Q1 2024 Summary
Published Jan 15, 2025, 11:11 PM UTC- Significant Pediatric Market Opportunity: Management believes the actual pediatric market for narcolepsy treatment is "likely materially larger than what's actually being treated today" due to the condition's onset in adolescence and challenges in early diagnosis. This suggests that the potential approval of LUMRYZ for pediatric use could unlock a substantial growth opportunity beyond the current estimate of 5% of oxybate-treated narcolepsy patients.
- Expansion into New Patient Segments and Market Growth: LUMRYZ is seeing increasing uptake among patients who have not previously been on oxybate therapy, indicating strong market penetration. Richard Kim noted that "there definitely has been growth almost quarter-over-quarter for the Naive segment", highlighting the growing number of naïve patients starting therapy. Additionally, the company is attracting healthcare providers who had not previously prescribed oxybates, contributing to overall market growth.
- Potential in Idiopathic Hypersomnia (IH) Market: Avadel is progressing towards initiating a pivotal Phase III trial for LUMRYZ in IH in the second half of this calendar year, aiming to address unmet needs in this patient population . Patients with IH struggle with sleep inertia, making it difficult to wake up for a second dose, making a once-at-bedtime therapy like LUMRYZ particularly beneficial. Richard Kim stated that "for IH, it really comes down to more of the sleep inertia...if you can't wake up to [take a] second dose, you're getting a subtherapeutic dose".
- Ongoing litigation, including an APA suit against the FDA and patent litigation in Delaware, may pose legal risks and uncertainties for Avadel Pharmaceuticals. ,
- Revenue growth lagging despite increasing patient numbers due to factors like higher deductibles and gross-to-net adjustments, leading to revenues coming in lighter than expected. ,
- Difficulty in developing a low sodium version of LUMRYZ due to formulation challenges may limit market share among patients at risk from sodium intake.
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Sales vs. Patient Growth
Q: Why did patient growth outpace sales this quarter?
A: The company added 900 patients to RYZUP and 700 patient initiations, focusing on getting patients on therapy and familiarizing ACP offices with prescribing. Q1 experienced industry-wide headwinds like higher deductibles affecting co-pays, which are expected to settle down. Discontinuation rates are numerically lower than historical rates. -
Net Price Evolution
Q: How has net pricing progressed, and what are expectations this year?
A: The company expects patients to generate about $120,000 of net revenue per year, and they are currently at that point. Variables affecting net pricing include patient compliance and gross-to-net adjustments, which tend to settle after Q1. -
Patient Add Momentum
Q: How is patient add momentum progressing, and how should we model trends?
A: They are pleased with strong and steady growth, adding over 900 patient adds each quarter. While it's hard to predict exact numbers, they aim to continue this trend at a minimum going forward. -
Xywav Patient Switches
Q: What percentage of LUMRYZ patients were on Xywav?
A: A majority of enrollments and patient initiations are switches from twice-nightly oxybate, with over 25%–30% of patients having switched from Xywav. -
Formulary Changes Opportunity
Q: Can LUMRYZ capture patients affected by Xyrem formulary changes?
A: Yes, several formulary changes have led to branded sodium oxybate and AG no longer being covered. These patients are a focal point, presenting a unique opportunity for LUMRYZ with payers. -
Litigation Update
Q: What's the status of outstanding litigation?
A: Upcoming hearings include the APA hearing against FDA scheduled for Friday, where the company will support the government. The Delaware patent litigation has a hearing on June 4. -
Discontinuation Rates
Q: Are discontinuation rates higher among naïve and previously discontinued patients?
A: Overall discontinuation rates are very strong and lower than traditional rates for twice-nightly oxybates. Naïve and previously discontinued patients have slightly lower rates compared to switch patients, but not meaningfully lower. -
Medicaid Coverage in Pediatrics
Q: What's the status of Medicaid coverage for LUMRYZ in pediatrics?
A: They are in the process of securing Medicaid coverage, which takes a very long time. Significant Medicaid usage hasn't occurred yet, and they will provide updates as progress is made. -
Low Sodium Version Development
Q: How important is developing a low-sodium LUMRYZ, and how difficult is it?
A: While not required for success, they believe all patients should have the opportunity for uninterrupted sleep. They are working on a low-sodium version, which is a formulation challenge, and will provide updates later this year. -
IH Trial Design
Q: Will the IH trial design mirror previous studies like Jazz's?
A: While not explicitly stated, it's fair to say that previous studies are good proxies for their trial design. They are engaging with the FDA and will share details as they become public. -
IH Market Size
Q: Is the pediatric IH market larger than currently treated 5%?
A: Yes, the actual market opportunity is likely materially larger due to early symptom onset and challenges in diagnosis. There's opportunity among both treated and untreated patients. -
Change Healthcare Impact
Q: Did the Change Healthcare disruption affect fill rates?
A: They have not seen any meaningful impact on fill rates due to the disruption. -
Lag Time to Therapy Initiation
Q: What is the lag time between RYZUP enrollment and therapy initiation?
A: For patients with coverage, lag time averages about 30 days. For those without coverage, it's much longer, measured in months. -
RYZUP Abandonment Rates
Q: Do patients abandon RYZUP before starting therapy?
A: Yes, some patients abandon before initiation, but the abandonment rate is very low and consistent throughout the launch. Reasons include loss of interest, insurance issues, or personal circumstances. -
Patient Segment Distribution
Q: Can you break down the mix of naïve and previously discontinued patients?
A: In Q1, there was a more balanced mix between switches and discontinued/naïve patients. Among the latter, there has been quarter-over-quarter growth in the naïve segment. -
CV Risk in IH vs. Narcolepsy
Q: Are there differences in cardiovascular risk between IH and narcolepsy patients?
A: Generally, no significant differences. Both are younger patient populations with less Medicare representation.