Full Press Release Details
Avadel Pharmaceuticals plc ("Avadel")
is a branded specialty pharmaceutical company. Avadel's current revenues are primarily derived from products it markets based
on first-to-file New Drug Applications ("NDAs") for pharmaceutical products previously sold in the U.S. without Food
and Drug Administration ("FDA") approval ("Unapproved Marketed Products" or "UMDs"). In addition,
through the acquisition of patient-focused, innovative products or businesses in the commercial- and or late-stage of development,
Avadel seeks to provide solutions for overlooked and unmet medical needs, including its urology product, Noctiva ,
which it in-licensed in 2017 and will begin marketing in 2018. Avadel also seeks to develop products that utilize its Micropump
drug delivery technology, such as its narcolepsy product which is in clinical trials.
Avadel's current commercial portfolio
consists of three sterile injectable products, which were previously UMDs, used in the hospital setting, and Noctiva ,
a urology product, which is the first and only FDA approved product for the treatment of nocturia due to nocturnal polyuria in
adults. Avadel believes that nocturia, the condition of waking two or more times per night to void, represents a large unmet medical
need affecting approximately 40 million Americans.
Avadel is actively developing a fourth sterile,
injectable UMD product with an expected NDA filing in 2018. In addition, Avadel is are currently enrolling patients in its REST-ON
Phase III clinical trial to evaluate the safety and efficacy of FT 218, a once-nightly formulation of sodium oxybate using Micropump ,
for the treatment of excessive daytime sleepiness (EDS) and cataplexy in patients suffering from narcolepsy. Narcolepsy is a rare
sleep disorder with few approved treatment options. Avadel will continue to strategically evaluate potential UMD and Micropump
based product candidates for development and approval, and will also look for synergistic acquisition targets to grow its company.
Corporate Information
Avadel was incorporated on December 1,
2015 as an Irish private limited company, and re-registered as an Irish public limited company, or plc, on November 21, 2016.
Its principal place of business is located at Block 10-1, Blanchardstown Corporate Park, Ballycoolin, Dublin 15, Ireland. Avadel's
phone number is 011-353-1-485-1200, and its website is www.avadel.com. Avadel's website is not incorporated into
this Current Report on Form 8-K.
Avadel is the successor to Flamel Technologies
S.A., a French soci t anonyme ("Flamel"), as the result of the merger of Flamel with and into
Avadel which was completed at 11:59:59 p.m., Central Europe Time, on December 31, 2016 (the "Merger") pursuant to the
agreement between Flamel and Avadel entitled Common Draft Terms of Cross-Border Merger dated as of June 29, 2016 (the "Merger
Agreement"). Immediately prior to the Merger, Avadel was a wholly owned subsidiary of Flamel. In accordance with the Merger
Agreement, as a result of the Merger:
Thus, the Merger changed the jurisdiction
of Avadel's incorporation from France to Ireland, and an ordinary share of Avadel held (either directly or represented by
an ADS) immediately after the Merger continued to represent the same proportional interest in Avadel's equity owned by the
holder of a share of Flamel immediately prior to the Merger.
References in this "Business of Avadel"
to "Avadel" shall be deemed to be references to Flamel prior to the completion of the Merger, unless the context otherwise
Prior to completion of the Merger, the Flamel
ADSs were listed on the Nasdaq Global Market ("Nasdaq") under the trading symbol "FLML"; and immediately
after the Merger Avadel's ADSs were listed for and began trading on Nasdaq on January 3, 2017 under the trading symbol "AVDL."
Further details about the reincorporation,
the Merger and the Merger Agreement are contained in Avadel's definitive proxy statement filed with the SEC on July 5, 2016
Under Irish law, Avadel can only pay dividends
and repurchase shares out of distributable reserves, as discussed further in the 2016 Proxy. Upon completion of the Merger, Avadel
did not have any distributable reserves. On February 15, 2017, Avadel filed a petition with the High Court of Ireland seeking the
court's confirmation of a reduction of Avadel's share premium so that it can be treated as distributable reserves for
the purposes of Irish law. On March 6, 2017, the High Court issued its order approving the reduction of Avadel's share premium
arising pursuant to the Merger by $317.3 million which can be treated as distributable reserves.
Avadel currently has five direct wholly
owned subsidiaries: Avadel US Holdings, Inc., Flamel Ireland Limited, trading under the name Avadel Ireland, Avadel Investment
Company Limited, Avadel Finance Ireland Designated Activity Company and Avadel France Holding SAS. Avadel US Holdings, Inc. is
a Delaware corporation, and is the holding entity of Avadel Specialty Pharmaceuticals, LLC, Avadel Legacy Pharmaceuticals, LLC,
Avadel Management Corporation, FSC Holding Company and Avadel Operations Company, Inc. Avadel Finance Ireland Designated Activity
Company is the holding entity of Avadel Finance Cayman Limited. Avadel Ireland is a corporation organized under the laws of Ireland
and is where all intangible property was relocated on December 16, 2014. Avadel France Holding SAS is a soci t
par actions simplifi e, organized under the laws of France and is the holding entity of Avadel Research SAS where Avadel's
research and development activities take place.
Asset Purchase Agreement with Cerecor.
On February 12, 2018, Avadel and certain of its subsidiaries, as sellers, entered into an asset purchase agreement (the "Cerecor
Purchase Agreement") with Cerecor, Inc. ("Cerecor") pursuant to which the sellers agreed to divest substantially
all of the assets held directly and indirectly by FSC Therapeutics, LLC and FSC Laboratories, Inc (collectively, "FSC").
FSC markets three pediatric pharmaceutical products indicated for infection, allergy and gastroesophageal disease ("GERD"),
and a medical device for the administration of aerosolized medication using pressurized Metered Dose Inhalers (pMDIs) for the treatment
of asthma. Avadel acquired FSC in February 2016 from Deerfield CSF, LLC ("Deerfield CSF"), an affiliate of Deerfield
Management, one of Avadel's major shareholders. The Cerecor Purchase Agreement provides that Cerecor will acquire FSC's
business assets and will assume Avadel's remaining payment obligations to Deerfield CSF under the February 2016 membership
interest purchase agreement pursuant to which Avadel acquired FSC (the "2016 MIPA"). Avadel will retain responsibility
for the interim interest payment of $262,500 per quarter through March 31, 2018. The remaining payment obligations to Deerfield
CSF, which were assumed by Cerecor, consist of (a) a quarterly payment of $262,500 beginning July 2018 and ending October 2020
(a total remaining payment obligation of $2.6 million), (b) a payment in January 2021 of $15.3 million, and (c) a 15% royalty per
annum on net sales of the FSC products during the period ending February 6, 2026, up to a total royalty of approximately $10.3
million (the "Royalty"). Avadel will pay a make-whole payment to Cerecor in respect of costs incurred in 2018 and 2019
associated with a certain supply contract being assumed by Cerecor.
The transactions under the Cerecor Purchase
Agreement require the consent of Deerfield CSF. Such consent is expected to be delivered at the closing, subject to the delivery
by Avadel of its guaranty, in favor of Deerfield CSF, of the payment obligations under the 2016 MIPA being assumed by Cerecor including
certain minimum Royalty payments. As a further condition to closing under the Cerecor Purchase Agreement, the majority shareholder
of Cerecor will issue a guarantee in favor of Avadel the effect of which is to largely offset any payment obligations Avadel may
incur as a result of the Avadel guaranties to Deerfield CSF including any payments in respect of the minimum Royalty payments.
In addition, Avadel will enter into a development agreement with Cerecor pursuant to which Avadel will use reasonable diligent
efforts to develop and provide to Cerecor four product formulations utilizing Avadel's LiquiTime technology.
Cerecor will reimburse Avadel for any costs associated with the development of the four LiquiTime products in excess
of $1 million in the aggregate. Successful completion of pilot bioequivalence studies with respect to the four LiquiTime
products are to be completed within the first 18 months from the effective date of the development agreement. Upon transfer of
these product formulations, Cerecor will assume all remaining development costs and responsibilities for the completion of product
development, any required clinical studies, construction of NDA applications and associated filing fees. Upon regulatory approval
and commercial launch of any such LiquiTime products, Cerecor will pay Avadel quarterly royalties based on a percentage
of net sales of any products in the mid-single digits.
Avadel believes that the divestiture of
its pediatric assets pursuant to the Cerecor Purchase Agreement will be accretive to Avadel's results of operations going
forward. However, Avadel is evaluating any gain or loss that it may recognize for financial reporting purposes in the first quarter
of 2018 (if a gain) or in the fourth quarter of 2017 (if a loss) as a result of the divestiture pursuant to GAAP.
FT 218 Orphan Drug Designation. In
January 2018 Avadel announced that the FDA granted Orphan Drug Designation to its proposed product, FT 218. FT 218, which is currently
in a Phase III clinical trial, is intended for the treatment of EDS and cataplexy in patients suffering from narcolepsy. The designation
has been granted on the plausible hypothesis that FT 218 may be clinically superior to the only other approved sodium oxybate product.
FT 218 is a once-nightly formulation of sodium oxybate using Avadel's Micropump technology. Orphan Drug Designation
is intended to advance drug development for rare diseases. The FDA provides Orphan Drug Designation to drugs and biologics that
demonstrate promise or improvements for the diagnosis and/or treatment of rare diseases or conditions that affect fewer than 200,000
people in the U.S. Following the completion of the clinical trial, if FT 218 is able to adequately demonstrate clinical superiority