GlobeNewswire Inc | Aug 9, 2021 08:00AM EDT

August 09, 2021

-- Commercial and launch preparations on track to support potential U.S. FDA approval of FT218 for the treatment of excessive daytime sleepiness and cataplexy in adults suffering from narcolepsy -- Presentation of post hoc analyses from pivotal REST-ON clinical trial at SLEEP 2021 further support positive primary and secondary endpoint data for all evaluated doses of FT218, beginning as early as week three of treatment -- Expansion of leadership team with addition of established biopharma industry leaders -- Management to host a conference call today at 8:30 a.m. ET

DUBLIN, Ireland, Aug. 09, 2021 (GLOBE NEWSWIRE) -- Avadel Pharmaceuticals plc (Nasdaq: AVDL), a company focused on developing FT218, an investigational, once-nightly formulation of sodium oxybate for treating excessive daytime sleepiness (EDS) and cataplexy in adults with narcolepsy, today provided a corporate update and announced its financial results for the second quarter ended June 30, 2021.

This quarter, we made significant progress advancing FT218, which we believe holds tremendous potential to transform the treatment landscape for patients as a once-at-bedtime option for managing EDS and cataplexy in adult patients with narcolepsy. The data presented at SLEEP 2021 demonstrates the additional benefit of consolidating sleep, which we believe holds great promise as many people with narcolepsy also suffer from fragmented sleep, said Greg Divis, Chief Executive Officer of Avadel. As we enter the final stages of NDA review and approach our October PDUFA date, we remain confident in the strength of our regulatory filing strategy. In parallel, our commercial and launch preparations are on track, including the addition of key hires to our leadership team, and we look forward to providing more detail on our commercial strategy following potential approval of FT218.

Second Quarter and Recent Company Highlights

-- Progressed preparations and launch readiness activities for the potential commercialization of FT218 as the first and only once-at-bedtime option for managing EDS and cataplexy in narcolepsy New Drug Application (NDA) for FT218 was accepted for filing by the U.S. Food and Drug Administration (FDA) in February 2021, and was assigned a Prescription Drug User Fee Act (PDUFA) target action date of October 15, 2021Conducting scientific and medical community engagement and education, as well as payor clinical presentations -- Presented new clinical post-hoc analyses from the pivotal Phase 3 REST-ON clinical study at SLEEP 2021 further supporting clinical benefit of all evaluated doses of FT218, beginning as early as week three of treatment Data demonstrated improvement in EDS for both narcolepsy subtypes with and without stimulant use as well as decreases in weight and body mass index -- Expanded leadership team with addition of established biopharma industry leaders to support anticipated regulatory approval and commercialization of FT218 Appointed Jeff Cruikshank as Vice President, Sales; Denise Strauss as Vice President, Marketing and New Product Strategy; and Angela Woods as Vice President, People and Culture -- Progressed 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 oxybates and patient preference

Avadel plans to present data from RESTORE study on patient preference to once-nightly or twice-nightly dosing regimens, as well as nocturnal experiences when using twice-nightly sodium, at future medical congresses.

Overview of Second Quarter ResultsAs a result of the sale of the sterile injectable products toExela Sterile Medicines LLConJune 30, 2020, the Company did not report any revenue for the quarter endedJune 30, 2021, compared to $10.1 million for the same period in 2020.

R&D expenses were $6.8 million in the quarter ended June 30, 2021, compared to $4.1 million for the same period in 2020. The increase on a year-over-year basis was primarily attributed to increased costs associated with pre-NDA approval activities, primarily the purchase of raw materials, in preparation for product launch, if FT218 is approved.

SG&A expenses were $15.2 million in the quarter ended June 30, 2021, compared to $7.1 million for the same period in 2020. The year-over-year increase is the result of a number of factors including commercial launch planning costs related to FT218 and higher compensation costs associated with higher headcount, primarily in the areas of commercial and medical affairs.

Income tax benefit was $3.8 million in the quarter ended June 30, 2021, compared to income tax expense of $5.3 million for the same period in 2020. The income tax expense recorded in 2020 was the result of taxes recorded on the gain from the sale of the hospital products.

Net loss for the quarter ended June 30, 2021 was $19.6 million, or ($0.33) per diluted share, compared to net income of $30.9 million, or $0.49 per diluted share, for the same period in 2020. The Company reported net income and diluted income per share for the quarter ending June 30, 2020, resulting from the $45.8 million pre-tax gain from sale of the sterile injectable products.

Cash, cash equivalents and marketable securities were $202.8 million as of June 30, 2021. The Company has convertible debt of $143.8 million due in February 2023.

Conference CallA conference call to discuss these results is scheduled for Monday, August 9, 2021 at 8:30 a.m. ET. To access the conference call, investors are invited to dial (844) 388-0559 (U.S. and Canada) or (216) 562-0393 (International). The conference ID number is 4560878. 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. 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 publication of additional clinical trial data for FT218, the commercial launch of FT218 (if approved), the market acceptance of FT218 (if approved), and the advancement and expected timing of the RESTORE study to generate long-term safety, tolerability, and efficacy data for FT218. 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).

The Companys 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, the Companys business and operations are subject to significant risks, and, as a result, there can be no assurance that actual results and the results of the companys 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 the Companys forward-looking statements include the risk that: positive results from the REST-ON trial may not necessarily be predictive of the results of future or ongoing clinical studies; the NDA for FT218 is not approved by the FDA or such approval is delayed; the risk that commercial launch of FT218 (if approved) is delayed or never occurs; the risk that the potential market acceptance of FT218 (if approved) may differ materially from projections; the risk that FT218 may be found to infringe one or more patents of third parties; the risk that the RESTORE study may be delayed or may not be completed at all; and the risk that the impact of the current COVID-19 pandemic on the Companys 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 the Companys Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (SEC) on March 9, 2021 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. The Company does not undertake any obligation to publicly update or revise our forward-looking statements, except as required by law.

Investor Contact:Courtney TurianoStern Investor Relations, Inc.Courtney.Turiano@sternir.com(212) 698-8687

Media Contact:Nicole Raisch GoelzReal Chemistryngoelz@realchemistry.com(408) 568-4292

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

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020 Product sales $ ? $ 10,091 $ ? $ 22,334 Operating expenses: Cost of products ? 3,285 ? 5,742 Research and 6,762 4,057 10,614 9,587 development expensesSelling, general and 15,174 7,095 26,186 15,008 administrative expensesIntangible asset ? 203 ? 406 amortizationChanges in fair valueof contingent ? 918 ? 3,396 considerationGain on sale of ? (45,760 ) ? (45,760 ) Hospital ProductsRestructuring costs ? 24 (53 ) 183 (income)Total operating expense 21,936 (30,178 ) 36,747 (11,438 ) (income)Operating (loss) income (21,936 ) 40,269 (36,747 ) 33,772 Investment and other 432 (741 ) 1,042 (1,119 ) income (expense), netInterest expense (1,930 ) (3,237 ) (3,859 ) (6,427 ) Gain from release of 88 ? 166 ? certain liabilitiesOther expense - changesin fair value of ? (125 ) ? (435 ) contingentconsideration payable(Loss) income before (23,346 ) 36,166 (39,398 ) 25,791 income taxesIncome tax (benefit) (3,765 ) 5,292 (6,372 ) (4,218 ) expenseNet (loss) income $ (19,581 ) $ 30,874 $ (33,026 ) $ 30,009 Net (loss) income per $ (0.33 ) $ 0.57 $ (0.56 ) $ 0.63 share - basicNet (loss) income per (0.33 ) 0.49 (0.56 ) 0.58 share - diluted Weighted average numberof shares outstanding - 58,488 54,272 58,465 47,665 basicWeighted average numberof shares outstanding - 58,488 69,942 58,465 63,083 diluted

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

June 30, December 31, 2021 2020 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 67,142 $ 71,722 Marketable securities 135,701 149,680 Research and development tax credit receivable 2,551 3,326 Prepaid expenses and other current assets 25,308 38,726 Total current assets 230,702 263,454 Property and equipment, net 321 359 Operating lease right-of-use assets 2,249 2,604 Goodwill 16,836 16,836 Research and development tax credit receivable 983 3,445 Other non-current assets 31,500 24,939 Total assets $ 282,591 $ 311,637 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities: Current portion of operating lease liability 494 474 Accounts payable 5,116 2,934 Accrued expenses 7,524 6,501 Other current liabilities 3,146 5,200 Total current liabilities 16,280 15,109 Long-term debt 141,774 128,210 Long-term operating lease liability 1,589 1,840 Other non-current liabilities 4,068 4,212 Total liabilities 163,711 149,371 Shareholders? equity: Preferred shares, nominal value of $0.01 per share;50,000 shares authorized; 488issued and outstanding at June30, 2021 and 488 5 5 issued and outstanding atDecember31, 2020, respectivelyOrdinary shares, nominal value of $0.01 per share;500,000 shares authorized;58,488 issued and outstanding at June30, 2021 and 584 583 58,396 issued and outstandingat December31, 2020Additional paid-in capital 544,094 566,916 Accumulated deficit (403,453 ) (384,187 )Accumulated other comprehensive loss (22,350 ) (21,051 )Total shareholders? equity 118,880 162,266 Total liabilities and shareholders? equity $ 282,591 $ 311,637

AVADEL PHARMACEUTICALS PLCCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)

Six Months Ended June 30, 2021 2020 Cash flows from operating activities: Net (loss) income $ (33,026 ) $ 30,009 Adjustments to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization 417 975 Remeasurement of acquisition-related contingent ? 3,396 considerationRemeasurement of financing-related contingent ? 435 considerationAmortization of debt discount and debt issuance 625 3,193 costsChange in deferred tax and income tax deferred (6,228 ) 161 chargeStock-based compensation expense 3,729 1,511 Gain on the disposition of the hospital products ? (45,760 )Gain from the release of certain liabilities (166 ) ? Other adjustments 757 477 Net changes in assets and liabilities Accounts receivable ? 2,589 Inventories ? (1,353 )Prepaid expenses and other current assets (3,106 ) (1,149 )Research and development tax credit receivable 3,078 2,036 Accounts payable & other current liabilities 176 (1,550 )Accrued expenses 1,199 (6,906 )Accrued income taxes ? 321 Earn-out payments for contingent consideration in ? (3,736 )excess of acquisition-date fair valueRoyalty payments for contingent consideration ? (608 )payable in excess of original fair valueOther assets and liabilities (1,021 ) (3,458 )Net cash used in operating activities (33,566 ) (19,417 ) Cash flows from investing activities: Purchases of property and equipment (26 ) ? Proceeds from the disposition of the hospital 16,500 14,500 productsProceeds from sales of marketable securities 66,213 15,716 Purchases of marketable securities (53,372 ) (97,878 )Net cash provided by (used in) investing activities 29,315 (67,662 ) Cash flows from financing activities: Proceeds from the February 2020 private placement ? 60,639 Proceeds from the May 2020 public offering ? 116,974 Proceeds from stock option exercises and employee 149 1,903 stock purchase planNet cash provided by financing activities 149 179,516 Effect of foreign currency exchange rate changes on (478 ) (37 )cash and cash equivalents Net change in cash and cash equivalents (4,580 ) 92,400 Cash and cash equivalents at January 1, 71,722 9,774 Cash and cash equivalents at June 30, $ 67,142 $ 102,174