Avadel (NASDAQ:AVDL) is a Dublin, Ireland-based company that merged with France-based Flamel Technologies recently. Avadel has few approved drugs like Bloxiverx (neostigmine inj.), Vazculep (phenylephrine inj.), and Alkovaz (ephedrine inj.). Its marketed products had revenues of $150 million in 2016 (source). The stock has shown a gain on unusual volume recently and we decided to look at this company.
Narcolepsy is characterized by excessive daytime sleepiness and nighttime sleep disturbance. About 70% of narcolepsy patients also have cataplexy, which is characterized by sudden drop attacks with loss of muscle tone in the daytime. The prevalence of narcolepsy in the US is about 160,000 patients, but only 25-50% of these are diagnosed according to an estimate. Sodium oxybate is a commonly used medication that is used before bedtime to consolidate sleep in narcolepsy.
It is also the only approved medication to treat narcolepsy associated with cataplexy. Xyrem is a branded form of sodium oxybate that is marketed by Jazz Pharmaceuticals (NASDAQ:JAZZ), and had $1 billion in sales (source) (expected to grow at single digits/year). However, only 12,800 narcolepsy patients are on Xyrem at present. Xyrem has been a big revenue driver for Jazz Pharmaceuticals since its approval, and accounts for 70% of its operating profit. Stimulants like modafinil are also used in daytime to promote alertness in narcolepsy. However, just consolidation of night sleep by Xyrem also promotes daytime alertness.
There has been a recent dispute over patents of Xyrem. Some generic drug companies have tried to file generic forms of Xyrem, but were withheld from doing so by various patent lawsuits filed by Jazz. In January this year, Jazz Pharma itself filed for a generic Xyrem version (ANDA with REMS was accepted). Another company Roxane managed to get its generic version of Xyrem approved by the FDA in January 2017, but Jazz Pharmaceuticals has
