GlobeNewswire Inc | Mar 9, 2021 07:00AM EST

March 09, 2021

-- New Drug Application (NDA) for once-nightly FT218 to treat excessive daytime sleepiness and cataplexy in adults with narcolepsy accepted for filing by the FDA; assigned a Prescription Drug User Fee Act (PDUFA) target date of October 15, 2021 -- Completed key appointments for Commercial, Clinical and Medical Affairs functions to lead launch planning and readiness to capitalize on significant market opportunity -- Presenting new data highlighting the overall clinical value proposition of FT218 at upcoming medical congresses and key publications -- Management to host a conference call today at 8:30 a.m. ET

DUBLIN, Ireland, March 09, 2021 (GLOBE NEWSWIRE) -- Avadel Pharmaceuticals plc(Nasdaq: AVDL), a company focused on developing FT218, an investigational, once-nightly formulation of sodium oxybate designed to treat excessive daytime sleepiness and cataplexy in adults with narcolepsy, today provided a corporate update and announced its financial results for the fourth quarter and year ended December 31, 2020.

We are pleased with the significant and rapid progress we have made on a number of fronts with our once nightly FT218 program including clinical research, market opportunity assessment, launch preparation, and our regulatory filing strategy. In less than 10 months, we have delivered exceptional top line results, an NDA submission and now formal FDA acceptance for review of our once-nightly FT218 NDA, said Greg Divis, Chief Executive Officer of Avadel.

Mr. Divis continued, Our priorities between now and a launch of FT218, if approved, are very clear: the execution of our NDA filing strategy and subsequent approval; the acceleration of our launch readiness; and the externalization of our pivotal data and related market preparation activities. We believe Avadel is well positioned to bring FT218 to patients suffering from narcolepsy and potentially command a market leading share of this multi-billion-dollar opportunity.

Fourth quarter and recent company highlights

-- The NDA for FT218 was accepted for filing by the FDA and assigned a PDUFA target action date of October 15, 2021 -- Appointed Richard Kim as Chief Commercial Officer to lead the commercial strategy and launch of FT218, if approved -- Appointed Dr. Jennifer Gudeman as Vice President, Medical and Clinical Affairs, leading the Companys medical and clinical affairs activities -- Scheduled to present data from our REST-ON trial at the American Academy of Neurology in April 2021 and at SLEEP in June 2021, including all three primary endpoints, as well as a number of secondary endpoints and post-hoc analyses -- To highlight the novel technology and predictable PK profile of FT218, four of the clinically relevant Phase 1 PK studies were recently described in a Clinical Therapeutics publication, Pharmacokinetics of FT218, a Once-Nightly Sodium Oxybate Formulation in Healthy Adults -- Ongoing analysis of an internal comprehensive market assessment has provided key insights about the narcolepsy market and once nightly therapy, including: Once-nightly FT218, if approved, is expected to be the preferred oxybate of choice based on results from large quantitative HCP and patient research projectsOxybate eligible patients ranked a once-nightly therapy as being the most important driver of treatment preferenceA once-nightly therapy was characterized by patients as increasing the likelihood of compliance and reducing stress and anxiety associated with the middle of the night dosingOxybate market expansion potential could benefit once-nightly FT218 due to patients and HCPs reported dosing challenges associated with the twice nightly treatment regimen of currently available oxybate products -- Continued the expansion and enrollment of the RESTORE open-label extension/switch study of FT218 designed to generate long-term safety, tolerability, and efficacy data, as well as data on switching from twice-nightly sodium oxybate and patient preference

Overview of Fourth Quarter Results

As a result of the sale of the sterile injectable products to Exela Sterile Medicines LLC on June 30, 2020, the Company did not report any revenue for the fourth quarter of 2020, compared to $11.0 million in the fourth quarter of 2019.

R&D expenses were$5.3 millionin the fourth quarter of 2020, compared to $7.8 million in the fourth quarter of 2019. The decrease on a year-over-year basis was primarily attributed to the completion of the Phase 3 REST-ON clinical study for FT218, which concluded during the first quarter of 2020, as well as lower headcount due to the restructuring activities initiated during 2019.

SG&A expenses were $9.0 million in the fourth quarter of 2020, compared to $7.7 million in the fourth quarter of 2019. The year-over-year increase is the result of a number of factors including FT218 NDA preparation and submission costs, commercial launch planning costs related to FT218 and higher stock-based compensation.

Net loss for the fourth quarter of 2020 was $11.3 million, or ($0.19) per diluted share, compared to a net loss of $2.7 million, or ($0.07) per diluted share, for the same period in 2019. The increase in net loss and diluted loss per share is primarily the result of the year-over-year decrease in revenue due to the sale of the sterile injectable products partially offset by lower operating expenses. The increase in diluted shares outstanding resulted primarily from equity issuances related to financing activities completed during the first half of the year.

Cash, cash equivalents and marketable securities were $221.4 million as of December 31, 2020. The Company has convertible debt of $143.8 million due in February 2023.

Conference Call:A conference call to discuss these results has been scheduled for Tuesday, March 9, 2021 at8:30 a.m. ET. To access the conference call, investors are invited to dial (877) 407-9716 (U.S. andCanada) or (201) 493-6779 (International). The conference ID number is 13716363. A live audio webcast can be accessed by visiting the investor relations section of the Companys website,www.avadel.com. A replay of the webcast will be archived on Avadels website for 90 days following the event.

About FT218FT218 is an investigational, once-nightly formulation of sodium oxybate that includes Avadels MicroPump controlled-release (CR) technology. In March of 2020, the Company completed the REST-ON study, a pivotal, double-blind, randomized, placebo-controlled Phase 3 trial, to assess the efficacy and safety of FT218 in the treatment of excessive daytime sleepiness and cataplexy in patients suffering from narcolepsy. In December 2020, the Company submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for FT218 to treat excessive daytime sleepiness and cataplexy in adults with narcolepsy. The NDA for FT218 was accepted by the FDA in February 2021 and assigned a Prescription Drug User Fee Act (PDUFA) target action date of October 15, 2021. FT218 has been granted Orphan Drug Designation from the U.S. Food and Drug Administration (FDA) for the treatment of narcolepsy. The designation was granted on the plausible hypothesis that FT218 may be clinically superior to the twice-nightly formulation of sodium oxybate already approved by the FDA for the same indication. In particular, FT218 may be safer due to ramifications associated with the dosing regimen of the previously approved product.

About Avadel Pharmaceuticals plcAvadel Pharmaceuticals plc (Nasdaq: AVDL) is a biopharmaceutical company primarily focused on the development and FDA approval of FT218, an investigational, once-nightly, extended-release formulation of sodium oxybate designed to treat excessive daytime sleepiness and cataplexy in adults with narcolepsy. For more information, please visit www.avadel.com.

Cautionary Disclosure Regarding Forward-Looking StatementsThis press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements relate to our future expectations, beliefs, plans, strategies, objectives, results, conditions, financial performance, prospects, or other events. Such forward-looking statements include, but are not limited to, the FDAs review of the NDA for FT218, the sufficiency of data supporting the NDA for FT218, the commercial launch of FT218 (if approved), and the market acceptance of FT218 (if approved). In some cases, forward-looking statements can be identified by the use of words such as will, may, could, believe, expect, look forward, on track, guidance, anticipate, estimate, project, next steps and similar expressions, and the negatives thereof (if applicable).

Our forward-looking statements are based on estimates and assumptions that are made within the bounds of our knowledge of our business and operations and that we consider reasonable. However, our business and operations are subject to significant risks, and, as a result, there can be no assurance that actual results and the results of our business and operations will not differ materially from the results contemplated in such forward-looking statements. Factors that could cause actual results to differ from expectations in our forward-looking statements include the risk that the NDA for FT218 is not approved by the FDA or such approval is delayed, the risk that FT218 (if approved) may not receive a 7-year Orphan Drug Exclusivity, the risk that the RESTORE study may be delayed or may not be completed at all, the risk that commercial launch of FT218 (if approved) is delayed, the risk that the potential market performance for FT218 (if approved) may differ materially from projections, and the risk that the impact of the current COVID-19 pandemic on our financial results and results of operations could be greater than we anticipate and the risks and uncertainties described in the Risk Factors section of Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, which we filed with the Securities and Exchange Commission (SEC) on March 16, 2020 and subsequent SEC filings.

Forward-looking statements speak only as of the date they are made and are not guarantees of future performance. Accordingly, you should not place undue reliance on forward-looking statements. We do not undertake any obligation to publicly update or revise our forward-looking statements, except as required by law.

Contacts:

Investor Contacts

Tom McHughChief Financial OfficerPhone: (636) 449-1843Email: tmchugh@avadel.com

Tim McCarthyLifeSci Advisors, LLCPhone: (212) 915.2564Email: tim@lifesciadvisors.com

Media Contact

Patrick BurseyLifeSci Communications, LLCPhone: (646) 970-4688Email: pbursey@lifescicomms.com

AVADEL PHARMACEUTICALS PLCUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME(In thousands, except per share data)

Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019 Product sales $ ? $ 10,995 $ 22,334 $ 59,215 Operating expenses: Cost of products ? 2,414 5,742 12,125 Research and development 5,286 7,757 20,442 32,917 expensesSelling, general and 8,974 7,663 32,405 30,183 administrative expensesIntangible asset ? 206 406 816 amortizationChanges in fair value of ? (1,539 ) 3,327 845 contingent considerationGain on sale of Hospital ? ? (45,760 ) ? ProductsRestructuring costs ? 1,841 (43 ) 6,441 (income)Total operating expenses 14,260 18,342 16,519 83,327 Operating (loss) income (14,260 ) (7,347 ) 5,815 (24,112 )Investment and other income 74 (1,479 ) (832 ) 1,069 (expense), netInterest expense (3,308 ) (3,190 ) (12,994 ) (12,483 )Gain from release of 3,364 ? 3,364 ? certain liabilitiesGain (loss) ondeconsolidation of ? 162 ? (2,678 )subsidiaryOther income (expense) -changes in fair value of ? 118 (435 ) (378 )contingent considerationpayableLoss before income taxes (14,130 ) (11,736 ) (5,082 ) (38,582 )Income tax benefit (2,852 ) (8,997 ) (12,110 ) (5,356 )Net (loss) income $ (11,278 ) $ (2,739 ) $ 7,028 $ (33,226 ) Net loss (income) per share $ (0.19 ) $ (0.07 ) $ 0.13 $ (0.89 )- basicNet loss (income) per share (0.19 ) (0.07 ) 0.13 (0.89 )- diluted Weighted average number of 58,325 37,465 52,996 37,403 shares outstanding - basicWeighted average number ofshares outstanding - 58,325 37,465 54,941 37,403 diluted

AVADEL PHARMACEUTICALS PLCUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share data)

December December 31, 2020 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 71,722 $ 9,774 Marketable securities 149,680 54,384 Accounts receivable ? 8,281 Inventories, net ? 3,570 Research and development tax credit receivable 3,326 2,107 Prepaid expenses and other current assets 38,726 4,264 Total current assets 263,454 82,380 Property and equipment, net 359 544 Operating lease right-of-use assets 2,604 3,612 Goodwill 16,836 18,491 Intangible assets, net ? 813 Research and development tax credit receivable 3,445 6,322 Other non-current assets 24,939 39,274 Total assets $ 311,637 $ 151,436 LIABILITIES AND SHAREHOLDERS? EQUITY (DEFICIT) Current liabilities: Current portion of long-term contingent consideration $ ? $ 5,554 payableCurrent portion of operating lease liability 474 645 Accounts payable 2,934 6,100 Accrued expenses 6,501 19,810 Other current liabilities 5,200 3,875 Total current liabilities 15,109 35,984 Long-term debt 128,210 121,686 Long-term contingent consideration payable, less ? 11,773 current portionLong-term operating lease liability 1,840 2,319 Other non-current liabilities 4,212 8,873 Total liabilities 149,371 180,635 Shareholders? equity (deficit): Preferred shares, nominal value of $0.01 per share;50,000 shares authorized; 488 issued and outstanding 5 ? at December 31, 2020 and 0 issued and outstanding atDecember 31, 2019Ordinary shares, nominal value of $0.01 per share;500,000 shares authorized;58,396 issued and 583 429 outstanding at December 31, 2020, and 42,927 issuedand 37,520 outstanding at December 31, 2019Treasury shares, at cost, 0 and 5,407 shares held at ? (49,998 )December 31, 2020 and December 31, 2019, respectivelyAdditional paid-in capital 566,916 434,391 Accumulated deficit (384,187 ) (391,215 )Accumulated other comprehensive loss (21,051 ) (22,806 )Total shareholders? equity (deficit) 162,266 (29,199 )Total liabilities and shareholders? equity (deficit) $ 311,637 $ 151,436

AVADEL PHARMACEUTICALS PLCUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

Twelve Months Ended December 31, 2020 2019 Cash flows from operating activities: Net income (loss) $ 7,028 $ (33,226 )Adjustments to reconcile net income (loss) to net cash used in operating activities:Depreciation and amortization 1,690 2,486 Remeasurement of acquisition-related contingent 3,327 845 considerationRemeasurement of financing-related contingent 435 378 considerationAmortization of debt discount and debt issuance costs 6,524 5,995 Changes in deferred tax (7,431 ) (6,334 )Share-based compensation expense 2,999 519 Gain on the disposition of the Hospital Products (45,760 ) ? Loss on deconsolidation of subsidiary ? 1,750 Gain from the release of certain liabilities (3,364 ) ? Other adjustments 142 (254 )Net changes in assets and liabilities Accounts receivable 8,281 2,471 Inventories, net (1,352 ) 1,155 Prepaid expenses and other current assets 1,863 (1,187 )Research and development tax credit receivable 2,213 (1,014 )Accounts payable & other current liabilities (2,788 ) 4,641 Deferred revenue ? (114 )Accrued expenses (13,226 ) 357 Earn-out payments for contingent consideration in (5,323 ) (10,988 )excess of acquisition-date fair valueRoyalty payments for contingent consideration payable (866 ) (1,748 )in excess of original fair valueOther assets and liabilities (3,126 ) (4,057 )Net cash used in operating activities (48,734 ) (38,325 ) Cash flows from investing activities: Purchases of property and equipment (98 ) (29 )Proceeds from disposal of property and equipment ? 154 Proceeds from the disposition of the Hospital Products 25,500 ? Proceeds from sales of marketable securities 36,284 63,246 Purchases of marketable securities (131,407 ) (24,648 )Net cash (used in) provided by investing activities (69,721 ) 38,723 Cash flows from financing activities: Proceeds from the February 2020 private placement 60,570 ? Proceeds from the May 2020 public offering 116,924 ? Proceeds from issuance of ordinary shares 2,189 118 Other financing activities, net ? (145 )Net cash provided by (used in) financing activities 179,683 (27 )Effect of foreign currency exchange rate changes on 720 78 cash and cash equivalentsNet change in cash and cash equivalents 61,948 449 Cash and cash equivalents at January 1 9,774 9,325 Cash and cash equivalents at December 31 $ 71,722 $ 9,774

AVADEL PHARMACEUTICALS PLCUNAUDITED SUPPLEMENTAL INFORMATION(In thousands, except per share data)

Three Months Ended December Twelve Months Ended 31, December 31,Revenues by 2020 2019 2020 2019Product: Bloxiverz $ ? $ 1,087 $ 2,201 $ 7,479 Vazculep ? 5,483 10,429 33,152 Akovaz ? 4,696 9,545 18,642 Other ? (271 ) 159 (58 )Product sales $ ? $ 10,995 $ 22,334 $ 59,215