Avadel Pharmaceuticals (NASDAQ:AVDL) stock rose ~13% on Wednesday after Jefferies Financial upgraded the shares to Buy from Hold on opportunity of taking market share from Jazz Pharmaceuticals' (NASDAQ:JAZZ) oxybate franchise.
The firm also raised the price target to $11 from $6.50. Jefferies noted that it increased peak patients on the company's sleep disorder therapy Lumryz to ~5K after a survey of 11 sleep doctors and two key opinion leaders (KOLs) calls on more switches from Jazz's drug Xyrem and less loss to generics.
Earlier in November, a court ruled in Avadel's favor over patent dispute with Jazz related to narcolepsy therapy Xyrem. The court had ordered Jazz to delist U.S. Patent no. 873193 ((the REMS Patent)) from the FDA's Orange Book.
With the court decision, Avadel is seeking to accelerate the FDA's final approval of Lumryz. The drug had received tentative approval to treat excessive daytime sleepiness (EDS) or cataplexy in adults with narcolepsy.
Jefferies believes the switch patient opportunity is larger than it had previously estimated.
The firm added that the remaining uncertainties include a soon changing narcolepsy treatment arena and unlikelihood of bringing back oxybate d/c patients, among other things.
The once-daily Lumryz is a formulation of sodium oxybate which uses Avadel's proprietary drug delivery technology, according to the company.