Cover page
Cover page - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 05, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-37977 | |
Entity Registrant Name | AVADEL PHARMACEUTICALS PLC | |
Entity Incorporation, State or Country Code | L2 | |
Entity Tax Identification Number | 98-1341933 | |
Entity Address, Address Line One | 10 Earlsfort Terrace | |
Entity Address, City or Town | Dublin 2 | |
Entity Address, Postal Zip Code | D02 T380 | |
Entity Address, Country | IE | |
Country Region | 353 | |
City Area Code | 1 | |
Local Phone Number | 901-5201 | |
Title of 12(b) Security | Ordinary Shares, nominal value $0.01 per share | |
Trading Symbol | AVDL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 96,270,528 | |
Entity Central Index Key | 0001012477 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Net product revenue | $ 41,504 | $ 1,496 | $ 68,682 | $ 1,496 |
Cost of products sold | 2,788 | 36 | 4,310 | 36 |
Gross profit | 38,716 | 1,460 | 64,372 | 1,460 |
Operating expenses: | ||||
Research and development expenses | 4,051 | 4,223 | 7,119 | 8,053 |
Selling, general and administrative expenses | 47,406 | 46,778 | 96,029 | 71,246 |
Total operating expense | 51,457 | 51,001 | 103,148 | 79,299 |
Operating loss | (12,741) | (49,541) | (38,776) | (77,839) |
Investment and other income, net | 1,126 | 623 | 2,504 | 816 |
Interest expense | (2,716) | (2,295) | (5,308) | (5,554) |
Loss on extinguishment of debt | 0 | (13,129) | 0 | (13,129) |
Loss before income taxes | (14,331) | (64,342) | (41,580) | (95,706) |
Income tax (benefit) provision | (509) | 90 | (416) | (490) |
Net loss | $ (13,822) | $ (64,432) | $ (41,164) | $ (95,216) |
Net loss per share - basic (in dollars per share) | $ (0.14) | $ (0.83) | $ (0.44) | $ (1.35) |
Net loss per share - diluted (in dollars per share) | $ (0.14) | $ (0.83) | $ (0.44) | $ (1.35) |
Weighted average number of shares outstanding - basic (in shares) | 96,151 | 77,246 | 93,922 | 70,603 |
Weighted average number of shares outstanding - diluted (in shares) | 96,151 | 77,246 | 93,922 | 70,603 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (13,822) | $ (64,432) | $ (41,164) | $ (95,216) |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation (loss) income | (74) | 8 | (310) | 183 |
Net other comprehensive (loss) income, net of income tax expense of $0, $0, $0, and $0, respectively | (385) | 75 | (738) | 216 |
Total other comprehensive (loss) income, net of tax | (459) | 83 | (1,048) | 399 |
Total comprehensive loss | $ (14,281) | $ (64,349) | $ (42,212) | $ (94,817) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net other comprehensive (loss) income, tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 28,847 | $ 31,167 |
Marketable securities | 42,535 | 73,944 |
Accounts receivable, net | 33,377 | 12,103 |
Inventories | 13,313 | 10,380 |
Research and development tax credit receivable | 927 | 1,322 |
Prepaid expenses and other current assets | 6,781 | 5,286 |
Total current assets | 125,780 | 134,202 |
Property and equipment, net | 484 | 585 |
Operating lease right-of-use assets | 2,154 | 2,591 |
Goodwill | 16,836 | 16,836 |
Research and development tax credit receivable | 252 | 332 |
Other non-current assets | 12,015 | 10,152 |
Total assets | 157,521 | 164,698 |
Current liabilities: | ||
Current portion of operating lease liability | 866 | 934 |
Accounts payable | 9,794 | 11,433 |
Accrued expenses | 33,711 | 24,227 |
Other current liabilities | 242 | 261 |
Total current liabilities | 44,613 | 36,855 |
Long-term operating lease liability | 1,308 | 1,690 |
Royalty financing obligation | 35,493 | 32,760 |
Other non-current liabilities | 5,819 | 5,654 |
Total liabilities | 87,233 | 76,959 |
Shareholders’ equity: | ||
Preferred shares, nominal value of $0.01 per share; 50,000 shares authorized; zero issued and outstanding at June 30, 2024 and 5,194 issued and outstanding at December 31, 2023 | 0 | 52 |
Ordinary shares, nominal value of $0.01 per share; 500,000 shares authorized; 96,204 issued and outstanding at June 30, 2024 and 89,825 issued and outstanding at December 31, 2023 | 961 | 898 |
Additional paid-in capital | 880,202 | 855,452 |
Accumulated deficit | (786,660) | (745,496) |
Accumulated other comprehensive loss | (24,215) | (23,167) |
Total shareholders’ equity | 70,288 | 87,739 |
Total liabilities and shareholders’ equity | $ 157,521 | $ 164,698 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred shares, nominal value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred shares, shares issued (in shares) | 0 | 5,194,000 |
Preferred shares, shares outstanding (in shares) | 0 | 5,194,000 |
Ordinary shares, nominal value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued (in shares) | 96,204,000 | 89,825,000 |
Ordinary shares, shares outstanding (in shares) | 96,204,000 | 89,825,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Ordinary shares | Preferred shares | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss |
Beginning balance (in shares) at Dec. 31, 2022 | 62,878 | 488 | ||||
Beginning balance at Dec. 31, 2022 | $ (21,145) | $ 628 | $ 5 | $ 589,783 | $ (585,220) | $ (26,341) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (30,784) | (30,784) | ||||
Other comprehensive (loss) income | 315 | 315 | ||||
Issuance of common stock, net of issuance costs (in shares) | 1,564 | |||||
Issuance of common stock, net of issuance costs | 11,913 | $ 16 | 11,897 | |||
Amortization of deferred issuance costs | (16) | (16) | ||||
Vesting of restricted shares (in shares) | 22 | |||||
Employee share purchase plan share issuance (in shares) | 14 | |||||
Employee share purchase plan share issuance | 29 | 29 | ||||
Share-based compensation expense | 1,522 | 1,522 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 64,478 | 488 | ||||
Ending balance at Mar. 31, 2023 | (38,166) | $ 644 | $ 5 | 603,215 | (616,004) | (26,026) |
Beginning balance (in shares) at Dec. 31, 2022 | 62,878 | 488 | ||||
Beginning balance at Dec. 31, 2022 | (21,145) | $ 628 | $ 5 | 589,783 | (585,220) | (26,341) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (95,216) | |||||
Other comprehensive (loss) income | 399 | |||||
Ending balance (in shares) at Jun. 30, 2023 | 89,321 | 5,194 | ||||
Ending balance at Jun. 30, 2023 | 143,192 | $ 893 | $ 52 | 848,626 | (680,436) | (25,943) |
Beginning balance (in shares) at Mar. 31, 2023 | 64,478 | 488 | ||||
Beginning balance at Mar. 31, 2023 | (38,166) | $ 644 | $ 5 | 603,215 | (616,004) | (26,026) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (64,432) | (64,432) | ||||
Other comprehensive (loss) income | 83 | 83 | ||||
Issuance of common stock, net of issuance costs (in shares) | 12,205 | 4,706 | ||||
Issuance of common stock, net of issuance costs | 134,151 | $ 122 | $ 47 | 133,982 | ||
Conversion of preferred stock into ordinary shares/ Mandatory exchange of notes, net of issuance costs (in shares) | 12,347 | |||||
Conversion of preferred stock into ordinary shares/ Mandatory exchange of notes, net of issuance costs | 102,162 | $ 123 | 102,039 | |||
Exercise of stock options (in shares) | 291 | |||||
Exercise of stock options | 1,750 | $ 4 | 1,746 | |||
Share-based compensation expense | 7,644 | 7,644 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 89,321 | 5,194 | ||||
Ending balance at Jun. 30, 2023 | 143,192 | $ 893 | $ 52 | 848,626 | (680,436) | (25,943) |
Beginning balance (in shares) at Dec. 31, 2023 | 89,825 | 5,194 | ||||
Beginning balance at Dec. 31, 2023 | 87,739 | $ 898 | $ 52 | 855,452 | (745,496) | (23,167) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (27,342) | (27,342) | ||||
Other comprehensive (loss) income | (589) | (589) | ||||
Issuance of common stock, net of issuance costs (in shares) | 640 | |||||
Issuance of common stock, net of issuance costs | 9,250 | $ 6 | 9,244 | |||
Amortization of deferred issuance costs | (3) | (3) | ||||
Conversion of preferred stock into ordinary shares/ Mandatory exchange of notes, net of issuance costs (in shares) | 5,194 | (5,194) | ||||
Conversion of preferred stock into ordinary shares/ Mandatory exchange of notes, net of issuance costs | 0 | $ 52 | $ (52) | |||
Exercise of stock options (in shares) | 390 | |||||
Exercise of stock options | 3,356 | $ 3 | 3,353 | |||
Employee share purchase plan share issuance (in shares) | 48 | |||||
Employee share purchase plan share issuance | 584 | $ 1 | 583 | |||
Share-based compensation expense | 5,389 | 5,389 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 96,097 | 0 | ||||
Ending balance at Mar. 31, 2024 | 78,384 | $ 960 | $ 0 | 874,018 | (772,838) | (23,756) |
Beginning balance (in shares) at Dec. 31, 2023 | 89,825 | 5,194 | ||||
Beginning balance at Dec. 31, 2023 | 87,739 | $ 898 | $ 52 | 855,452 | (745,496) | (23,167) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (41,164) | |||||
Other comprehensive (loss) income | (1,048) | |||||
Ending balance (in shares) at Jun. 30, 2024 | 96,204 | 0 | ||||
Ending balance at Jun. 30, 2024 | 70,288 | $ 961 | $ 0 | 880,202 | (786,660) | (24,215) |
Beginning balance (in shares) at Mar. 31, 2024 | 96,097 | 0 | ||||
Beginning balance at Mar. 31, 2024 | 78,384 | $ 960 | $ 0 | 874,018 | (772,838) | (23,756) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (13,822) | |||||
Other comprehensive (loss) income | (459) | (459) | ||||
Exercise of stock options (in shares) | 107 | |||||
Exercise of stock options | 723 | $ 1 | 722 | |||
Share-based compensation expense | 5,462 | 5,462 | ||||
Ending balance (in shares) at Jun. 30, 2024 | 96,204 | 0 | ||||
Ending balance at Jun. 30, 2024 | $ 70,288 | $ 961 | $ 0 | $ 880,202 | $ (786,660) | $ (24,215) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (41,164) | $ (95,216) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 978 | 1,189 |
Amortization of debt discount and debt issuance costs | 0 | 2,460 |
Share-based compensation expense | 10,851 | 9,166 |
Loss on extinguishment of debt | 0 | 13,129 |
Other adjustments | (1,208) | 42 |
Net changes in assets and liabilities | ||
Accounts receivable | (21,274) | (1,775) |
Inventories | (2,264) | (1,439) |
Prepaid expenses and other current assets | (1,557) | (4,400) |
Research and development tax credit receivable | 451 | 2,127 |
Accounts payable & other current liabilities | (1,638) | 2,470 |
Accrued expenses | 9,484 | 10,246 |
Other assets and liabilities | (549) | (255) |
Net cash used in operating activities | (47,890) | (62,256) |
Cash flows from investing activities: | ||
Proceeds from sales of marketable securities | 207,835 | 25,618 |
Purchases of marketable securities | (175,898) | (113,460) |
Net cash provided by (used in) investing activities | 31,937 | (87,842) |
Cash flows from financing activities: | ||
Payments for February 2023 Notes | 0 | (17,500) |
Payments for debt issuance costs | 0 | (4,357) |
Proceeds from stock option exercises and employee share purchase plan | 4,663 | 1,779 |
Net cash provided by financing activities | 13,913 | 125,986 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (280) | 116 |
Net change in cash and cash equivalents | (2,320) | (23,996) |
Cash and cash equivalents at January 1, | 31,167 | 73,981 |
Cash and cash equivalents at June 30, | 28,847 | 49,985 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 1,748 | 4,520 |
Public Offering | ||
Cash flows from financing activities: | ||
Proceeds from issuance of shares, net of issuance costs | 0 | 134,151 |
At-The-Market Offering Program | ||
Cash flows from financing activities: | ||
Proceeds from issuance of shares, net of issuance costs | $ 9,250 | $ 11,913 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations. Avadel Pharmaceuticals plc (Nasdaq: AVDL) (“Avadel,” the “Company,” “we,” “our,” or “us”) is a biopharmaceutical company. The Company is registered as an Irish public limited company. The Company’s headquarters are in Dublin, Ireland with operations in Dublin, Ireland and St. Louis, Missouri, United States (“U.S.”). LUMRYZ is an extended-release formulation of sodium oxybate indicated to be taken once at bedtime for the treatment of cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy. LUMRYZ was approved by the U.S. Food and Drug Administration (“FDA”) on May 1, 2023. The FDA also granted Orphan Drug Exclusivity (“ODE”) to LUMRYZ for a period of seven years until May 1, 2030. In June 2023, the Company commercially launched LUMRYZ in the U.S. In approving LUMRYZ, the FDA approved a risk evaluation and mitigation strategy (“REMS”) for LUMRYZ to help ensure that the benefits of the drug in the treatment of cataplexy and EDS in narcolepsy outweigh the risks of serious adverse outcomes resulting from inappropriate prescribing, misuse, abuse, and diversion of the drug. Under this REMS, healthcare providers who prescribe the drug must be specially certified; pharmacies that dispense the drug must be specially certified; and the drug must be dispensed only to patients who have enrolled in the LUMRYZ REMS and completed all REMS requirements, including documentation of safe use conditions. As of the date of this Quarterly Report, the Company’s only commercialized product is LUMRYZ. The Company continues to evaluate opportunities to expand its product portfolio. Liquidity. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The adequacy of the Company’s cash resources depends on the outcome of certain business conditions including the cost of the Company’s ongoing LUMRYZ commercialization activities, the Company’s cost structure, and other factors set forth in “Risk Factors” within Part I, Item 1A of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 29, 2024 (the “Annual Report on Form 10-K”). Ordinary Shares Effective April 15, 2024, the Company’s ordinary shares, nominal value $0.01 per share (“ordinary shares”), became directly listed on the Nasdaq Stock Market. The Company caused a mandatory exchange of its American Depositary Shares (“ADSs”) for the underlying ordinary shares on a one-for-one basis. Accordingly, the Bank of New York Mellon (“BNY Mellon”), as Depositary for the ADSs, issued a notice of termination of its American Depository Receipt program (“ADR Program”) of ADSs to the registered holders of ADSs according to the requirements under the deposit agreement dated January 3, 2017 (the “Deposit Agreement”) among the Company, BNY Mellon and holders of ADSs. The Deposit Agreement terminated on July 15, 2024. At-the-Market Offering Program On May 8, 2024, the Company entered into an Open Market Sale Agreement SM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) pursuant to which the Company may offer and sell its ordinary shares, from time to time, with respect to an at-the-market offering program (“ATM Program”) under which Jefferies will act as sales agent. The Sales Agreement provides that Jefferies will be entitled to aggregate compensation for its services an amount up to 3.0% of the gross proceeds of any ordinary shares sold through Jefferies under the Sales Agreement. The Sales Agreement replaces the Company’s previous Open Market Sale Agreement SM with Jefferies, dated February 4, 2020 (the “ADS Sales Agreement”), which provided for the sale of ADSs by the Company. The Company terminated the ADS Sales Agreement upon effectiveness of the Sales Agreement following the mandatory exchange of the ADSs and the direct listing of the ordinary shares on the Nasdaq Stock Market on April 15, 2024. The ordinary shares will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-267198), filed with the SEC on August 31, 2022, as amended, and declared effective by the Commission on September 12, 2022, as supplemented by the prospectus supplement dated May 8, 2024 (the “Prospectus Supplement”). The Company may offer and sell ordinary shares having an aggregate offering price of up to $100,000 under the Prospectus Supplement. Prior to termination, the Company issued and sold 640 ordinary shares pursuant to the ADS Sales Agreement during the three months ended March 31, 2024, resulting in net proceeds to the Company of approximately $9,250. The Company did not issue or sell ordinary shares during the three months ended June 30, 2024 under the Sales Agreement. Preferred Shares In March 2024, 5,194 Series A Non-Voting Convertible Preferred Shares and Series B Non-Voting Convertible Preferred Shares (“Series B Preferred Shares”) were converted to 5,194 ordinary shares at the option of the holders. Accordingly, there were no preferred shares issued and outstanding at June 30, 2024. Basis of Presentation. The unaudited condensed consolidated balance sheet as of June 30, 2024 and the interim unaudited condensed consolidated financial statements presented herein, have been prepared in accordance with U.S. GAAP, the requirements of Form 10-Q and Article 10 of Regulation S-X and, consequently, do not include all information or footnotes required by U.S. GAAP for complete financial statements or all the disclosures normally made in an Annual Report on Form 10-K. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K. Certain prior year amounts have been reclassified within the notes to the unaudited condensed consolidated financial statements to condense line items of the same nature to conform with the current year presentation. The unaudited condensed consolidated financial statements include the accounts of the Company and subsidiaries and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. All intercompany accounts and transactions have been eliminated. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. Newly Issued Climate-Related Disclosure Rule. In March 2024, the SEC issued a final rule requiring public companies to disclose climate-related information in their registration statements and annual reports. For large accelerated filers, the initial disclosure rules are effective for annual periods for the year ending December 31, 2025. In April 2024, the SEC voluntarily stayed the final rule pending the completion of judicial review by the Court of Appeals for the Eighth Circuit. The Company is monitoring the development of litigation related to the SEC’s rule, and is currently evaluating the effects of the final rule on its disclosures, processes and procedures. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company’s source of net product revenue during the three and six months ended June 30, 2024 and 2023 consists solely of sales of LUMRYZ in the U.S. For the three and six months ended June 30, 2024 and 2023 , three customers accounted for 100% of sales. The following table presents a summary of the percentage of total gross sales to customers : Three Months Ended June 30, Six Months Ended June 30, Sales by Customer: 2024 2023 2024 2023 Caremark 52 % 42 % 48 % 42 % Accredo 33 % 39 % 36 % 39 % Optum 15 % 19 % 16 % 19 % |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The Company is required to measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, the Company uses fair value extensively when accounting for and reporting certain financial instruments. Fair value is estimated by applying the hierarchy described below, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. ASC 820, Fair Value Measurement , defines fair value as a market-based measurement that should be determined based on the assumptions that marketplace participants would use in pricing an asset or liability. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may generally use one or each of the following techniques: • Income approach, which is based on the present value of a future stream of net cash flows. • Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. As a basis for considering the assumptions used in these techniques, the standard establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: • Level 1 - Quoted prices for identical assets or liabilities in active markets. • Level 2 - Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. • Level 3 - Unobservable inputs that reflect estimates and assumptions. The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the accompanying unaudited condensed consolidated balance sheets: As of June 30, 2024 As of December 31, 2023 Fair Value Measurements: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Marketable securities (see Note 4 ) Government securities - U.S. $ 42,535 $ — $ — $ 73,944 $ — $ — Total assets $ 42,535 $ — $ — $ 73,944 $ — $ — A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. During the periods ended June 30, 2024 and December 31, 2023, respectively, there were no transfers in and out of Level 3. During the three and six months ended June 30, 2024 and 2023, respectively, the Company did not recognize any allowances for credit losses. Some of the Company’s financial instruments, such as cash and cash equivalents, accounts receivable and accounts payable, are reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. Royalty Financing Obligation As of June 30, 2024, the carrying value of the royalty financing obligation under the Royalty Purchase Agreement (“RPA”) approximated its fair value and was measured using the estimates of forecasted net product revenue based on current contractual and statutory requirements, specific known market events and trends, industry data, historical trends, current and expected patient demand and forecasted customer buying and payment patterns (Level 3 inputs). See Note 6: Royalty Financing Obligation for additional information regarding the Company’s royalty financing obligation. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities The Company has investments in available-for-sale debt securities which are recorded at fair market value. The change in the fair value of available-for-sale debt investments is recorded as accumulated other comprehensive loss in shareholders’ equity, net of income tax effects. As of June 30, 2024, the Company considered any decreases in fair value on its marketable securities to be driven by factors other than credit risk, including market risk. The following tables show the Company’s available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of June 30, 2024 and December 31, 2023, respectively: June 30, 2024 Marketable Securities: Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Government securities - U.S. $ 42,320 $ 215 $ — $ 42,535 Total $ 42,320 $ 215 $ — $ 42,535 December 31, 2023 Marketable Securities: Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Government securities - U.S. $ 72,990 $ 954 $ — $ 73,944 Total $ 72,990 $ 954 $ — $ 73,944 The Company determines realized gains or losses on the sale of marketable securities on a specific identification method. The Company reflects these gains and losses as a component of investment and other income, net in the accompanying unaudited condensed consolidated statements of loss. The Company recognized gross realized gains of $709 and no gross realized losses for the three months ended June 30, 2024. The Company recognized gross realized gains of $1,107 and no gross realized losses for the six months ended June 30, 2024. The Company recognized immaterial gross realized gains and losses for the three and six months ended June 30, 2023. The following table summarizes the estimated fair value of the Company’s investments in marketable debt securities, accounted for as available-for-sale debt securities and classified by the contractual maturity date of the securities as of June 30, 2024: Maturities Marketable Debt Securities: Less than 1 Year 1-5 Years 5-10 Years Greater than 10 Years Total Government securities - U.S. $ 42,535 $ — $ — $ — $ 42,535 Total $ 42,535 $ — $ — $ — $ 42,535 The Company has classified its investment in available-for-sale marketable debt securities as current assets in the condensed consolidated balance sheets as the securities need to be available for use, if required, to fund current operations. There are no restrictions on the sale of any securities in the Company’s investment portfolio. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The principal categories of inventories were comprised of the following: Inventory: June 30, 2024 December 31, 2023 Raw materials and supplies $ 2,566 $ 5,291 Work in process 4,819 2,037 Finished goods 5,928 3,052 Total $ 13,313 $ 10,380 The Company capitalizes inventory costs associated with products when future commercialization is considered probable and the future economic benefit is expected to be realized, which is typically when regulatory approval is obtained for a drug candidate. As such, the Company began capitalizing costs related to inventory in May 2023 upon FDA approval of LUMRYZ. Manufacturing costs associated with inventory purchased or produced prior to FDA approval were recorded as research and development expense in prior periods. |
Royalty Financing Obligation
Royalty Financing Obligation | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Royalty Financing Obligation | Royalty Financing Obligation On March 29, 2023, the Company and Avadel CNS Pharmaceuticals, LLC entered into the RPA with RTW Investments, L.P. (“RTW”) that could provide the Company up to $75,000 of royalty financing in two tranches. The first tranche of $30,000 became available upon satisfaction of certain conditions which included the Company’s first shipment of LUMRYZ. The second tranche is now available to use, at the Company’s election, as the Company has achieved quarterly net revenue of $25,000 prior to the quarter ending June 30, 2024. The second tranche expires if the Company does not elect to use it by August 31, 2024. On August 1, 2023, the Company received the first tranche of $30,000 . As a result of receiving the first tranche, the Company is required to make quarterly royalty payments calculated as 3.75% of worldwide net product revenue of LUMRYZ, up to a total payback of $75,000 . The RPA is recorded as a royalty financing obligation on the unaudited condensed consolidated balance sheets based on the Company’s evaluation of the terms of the RPA. The accounts receivable and inventory balances of LUMRYZ are pledged as collateral for the RPA. There are no subjective acceleration clauses or provisions, and there are no covenants in violation or other clauses that would cause the full amount of the royalty financing obligation to be callable. As such, the RPA is recorded as a long-term obligation on the unaudited condensed consolidated balance sheets. The Company imputes interest using the effective interest method and records interest expense based on the unamortized royalty financing obligation. The Company’s estimate of the interest rate under the RPA is based primarily on forecasted net revenue and the calculated amounts and timing of net royalty payments to reach the total payback of $75,000. As of June 30, 2024 and December 31, 2023 the effective interest rate is estimated as 30.4%. The Company will account for changes in the imputed interest rate resulting from changes in forecasted net product revenue using the prospective method. The following table shows the activity within the royalty financing obligation account: Royalty Financing Obligation: June 30, 2024 December 31, 2023 Royalty financing obligation – beginning balance $ 33,490 $ — Receipt of the first tranche of the royalty financing obligation — 30,000 Accretion of imputed interest expense on royalty financing obligation 5,308 3,743 Less: royalty payments made to RTW (1,748) (253) Royalty financing obligation – ending balance 37,050 33,490 Less: royalty payable to RTW classified within accrued expenses (1,557) (730) Royalty financing obligation, non-current $ 35,493 $ 32,760 The accretion of imputed interest expense is reflected as interest expense in the unaudited condensed consolidated statements of loss. For the three months ended June 30, 2024, the total interest expense related to the royalty financing obligation was $2,716. For the six months ended June 30, 2024, the total interest expense related to the royalty financing obligation was $5,308. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax benefit was $509 for the three months ended June 30, 2024 resulting in an effective tax rate of 3.6%. The income tax provision was $90 for the three months ended June 30, 2023 resulting in an effective tax rate of (0.1)%. The change in the effective income tax rate for the three months ended June 30, 2024, as compared to the prior period in 2023, is primarily driven by the release of uncertain tax positions due to the expiration of their statute of limitations in the current period. The income tax benefit was $416 for the six months ended June 30, 2024 resulting in an effective tax rate of 1.0%. The income tax benefit was $490 for the six months ended June 30, 2023 resulting in an effective tax rate of 0.5%. The change in the effective income tax rate for the six months ended June 30, 2024, as compared to the prior period in 2023, is primarily driven by the release of uncertain tax positions due to the expiration of their statute of limitations in the current period compared to a state tax refund received during the first quarter of the prior period. |
Other Assets and Liabilities
Other Assets and Liabilities | 6 Months Ended |
Jun. 30, 2024 | |
Other Liabilities Disclosure [Abstract] | |
Other Assets and Liabilities | Other Assets and Liabilities Various other assets and liabilities are summarized as follows: Prepaid Expenses and Other Current Assets: June 30, 2024 December 31, 2023 Prepaid and other expenses $ 6,109 $ 4,373 Other 672 913 Total $ 6,781 $ 5,286 Other Non-Current Assets: June 30, 2024 December 31, 2023 Right of use assets at contract manufacturing organizations $ 11,876 $ 9,905 Other 139 247 Total $ 12,015 $ 10,152 Accrued Expenses: June 30, 2024 December 31, 2023 Accrued professional fees $ 15,674 $ 11,961 Reserves for variable consideration 11,152 4,044 Accrued compensation 5,328 7,492 Royalty payable to RTW 1,557 730 Total $ 33,711 $ 24,227 Other Non-Current Liabilities: June 30, 2024 December 31, 2023 Tax liabilities $ 4,985 $ 5,407 Other 834 247 Total $ 5,819 $ 5,654 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during each period. Diluted net loss per share is calculated by dividing net loss by the diluted number of shares outstanding during each period. Except where the result would be anti-dilutive to net loss, diluted net loss per share would be calculated assuming the impact of the conversion of the 4.50% exchangeable senior notes due February 2023 (“February 2023 Notes”) and the 4.50% exchangeable senior notes due October 2023 (“October 2023 Notes”, together, the “2023 Notes”), the conversion of the Company’s preferred shares, the exercise of outstanding equity compensation awards, and ordinary shares expected to be issued under the Company’s Employee Share Purchase Plan (“ESPP”). The Company had a choice to settle the conversion obligations under the 2023 Notes in cash, shares or any combination of the two. The Company utilized the if-converted method to reflect the impact of the conversion of the 2023 Notes, unless the result was anti-dilutive. This method assumed the conversion of the 2023 Notes into shares of the Company’s ordinary shares and reflected the elimination of the interest expense related to the 2023 Notes. The dilutive effect of the stock options, restricted stock units, preferred shares and ordinary shares expected to be issued under the Company’s ESPP has been calculated using the treasury stock method. A reconciliation of basic and diluted net loss per share, together with the related shares outstanding in thousands is as follows: Three Months Ended June 30, Six Months Ended June 30, Net Loss Per Share: 2024 2023 2024 2023 Net loss $ (13,822) $ (64,432) $ (41,164) $ (95,216) Weighted average shares: Basic shares 96,151 77,246 93,922 70,603 Effect of dilutive securities—employee and director equity awards outstanding, preferred shares and 2023 Notes — — — — Diluted shares 96,151 77,246 93,922 70,603 Net loss per share - basic $ (0.14) $ (0.83) $ (0.44) $ (1.35) Net loss per share - diluted $ (0.14) $ (0.83) $ (0.44) $ (1.35) |
Comprehensive Loss
Comprehensive Loss | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
Comprehensive Loss | Comprehensive Loss The following table shows the components of accumulated other comprehensive loss, net of tax effects: Three Months Ended June 30, Six Months Ended June 30, Accumulated Other Comprehensive Loss: 2024 2023 2024 2023 Foreign currency translation adjustment: Beginning balance $ (24,357) $ (24,277) $ (24,121) $ (24,452) Net other comprehensive (loss) income (74) 8 (310) 183 Balance at June 30, $ (24,431) $ (24,269) $ (24,431) $ (24,269) Unrealized gain (loss) on marketable debt securities, net Beginning balance $ 601 $ (1,749) $ 954 $ (1,890) Net other comprehensive (loss) income, net of income tax expense of $0, $0, $0, and $0 respectively (385) 75 (738) 216 Balance at June 30, $ 216 $ (1,674) $ 216 $ (1,674) Accumulated other comprehensive loss at June 30, $ (24,215) $ (25,943) $ (24,215) $ (25,943) The effect on the Company’s unaudited condensed consolidated financial statements of amounts reclassified out of accumulated other comprehensive loss was immaterial for all periods presented. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is subject to potential liabilities generally incidental to its business arising out of present and future lawsuits and claims related to product liability, personal injury, contract, commercial, intellectual property, tax, employment, compliance and other matters that arise in the ordinary course of business. The Company accrues for potential liabilities when it is probable that future costs (including legal fees and expenses) will be incurred and such costs can be reasonably estimated. At June 30, 2024 and December 31, 2023, there were no contingent liabilities with respect to any litigation, arbitration or administrative or other proceeding that are reasonably likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, cash flows or liquidity. First Jazz Complaint On May 12, 2021, Jazz Pharmaceuticals, Inc. (“Jazz”) filed a formal complaint (the “First Complaint”) initiating a lawsuit in the United States District Court for the District of Delaware (the “Court”) against Avadel Pharmaceuticals plc, Avadel US Holdings, Inc., Avadel Management Corporation, Avadel Legacy Pharmaceuticals, LLC, Avadel Specialty Pharmaceuticals, LLC, and Avadel CNS Pharmaceuticals, LLC (collectively, the “Avadel Parties”). In the First Complaint, Jazz alleges the sodium oxybate product (“Proposed Product”) described in the NDA owned by Avadel CNS Pharmaceuticals, LLC (“Avadel CNS”) will infringe at least one claim of U.S. Patent No. 8731963, 10758488, 10813885, 10959956 and/or 10966931 (collectively, the “patents-in-suit”). The First Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. On June 3, 2021, the Avadel Parties timely filed their Answer and Counterclaims (the “Avadel Answer”) with the Court in response to the First Complaint. The Avadel Answer generally denies the allegations set forth in the First Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patents-in-suit), and asserts a number of counterclaims seeking i) a declaratory judgment of non-infringement of each patent-in-suit, and ii) a declaratory judgment of invalidity of each patent-in-suit. On June 18, 2021, Jazz filed its Answer (“Jazz Answer”) with the Court in response to the Avadel Answer. The Jazz Answer generally denies the allegations set forth in the Avadel Answer and sets forth a single affirmative defense asserting that Avadel has failed to state a claim for which relief can be granted. On June 21, 2021, the Court issued an oral order requiring the parties to i) confer regarding proposed dates to be included in the Court’s scheduling order for the case, and ii) submit a proposed order, including a proposal for the length and timing of trial, to the Court by no later than July 21, 2021. On July 30, 2021, the Court issued a scheduling order establishing timing for litigation events including i) a claim construction hearing date of August 2, 2022, and ii) a trial date of October 30, 2023. On October 18, 2021, consistent with the scheduling order, Jazz filed a status update with the Court indicating that Jazz did not intend to file a preliminary injunction with the Court at this time. Jazz further indicated that it would provide the Court with an update regarding whether preliminary injunction proceedings may be necessary after receiving further information regarding the FDA’s action on Avadel CNS’s NDA. On January 4, 2022, the Court entered an agreed order dismissing this case with respect to Avadel Pharmaceuticals plc, Avadel US Holdings, Inc., Avadel Specialty Pharmaceuticals, LLC, Avadel Legacy Pharmaceuticals, LLC, and Avadel Management Corporation. A corresponding order was entered in the two below cases on the same day. On February 25, 2022, Jazz filed an amended Answer to the Avadel Parties’ Counterclaims (“the Jazz First Amended Answer”). The Jazz First Amended Answer is substantially similar to the Jazz Answer except insofar as it adds an affirmative defense for judicial estoppel and unclean hands. Corresponding amended answers were filed in the two below cases on the same day. On June 23, 2022, Avadel CNS filed a Renewed Motion for Judgment on the Pleadings, with respect to its counterclaim against Jazz seeking to have U.S. Patent No. 8731963 (the “REMS Patent”) delisted from the Orange Book and seeking to have the motion resolved concurrent with the parties’ Markman hearing on August 31, 2022. On July 7, 2022, Jazz filed a response styled as Objections to Avadel CNS’ Motion for Judgment on the Pleadings. On July 14, 2022, Avadel CNS replied to Jazz’s response, and on July 21, 2022, Avadel CNS requested oral argument on its delisting motion simultaneous with the Markman hearing. On August 24, 2022, the Court ordered Jazz to respond substantively to Avadel CNS’ motion, which Jazz did on August 26, 2022. Avadel CNS filed its reply on August 28, 2022. On August 23, 2022, the Markman hearing was postponed. On September 7, 2022, the case was reassigned to a new judge, and the Markman hearing was held on October 25, 2022. At the Markman hearing, Avadel CNS reiterated its request for an expedited hearing on the Renewed Motion for Judgment on the Pleadings for the delisting of the REMS Patent. On October 28, 2022, the Court granted Avadel CNS’ request and scheduled the hearing for November 15, 2022. The Court held the Markman hearing on November 15, 2022 and issued a claim construction ruling on November 18, 2022. Also, on November 18, 2022 the Court granted Avadel’s Renewed Motion for Judgment on the Pleadings and ordered Jazz to request delisting of the REMS Patent from the Orange Book. On November 22, 2022, Jazz appealed that decision and on December 14, 2022, the Federal Circuit issued a stay of the delisting order until further notice. Oral argument was held February 14, 2023. On February 24, 2023, the United States Court of Appeals for the Federal Court affirmed the previous ruling from the Court, ordering the delisting of the REMS Patent from the Orange Book, which has since occurred. On March 7, 2023, in response to a joint stipulation filed by the parties, the Court issued an order dismissing Jazz’s infringement claims against the Avadel Parties relating to the REMS Patent as well as Avadel Parties’ noninfringement and invalidity counterclaims relating to the REMS Patent. On March 15, 2023, the parties submitted a Stipulation and Proposed Order Modifying the Case Schedule to accommodate additional claim construction proceedings. That stipulation remains pending before the Court. On April 26, 2023, the parties filed their Supplemental Joint Claim Construction Brief. On July 3, 2023, the Court issued a modified scheduling order establishing a new trial date of February 26, 2024. On July 21, 2023, in response to a Court order, the parties submitted a Stipulation and Proposed Order Modifying the Case Schedule with an updated proposed schedule to accommodate additional claim construction proceedings. On August 4, 2023, the Court entered a modified version of the parties’ proposed schedule, which was revised on August 28, 2023. The parties’ Second Supplemental Joint Claim Construction Brief was filed on October 10, 2023, and a Markman hearing regarding the disputed terms occurred on November 1, 2023. The Court issued its claim construction order on December 15, 2023. On August 15, 2023, Avadel renewed its request to consolidate this litigation with the litigation described in the Avadel Complaint below. On November 3, 2023, the Court denied that request. On November 30, 2023, the parties filed cross motions for summary judgment. The parties filed opposition briefs on December 15, 2023. The parties filed reply briefs on December 22, 2023. On February 14, 2024, the Court denied the parties’ summary judgment motions. On February 15, 2024, the Court held its Pretrial Conference. Trial was held from February 26, 2024 to March 1, 2024 (the “February Patent Trial”). On March 4, 2024, the jury returned a verdict of no infringement for U.S. Patent No. 10758488 and infringement of U.S. Patent No. 11147782, with damages of $234, which are included in the unaudited condensed consolidated balance sheets in other non-current liabilities at June 30, 2024. On March 19, 2024, the Court issued a Supplemental Scheduling Order setting a June 4, 2024 hearing on Jazz’s request for a permanent injunction or ongoing royalty. An ongoing royalty, if any, will be determined by the Court, and a range of possible loss, if any, cannot be reasonably estimated at this time. Briefing on Jazz’s request closed on May 20, 2024, and the hearing was held June 4, 2024. Jazz’s request remains pending. Second Jazz Complaint On August 4, 2021, Jazz filed another formal complaint (the “Second Complaint”) initiating a lawsuit in the Court against the Avadel Parties. In the Second Complaint, Jazz alleges the Proposed Product described in the NDA owned by Avadel CNS will infringe at least one claim of U.S. Patent No. 11077079. The Second Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. On September 9, 2021, the Avadel Parties timely filed their Answer and Counterclaims (the “Second Avadel Answer”) with the Court in response to the Second Complaint. The Second Avadel Answer generally denies the allegations set forth in the Second Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patent-in-suit), and asserts a number of counterclaims seeking i) a declaratory judgment of non-infringement of the patent-in-suit, and ii) a declaratory judgment of invalidity of the patent-in-suit. On October 22, 2021, the Court issued an oral order stating that this case should proceed on the same schedule as the case filed on May 12, 2021. On September 7, 2022, the case was reassigned to a new judge. Third Jazz Complaint On November 10, 2021, Jazz filed another formal complaint (the “Third Complaint”) initiating a lawsuit in the Court against the Avadel Parties. In the Third Complaint, Jazz alleges the Proposed Product described in the NDA owned by Avadel CNS will infringe at least one claim of U.S. Patent No. 11147782. The Third Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. This case will proceed on the same schedule as the cases associated with the First and Second Complaints above. On December 21, 2021, the Court entered a revised schedule for the First, Second and Third Complaints, setting a new claim construction date of August 31, 2022. On January 7, 2022, Avadel CNS timely filed its Answer and Counterclaims (the “Third Avadel Answer”) with the Court in response to the Third Complaint. The Third Avadel Answer generally denies the allegations set forth in the Third Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patent-in-suit), and asserts a number of counterclaims seeking i) a declaratory judgment of non-infringement of the patent-in-suit, and ii) a declaratory judgment of invalidity/unenforceability of the patent-in-suit. On September 7, 2022, the case was reassigned to a new judge. Fourth Jazz Complaint On July 15, 2022, Jazz filed another formal complaint (the “Fourth Complaint”) initiating a lawsuit in the Court against Avadel CNS. In the Fourth Complaint, Jazz alleges the Proposed Product described in the NDA owned by Avadel CNS will infringe at least one claim of the REMS Patent, which was asserted in the First Complaint. The FDA required Avadel CNS to file a Paragraph IV certification against the REMS Patent, which Avadel CNS did under protest, consistent with its Renewed Motion for Judgment on the Pleadings for the delisting of the REMS Patent from the Orange Book, which was later ordered to be delisted in the above First Jazz Complaint action. Avadel CNS provided the required notice of its Paragraph IV certification to Jazz, and Jazz reasserted the REMS Patent in a separate action following receipt of that notice. The Fourth Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. On September 7, 2022, the case was reassigned to a new judge. On September 21, 2022, Jazz served the Fourth Complaint. On October 21, 2022, Avadel CNS timely filed its Answer and Counterclaims (the “Fourth Avadel Answer”) with the Court in response to the Fourth Complaint. The Fourth Avadel Answer generally denies the allegations set forth in the Fourth Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patent-in-suit), and asserts a number of counterclaims for i) a declaratory judgment of non-infringement of the patent-in-suit, ii) a declaratory judgment of invalidity/unenforceability of the patent-in-suit, iii) delisting of the patent-in-suit from the Orange Book; iv) monopolization under the Sherman Antitrust Act of 1890 (the “Sherman Act”); and v) attempted monopolization under the Sherman Act. On December 9, 2022, Jazz filed a Motion to Dismiss Avadel’s Antitrust Counterclaims. Avadel filed its opposition brief on December 27, 2022, and Jazz filed its reply brief on January 6, 2022. On January 11, 2023, Avadel filed a request for oral argument on the motion. On May 24, 2024, the Court denied Jazz’s Motions to Dismiss. On June 7, 2024, Jazz filed its Answer to Avadel’s Counterclaims. On March 6, 2023, the parties filed a stipulation of dismissal, dismissing Jazz’s claims with respect to the REMS Patent and Avadel CNS’s related non-infringement and invalidity counterclaims. The Court entered that stipulation on March 7, 2023. On May 19, 2023, the Court issued a scheduling order establishing timing for litigation events including i) completion of fact discovery by March 14, 2024, and ii) a deadline for case dispositive motions of September 20, 2024. On January 23, 2024, the parties submitted a stipulation to extend the case schedule. On January 24, 2024, the Court ordered an extension of the case schedule, including i) completion of fact discovery by June 20, 2024 and ii) a deadline for case dispositive motions by January 31, 2025. On January 24, 2024, the Court issued an order setting a pretrial conference for October 30, 2025 and a 5-day trial to begin on November 3, 2025. On April 22, 2024, the parties submitted a stipulation extending certain pretrial deadlines, including i) extending completion of fact discovery to September 27, 2024 and ii) extending the deadline for case dispositive motions to April 4, 2025. On June 29, 2023, Jazz filed a Motion to Stay the case, pending resolution of its Motion to Dismiss. Briefing on that Motion to Stay closed on August 10, 2023. On March 13, 2024, Jazz filed a Supplemental Motion to Stay, pending the resolution of the post-trial briefing and any appeals from the February Patent Trial. On May 24, 2024, the Court denied Jazz’s Motions to Stay. On June 7, 2024, Jazz filed a Motion for Reargument or in the Alternative to Certify an Appeal. Avadel filed its opposition brief on June 28, 2024. Jazz filed its reply brief on July 12, 2024. Jazz’s motion remains pending. Avadel Complaint On April 14, 2022, Avadel CNS and Avadel Pharmaceuticals plc (collectively the “Avadel Plaintiffs”) filed a formal complaint (the “Avadel Complaint”) initiating a lawsuit in the Court against Jazz and Jazz Pharmaceuticals Ireland Ltd. (collectively, the “Jazz Parties”). In the Avadel Complaint, the Avadel Plaintiffs allege that the Jazz Parties breached certain confidential disclosure agreements and misappropriated certain of the Avadel Plaintiffs’ trade secrets. The Avadel Complaint further includes typical relief requests such as injunctive relief, monetary damages and attorneys’ fees, costs and expenses, as well as seeking correction of inventorship of certain Jazz patents, for which the Jazz Parties claim ownership, to include former Avadel Plaintiffs’ scientists. On June 2, 2022, Jazz answered the Avadel Complaint. The Answer generally denies the allegations set forth in the Avadel Complaint and includes various affirmative defenses. On July 8, 2022, Jazz filed a Motion for Judgment on the Pleadings seeking to have all Counts dismissed for failure to state a claim upon which relief can be granted. The Avadel Plaintiffs’ response to that Motion was filed with the Court on July 29, 2022. Jazz’s reply was filed with the Court on August 5, 2022. On February 2, 2023, the Court held a hearing on Jazz’s Motion for Judgment on the Pleadings. On September 7, 2022, the case was reassigned to a new judge. On February 2, 2023, the Court held a hearing on Jazz’s Motion for Judgment on the Pleadings. On July 18, 2023, the Court denied Jazz’s Motion for Judgment on the Pleadings. On August 15, 2023, the parties submitted competing proposed scheduling orders, and Avadel requested consolidation with the above First Jazz Complaint litigation. That request for consolidation was denied on November 3, 2023. On November 17, 2023, the parties submitted an updated joint proposed scheduling order. On January 30, 2024, the parties agreed to a 6-week stay of discovery and submitted a proposed stipulation extending certain case deadlines to accommodate the same. On February 9, 2024, the parties submitted an updated proposed scheduling order consistent with that stipulation, setting the close of fact discovery for August 9, 2024 and a trial date of December 15, 2025. That proposed scheduling order remains pending before the Court as of the date of this Quarterly Report on Form 10-Q. On March 19, 2024, Jazz filed a Motion to Stay, pending the resolution of the post-trial briefing and any appeals from the February Patent Trial. On May 24, 2024, the Court denied Jazz’s Motions to Stay. On May 10, 2024, the Court issued a scheduling order establishing timing for litigation events including i) completion of fact discovery by August 9, 2024, ii) a deadline for case dispositive motions of May 30, 2025, and iii) a 5-day jury trial beginning December 15, 2025. On June 11, 2024, the Court entered a stipulation by the parties extending certain case deadlines, including i) extending close of fact discovery to November 1, 2024 and ii) dispositive motions to July 18, 2025. On July 3, 2024, Jazz filed an Amended Answer to the Avadel Complaint. The Amended Answer generally denies the allegations set forth in the Avadel Complaint and includes various affirmative defenses. Jazz’s Administrative Procedure Act Complaint On June 22, 2023, Jazz filed an Administrative Procedure Act suit against the FDA, the U.S. Department of Health and Human Services, the Secretary of Health and Human Services and the Commissioner of Food and Drugs (the “Federal Defendants”) in the United States District Court for the District of Columbia (the “DC Court”) related to the NDA for LUMRYZ. This suit alleges that the FDA’s approval of LUMRYZ was an unlawful agency action and asks the DC Court to set aside FDA’s approval of LUMRYZ. On June 28, 2023, the DC Court granted Avadel CNS’s unopposed motion to intervene in the case to defend the FDA’s decision. On August 14, 2023, the Court entered a scheduling order establishing timing for litigation events including early summary judgment briefing closing December 22, 2023. On September 22, 2023, Jazz filed its Motion for Summary Judgment. On October 20, 2023, the FDA and Avadel filed their Cross Motions for Summary Judgment. Briefing on the parties’ motions closed January 4, 2024. On February 14, 2024, the Court set hearing for oral argument on the parties’ motions for February 27, 2024. On February 21, 2024, the Court rescheduled the oral argument to April 9, 2024. On April 2, 2024, the Court rescheduled the oral argument to May 10, 2024. On May 10, 2024, the Court heard oral argument on the parties’ motions. The motions remain pending. Material Commitments Other than commitments disclosed in Note 14 : Contingent Liabilities and Commitments |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||
Net loss | $ (13,822) | $ (27,342) | $ (64,432) | $ (30,784) | $ (41,164) | $ (95,216) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations. Avadel Pharmaceuticals plc (Nasdaq: AVDL) (“Avadel,” the “Company,” “we,” “our,” or “us”) is a biopharmaceutical company. The Company is registered as an Irish public limited company. The Company’s headquarters are in Dublin, Ireland with operations in Dublin, Ireland and St. Louis, Missouri, United States (“U.S.”). LUMRYZ is an extended-release formulation of sodium oxybate indicated to be taken once at bedtime for the treatment of cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy. LUMRYZ was approved by the U.S. Food and Drug Administration (“FDA”) on May 1, 2023. The FDA also granted Orphan Drug Exclusivity (“ODE”) to LUMRYZ for a period of seven years until May 1, 2030. In June 2023, the Company commercially launched LUMRYZ in the U.S. In approving LUMRYZ, the FDA approved a risk evaluation and mitigation strategy (“REMS”) for LUMRYZ to help ensure that the benefits of the drug in the treatment of cataplexy and EDS in narcolepsy outweigh the risks of serious adverse outcomes resulting from inappropriate prescribing, misuse, abuse, and diversion of the drug. Under this REMS, healthcare providers who prescribe the drug must be specially certified; pharmacies that dispense the drug must be specially certified; and the drug must be dispensed only to patients who have enrolled in the LUMRYZ REMS and completed all REMS requirements, including documentation of safe use conditions. As of the date of this Quarterly Report, the Company’s only commercialized product is LUMRYZ. The Company continues to evaluate opportunities to expand its product portfolio. |
Liquidity | Liquidity. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. |
Basis of Presentation | Basis of Presentation. |
Reclassifications | Certain prior year amounts have been reclassified within the notes to the unaudited condensed consolidated financial statements to condense line items of the same nature to conform with the current year presentation. |
Newly Issued Climate-Related Disclosure Rule | Newly Issued Climate-Related Disclosure Rule. In March 2024, the SEC issued a final rule requiring public companies to disclose climate-related information in their registration statements and annual reports. For large accelerated filers, the initial disclosure rules are effective for annual periods for the year ending December 31, 2025. In April 2024, the SEC voluntarily stayed the final rule pending the completion of judicial review by the Court of Appeals for the Eighth Circuit. The Company is monitoring the development of litigation related to the SEC’s rule, and is currently evaluating the effects of the final rule on its disclosures, processes and procedures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Percentage of Total Sales to Customers | The following table presents a summary of the percentage of total gross sales to customers : Three Months Ended June 30, Six Months Ended June 30, Sales by Customer: 2024 2023 2024 2023 Caremark 52 % 42 % 48 % 42 % Accredo 33 % 39 % 36 % 39 % Optum 15 % 19 % 16 % 19 % |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the accompanying unaudited condensed consolidated balance sheets: As of June 30, 2024 As of December 31, 2023 Fair Value Measurements: Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Marketable securities (see Note 4 ) Government securities - U.S. $ 42,535 $ — $ — $ 73,944 $ — $ — Total assets $ 42,535 $ — $ — $ 73,944 $ — $ — |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities | The following tables show the Company’s available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of June 30, 2024 and December 31, 2023, respectively: June 30, 2024 Marketable Securities: Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Government securities - U.S. $ 42,320 $ 215 $ — $ 42,535 Total $ 42,320 $ 215 $ — $ 42,535 December 31, 2023 Marketable Securities: Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Government securities - U.S. $ 72,990 $ 954 $ — $ 73,944 Total $ 72,990 $ 954 $ — $ 73,944 |
Schedule of Contractual Maturity Dates | The following table summarizes the estimated fair value of the Company’s investments in marketable debt securities, accounted for as available-for-sale debt securities and classified by the contractual maturity date of the securities as of June 30, 2024: Maturities Marketable Debt Securities: Less than 1 Year 1-5 Years 5-10 Years Greater than 10 Years Total Government securities - U.S. $ 42,535 $ — $ — $ — $ 42,535 Total $ 42,535 $ — $ — $ — $ 42,535 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Principal Categories of Inventories | The principal categories of inventories were comprised of the following: Inventory: June 30, 2024 December 31, 2023 Raw materials and supplies $ 2,566 $ 5,291 Work in process 4,819 2,037 Finished goods 5,928 3,052 Total $ 13,313 $ 10,380 |
Royalty Financing Obligation (T
Royalty Financing Obligation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Royalty Financing Obligation | The following table shows the activity within the royalty financing obligation account: Royalty Financing Obligation: June 30, 2024 December 31, 2023 Royalty financing obligation – beginning balance $ 33,490 $ — Receipt of the first tranche of the royalty financing obligation — 30,000 Accretion of imputed interest expense on royalty financing obligation 5,308 3,743 Less: royalty payments made to RTW (1,748) (253) Royalty financing obligation – ending balance 37,050 33,490 Less: royalty payable to RTW classified within accrued expenses (1,557) (730) Royalty financing obligation, non-current $ 35,493 $ 32,760 |
Other Assets and Liabilities (T
Other Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Various other assets and liabilities are summarized as follows: Prepaid Expenses and Other Current Assets: June 30, 2024 December 31, 2023 Prepaid and other expenses $ 6,109 $ 4,373 Other 672 913 Total $ 6,781 $ 5,286 |
Schedule of Other Non-Current Assets | Other Non-Current Assets: June 30, 2024 December 31, 2023 Right of use assets at contract manufacturing organizations $ 11,876 $ 9,905 Other 139 247 Total $ 12,015 $ 10,152 |
Schedule of Accrued Expenses | Accrued Expenses: June 30, 2024 December 31, 2023 Accrued professional fees $ 15,674 $ 11,961 Reserves for variable consideration 11,152 4,044 Accrued compensation 5,328 7,492 Royalty payable to RTW 1,557 730 Total $ 33,711 $ 24,227 |
Schedule of Other Non-Current Liabilities | Other Non-Current Liabilities: June 30, 2024 December 31, 2023 Tax liabilities $ 4,985 $ 5,407 Other 834 247 Total $ 5,819 $ 5,654 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Net Loss Per Share | A reconciliation of basic and diluted net loss per share, together with the related shares outstanding in thousands is as follows: Three Months Ended June 30, Six Months Ended June 30, Net Loss Per Share: 2024 2023 2024 2023 Net loss $ (13,822) $ (64,432) $ (41,164) $ (95,216) Weighted average shares: Basic shares 96,151 77,246 93,922 70,603 Effect of dilutive securities—employee and director equity awards outstanding, preferred shares and 2023 Notes — — — — Diluted shares 96,151 77,246 93,922 70,603 Net loss per share - basic $ (0.14) $ (0.83) $ (0.44) $ (1.35) Net loss per share - diluted $ (0.14) $ (0.83) $ (0.44) $ (1.35) |
Comprehensive Loss (Tables)
Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Loss | The following table shows the components of accumulated other comprehensive loss, net of tax effects: Three Months Ended June 30, Six Months Ended June 30, Accumulated Other Comprehensive Loss: 2024 2023 2024 2023 Foreign currency translation adjustment: Beginning balance $ (24,357) $ (24,277) $ (24,121) $ (24,452) Net other comprehensive (loss) income (74) 8 (310) 183 Balance at June 30, $ (24,431) $ (24,269) $ (24,431) $ (24,269) Unrealized gain (loss) on marketable debt securities, net Beginning balance $ 601 $ (1,749) $ 954 $ (1,890) Net other comprehensive (loss) income, net of income tax expense of $0, $0, $0, and $0 respectively (385) 75 (738) 216 Balance at June 30, $ 216 $ (1,674) $ 216 $ (1,674) Accumulated other comprehensive loss at June 30, $ (24,215) $ (25,943) $ (24,215) $ (25,943) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
May 08, 2024 USD ($) | Apr. 15, 2024 $ / shares | May 01, 2023 | Mar. 31, 2024 shares | Jun. 30, 2024 $ / shares shares | Mar. 31, 2024 USD ($) shares | Jun. 30, 2023 shares | Dec. 31, 2023 $ / shares shares | |
Class of Stock [Line Items] | ||||||||
Term of orphan drug exclusivity | 7 years | |||||||
Ordinary shares, nominal value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
ADSs, conversion ratio | 1 | |||||||
Preferred shares, shares issued (in shares) | 0 | 5,194,000 | ||||||
Preferred shares, shares outstanding (in shares) | 0 | 5,194,000 | ||||||
Preferred shares | ||||||||
Class of Stock [Line Items] | ||||||||
Shares converted (in shares) | (5,194,000) | (5,194,000) | ||||||
Ordinary shares | ||||||||
Class of Stock [Line Items] | ||||||||
Shares converted (in shares) | 5,194,000 | 5,194,000 | 12,347,000 | |||||
At-The-Market Offering Program | ||||||||
Class of Stock [Line Items] | ||||||||
Sales agent commission, as a percent of aggregate gross sales proceeds | 3% | |||||||
Sale of stock, maximum aggregate offering price | $ | $ 100,000 | |||||||
Shares sold in offering (in shares) | 0 | |||||||
Aggregate net proceeds from stock offering | $ | $ 9,250 | |||||||
At-The-Market Offering Program | American Depositary Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Shares sold in offering (in shares) | 640,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - Revenue from Contract with Customer Benchmark - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Three Customers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 100% | 100% | 100% | 100% |
Caremark | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 52% | 42% | 48% | 42% |
Accredo | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 33% | 39% | 36% | 39% |
Optum | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 15% | 19% | 16% | 19% |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 42,535 | $ 73,944 |
Government securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 42,535 | 73,944 |
Fair Value Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 42,535 | 73,944 |
Fair Value Measurements, Recurring | Level 1 | Government securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 42,535 | 73,944 |
Fair Value Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Fair Value Measurements, Recurring | Level 2 | Government securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Fair Value Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Fair Value Measurements, Recurring | Level 3 | Government securities - U.S. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | $ 0 |
Marketable Securities - Summary
Marketable Securities - Summary of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | $ 42,320 | $ 72,990 |
Unrealized Gains | 215 | 954 |
Unrealized Losses | 0 | 0 |
Fair Value | 42,535 | 73,944 |
Government securities - U.S. | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 42,320 | 72,990 |
Unrealized Gains | 215 | 954 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 42,535 | $ 73,944 |
Marketable Securities - Narrati
Marketable Securities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 709 | $ 0 | $ 1,107 | $ 0 |
Gross realized losses | $ 0 | $ 0 | $ 0 | $ 0 |
Marketable Securities - Schedul
Marketable Securities - Schedule of Contractual Maturity Dates (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 1 Year | $ 42,535 | |
1-5 Years | 0 | |
5-10 Years | 0 | |
Greater than 10 Years | 0 | |
Total | 42,535 | $ 73,944 |
Government securities - U.S. | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 1 Year | 42,535 | |
1-5 Years | 0 | |
5-10 Years | 0 | |
Greater than 10 Years | 0 | |
Total | $ 42,535 | $ 73,944 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 2,566 | $ 5,291 |
Work in process | 4,819 | 2,037 |
Finished goods | 5,928 | 3,052 |
Total | $ 13,313 | $ 10,380 |
Royalty Financing Obligation -
Royalty Financing Obligation - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Aug. 01, 2023 USD ($) | Mar. 29, 2023 USD ($) tranche | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |||||||
Maximum proceeds from royalty financing | $ 75,000 | ||||||
Quarterly net revenue target for royalty financing | $ 25,000 | ||||||
Quarterly royalty payments for royalty financing, percentage | 3.75% | ||||||
Interest expense | $ 2,716 | $ 2,295 | $ 5,308 | $ 5,554 | |||
Royalty Financing | |||||||
Debt Instrument [Line Items] | |||||||
Number of tranches | tranche | 2 | ||||||
Proceeds from issuance of long-term debt | $ 30,000 | $ 0 | $ 30,000 | ||||
Effective interest rate | 30.40% | 30.40% | 30.40% | ||||
Interest expense | $ 2,716 | $ 5,308 | $ 3,743 |
Royalty Financing Obligation _2
Royalty Financing Obligation - Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 01, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Debt Instrument, Increase (Decrease), Net [Roll Forward] | ||||||
Accretion of imputed interest expense on royalty financing obligation | $ 2,716 | $ 2,295 | $ 5,308 | $ 5,554 | ||
Royalty Financing | ||||||
Debt Instrument, Increase (Decrease), Net [Roll Forward] | ||||||
Royalty financing obligation – beginning balance | 33,490 | $ 0 | $ 0 | |||
Receipt of the first tranche of the royalty financing obligation | $ 30,000 | 0 | 30,000 | |||
Accretion of imputed interest expense on royalty financing obligation | 2,716 | 5,308 | 3,743 | |||
Less: royalty payments made to RTW | (1,748) | (253) | ||||
Royalty financing obligation – ending balance | 37,050 | 37,050 | 33,490 | |||
Less: royalty payable to RTW classified within accrued expenses | (1,557) | (1,557) | (730) | |||
Royalty financing obligation, non-current | $ 35,493 | $ 35,493 | $ 32,760 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) provision | $ (509) | $ 90 | $ (416) | $ (490) |
Effective income tax rate | 3.60% | (0.10%) | 1% | 0.50% |
Other Assets and Liabilities -
Other Assets and Liabilities - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Prepaid and other expenses | $ 6,109 | $ 4,373 |
Other | 672 | 913 |
Total | $ 6,781 | $ 5,286 |
Other Assets and Liabilities _2
Other Assets and Liabilities - Other Non-Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Right of use assets at contract manufacturing organizations | $ 11,876 | $ 9,905 |
Other | 139 | 247 |
Total | $ 12,015 | $ 10,152 |
Other Assets and Liabilities _3
Other Assets and Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Accrued professional fees | $ 15,674 | $ 11,961 |
Reserves for variable consideration | 11,152 | 4,044 |
Accrued compensation | 5,328 | 7,492 |
Royalty payable to RTW | 1,557 | 730 |
Total | $ 33,711 | $ 24,227 |
Other Assets and Liabilities _4
Other Assets and Liabilities - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Tax liabilities | $ 4,985 | $ 5,407 |
Other | 834 | 247 |
Total | $ 5,819 | $ 5,654 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | ||||
Potential ordinary shares excluded from the computation of weighted average shares (in shares) | 1,140 | 2,212 | 1,032 | 6,813 |
February 2023 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.50% | 4.50% | ||
October 2023 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.50% | 4.50% |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||||
Net loss | $ (13,822) | $ (27,342) | $ (64,432) | $ (30,784) | $ (41,164) | $ (95,216) |
Weighted average shares: | ||||||
Basic shares (in shares) | 96,151 | 77,246 | 93,922 | 70,603 | ||
Effect of dilutive securities - employee and director equity awards outstanding, preferred shares and 2023 Notes (in shares) | 0 | 0 | 0 | 0 | ||
Diluted shares (in shares) | 96,151 | 77,246 | 93,922 | 70,603 | ||
Net loss per share - basic (in dollars per share) | $ (0.14) | $ (0.83) | $ (0.44) | $ (1.35) | ||
Net loss per share - diluted (in dollars per share) | $ (0.14) | $ (0.83) | $ (0.44) | $ (1.35) |
Comprehensive Loss (Details)
Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Accumulated Other Comprehensive Loss: | ||||
Beginning balance | $ 78,384 | $ (38,166) | $ 87,739 | $ (21,145) |
Net other comprehensive (loss) income | (14,281) | (64,349) | (42,212) | (94,817) |
Ending balance | 70,288 | 143,192 | 70,288 | 143,192 |
Net other comprehensive (loss) income, tax expense | 0 | 0 | 0 | 0 |
Accumulated other comprehensive loss | ||||
Accumulated Other Comprehensive Loss: | ||||
Beginning balance | (23,756) | (26,026) | (23,167) | (26,341) |
Ending balance | (24,215) | (25,943) | (24,215) | (25,943) |
Foreign currency translation adjustment | ||||
Accumulated Other Comprehensive Loss: | ||||
Beginning balance | (24,357) | (24,277) | (24,121) | (24,452) |
Net other comprehensive (loss) income | (74) | 8 | (310) | 183 |
Ending balance | (24,431) | (24,269) | (24,431) | (24,269) |
Unrealized gain (loss) on marketable debt securities, net | ||||
Accumulated Other Comprehensive Loss: | ||||
Beginning balance | 601 | (1,749) | 954 | (1,890) |
Net other comprehensive (loss) income | (385) | 75 | (738) | 216 |
Ending balance | $ 216 | $ (1,674) | $ 216 | $ (1,674) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
First Jazz Complaint | |
Loss Contingencies [Line Items] | |
Loss contingency accrued | $ 234 |