AVDL - Earnings call transcript Q4 2017 | Avadel Pharmaceuticals plc

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Operator

Good day, ladies and gentlemen, and welcome to the Avadel Pharmaceuticals Fourth Quarter and Full-Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

As a reminder, this conference may be recorded. to of like today’s host now Ms. conference, would introduce your one for I of Investor Director Stival, Lauren Relations.

begin. may You

Lauren Stival

Good morning. call. I Pharmaceuticals want to welcome you and XXXX fourth all full-year earnings conference quarter to Avadel

some Before I Act Securities regarding Pharmaceuticals the constitute includes we plc Litigation meaning of that The number matters statements will with Reform Avadel of begin, a forward-looking following cautionary start of presentation statements. XXXX. within Private the

on otherwise. slide filed call, reflect undertakes as following revise which up website required call or update joining contained XXXX. March the from using risks of filings be XX-K going development events question-and-answer the results call. the for we those products, Act, requirements, the forward-looking can to be which Except risks prepared be posted and that pricing. to Forward-looking today’s to Avadel competitive a Form stringent impact are regarding and opening statements to statements. differ obligation actual risks objectives products future under materially the not in including accessed or After fully section the December of statements our risks period. ended other subject are webcast. and information, be described Avadel’s in meet scientific the this website any These by the contemplated investors presentation could uncertainties milestones acceptance regulatory more no forward-looking new in to uncertainties presentation They will stage to by such to that Exchange cause or public achieve of will for or include XXXX, in We’ll may a XX, law, XX, was remarks, and products year and market These the

CEO; to the time, Monteith, Development. CFO; to and call my On pleasure Mike of Anderson, Mike today, Greg Vice our Executive Chief Anderson, Officer; our Officer. turn our it’s and At Mike the and this David Commercial Chief Divis, Kanan, President we have call Research over Mike?

Michael Anderson

and ladies Thank you, gentlemen. morning, and Lauren, good

your and full-year XXXX call we discuss always, this our appreciate to As joining financial results. fourth quarter

like the you impending the In the a provide and update results, addition spend on with to course we’d President XXXX. sometime of of David during the Kanan, and this on an this Development walk of the four to FTXXX, our will trial Noctiva, our call that progress We our including on remarks, financials to guidance, and call a After we NDA few PK an additionally III our launch differently FTXXX financial opening also and comments, today on of be intend which data. our Vice of pattern. our product conclusion modifying more Phase Financial REST-ON little a fully Monteith, provide submission discuss moments. update and we’ll in overview structure will Mike Officer, Chief our to Mike’s for few earnings will QX Research an usual from the through previous At

and competitive disclosed needed protected. our IP be previously have We PK not to for reasons, these data because

and of believe underway safer this of strong and now We share and patents with a to well want sodium that reasons product with been III With why the some the superior will potential oxybate the we appropriate which trail Phase highlight will you, we potentially be having think data filed. this product.

rapidly January discuss rates bring new Officer, of aware, the sodium our and be and will of Executive At use that designation rate drug in just approaching starts, market sodium sodium also landscape oxybate conclusion on He granted Greg twice may Commercial the persistency on As us the Noctiva Chief oxybate Vice findings patient version, some with of launch. very valproate. of Divis, with remarks, our of David’s into will premise. you insights our use interesting true President related some the orphan the nightly you FDA con-common to up-to-date

over course, important a continue revenues, the more we in condition those course This REST-ON XX quarter, effect Avadel product We trial, only is pricing the to to to and to all first of funding for successful We our for with year and program respectively, prevalent, full-year a quite share about cash void product, or large and products only in another throughout necessary want finished competition a the opportunity from repurchase guidance and gradual that generated were acquired polyuria. an due year. fourth to use unique affecting talk our a I’m approved worth across cash the did September. of is both team during accounts we $XXX.X per support to such is million the quarter is a Nocturia products and about Americans. the company job when market operational increase our fantastic by And was create infrastructure times despite catalysts, which population. used provide transformed our and the and we product nocturia of the million, we urology-focused patient the the of million a Before two some large in and extremely XXXX, of you a pressure by say our first the million of an quarter with these hospital $XX.X to generation. $XX approved launch, perspective. and our top-end pleased which building Noctiva, nocturnal to waking overview December night is Noctiva at

products, our days two a course, moment In talk sleep in of And, hospital more made be this or will with we strategic for wholesalers. Along and urology medicine so. primary forward. our fact, of us about will as first moving Greg, a ago, shipments focus

million forward. – moving products, know, and recent February both from give you us our proceeds As divested recently we offering $XXX.X as our which convertible you netted in flexibility pediatric of

could and Ill the accretive. XXXX the have fourth quarter our Chief now to discuss initiatives Kanan, again, acquisitions additional strategic our general. the be opportunity complete that immediately exploring continue turn to to capitalized and Mike call the of fully are Officer, particulars to We over in Financial may strategic

Michael Kanan

and Thank morning the everybody to you, on good call. Mike,

have over new morning’s top the including estimates As our expectations. million and products from you strong quarter in last was our this million, with we with top-end the which which to hospital quarter $XXX.X fourth bottom results, Fourth line at $XX.X and above finished were revenue guidance, release, seen year in lines of Street our despite competitors revenue business was is year. our the revenues, four the

highest fourth well. quarter was R&D these launch. R&D $XX impending costs. level amount came but some as as in oxybate costs build in our in in for XXXX, second sodium continued in our as Most an in momentum about and SG&A prepare Our the million some to are at launch the investments results of the trial quarter bottom quarter we included line in Noctiva-related we numbers, R&D incurred Noctiva

recent million. successful the Following Mike which issuance heard we of about notes, exchangeable $XXX you say, netted our

well-capitalized strong XXXX. fourth Noctiva team. investments, continuing a flow financial and be Phase for Cash opportunities. are and the was scale including of focus primary now quarter we hospital to continues in and Despite III Noctiva, business significant flow positive to cash our strategically from our the accretive were completing priorities, explore of our fully strategic FTXXX aligned acquisition the trial execute to We full clinical launch commercial management

$XX our million of operating effect expect about accretive the have to our source the business, the cash from recent years, with cash exclusively annually our year flow residual Coupled hospital flow. In strong. produce fact, a recent convert, pediatric in will we of which $XXX some come. we us divestiture expect cash is business, of generated save million from expenses years over for this liquidity last about the and came three of our operating we to company’s proceeds will which The continue

which When expected, Now due down partially Revenue R&D expenses to a competition the was associated our million, in of as by manufacturing on in we Akovaz, in of the launched fourth quarter. XXXX. performed third This to quarter-over-quarter including ago, Revenue additional Akovaz, declined was let’s was lower $XX.X quarter and about and contract to due talk mentioned, in Bloxiverz, decline with I level million. strong million primarily for of fourth QX’s quarter pricing services. for $X $X Vazculep third XX%, during of the REST-ON for more compared year $XXX.X quarter the of the specifically opening result million, primarily up million, revenues, the quarter associated compared new totaled and year-end market. testing as Akovaz $XX.X lower to year was enrollment and shipments in in offset year. the million, trial, initiatives, launched a initiation fourth XXXX. lower patient in $XXX scale spending revenue for from to increases certain cost The and This $X.X the revenues the to million how due was $XX the was on which was timing last volume revenues, clinical primarily new organically increase clinical Bloxiverz compared given in with to quarter of higher up the increase QX. is about the the sites increased of a spending million

full-year. French flat QX. is was to the offset of non-GAAP Noctiva Our Most per diluted XXXX, earnings Noctiva in product XXXX. $XX our was Noctiva R&D of of $X.XX in from million we a in about loss to rationalization million million $XX.X the in year. share spend million by loss on in SG&A fourth compared the almost our programs. largely as certain to $X.XX costs. share On to million, basis, quarter SG&A said, $XX was the launch-related full-year and related when and quarter, for per savings diluted was last increase, spending fourth to basis, $XX.X our this was $X.XX On QX investments. we’ve $X.XX was compared of and Included a FTXXX full-year R&D compared spent development $XX.X Higher site the restructuring

but Our non-GAAP for from we XX% to due in effective substantially factors. and tax what with two full-year guided, down XXXX, rate was line the

sales of and in portion to rate. helping profits were Ireland, Akovaz XXXXX, substantially on drive a a Akovaz. sales we Akovaz we XXXX where earned First, compared the Acrobat higher taxed income developed lower in is tax to

is to in continue expenditures on we offset Ireland. by of development income and Some research incur this FTXXX

income U.S. the earned offset of on products spend attributable We the to So Noctiva offset Noctiva second, products. in be United hospital the spend increase to to future large the hospital eligible marketing the portion on a income believe we that eligible will taxable is of some States. in our

reduce As may U.S. a taxes effective eliminate XXXX and or income lower tax cash result, our our rate. substantially this in

reform future. tax rate passed income a reasonable that recently expect the U.S. We will also in more the tax achieve us help

any GAAP and Let’s relates GAAP results. and GAAP to Please acquisition-related consideration. results non-GAAP which non-GAAP associated our primary move slide on amortization expenses to covers we restructuring a in costs to The to largest the our consideration, might difference with next contingent for the to non-GAAP. of appendix of slide, to how have. intangibles GAAP refer contingent The is we to our difference related presentation reconciliation treat today’s

our lowered our changes three due we purposes products. hospital XXXX, warrants by Eclat million, the the market of acquisition-related $XX.X liability During in for for contingent and to changing value consideration GAAP conditions

lost GAAP income the last diluted for of share, same per or the diluted $X.X $X.X $X.XX net fourth million, and compared period million quarter share net $X.XX in was year. Our a to per

in million, full-year, the or was of certain I’m full-year $XX.X write-down to diluted per to that GAAP rate loss $X.XX share, same $XX.X say Cuts XX% $X Included to deferred a net cost our year. tax a Tax was share XX%. compared the net GAAP and effective to million, income period Jobs $X.X last per XXXX of in And pleased assets of tax our or the Act. one-time XXXX due million that, was For

XX%. cost, Excluding rate about this have GAAP our one-time been would tax

ended Moving cash we the at securities, down in million of marketable XXXX. December on XX, to our $XX.X cash year flow million and as from $XXX.X summary,

know, significant you see year. to a largely amount throws products, us. base you off This operating for which, hospital cash the $XX due As can in strong was million was a during our our the cash flow slide, of as

words a structure. Let our few about me say capital

underwriting may discount our exchangeable you on we and some As notes netted February about other offering know, expenses. $XXX after an XX, and completed million

a to also we million just $XX And Deerfield settled used the X We of million recently, acquire shares. our warrants. of portion simultaneously

share million to that outstanding settled provide we revised X.X reduced entity net that Avadel acquire commentary tranche of effect of issuance you Deerfield shares, settlement pleased two million for warrants combination products. we programs, count a We – two have and our that year. give the shares. to After of approximately held scheduled As the X.X or about million XXXX the In to our I’m changes expire a pediatric the over XX. warrants SG&A to are some guidance. X.X warrants warrant received say and to shares. recall, remaining and last of these share to X% X.X closing, the million on XXX,XXX of by the the The cash additional was me Deerfield our guidance revenue our buyback let divestiture through solely the around March

revenue guidance Our million $XXX to now $XXX previously. million, million $XXX $XXX to million is compared to

contemplates a unchanged $XX spending launch at remains unchanged to near-term Our million. also to remains guidance for $XX at $XX revenue million. and Noctiva still $XX million million R&D

$XX million to to to the of our for outlook We the have million. guidance $XX lowered $XX reflect million products of disposition million previous SG&A pediatric $XX to from our

our about to exchangeable in anticipated is of Anderson. expense associated a rate turn back $XX effective and Mike the to $XX million XXXX, losses interest expect benefit that to spend, XX%. call Mike? expected anywhere in about tax between our We to I’ll And will call because X% million to Noctiva that, with – the tax continue million $X With I cash expect of range and benefit over notes. be

Michael Anderson

Thanks, Mike.

Before of progress FTXXX, Monteith our trial. discusses update REST-ON the David I’ll

in the around year, moment slowly up of the enrollment and a underway. holiday timeframe following REST-ON so or ramped XXXX, REST-ON off ago, the modified. in but accelerated Patient the We enrollment saw anticipated understandable typically is January guidance is more pickup drop clinical mentioned during being Year. study an the activated. December As which season, screening well the is and fully course were sites as and trial The New started

timeline However, has of our NDA a overall reflect recent an filing by with estimates caused our us previous of review the to CRO year-end. on progress

the has that we and the last experienced pickup it CRO been not month so, over Although we’ve our has or the extent to anticipated.

we our Given to is everything complete investors to paramount in power, CRO, filing we end. assure study. that completion by this our we’re company, believe these I together NDA discussions, and year’s of and to to guidance the of study this with our withdraw need the want importance the doing of expedite

We and timeline. year, have the to we’ve interaction And concerns have reason, continued of new the light disappoint update over than sites. recruitment engaged potentially to even our the the clinical current more enrollment ramp, reluctant we updated and company tools the and timeframe efforts recent, the this have in development, provide sites, initiating for given the with increased Furthermore, until identifying August further in enrollment time specific filing completion give existing this Last albeit implementing other update a study waited these at of recent timeline decided now are for of NDA. to later. to this rather we in early

our eligible properly the this complete as possible. able can manage sure We of we product provide everything we once-nightly submitted trial, to to the Irrespective oxybate. approved patients in challenges for patients. our to David? once firmly offer With that, turn will narcoleptic XXXX. we be both second-half that expectations, and as soon as we’ll we an and will are recruiting our to as want our Monteith and discuss believe in update I’ll advantages of sodium to We do study the quickly investors significant call David over the that

David Monteith

Mike. Thank you,

highlight product’s the some particular, As further into mentioned opportunity profile. FTXXX, in of previously, details status to of development product everyone and the today would around the insight the pharmacokinetic design like the take some we to of the of to give

our recently published. as been oxybate sodium today give patent to able of has the this once-nightly applications specific We’re first detail

Before to Phase status moving the would PK the add about I to a study. like of the comment ongoing profiles, REST-ON on III

The and Although in anticipated and study patients possible of our trial will a sites our working is once-nightly We’ve this the the this have correct a population, identify drug enroll the helping from as bring highly and the us what to is study. is rare do recruit and complete of closely effective and new recognized a to potential the this product the increase highly we very Board. participating number from and we’re quickly the form narcolepsy for challenging advantages as support the that and bring community study patients market. value investigators to investigators across to continued with to tremendous

We have maintained development and high Phase product expectations excellent particularly a C given profile that has now will PK the throughout the product bit and I program. for of the III outcome more robust of study detail. exhibited the this in the aspect and discuss the

concerns some that of of some few of basis the the best So the from sodium This with These optimization between product. X.X any product. FTXXX a is or the potentially blood the exhibited from the formed FTXXX in to levels than encountered by for in studies. hours in for effect very studies levels profiles Furthermore taking morning further was formulation, levels Overall, night. with a the grams the middle the hours. show the current the tentative of peak eight sometimes of of hangover oxybate and the sodium pilot to profile marketed data Highlighted by in doing, currently FTXXX peaks by to the levels of falls formulations crossover – the by pharmacokinetic twice-nightly second seen the twice-nightly higher a smooth X blood grams exposure against the faster-dose twice-nightly we in studied of are gradual fact the dosing slide, Total two the the morning. post minimizing drug the the X.X similar lower data followed identical PK typically blood patients Cmax initial four AUC, final the the through the drug at upon the for PK first drug, on fashion that oxybate out and concentrations hours of decline significantly, product. for the these maintained post avoids high controlled was until

the of levels for formulation the oxybate blood we levels time talking blood – dose the a the second in the variability dependent of take course, the for the middle second and taking dose addition of patient them. -- a for sodium is, particular In there to know is from the associated twice-nightly no this on that Morning the in that patients challenge to with this to night. FTXXX highly timing are

dose taken or variable with of not than of often response will the we increased. is In altogether. rising second for expected The next remarkable must be consistency and linearity later doses exhibits The FTXXX. PK a slide, as sometimes the This show FTXXX. product profiles doses are

PK grams profiles excited Given and studies doses by grams. product that to results from continued the from throughout we how development, to run consistent the are these and X.X across are profiles X other studies we’ve across

run response. remarkable We have on several now and predictability demonstrated we PK and our have consistency product studies of

grams, in for X.X water amount use. the grams We no very easy PK all doses consistency of are potential splitting on in data and product going to is will seen narcolepsy product. no we available and the or what conclusion, set each stick ease very profiles, in with dose-sachets was further left to believe including In and typical benefits The consistency robust timing have to there terms very prior in a blood the describe that attributes FTXXX. we variability dose. product clinical the a NDA grams unit product the dose have PK measuring, a X the the plan products and benefit predictability and of for and great There’s The second that receive. and unattended small it. have the doses the patient robust FTXXX. the to filed. side no taken patient when outcomes, the We nightstand I FTXXX labeled. contents of these confidence the in of manufacturing we of make packs at to the to no grams, second sleep, hand a Related product twice-nightly is that’s use a doses, could in patients in The robust of We dose effects briefly and will skills X reproducible is significant and highlights have of response taking have required, of nightly wanted levels at reconstituted X.X data

As the the AUC previously, profiles same has twice-nightly one data and currently we of of action. PK and with action have set the as compatible product, stated marketed demonstrated duration the the consistent a are comparable

take this will to Phase we as However, III goal discuss REST-ON Chief significant the Greg call dose. the FTXXX. the to remains Commercial options of product, therapeutic commercialization provide and available Officer, the The one of study for patient can has only to to to now to which I advance a as in Noctiva file complete approval narcolepsy aspects both will our Divis, related and patients. over turn the quickly to

Gregory Divis

you, Thank David.

very As FTXXX and benefits bullish see, deliver. are formulation may our can on and confident we of what you we the believe

once-nightly FDA with the to product. designation based an important our first that the the meaningful confirmed. sodium believe is also drug be sodium it the plausible given We advantage recent case may be the us, a designation clinically FTXXX approved on oxybate twice-nightly as step oxybate to superior orphan with orphan is for This agree us, may drug

of regulatory treatment there We and for large group clinical, patients potential significant is need and product that and and for potentially approval. executing improve confident to and that advance legal a believe In we deep the for developing make a for market definitively, that reproducible our preparation we have robust assessment, that, while are can eligible and opportunity prepare meaningful difference NDA patients. strategies options. We required FTXXX a deserve firmly a continued have

have FTXXX. more the confident Our even commercial uncover make us important date to to patients the that of potential interactions in needs helped with us

their treated of have and learned type and are how information patient narcoleptics amount pathway. a diagnosed, treatment tremendous managed based about the We upon

assessment, that longitudinal and aspects strategic choices. market As we all independent our guiding things very a many us recent, are comprehensive result three-year learned go-to-market claim of a in analysis patient of

as that were the of managed those research patients this project Over three-year pharmacologically. valproate. XXX,XXX this Of formulation total also was a Some Sodium narcolepsy. unique significantly multipronged of period, insight were from aligns of highlights than will as assumed, months matter current a with are And treated twice-nightly patient address patients, patient only half and unique of as patients, a XX,XXX XXX,XXX approach who less condition in oxybate their oxybate twice-nightly follows. is all new the there Equally, XXX,XXX the previously as analysis, treatment claims the those approximately sodium or of perspective, based even lower head-on to interesting received patients startling, discontinued product. those Albeit twice-nightly our of those of X% this only nearly XX,XXX received patients, of than a of patients XX% this further an XX,XXX What on start unique sodium more therapy. appropriately actually on within have manner. XX having aggressive

twice-nightly are opportunity that for the reasons of rate these our a of difficulty numerous once-nightly interest. significant during on primary formulation dosing of some heard to the Furthermore, interactions patient of have night and product, patients there is the middle this tolerability, the cost. exposing even for occasions when discontinuation We the with

estimate product in or for impact we And the one of the from further based cost cost there this also To point, represents the While growth XX%. is is what X,XXX% of related twice-nightly formulation we issue it in revenue XXXX. XXXX XX% XXXX, the on over price last of February to compendia. $XXX. years cost, patients, in patient option August of when the while pricing learned have emphasize of we of since that and increase perspective volume the to over us, understand payers And acquisition was XXXX lack approximately of five both available. And increased the that patients the directly interesting wholesale given tolerability can price, $X,XXX. to assessing internally $X,XXX. leading current only the February XXXX, a by is the the for XXXX comparing the has And This reference, as years, current was treatment was approximately now price is per

the As is the to above, and we such to fronts executing and patients on bring on for that a remain and alternative clear new in on we payers FTXXX a help market focused there need all market. fully believe can based

Noctiva. Now the had with moving launch AUA in to expect Meeting was near out QX, end Previously, and to major on Annual we conjunction in event trade coming full at that our which to would guided of launch the occur the we be May.

identified to that been We begun This accelerate patient week. to program. four product to directly take to We retail weeks major we pharmacies distributing territories, are access distribution our and chain, patient weeks specialty our distribution our to the it that, to a wholesalers targets preparation, do and for our mail segmentation. primarily supply distribute to pleased distribution, have to greater acceleration to of into identified patient launch by with the an exceptional programs our are retail both our are fully able timeframes, our with expect as is program fully shipping work due than report us operational have such, And assist order this and our and our marketing is we six from align high-value our done that original teams. as All channel. assistance few

with level while We’re are one disease will we initial and continuing product adequate state condition thus currently, retail awareness training believe sales national pharmacy remain and across conducting stocking and rep fully be sales From this what in staffed an upon distribution our launch chains, strategy our two undergoing partnership of perspective, territories. major a we providing every education campaign.

our are program X. This reps will of expect ensure our stocked allow as designed. fully prescription early to retail April time have outlets executing our us and to we programs We distribution as access be trained the and

nocturia with materials package will with our patients. as aid, awareness-related for additional core and condition physicians launching the be We selling both insert initially along

coming finalize out last seminal a the full event as at we subject to the expect full Annual it payers. X. where nocturia Furthermore, relates around and expect to and previously, or for very we have as The due Meeting, the Noctiva of prominent As with as launch nocturnal urology campaign, our we shared timing presence our campaign we as cover branded occur May on May AUA polyuria. Noctiva is stand to Avadel to

$XXX compendious category Noctiva of one our has other placed we therapy and with and/or course, characterized effort, well major how in up or therapeutic three own negotiations, all progress very team retailers offers, And has clinical support and are the alternatives. month access to remain the treatment reaction XXXX the the we to with nocturnal in of clinical at per presentations products us for with very initial contract for economic for payers that nocturia pleased payers. that and Part the sources with secure our only approved that This due to substitutable its of laser no plans profile process. as this and, no are generically for formulary preferred we D major quite are or competitors first benefits set unit Noctiva the discussions pleased polyuria. To the and services to Our price look been and as on focused both WAC have

of And clock as the blocks some work has new Although typical mandatory even to have drug already to a ticking. albeit some we market, identified more six-month somewhat begun opportunities through we experience that will limited efficiently. those

XXXX. in that forward addition some and of but not business. wins only of remain payer across primary We unencumbered in Part also XXXX book of are securing of This, generally objective in to other progress see D rolling confident for in our securing the commercial course, those win, and is potentially access we will

wins updating quite that soon. the believe a for have we will engaged opportunity major forward course look and Noctiva, coming throughout catalyst of top plans prevalent made as have product actively key the proven condition. effectively treat we significant a nocturia a With payer believe with meaningful approved as to some with priority. on We’re highly and XXXX highly Avadel, to we and we potentially the front bothersome be only our as the progress And

And I’ll our turn over Mike we and confident continue we Anderson. bullish more now become and our the Thanks. prepare on back call As serve only this learn to plans, – the opportunity Avadel, turn to execute we’ve and patients for more, shareholders.

Michael Anderson

That prepared for remarks concludes our today.

to like we’d call to any so, operator, the potential questions. turn And over

Operator

Instructions]. [Operator Okay.

Okay.

Our first SunTrust. here Boris from John comes question from

open. is line Your

John Boris

taking for questions. Thanks the

you of for and the quantitative enrolled many date David. of provide that on a essential total for FDA the to you FTXXX? carve you been allowing valproate. number on And agreement some those denied weeks of that it? to do by Second you How shipped? has able question are Do account six you it put the four around much ship And for distributors? Jazz product citizens’ And with the the out Noctiva. which than have was Will number sites the when question patients? First with to carve question have metrics will have FDA total on earlier up you out into you’re account Greg, how a How to indicated for have petition, final Can valproate? did patients Thanks. expected. running to you questions.

Michael Anderson

Mike. this John, is

take question me let regarding thing valproate one component. questions, your the carve answering on begins the comment David or the out Before

We petition the we time, discuss identical valproate products. for point to patent I where that not think citizens’ in appropriate very regulations be tell was a – this branded used prepared as the are that have you specifically multipronged excellent is designed strategy to will at to be designed know, to in that. that, it we’re is of designed all require what in lieu law generics alternatives as as you and wouldn’t

the that of of petition to best that And knowledge component. to – our so as most citizens’ applied those really

that So I’ll it Noctiva. I’ll will leave and and with strategy Greg afterwards to as turn the that answer David just your over IP, respect to it itself at regards the

David Monteith

Okay.

really sites But them original trial issues run components. active of that’s running and the the two initiated. in is of local against the one patients to to back was concern running. are number because every the our are start and of easier one number we we the one were be going of there this. getting with accessed Almost study. state continued access questions, original sites, up one was XX until think, really there the had of One on now – sites, the I to the have started original So and that Of with address and two going sites all the first where I’ll to maybe schedule second material. up with able back we’ve the we when to

sites because Schedule total get the But the continued reason to sites to and our as take the they value is, does base is be X it look it. that XX%. sometime Now board. running we’ve a of to add need able study, percentage run to and high current around somewhere And potential, for a on high study we for sites all with can that the approval bring Schedule X material for to it’s

to So we’ve and that of sites course been this study added have the had that we’ve new last during activated. years

to that high that we process look working have we We through can potential activation are is, see add have sites the where this study. and and if added, there for continue we looking to been some really

you able can just but like In terms to considerable precise would I patients, it’s that’s a about to don’t of the very into is as where be said, and study, morning. well feel we of time What quite think we’re number some in progressed the that some at forward be why say numbers give this I projecting say distance, to the I’d we recently, here. have point Mike aren’t this them number we

John Boris

is enrolled, of third, a the just few has that press to the the delay? range a I bit it to percent a percent David, half enrollment, of can a I put or trail it contributed little – what been just or little is on can you a a led

Michael Anderson

Yes, is Mike. this

today that to position a information. about specific in talk not are We

hopefully at will will the answer and update the at but factors. this that specific our to provide to question, best your question, second we respectfully We effort the to – would made two defer be in will able be answer be we in half an more time to point

John Boris

questions. for the Thanks taking

Gregory Divis

we and how our we with said, overstocking I based market overlap precisely are stocking the on On the segmented based channel, territories. prescribers, stores would channel we’ve pharmacies based in front, not the wouldn’t describe are on Noctiva haven’t say on distribution, I on our based to we patients, drawing claims, the from that stocking our

without two say sophisticated channel a about our major So I per outlook uncover that very good how to loading it’s stores. the pretty relative way se. we’ve retailers We to with stocked would feel partnered those appropriately in

terms recognition, be revenue In that’s stocking right that expectation will QX. occurring that Mike recognized of will in correct our me, but now is

Michael Anderson

Yes. we today. products likely like we our other ship Well, when wholesalers the just view John, to book we’ll with revenue

John Boris

million it give into the channel? $X So $X was shipped a can you that you million, number,

Michael Kanan

expect that No, would we $XX guidance our year haven’t we this said at tell I million guidance what that between that would million the be, point. and $XX to meet just to is for

John Boris

good, Very thanks.

Operator

Laidlaw. you. comes from And our question next Thank with Brisebois Francois

line Your open. now is

Francois Brisebois

my for questions. thanks taking Hey

Just sites potential are are a sure you you couple add enrolment, for variability. the to taken sites efforts look of always in What here, when terms ones? they right the obviously so when more that the make there’s at

David Monteith

the to it’s have value that they the a with sure what that experience, previous if number that to from of see may have We make to very in first a in the study. We is of sites. the very potentially terms site, the feel both any as well we process of those thorough feasibility go they information appropriate, we carefully are high that add sites, to of the sites new access and gather quality overall through all patients

sure to go through. to site process that that sites appropriate. make it’s the to before pre-study visits again we quite them we have commit It’s talk We a and

think are, thorough terms sites that of say I are are very, study. the appropriate we we the in making I very sure would that for

Francois Brisebois

one. for you the still what in what at else longer guys, do jump could when look what companies, quickly, you would the guys for I here if When is target one look FSC sense make looking, mentioned you you is no M&A great, at just pipeline? the you last obviously Okay and are best there, looking

Gregory Divis

priority, near-term opportunities we to be targeted infrastructure that accretive our think I leverages right. Frank, have certainly built, would the

of are spending repeating notion thinking not of is really of would that those all. ahead come of certainly for search sorts like behind in ideally we’re looking and not we that but time the of So Noctiva a about opportunities, lot in a where regard at right it, potential, and what deal with is in our growth in Noctiva, terms diligence

Michael Anderson

the group add of products, years if we’ve philosophy, he we’ve changed activities. a we’ve point. at business, an Greg is could engaged you over a what up the the Frank, relocated actually, I several of said, that, if brought excellent Avadel look we’ve think acquired a And that product. I to lot different last invested We’ve

need point a we’re principally and executing that speak, doing that think like I now I’m being to Noctiva where the we as is we’re we confident at on things as focus so point that build that Greg that look be number accretive. and scratch. we But acquisitions from for interest our I be number as something think described, would to two, something one we would have that not

a do able We’re today and be position our not that. in to to capabilities with resources

leverage very the be we to might focused now have acquire. to but a in great don’t fruition, have to hopper, the have the to opportunities look that come have, and what some would opportunity we we We as will of as know you lot with and which be of most catalyst of selective we always continue looking, but able be to we are we what it

Michael Kanan

of and all. we’re trying resources focus Noctiva we’re is, we’ve from on in P&L and sight where see at to on and invested terms in comment this compromising clear today we of a leverage And line then those we how have our urology Last things very can do vision we there. work without the and we launch, the are go are in in with – launch of that and this where

Francois Brisebois

much. very you thank Okay,

Operator

Matt Kaplan next from Thank Ladenburg question comes our Thalmann. you. with And

now is open. Your line

Matthew Kaplan

Good morning.

addressing a enrollment any and on in wanted to those? are what of, dig you impacting, you’ve have Just little bit are impact FT more issues are into the XXX terms identified that how that

David Monteith

as oxybate patients is of mean that not it’s looking this. situation, all patients there are The a first a as naïve you demanding it’s patients. of these are of study available you quite complex know many to I know And the as well. we so for recondition, sodium

higher are patients So previous – associated of lot and are a Xyrem. the there been clinical with have have find that that, sites. to protect exposure who of research they clinical it is will I the Maybe is they you had with like with the mean sites it’s one will things

we finding are bit little we than for would maybe pre-screen who lower that had but eligible we things the anticipated, of trial is that to rate, going originally larger as patients much is one an the So issue. to a be the are understand as exposure is be previous know not a aware and the there product they we twice-nightly of patient population

on recruitment the outreach to that the to access and initiatives, patient that to clinical call are patients mentioned for a particular necessarily there criteria try are to body potential one demand thing, physicians initiatives hard research in not we maybe study. are outreach this a strict patients, there study. exclusion who of for finger to this of study, It’s of It’s lot overall number study. is XX% centers a larger related So but inclusion during and placebo-controlled the a specifically quiet

protocol that part point and about think program, protocol and and other to the time option the have the this take to enroll. subject in with the make taking in in with step we back already the you certainly have an careful very, we to would consider be we special at commence we are with be patients, are well where the a FDA of, overall find remember That the huge – the thing agreed one And people the for assessment we to study. that agreement so right very take it that, is of just may an to that We to place. have easier into thinking easy the us and well, given just should FDA have protocol

Matthew Kaplan

and Can you recent published. patent the there that you IP a IP application mentioned then that And describe Thank surrounding yes, was Okay. you. was XXX? new the then,

Michael Anderson

published. is IP the So

– go If claims in that REST-ON ranges data on really January. formulation, a it patent. the earlier to the describes And currently we patent the embodiments in design formulation. the up, published using product now it would there go. background of we’re the around was fall necessarily describes And be and and certainly It’s it for the not the that on one described that study pharmacokinetic would it of you’ll exactly to – able find January within the you first the site that patent, that different within what’s overall but the

applications. FTXXX on We will and around to work product IP we have additional continue

Matthew Kaplan

Great. to And guess, covered by unrestricted terms overall I of coverage an beginning covered lives May, Noctiva. have what lives in percentage At percentage shifting manner? guess, to of I of is the do in gears launch, expect you and of

Gregory Divis

that, of both in is our a probably that, part, in a is be Part Yes, non-preferred business, I coverage, in have position the in books the in In but fairly for to barrier, D. Part think, in robust May our book estimation D, Part most we’ll to that D, in view, uptake view have but is our going commercial business, coverage. of we’ll it’s

program roll is treatment built we drug investment a then covered from what as benefit. is with get So on the as it and that into their move XXXX and patient into that view it access payer to distribution – product mitigate at of to status turn – We standpoint. program will designed despite those a a patients that the get done and challenges formulary course an experience upfront throughout we that the wins patients their have

how on the are will, of regardless we our is not them support mail patients that’s at pharmacy or So prescription in specialty whether through payer the distribution you order ensure through disrupted programs based distribution. to goal, if our point of retail help to requisite situation built

Matthew Kaplan

Okay.

I Just – understand. so

means you robust side, the coverage robust XX%-plus what? or commercial say So in

Gregory Divis

our patients we’ve And preferential ensure access. there commercial getting focused programs right, in pays we’re the done is that to us that because benefit told it’s that has that are But more just be commercial around to not on sector, the why than positioning, on blocked, lives I mean and date patient would ensuring No, which we’ve large feedback built of $XX. focused terms in design-related. we’re by what no the is, reason that those

patient – patient, their will from design, situation there that the that whatever is right, then out-of-pocket pay Tier then X because standpoint. So their XX, $XX, non-preferred benefit is that if for in they’re of terms

create is premise whole negotiations like preferred as their programs the they’re payers. commercial work around out-of-pocket, the whatnot we from from such contract that through a standpoint, the in that with position So necessary and to it’s patient there while

Matthew Kaplan

of you then or back have And kind of it early to you’re coverage in? year little going this rolling you kind see very Is do the to at late more Part just hopefully D, it next year? Where said launch. coming

Gregory Divis

XXXX, in on Well, in bid remember be you in Part XXXX. to formulary that D needed to

major bidding roll looking that now. bidding XXXX. for XXXX got plans that we’re we to bid We’ve from we’re extensions were language all forward now with to the include and So

which loss. presentations, So gone – the are in we’re contract payer are you’re those waiting and or of and represents P&T all referring clinical to. those XX all top directly that process been on on have But engaged have negotiations, of depending proposals almost decisions XX%

that D So expectation Tier our a a it’s from that large little cases, of NDC and by forward, we’ll high. a both standpoint. in that, non-preferred is non-preferred in D, pretty be Part are block co-insurance rolls in rates X until bit get the Part in – primarily we But win position

program have their D expectation not cash a mirror believe, the patient interesting that will equally which of that, built that we improves, allows And paid outside out-of-pocket. for and until that Part formulary program we such, find our a participate as So as to that is patient adjudicate they’ll $XX claim. would in situation

Matthew Kaplan

Part D coverage after? in the percentage versus covered of commercial lives are that And the you’re going population under

Gregory Divis

the Yes. adults of that at XX XX the are you who XX% and this half bit that or XX% and in I from patients XX%, condition are above. more of And if little who above, of mean than data demographic, point, look are suffer right? XX% a all

Matthew Kaplan

can Okay, in beyond of that have you last internal FTXXX point? you give us And at then pipeline this your terms that’s an forward progressing you’re what update helpful. question, in

Michael Anderson

is this Mike. Matt,

our – of been know, we’ve through business. some for divestiture included had Those products, are you on our R&D As products pediatric most working efforts now, in France. the we’ve that part in the have

licensing And – agreement. to those Cerecor, confidential. believes partners, the separate be license and a have because We development

do of continued be We’re But R&D stage development talk position about opportunities have some efforts from as not it. able we that we’re the in to to looking early our relates to France. a at, it

Matthew Kaplan

products? So beyond Mike the I guess, or pediatric – indications,

Michael Anderson

Yes.

Matthew Kaplan

those – sleep there’s of -- in your urology beyond terms new there and focus? opportunities Is

Michael Anderson

I I’m sorry. hear didn’t that. sorry, I’m

Matthew Kaplan

In of candidates new your opportunities terms and in of are urology that focus you’re that in sleep pipeline there are internal disorders? organically terms developing,

Gregory Divis

and of and building relatively is sorts are this Matt, opportunities would of And such, our long-term. assets apply newness Hey, means pipeline how opportunities, at say opportunities from there we’re already the we a we Greg. the recognized that, at standpoint. pipeline today given a as I importance aligned build with in technology of under that for are a Noctiva are developing pipeline Those other those that looking businesses. to do as well as strategy looking evaluation as

Matthew Kaplan

Great. Thanks a lot taking for guys. questions,

Gregory Divis

Matt. Sure,

Operator

comes our Henry with And you. ROTH question Capital. Thank Scott next from

is line Your open. now

Scott Henry

different of to areas start. a Thank you taking I’ll couple hit for the questions.

pretty Noctiva, looked when about QX. pushes Any business in Eclat kind Akovaz? we Vazculep the pulls First, in but XXXX or – Noctiva, be think helpful strong of Bloxiverz and that or not would Bloxiverz,

Gregory Divis

markets been we’re stable. Scott, would I competing the that, requisite seen hey, we’ve relatively So, in have say

as last discussed competitors the have had we We new at end of year.

to these we couple few But little activity bit some as bit to for a our again, expected that pricing seen characterize last standpoint really ephedrine. is. of another opportunities everything defending of But weeks all in we’ve has categories the Akorn we’re time by one the from. weeks are share. what – and pressures. have for described, of participant has – seen the how I we’ve major in We’ll of purchasers. clearly, there one else, our But each – But these each seen quite seeing little governed last their segments a that shake of Akovaz, part most on We four with in we’ve the us would a relative We’re a all to as from benefit and sustainable created begin bit that same part. been on of at see disruption up contracts

that So we believe hold we can perspective, serve. from

Scott Henry

helpful. Thank look Mike, well, And you. outstanding a him to in ballpark all That’s couple through the things. the structure, talk a Kanan, the to the of XXXX? trajectory a chance flows of shares year? for movements Okay. what would as at with could And quarterly number for Mike on spend giving about that all say capital then you be when

Michael Kanan

that start We’ve be of guided $XX million, quarterly. going $XX Yes, in line continue progress new roughly let up Noctiva ramp sodium a me will may on rata to quarter. scale be patient – between launch. ramp R&D roughly, will begins initiatives the to pro as million we up, but I’ll move with the There SG&A a to trajectory. that’s throughout bit for oxybate, a as full

run So SG&A we expect slightly our go higher to first something that. would to rate than up quarter from

basic shares year. share million, fully a over our last you’re overall, are the of $XX specifically count count we share the guided more expecting. year, on that count, we’re With XX respect would for to And share haven’t diluted bit SG&A be. our to have what million about outstanding. like We is we here count But XX a million the right, million at now, $XX but right reduced is

So this we’re XX between the count. million at thinking XX what million to on share point is

Scott Henry

helpful. possibly you want up? will That’s give do prescription you guess, should it – Okay. an When we Thank I like at it opportunity when commercial May. do And data? to on then And Just would start Noctiva, it show promotion look to could start be in relevant? you. when to think first, then sounds

Gregory Divis

right, package what think, other channel. Yes, programs, I out see we will and from be with characterize way early its April, are some sampling some have things. you the access as a the And in because early we have with could we started through that made yet experience full to as mean, product initiating begin as won’t campaign or some that although programs, and in standpoint, patient come will insert, it we I

in it’s You April can IMS the up back-half of see captured in and – reporting. how scripts on depending to begin probably

expect what Some to that of through would would that start a to certain though, for go and That have to patients model, April. those self-report patients. in secure the in some said which and to we depend pursue being may of something the Noctiva. – seeing they channels how on I our extent for If begin distribution

instead the around May the more full timeframe terms package campaign, In much of is really insert. just right, of a

it them going day to XXXX, So look ramp every in, In everyday, formulary is convert terms into it’s at every and week. that And ultimately, patient we up it coupled wins to in our will kicking of mean, anything benefit. me, in material we’re with my we’ll program material, correlate from both I right? demand – the with a view driving covered

what’s look to right we’re timeframe, at So the week. it going every

see, So as the And that the standpoint. progresses, and think, as obviously, year I to every from will we it is get out important think, week – going be trajectory a I few bigger you’ll months, so. becoming, higher

Scott Henry

that. it I’m a to timeline think in because reasonable wants know, is Mike, the trial you that want asking answer Okay, great. And the on And Would filing, to I may about this then reasonable have but question could expectation? FTXXX, this. be not on enrolled final not still XXXX? another question of you probably

Michael Anderson

Scott, questions these great all I’m and today. a it’s question, enjoying really

of you able time, I in it for at so really provide in model we But be a to probably that time, second-half, sort an to so sorry. months position understand which this the in be update, we not several and be contemplate the we’re to able not forth to able at of just – point point next go. least We’d until to give at and sort and suggest kind need see like – think update. forth. But – we this we’d some until an people really rather to or of pontificate until anything time then any how to would

Scott Henry

Okay, fair taking enough. Well, the thank you for questions.

Michael Anderson

Thank you

Operator

queue. back And the further for showing like no questions you. in I’d further over call Thank I’m to to Mike turn Anderson remarks.

Michael Anderson

of the presenting – look months. to We’ll right. you, us forward joining And a we’ll updates again, will conferences number you be additional Thank several different Thank today. you, providing at for over next and operator. we year, we of a course good it with of we on the that the developments the launch the both on the throughout company. wish Noctiva and appreciate you trial, also course, other may And occur day. All

Operator

you the Ladies concludes for in today’s This and program. participation thank gentlemen, your conference.

have great now Everyone, may disconnect. You day. a

Avadel Pharmaceuticals (AVDL) 8 Mar 182017 Q4 Earnings call transcript