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Avadel Pharmaceuticals plc (Nasdaq: AVDL), a renowned biopharmaceutical organization dedicated to revolutionizing medicines to transform lives, recently announced its strategic collaboration with RTW Investments, LP, and some of its affiliated entities (collectively referred to as “RTW”). This partnership aims to provide a whopping sum of $75 million to aid the anticipated commercialization of LUMRYZ™. This innovative drug is intended for treating cataplexy or excessive daytime sleepiness (EDS) in adult narcolepsy patients.
Financing Activities and Balance Sheet Boost
Alongside the royalty agreement, Avadel Pharmaceuticals has also extended the maturity of its $96.2 million convertible notes until 2027. These critical financing steps, including the non-dilutive capital source through the royalty agreement and the convertible notes' maturity extension, offer Avadel increased financial flexibility. This is expected to support the potential commercialization of LUMRYZ™ for those suffering from narcolepsy.
RTW Investments, a Strategic Partner
RTW Investments is known for its strategic investments in promising healthcare organizations and assets. Their continued support has been instrumental to Avadel, and they have expressed confidence in the commercial prospects of LUMRYZ™.
Terms of the Royalty Agreement
Under the royalty agreement, RTW will provide up to $75 million of non-dilutive synthetic royalty financing commitment to Avadel. In return, RTW will receive tiered rate, cash royalty payments based on the net sales of LUMRYZ™ in the U.S. The rates will range from low to high single digits based on a certain quarterly sales threshold.
Convertible Note Exchange
Avadel has also extended the maturity of $96.2 million of its convertible notes to 2027 out of the existing $117.4 million convertible notes that were due in October 2023. Post the closing of the Exchange, approximately $21.2 million in existing notes will remain outstanding with terms unchanged.
About LUMRYZ™
LUMRYZ™ is an investigational formulation of sodium oxybate leveraging Avadel’s proprietary drug delivery technology. It is designed to be taken once at bedtime for the treatment of cataplexy or EDS in adults with narcolepsy. In 2020, Avadel completed the REST-ON study, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial, to assess the efficacy and safety of LUMRYZ™ in patients with narcolepsy.
FDA Approval and LUMRYZ™
In 2018, the U.S. Food and Drug Administration (FDA) granted LUMRYZ™ Orphan Drug Designation for the treatment of narcolepsy. On July 18, 2022, the FDA tentatively approved the LUMRYZ™ NDA for the treatment of cataplexy or EDS in adults with narcolepsy. Avadel is currently evaluating the long-term safety and tolerability of LUMRYZ™ in the open-label RESTORE clinical study.
About Avadel Pharmaceuticals plc
Avadel Pharmaceuticals plc (Nasdaq: AVDL) is a biopharmaceutical company focused on transforming medicines to transform lives. Their current lead drug candidate, LUMRYZ™, is an investigational formulation of sodium oxybate leveraging their proprietary drug delivery technology.
About RTW Investments, LP
RTW Investments, LP is a New York-based, global, full life-cycle investment firm that focuses on identifying transformational and disruptive innovations across the biopharmaceutical and medical technologies sectors. They combine deep scientific expertise with a solution-oriented investment approach to advance emerging medical therapies.
In conclusion, this strategic alliance between Avadel Pharmaceuticals and RTW Investments is a significant step forward in bringing innovative treatments to patients and transforming the healthcare landscape.
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