-network pharmacy, they are able to look for concomitant medications as well. So good for the payer, good for the patient, and we're hopefully going to make it good for the providers as well with all the services that we offer. And of course, our fundamental strategy has been, from an oxybate coverage perspective, parity with the best of the oxybate to not be stepped through any other oxybate. So we're not going to disrupt the [ applecart ] now, but we do not want to be disadvantaged compared to any oxybate right now. That has been the cornerstone pillar of what we've been doing. And recall, anyone who's already been exposed to oxybate on or previously are discontinued has in essence already stepped through a first-generation oxybate. So typically, what I would say, as I mentioned, I've had the pleasure of doing 11 previous launches. If you can get pretty broad coverage [ within the 6, 9 months ], you have done an excellent job and that has absolutely been our goal as well. Okay. The other component is, can we help to fulfill the product. As Dr. Stern said, it isn't easy in the United States. The system makes it very difficult for you for no matter what product or what category you're in. But a few things that we have done. The first thing we did was listen to our customers, which are providers, medical assistants in those offices and patients, all right? So some of the essential services that we are offering through rise up our patient support services is on the left side, a $0 commercial co-pay for eligible patients. We don't want affordability to get in the way of patients being able to access LUMRYZ. We have a patient assistance program for those people who cannot afford through their insurance to be on LUMRYZ. We also, very importantly, have a temporary assistance program. One of the things we hear a lot is people who are anxious and eager to get on to their therapy. So we have programs that can help to bridge patients before their benefits and investigations that completed, and that's something that we will work on, on an individual basis with the provider and the patient as well. All right. So the services are really important, but the people who [indiscernible] are very important as well. So we have -- in the middle column here, we've provided very personalized services. So maybe the most important feedback that we received in building our services is do not treat me like a number or a transaction, treat me like a person. Can you help develop a relationship with me, so I don't speak to 4 different people over a 3-month period of time. So one of the things we wanted to do in our patient centricity is have our staff at rise up, be nurses, people who actually understand clinical practice and patient care. So that's our front line that we have through [ RiseUP ]. They actually have all gone through a program called [ PAC ], which is to be prior authorization certified. But very importantly, our near secure navigators through RiseUP are geographically aligned across the country. So if you're in Texas and Houston, that clinician in that office will speak to the same nurse care navigator as well their patients. It will be an ongoing discussion and dialogue. I mean maybe one of nurse care navigators goes on vacation. We will have that case history and have one continuous conversation, not having to start this conversation at step 1 every single time, maybe the most essential thing that we heard in the feedback in building RiseUP. Now on the far right, very importantly, we also have to help because a lot of times offices will have multiple cases. So we actually have, as you heard from Dr. Morse, so we actually have built our field reimbursement team as well. There's 12 of those folks who are currently in the field right now, going into offices, helping listening, taking feedback, adjusting where [indiscernible] here as well, to make sure that we can support those people in offices. The [ MA ] job in today's world is very difficult. My son is a freshman in college, he's doing it. He's [indiscernible] They don't pay these people enough money to do what we do, right? So -- but having folks who can work with clinicians staffed hand-in-hand, and look at the overall composite of what goes on because we also have built a real-time data platform. So when [ FRM ] goes to office, they'll know who's [ queued up, ] who hasn't been as [ certified ] where they are in the system, whether or not the drug has been dispensed, so they can have a holistic conversation within an office as well. So really essential components of what we've done for our patient fulfillment as well and they've got a lot of experience. Okay. We have talked about 3 patient segments throughout many months and maybe probably the last 1.5 years here as well. And we've had a chance to sort of refresh our look at some of these patient segments as well with both research and some claims data, so we're going to get into that right now. We're going to start with the current marketplace, 16,000 patients approximately who are on first-generation oxybate. We know that there are 3,000 patients who are new to starts to oxybate annually every year. That's it's been pretty consistent. But when we go back to claims, we can see that in the last 5 years, there have been 32,000 unique patients who have been on first generation oxybate. So the math would tell you, about half of those 16,000 are on today and about half of them are no longer on a first generation oxybate, so there's a lot of patients who have been exposed to an oxybate -- first generation oxybate just in the last several years. So that's our foundation. So now let's switch to what could LUMRYZ offer to these segments as well and people at narcolepsy. So let's start with that currently on treatment segment again as well. So we have done extensive market research in these segments. And what we see is patient willingness to switch to LUMRYZ being greater than 60%. Physician intention to prescribe being greater than 60% once again, prior to any promotional effort or a claim around clinical security as well. And as you heard Dr. Stern eloquently say patients have voted with their feet from RESTORE, we're not communicating that directly, but we know that we have that real-world evidence as well. So it's just been great to [indiscernible] . And by the way, this is the patient feedback that we get is for patients both currently on the first-generation sodium oxybate and mix salt oxybate as well. Okay. Let's talk about those discontinued patients. What we can say through claims is the vast, vast, vast majority of these patients are still under the care of their health care provider or a sleep specialist. So they generally do not disappear if they [indiscernible] an oxybate because they still have the symptoms of narcolepsy. So it's a big segment, 16,000. We're not seeing every 1 of them reengages, but our market research and patient willingness to try LUMRYZ from a few different vantage points has been 33% to 65%. And physicians' interest and intent to prescribe greater than 60% for this segment as well, all right? And I think we heard very eloquently from Dr. Stern and Dr. Morse, some of the reasons why patients have [indiscernible] in the past as well. Maybe one of the more interesting things that we've learned in the last while is when we went to claims is naive patients. So we've actually gone back into claims, and what we can now see is there are clearly a lot of patients. We talk about 25,000 patients. This segment that we describe as oxybate naive have all been treated already with at least 2 stimulants, and many of them 3 and also wake [indiscernible] agent. 2/3 have already been on an antidepressant. So -- and as you know with this condition, sometimes they will start before the [indiscernible] diagnosis for an antidepressant, sometimes it will be added on to address some of their cataplexy as well. So this is a real population under the care of physicians right now. And our estimate is about half of these patients are currently under the care of physicians who treat currently use oxybates as well. Physician intention to prescribe in this segment, greater than 50% and patient willingness to try LUMRYZ is 35% to 40%. And some people might say, "Hey, that's kind of low." Considering they've not been on an oxybate, we think that's a great place to start because they would be switching or adding to Dr. Stern's point from taking stimulants [ wake-promoting ] agents and other therapies other than an oxybate as well, so this is sort of how we sort of look at the overall opportunity. And when you think about where first-generation oxybate are today, that means today, they're about 12% penetrated into this naive segment as well. So as much as we think about the opportunity to grow double whatever, we also sort of say we don't need to penetrate this market that much more to actually have more patients potentially be able to benefit from LUMRYZ as well. So when you stack all these 3 opportunities together, greater than 50,000 patients. Greg had alluded to this in the beginning. On the bottom, we know that we have a clear and relative benefit, and there is high interest from both physicians and from people with narcolepsy. When we get to the orange segment of patients who have discontinued first-generation oxybates, they are highly unlikely to try another first-generation oxybate. This is almost exclusively be an opportunity for LUMRYZ. And when we look at naive -- the naive segment, there are clearly patients within current oxybate prescribers today that can be considered, but we also see future opportunities to potentially expand the treater base as we go forward on a launch journey as well. So hopefully, I've sort of covered in this section the fact that there is opportunity beyond the first-generation oxybate marketplace. We've built a very clear plan based off of market research data analytics and speaking and listening to our customers. And we clearly see from the market research and the work that we've done that we can win in all 3 patient segments. Okay. So the good news is there's no transition. I'm going to introduce myself. I am Richard, good to see you guys again. I'm going to go into my last section, which is maybe where some of your [indiscernible] the early signals that we're seeing for the launch. So right now, our launch execution is well underway. It is on point, and we believe we have seen some very really strong signals for the launch. So as I was able to show you before, there's the 4 pockets of LUMRYZ. I show you the [ 7.5 ]. They are available on 4.5, 6, 7.5 and 9-gram packets. There -- we have 8 SKUs because they're available in 7 [ and 30-day accounts ]. And they're premeasured. You don't have to measure how much you're pouring out of the pocket, you dump it into water, you swirl it up for 60 seconds, you ingest it, swirl it again and you're good to go once and only at bed time. And LUMRYZ has been now available for the last few weeks at all of our specialty pharmacy networks, [indiscernible] [ CVS ] Specialty and Optum Frontier therapies. Optum opened up a new arm of their specialty pharmacy, specifically for rare disease, and we're really proud to partner with all 3 of these groups to help us distribute LUMRYZ. Here our campaign, the doorway to a better day. Once at bedtime for their daytime and it's the first and only single dose sodium oxybate. So when we've done the research, what patients want, as you heard from Katie is the chance to live the life that they either had or hope they could experience as well. And from transitioning from that bedroom into what looks like sort of their -- what their day could look like here as well. And what was really great for us when we tested our campaign is it tested equally well with providers and with people with narcolepsy because Dr. Morse says this a lot, and hopefully, I'm quoting this the right way, but if you think about the treatment paradigm for most providers or sleep experts, the patient is actually the captain and the provider is the first [ made ]. And together, they are formulating that plan. So the fact that this resonates with both providers and people at narcolepsy, we were really thrilled about as well. Our materials are starting to get there everywhere now. So first, on the left-hand side, these are things that we're doing for [ HCPs ]. So our -- and also for patients, so our LUMRYZ website has been updated. We're going to have another update coming soon here as well. So in the first few weeks, we've had 7,000 visitors to our patient site and 5,000 visitors, unique visitors to our HCP site as well. So -- and on the right side, these are just thumbnails of many of the materials that our sales force and our field teams have to actually communicate and go over the value population with LUMRYZ in health care providers' offices as well. So patients, that's very important for us here as well. So early last year, towards the end of '21, we rolled out a campaign called Narcolepsy Disrupts. And we had several thousand people who opted in to learn about narcolepsy and really talk about not only the daytime challenges, but the nighttime as well. When they registered on the bottom left, you could actually get a sleep diary. And one of the things we often hear from people with narcolepsy is I need a place to capture all my thoughts because oftentimes, that's the point of the conversation that a patient will have with their provider when they have a follow-up visit as well. So we have now begun to transition patients from an unbranded conversation around Narcolepsy Disrupts to now hear directly about LUMRYZ, and we've begun that transition around hundreds of people who are now opting into our branded campaigns. What we can sort of see from our survey data because we're actually learning a lot more of these folks is the people clearly who are transitioning into the LUMRYZ communications are predominantly oxybate experienced patients who are now signing up for those activities as well. We have a really [ cool how to video ] as well. I think it's -- we have [indiscernible] in there. There's a big [indiscernible] around using a [indiscernible] intercompany one, but it's a great opportunity to really actually understand, it's a relatively straightforward process for how to actually administer and take LUMRYZ as well. Okay. I'm guessing this is a section you probably are the most curious about how we're doing for the first few weeks. It is early. There's a lot of things to still do for our launch, but we do have some early indicators for what's going on with the launch. This -- I'm going to caveat this. We may not show the same information every single time we speak to you. But at this point in time, we thought it was relevant to frame out what's been going on for the first few weeks. So the first question is, can we see people. The answer is yes. Okay. So as you know, from those 4,500 active oxybate prescribers, about 1,600 make up 80% of the total prescription volume in the United States. So keep in mind, about 1/4 of our sales force has just been making calls starting this week. But through the first few weeks, we've been already able to see about 2/3 of these top-tier offices, sleep offices, all right? And so for us, that's great. Once again, we're introducing ourselves. We're introducing Avadel, but we're very quickly getting into the conversation to LUMRYZ because that's where a lot of sleep providers want to go as well. And once again, our sales force is now fully trained in territory as of this week. Okay. lots of [indiscernible] here. [indiscernible] . We're 3 weeks in, very early, but we're going to share with you some of the behavioral activity metrics that are probably important early signs that we believe really start to encompass the interest level that we've seen from the narcolepsy community around LUMRYZ. So the first thing you have to do as a provider in this country to be able to prescribe an oxybate and specifically LUMRYZ is get certified in our REMS program, right? It's relatively straightforward. You have to test that you've read the PI. There's a brochure that signifies that and then you attest online that you have read those documents as well. So in our first few weeks, there are over 625 physicians who have REM certified for LUMRYZ. They've taken that first step on their journey to be able to actually prescribe LUMRYZ to their patients who have narcolepsy as well. Pretty exciting, right? So it's a good start, right? We got more room to go. But maybe the next part, as you start to go through the funnel is then who's being enrolled into our RiseUP patient support center. So very early, literally once again, we've started our promotion just for the last few weeks, but we have already 140 patients who are now enrolled in our RiseUP-patient support center as well. So I'm going to caveat, not every one of these will absolutely go on to -- that's sort of the way it works in the United States, but some early insights that we have, the majority of these patients are previously on oxybate. They are on -- they're switching from oxybate. And about half of them are coming from mix salt and about half of them are coming from sodium oxybate first-generation oxybate. So we have seen people and patients sort of [indiscernible] here early on here as well, so this is just in the first 2 weeks. So you got to go through that process. And then we're also super thrilled to once that our first patients have now received LUMRYZ, but very interesting as well. So [indiscernible] Marie said, she has actually had some success with [indiscernible] as well. Our first patients have all been reimbursed for commercially paid for patients as well. So we're not guaranteeing that the way it's going to work all the time. But I was asked before, are you just going to be giving away free product to everyone who [indiscernible] LUMRYZ ? The answer is no. But there's a few insights here. So as Anne Marie and Tom have said or Dr. Morse said, Dr. Stern said, the practices are unfortunately used to dealing with getting medicines that are difficult to acquire through specialty pharmacy. They've got a lot of experience doing this year as well, but it's really been great to sort of see. And you can also sort of say that we've actually had all 3 of our commercial pharmacies already ship out product to patients as well. So these are very early signs to [indiscernible]. I wasn't sure if we're going to have any patients ship product by the time we got to this day, but it's been really cool to sort of see. So the top of the funnel is there, and now we're starting to pull those patients through to actually get LUMRYZ shipped to patients as well because ultimately, that's what it's all about. So you might ask how are we doing with the payers. In my next life, I want to come back as someone who deals with reimbursement payers because they're like gold, like it's so hard to sort of work through the systems here. We have an outstanding team that has been able to engage with payers now for the last couple of years. We probably had a little bit more time to talk to them than we wanted. But we have some really payer achievements and success that we've had here as well. We're very thrilled to [indiscernible] that we've signed one of the 3 GPO contracts and that as of July 1, LUMRYZ will be on the Express Scripts National Preferred Formulary across the country, right? That is a major achievement for us to have in the first few weeks of our launch. We also now already have 10 [ Blues plans ], Blue Cross, Blue Shield plans who have published PA criteria at parity with other oxybate. [indiscernible] a little bit faster than I was expecting, right? And we have coverage with one of the largest multistate integrated health care systems which in my past, I may have taken a couple of years. We got that in the first 3 weeks post our launch as well. So if you collectively look at all this, we've already have coverage in about 40 million covered commercial lives in the United States in our first 3 weeks post approval. If I'm [indiscernible] that has definitely exceeded my expectations, we have more work to do because they don't [indiscernible] this quickly. But -- and obviously, for some of the plans like the GPO contract is through Ascent, now our teams have to pull that through to some of the PBM other national [ TB ] implants as well. So tremendous progress with offices, tremendous progress with the payers. And going forward, we get asked a lot, what are you going to keep reporting on? Well, we've always been transparent. I've been super proud to take part of the conversations that Greg and Tom have had with many of you over the last few years and many months as well. So here's our commitment to you. We're going to keep updating you on where we are with [indiscernible] because that's so essential that's the gateway to getting on to products in the United States. We're going to give you feedback on [indiscernible] fulfillment is going. If I'm candid with you, it's a new process, and new sometimes is viewed as difficult. But as you heard from Anne Marie, Dr. Morse, we are listening to our customers. And our goal is to win every person over one person, one interaction at a time as well as we all adapt to a new process as well. We'll talk to how many patients are reimbursed on therapy when we get to our quarterly earnings here as well, which will be probably around the second week of August. We'll continue to get market research. And clearly, our fiduciary responsibility is to also report on the revenue that we have as well. So our goal is to try to stay committed and kind of transparent to our launch and make sure that you are understanding where we're -- how we're making progress throughout as well. Okay. Greg sort of teed up sort of this greater than $1 billion opportunity. I'm maybe going to go a little bit lift the hood and maybe give you a little bit more of our insights why we believe that's the opportunity plus for LUMRYZ. So clearly, right now, we're at the time where we're doing this more focused launch. We made very strategic decisions around where to focus and launch the services to [ belt ] here. We believe, as you've heard from Dr. Morse and Dr. Stern, the chance, the opportunity to expand the marketplace through new prescribers, new types of patients. And the other thing that we believe we'll see with LUMRYZ is increased persistency as well, knowing that you only have to take the dose once at bedtime. And Greg will talk a little bit about some of our future opportunities and indications as well. One of the questions we get asked a lot about is how are these generics, not just the AGs right now because to [ Ray Canada, ] we don't think we've seen much impact as far as the branded oxybate are concerned, but besides Xyrem. But how will the generic future generics impact the marketplace? And our fundamental belief is, even when generics come in potentially as early as 2026, it really doesn't fundamentally change the growth opportunity for LUMRYZ. And let me sort of start on the left side and maybe walk through the elements here. First, our beliefs and our conversations with payers are anyone who is on LUMRYZ at this point is highly unlikely to be forced to ever switch to a generic first-generation sodium oxybate, almost be unethical. Patients who have already experienced been in generation oxybate can continue to switch as we believe they will be able to do now to LUMRYZ as well. So none of those fundamentals really change even in the future. The focus could be on the naive segment. So there's a large segment, but they're the smallest patients who go on to oxybate therapy on an annual basis as well. We believe that in the next couple of years, it would be surprising if a lot of people looking for treatment options don't know about LUMRYZ. So we believe both provider and patient awareness will be very, very high. We also -- our other belief is that generic companies may be less likely to invest what we and other branded companies are into patient services and support that exists in the marketplace today. So we're not going to predict what's going to happen in 2026 today because if I could, I'd buy the Mega Millions ticket from the guys on the corner this morning. But we see there's 2 pathways for continued growth for us, right? So the first on the far right is, number 1 is if there's a step through generics for naive patients, and here's what happens from our side. We don't have to rebate more with the payers. Why would we do that if they're forcing a step through another product. We would just wait for them to step through that product. So -- and what happens there then is our switch opportunity begins to grow again, right? So sort of as we sort of see now and that would sort of [indiscernible] and we sort of see that switch opportunity growing at a much faster rate than clearly even exist in the market today. Now the second option is we don't have a step, and we probably have to give a bigger rebate. And a lot of that, we believe, will sort of depend on where we are in the marketplace why we get there, but the great thing for us is we're sort of in control of our own destiny. And we don't have to decide today what we're going to do. But in either path, there was a clear opportunity for [indiscernible] LUMRYZ to continue to grow throughout in this marketplace as well. So now I'm going to get back to the slide that Greg tease you with in the beginning of his opening, which is sort of looking at our future peak opportunity. So I'm going to sort of break through each of the elements along the way. So we talked about the 50,000 patients. I showed you just previously the 3 segments of Switch, Discontinued and Naive and our updated claims data that supports why we believe there are over 50,000 patients who are addressable population for LUMRYZ. And we're not saying we get them all the day, but they're an addressable population. So the next thing is the market research we have seen that [indiscernible] is [ 35% ] to 100-plus percent growth. You heard a little bit about that from our experts today as well, so we see that opportunity for LUMRYZ to expand the marketplace. And that expansion from our market research is predominantly exclusively for the growth of LUMRYZ. Now today, the marketplace, 16,000 patients, if we do the math, maybe you get to 20,000 to 25,000 patients who are on oxybate therapy. We're not trying to stick [indiscernible] out too far here. And as Greg stated and I sort of showed you some of the results specifically, through 6 unique demand research projects, physicians tell us they're going to give us a 50% to 60% market share as well. So you put that all together and not taking the aggressive end of the spectrum for all of these assumptions, that gives us a potential for greater than 10,000 patients. And what's crazy is you don't have to win massively in any of the segments. You can win a little bit in some, you can win big in 1 and to get to 10,000 patients, and we see 10,000 is just the beginning. Clearly, the opportunity goes well beyond that. But we think that's probably a good place for us to start, which once again translates into a greater than $1 billion opportunity for us at today's pricing. So -- but the great thing for us [indiscernible] we only win a [indiscernible] win. I always sort of say, good business only comes through good science and to focus on doing the best thing for people, patients. And that's what we are really focusing on here at Avadel. And as I sum up sort of my portion before I hand it back to Greg, our launch execution is absolutely on track right now. It hasn't been easy. There's been a lot of long nights and a lot of people [indiscernible] working on their vacations if they can even take 1 right now. But things are working, right? And we're going to make some -- we're going to have some speed bumps. We're going to have to make some adjustments. That's how you go through any launch, but our foundation is exceptionally strong from the strategic decisions that we have made. We believe we've got some really strong indicators early. People are starting to take actions towards wanting to prescribe LUMRYZ as we go as well. We're going to keep providing updates and we're really proud that we have this great new therapy that financially can also be rewarding for shareholders as well. But once again, for us, it comes down to our ability to help more people with narcolepsy and provide more options to the sleep experts who see them as well. So with that, I'm going to turn it back to Greg to close this out before we get to our Q&A.

Thanks, Richard. Thank you. Okay. For those on the webcast, we are going to Slide [ 110. ] We'll go to Slide 111. So again, I just want to comment on a few other things [indiscernible] we've heard a lot of data here today and a lot of information, and I'm sure you have a lot of questions, and I'm the only thing between you and your questions and then a lunch, so we'll certainly try to be efficient. But I want to be clear, a, we are not guiding right now. I don't think we're uncommon to any other company at this point in time in their launch. We're not giving financial guidance, but we do think that these are important leading indicators for us. In terms of that will lead to the sort of ramp and uptake as we go through the next couple of quarters, that are key. We can't get anybody prescribe LUMRYZ unless we have doctors who can write it. And you've seen a little bit of that early indication already in the first few weeks. Obviously, patient starts, right? Patients intend to want to enroll into our system with an intention to go on our therapy, right? You've seen a little bit of that in the first few weeks. And then, of course, these major payer decisions are obviously important as we expand that base that has already started to grow for us, and I'm sure there'll be more updates that we'll share in the coming weeks and months in that regard. But a common question I've received from many of you, even leading up to today was, okay, you're launching LUMRYZ, like, what's next, right? Where are you going to go from here, like what's your plan to diversify the business, right? And we've always talked about kind of the 3 legs of the stool, right? Most important thing we can do is successfully launch LUMRYZ, which creates as much optionality. Then it becomes how do you leverage the innovation that's LUMRYZ, how you leverage the investment we're making in commercializing LUMRYZ and can you apply our technology to any other oxybate like opportunities, right? We're not going to talk about all that today. But we are going to talk about the importance of how can we expand the patient population who could benefit from LUMRYZ. So call that our life cycle management strategy, right? Investing in the innovation and the differentiation that is LUMRYZ. Three areas we can do that in: age, indication, formulation, right? So we've been working on -- let me step back. Richard talked about the [ sleep meeting ] a little bit. There was a lot of excitement, a lot of physicians who were congratulating us on our approval, but much like you asking us the questions about what's next. We got similar questions from physicians at the Sleep Meeting, which were much more specific. When are you going to do pediatric and when are you going to do a study in [ IH? ] Like it came immediately after congratulations to your approval. So if we ever had any question of whether or not we should do that, I think it became pretty clear that there's a lot of interest in the clinical community. So we've been working on pediatrics for quite some time, right? We've been engaging with the FDA on this matter. It represents about 5% of the current narcolepsy market opportunity based upon the claims data that Richard and I have described previously. And the one thing we can say is beside the physician interest, like we hear from patients. We hear as much are from parents, we hear as much from parents of patients on oxybate as we do at times from patients themselves, right? And these are patients who have pediatric -- children who are pediatric patients. We hear from adults of or parents of adult children as well who wake up every night to wake their child up so they can get to work the next day or get to school the next day. So clearly, pediatric is something we're going to do. It's -- we've worked with FDA to have a pathway. We would expect to file our supplemental NDA as the slide says later this year, okay? So we'll give you an update on that, but we would expect that supplemental NDA to be filed later this year. So where are we on IH, right? [indiscernible] talked to people ask us a lot where you and IH. Again, a lot of interest on LUMRYZ for IH and Dr. Morse, Dr. Stern can certainly talk more eloquently about this. But what we hear from clinicians is that the deep sleep inertia that these patients suffer, the challenge of waking up is arguably maybe more so in IH than it even is in narcolepsy. And the value proposition of the LUMRYZ innovation may be even more compelling in that patient population as well. So from our standpoint, we wanted to understand the market. Like what's -- what is this market, right? Because we only see one approved formally approved product. We've seen their uptake over the last 5 quarters or whatever it is. But we have seen in the same claims database, over 45,000 uniquely diagnosed patients, about 80% of them are on some sort of therapeutic intervention. And about 5% of them are on the first-generation twice-nightly oxybate that has the approval for IH. So we certainly view that as an opportunity to do the clinical work as the community has certainly suggested and recommended we do. We are in, I would describe as pretty advanced R&D planning stages. So we'll update more specifically on timing, but there's a number of components to that, not only what's your protocol, but -- and who's your CRO, but you got to get clinical supply. It does require a quota requirement, you got to work with the FDA on our IND. So we'll update these things as we go, but it is clearly in our pathway now, now that we've cleared the approval and have our orphan exclusivity. And then lastly is formulation, right? So we believe all patients who are interested in having a once a bedtime treatment option should be -- should have that. And we obviously have the technology to be able to deliver that, right? So we're certainly targeting our own no or low sodium formulation for at-risk eligible patients, those who are self sensitive. That's what our label says, with a target product profile to be bioequivalent LUMRYZ. That's what we're trying to develop. Why? Because that could potentially enable us a PK only development pathway, assuming the FDA agrees with that, and that's the approach we're taking. We've been working on this for a little while. As many of you know, we continue to advance this, and we're still in our preclinical formulation stage. And as that advances as well, we certainly will update The Street as appropriate. But again, we believe now with the priority #1 being successfully launched LUMRYZ, the opportunity to expand the potential patient population is an important next step for us as we continue to build our company out. So just a quick snapshot on where we are from a cash standpoint. We talked about our balance sheet. All of you or many of you are aware of the things we've done during the course of the last few months to sort that out. But again, $275 million of, let's call it, pro forma cash and/or committed capital as of 3/31. We do believe that, that combined amount based on our current operating plan is adequate to fund our operations through cash flow breakeven, that is our plan today. So we believe we're in a very strong spot from a balance sheet and cash availability standpoint to help support the operations and successfully launch LUMRYZ and do all the things that Richard has described over the course of this morning. So maybe the last slide before we wrap up and move to a Q&A is we covered a lot of things here today. We've -- many of you have waited a long time for this period of time, and in some cases, actually today to hear our views on the market, right? But we're very, very focused as a company to deliver on the right priorities to create the right sort of value for all stakeholders, from patients, to shareholders to the company at large. We've tried to disclose and open the curtain up a little bit on our insights on the marketplace, and have a fire alarm at the same time. The things we do to avoid a Q&A, John, right. But at the end of the day, this is an exciting transformative time for Avadel. The police are excited, the fire companies are excited, and we really appreciate all of you being here. But I would be [indiscernible] if we didn't say thank you for spending your morning with us, and thank you to our guests to Dr. Stern, Dr. Morse and Katie in particular for sharing your story. We really appreciate you being here. For those on the webcast as well, spending your morning and having opportunity to discuss our thoughts around LUMRYZ and hear from our experts. So with that, I'll invite the management team up to maybe open it up to some Q&A.

This is [indiscernible] Patel with Bank of America. First question on payer coverage. With the Express Scripts coverage of LUMRYZ effective July 1, maybe if you could share what [indiscernible] will be required. And maybe if you can also provide some commentary on what you expect gross to net to look like with price at parity to Xywav. And then a follow-up question on idiopathic hypersomnia. What are you thinking about for the study design? Do you expect it to be a randomized double withdrawal study? Or are you thinking about that a little differently?

Yes. Let's see if we can remember those, Richard. Take the first the one, I'll take the next 2.

Yes. So as far as what we'll have with the Express [indiscernible] Formulary, it will be the same as current oxybate. So for the majority of patients, that means you step -- you have to try 1 or 2 other stimulants. It will vary a little bit by [ PBM by PBM ] as they pull it through, but it's the same as what you see for current oxybate as well, so generally stepping through a stimulant beforehand or [indiscernible]

Yes. I think the gross to net question is when we get regularly. I would say it's probably a bit premature to guide explicitly around gross to net at this stage. We certainly understand where we're sitting from a kind of a contract negotiation standpoint and what that looks like today. I think with the strategy going into our launch of parity access, not being disadvantaged to any oxybate, but being at the same place with oxybate is what you've seen at Express Scripts, what you saw at the 10 Blue Cross Blue Shield plans, what you see at the same national -- here comes -- so I think with -- again, what we're seeing emerge with our -- with some of these recent wins is that strategy right now seems to be playing out early. I would say the best advice and guidance we give around gross to net is that looking at the current kind of net pricing in the marketplace today, we think it is a reasonable proxy right now. And I think it's going to take us a couple of quarters to kind of work through kind of reimbursement and coverage policy decisions and what actual net impact that's going to have on our gross to nets. And we'll certainly obviously share that as we report quarterly going forward. On your question on IH, it's just not something we're going to share right now. We've obviously evaluated all different sort of trial designs, but we'll come out with that as we continue to advance our planning. Raise your hand high, if you want to ask a question.

This is Myriam from LifeSci Capital. Just a quick question for me. So it sounds like you're focusing on the top-tier oxybate prescribers. I was just wondering if you've seen some interest from those who are not currently prescribing sodium oxybate products and who might have been deterred by the twice-nightly dosing and what the clinician described and the complications that come with that.

Richard?

Great question. The answer is yes. So we are seeing enrollments from not actually lower experienced oxy prescribers, but also people who currently do not prescribe oxybate as well to be REM certified, and we're seeing some of that early activity coming through the patient enrollments as well. So maybe one thing I forgot to comment is these processes all take time, you ramp some enroll, you got to see your patient, you get them enrolled. And then it generally takes several weeks multiple, multiple weeks early on to actually get that enrollment process investigated and products shipped out. So the fact that we actually already have patients receive commercially shipped product is really a testament to how the payers, we believe, are actually viewing the unmet need for LUMRYZ. So yes. So -- and we're also sort of seeing that not only in the highly experienced oxybate prescribers. That's the majority of our activity, but there are signs coming also from people who are -- have little experience or actually have never experienced prescribing oxybate.

It's actually one of the benefits of our system where we get the early indicator, right? If somebody wants to prescribe who's not in that kind of core call plan because they haven't been a historical prescriber, we get the indicator when they sign up for our REMS, it allows us to then dispatch our team.

We have a question in from Jefferies, listening in on the webcast [indiscernible] on generic Xyrem. One generic has launched generic Xyrem at a small WAC discount, but 3 more could enter in a few days on July 1. Why should the price of that generic not be at a steep discount, thus deteriorating Xyrem as well as LUMRYZ price?

Yes. So what we've seen so far with the first [indiscernible] coming in the marketplace, first and foremost, is really a cannibalization of branded Xyrem to the authorized [ generic ]. We've seen almost no impact on the [indiscernible] operation right now. When the next wave of [indiscernible], they have very severe volume arrangements that are put into place. The ability for them to really impact the marketplace, we believe is extremely [ limited ]. But maybe more important is the feedback that we've received from payers. They've already been working with one. And at this point in time, there's probably a little incentive for them to work with others as they do right now, especially when they have volume limits on them as well. So as I mentioned, we haven't really seen that much impact, except for the cannibalization of the branded Xyrem to go to the AG .

Frank Brisebois with Oppenheimer. Just a quick 1 in terms of your $1 billion peak sales assumption. Are you -- based on the product profile, in those assumptions, are you staying conservative where you expect a similar discontinuation rate as the discontinuation rates seen with products in the market and if you could just remind everyone, what's been seen so far?

Sure. Yes. So what we've seen in claims data so far is with the first generation oxybate, about 1/4 of the patients is [ continue ] to add about 30 days and about 50% of new patients discontinue after 12 months. So the way I would answer that question, Frank, is if you think about our patient mix first and foremost, we're already seeing activity towards experienced oxybate patients as well. So they're on a different slope for that discontinuation rate than de novos. But what we believe -- and so what we've sort of looked at is not being that different, but maybe slightly better than what we've seen historically for new patients than the first-generation oxybates.

This is Ami Fadia from Needham again. Perhaps if you could talk about what percent of your target patient population is covered under [ ESI ] and if you could give us some expectations around when you might be able to complete the negotiations with the other 2 players? And then separately, Slide 94 talks about over 140 patients enrolled and [ drives ] up. Are these patients that are waiting to get drug? And maybe you can talk about what's the current time frame between when a patient gets prescribed a drug and when they receive drug and then perhaps implications around initial sales given your bridging program.

Okay. Well, let's start with -- so ESI is one of the major PBMs covered from the Ascent GPO. The Ascent GPO covers about 50 million lives. So it's a very significant sort of them, along with sort of [indiscernible], the CBS family are the 2 biggest GPO groups in the United States, so it's a very significant win for us to be able to secure that contract. I think one of the questions was then about sort of like the duration of time.

No, the other 2 .

Oh, the other 2 , sorry. There are 2 others. That's right. We are in [ active ] discussions and negotiations with them right now. To break [indiscernible] , they all work in different paces like sometimes you have to get on to [ a P&T ] at a different time. So as we sort of said before, what we sort of see as a lot of solid coverage decisions, if we can get them all done with sort of 6 to 9 months, we think that's a very good outcome. But as a reminder, prior to that as we were already seeing with some of our initial prescriptions, a lot of the reimbursement will come through medical necessity, which offices, you heard Dr. Morse [indiscernible] . I mean, that's what they do right now. They do medical necessity. They do denials. They're highly experienced in this. So even prior to those other coverage decisions coming forward, we absolutely sort of see the reimbursement going through medical [ condescessity ], right? And then as far as the time line, as far as filling that. So first, the patients going into RiseUP, those are unique patients that are now in there as well. That's the first signal for us that a patient along with the REM certification is now going through the prescription fill process. Now as I mentioned, we can't guarantee every single one of those will convert onto a [indiscernible] product because that happens in the United States here as well. But in general, it oftentimes takes several weeks at a minimum to be able to go through the [ BI ] process benefits investigation. However, we've already seen some of those go through very quickly in our first few weeks here as well. It's a bit of a wide range, and it's hard to be generalizable. But I would say, in general, it does take several weeks for those enrollments to convert into -- being shipped to [indiscernible]

Yes. That's especially, Ami, true prior to broad coverage policies decisions being in place, where it's not going through this additive step of medical necessity and the documentation that Dr. Stern and Dr. Morse wrote, which adds to the length of time. So it's clear that the first couple of quarters the time from entering at the top of the funnel and coming out as a reimbursed patient is going to take longer than it will when we have broad coverage policy decisions made and things are humming along, right? And that's really what's going to happen in the first couple of quarters based on our expectation. We're pleased that we've knocked a few back early. That certainly is helpful for us. And again, we're in early stages and glad to see that we've seen people and -- people with narcolepsy who want to go on LUMRYZ come in at the top and actually come out on drug already in the first few weeks, which I would think is something we probably didn't expect that happen at this stage. So...

Just a follow-up question. Can you provide an update on the progress of adding another CMO for domestic manufacturing of the drug?

Yes. I think we previously said that we have done a lot of work on redundancy of supply. And that work has been completed and that supplement was filed immediately after approval. So it's pending with the FDA now.

I actually have a question for the 2 doctors. I'm curious to know in the 3 weeks that LUMRYZ has been commercially available, how many existing oxybate patients have you had patient visits with? How many did you discuss LUMRYZ with of those? And how many of those decided to switch? What percentage once they had that interaction? And then if you can further that of the ones that did decide to switch, what was your experience getting them in?

John, I want to caveat this that like we're 3 weeks in. So...

Absolutely.

Right. So let's be a little bit mindful but go ahead.

Yes. So as I had alluded to earlier, I already have 6 patients who were in the process, 4 of them already approved with insurance. Again, I think the unique experience that Tom and I probably both share is that since we're a trial site, it's been an ongoing conversation with our patients irrespective. In terms of the last few weeks with my sleep fellows, we've probably seen 20 to 30 patients who are either brand-new patients or returns who have narcolepsy or idiopathic hypersomnia, and I have that conversation with all of them. Most typically, however, my approach to management of patients is that I don't accept for them to make a decision at the time of visit. I encourage them to discuss with their families, think about it, do their research, right, because I want them to come back and have a conversation with me. So -- and I also want to be mindful of not overwhelming my staff with changing everyone all at once, right? And I will say that there will be patients that will stay on twice nightly oxybate. I don't doubt that. The same as in any other disease state that I treat, where there may be the majority who are on the long acting, but then there are some who won't switch over.

If I can ask one quick question before we get to the other doctor. Out of curiosity, what are some rational or reasons why they would not switch?

So this is a disorder where individuals are scarred by the experience that they had prior to treatment. And so they literally have PTSD from the disorder. And so even for patients who I've seen a second opinions where they're inadequately treated, there's such a fear of going backwards that even when you're offering something that's better that they -- they don't want to change it, right? I'm not going to fix what's not broken. And so there is a process of saying, let's evaluate what might actually still be broken. So the one question I make sure I ask all my patients at every visit is what can't you do because of your narcolepsy? We used Epworth, we used MWT, we use all these things, right? The patients don't care about that. I frequently will joke that patients come in and no one has come in at that high [indiscernible] of 17, right? They come in and go, "I can't have s** with my husband, right, because I'm too tired." And we need to be able to address those things. So patients will not switch if they think that there's any risk of need to stepping backwards. But I would say that, that is not the majority, but that is a reason.

I just want to make a comment because what we can't capture in research is the notion of when 140 patients becomes 500 patients, becomes whatever thousand of number, 10,000 patients, whatever it may be, right, and what that does in terms of creating its own energy with across the community, right? Because today, we're asking this question in a vacuum of how people think about it today. And in 3 years from now, the view may be very, very different. And that patient who's reticent today may have 100 people around them in their advocacy group who all have switched and are doing great and may have a different view, right? But that's where executing and -- that's why our view is that we got to do it right early and build right experiences such that long term, we can build a highly valuable franchise and most importantly, help even more patients.

Yes. So in my practice, I'm the rate limiting step to getting people converted. I know, I think we have like 8 people enrolled already. At least 2 of those were not on the trial. But in order to enroll patients, I have to be there. I have to sign electronically. So I have to be there while they're filling out the form. We actually have plans this Friday to enroll more. And so -- and unfortunately, my clinic is understaffed. It's just kind of hard to find people these days. And so like I said, 8 so far, 2 that are not rollover. And like I said, I've been the rate limiting step in the last few weeks.

Any other questions? Yes, Matt?

Just a question for the doctors in terms of what you think the impact of the entry of generics will be on your management of patients and how that will affect your practice?

Again, I'll go back to the ideal world and the real world. If it's up to me, and if it's up to the patients, they'll be on once a night. That's not always the case. We, physicians don't want health care anymore. And so I'm -- I can see it's possible there'll be big forced people economically to go, but that's beyond my control. And like I said, it certainly wouldn't be my choice or the patient's choice.

So I personally view it as increased value proposition for LUMRYZ. And the reason why I say that is because my personal strategy of how I onboard any person on oxybate is I start them first on a once nightly, I titrate up and then introduce a second dose. What this naturally does in terms of the positioning right now is that you get the patient to tolerate the medication, you then get them to experience benefit. And then you're able to identify how frequently are you missing that second dose. You've now created the easiest path forward for once-nightly because I have incomplete benefit, toleration of the medication and there's an option that will get them more complete benefit. So it might delay me to getting there, but it's a great value proposition.

Okay. Well, again, maybe we just wrap up with a few final remarks and just say thank you again for spending your morning with us. Thank you for your questions. I think we've got a number of follow-ups scheduled with many of you over the next few days and happy to follow up with anybody either here in person or on the webcast if you have any follow-up questions about the content and what we discussed today. Let me again thank Dr. Morse, Dr. Stern and Katie for being our special guests and spending your time with us as well. Thank you, everybody.