Great. Good afternoon. Thank you again for joining us for this session. My name is Mohit Bansal. I'm one of the biotech and pharma analysts here at Wells Fargo, and I'm ready to have our other management team with us. We have Greg Divis, the CEO of the company. We have Tom McHugh, the CFO of the company. Thank you very much, team, everyone, for joining us today. Thanks for the opportunity to be here. We appreciate it. Thank you. Great, so there is a lot going on with the company, so maybe we can start with the, like, what are you up to, and then what's going on in the company? Let's start with that. Yeah, I think the, you know, the kinda overarching commentary is that we're obviously, you know, a little over a year into our launch. I think we're really pleased with the foundation we're building in the launch. Our last reported numbers were, we had, over thirty-nine hundred patients who had enrolled in our RyzUp program. We had over twenty-four hundred patients who had initiated therapy, and as of June 30, we had nineteen hundred patients remaining on therapy. We saw in Q2 a net add of five hundred patients in Q2, from that standpoint. But I think most importantly, as we've been on this journey now for a year in the marketplace, I think what we're most pleased about, besides the progress we've made in market, is that we're seeing actually a lot of our pre-launch research begin to materialize in the marketplace, right? For everything from foundationally, where we thought our source of business would come from, switch patients, naive patients, previously discontinued patients. We've seen healthy patients come from all those segments, but in addition to that, our research told us that we could expect to see some potential indication of market expansion in the form of physicians who have never used oxybate to begin to use oxybate. And we've seen that occur across, you know, a number of physicians who have chosen to put patients on LUMRYZ, who had never previously written an oxybate before. So I think, sum and substance, we're pleased with the progress we've made so far. There's a lot more to be done, and I look forward to having the discussion today. Awesome. So I'll talk a lot about the launch of LUMRYZ, but before that, I think the number one question we get about LUMRYZ is about the litigation, what happened there. So why don't you just, for those who don't know, but just to help us understand the outcome of that. Sure. You wanna-[crosstalk] Yes, surely. So from a, it, we do get that question quite often. Right. I'll share what I'm able to. You know, we are in active litigation, so comments will be a bit limited, but perhaps just to level set, you know, last week. We'll start with the most recent news. Last week, the judge in Delaware issued an order which we consider to be a big de-risking event for the company. He denied Jazz's request for injunction to enjoin us from being able to sell LUMRYZ for narcolepsy. So for us, it's business as usual, and the launch continues on. On the flip side, he did grant an injunction to enjoin us from being able to seek approval for LUMRYZ for the treatment of idiopathic hypersomnia. We, of course, disagree with the ruling. We almost immediately filed a notice to appeal, and that process is well underway. The other decision that many people are keeping an eye on and waiting for is related to where Jazz sued the FDA. That decision is expected, quite frankly, I would say, any day now. The hearing was on May 4. There's nothing new going on other than waiting for the decision to come out, and I'll finish my commentary with, you know, two actions that we've initiated against Jazz. One is for misappropriation of trade secrets, and the other is an antitrust litigation. Both of those trials are scheduled to occur in the fourth quarter of next year. Got it. Now that you have freedom in LUMRYZ, you are launching. Can you talk a little bit about, I mean, the 500 patients and, I mean, the patients you are seeing on LUMRYZ, where are these patients coming from? How many are these switchers versus the naive market? Can you talk. Characterize the market a little bit. Yeah. Our all of our research would have told us that there were, you know, the opportunity for LUMRYZ in the marketplace is a bit distinct and unique to LUMRYZ itself, from the perspective of patient segments that we're targeting are patients who are switch patients, or when we launched, there were about 16,000 actively treated twice-nightly oxybate patients. There is obviously the naive patients, with which historical data would have told us that about 3,000 new patients start every single year. And then, in addition to that, what we've uncovered was another segment of upwards of 15,000 patients who were previously on oxybate in the last four years but had subsequently discontinued for a myriad of reasons. So our thesis going into where we're gonna be able to see to generate business from all those sources based upon our insights, and that's what we've seen. The largest portion of our patients to date have come from switch patients, for sure. It's the largest market that's out there today and being actively treated. I would say that over the course of the launch, we've seen a continued increase in the uptake of naive patients who are de novo to oxybates, which represents our second-largest portion of patients, and third, followed by patients who have previously tried oxybate and discontinued, which again, we weren't sure how soon we would see that materialize, but it's really become a real segment for us. So from our perspective, what excites us the most is that we're not just competing in the space with... for 3,000 new starts every year. Like, our patient pool is substantially larger and gives us an opportunity to try to help potentially more patients. Got it. And are you seeing anything, any move to these authorized generics as well? I mean, do you see any- Which one is the bigger competitor? Is it Xywav or AGs at this point? ...Well, again, I think, you know, from our perspective, all oxybates are potential competitors, depending upon the patient need- Right and the physician's decision or choice. We obviously the introduction of the authorized generic back in early 2023 has come in and our view has made a fairly direct impact, almost a one-for-one impact, to the best of our knowledge, on the original twice-nightly oxybate product. In terms of its impact on us, I would say we don't really feel it every single day or from that standpoint. From a payer perspective, our coverage is really good. We haven't seen a broad adoption of authorized generic step edits or anything else like that. So our view on the role of the AG to date has been much more of one that has cannibalized the existing twice-nightly original oxybate product versus having a broader impact on the marketplace. Got it. That makes sense. And then there's always... Obviously, the argument is that Xywav is a low-sodium version versus yours is still a high-sodium version. Right. How much does it? Like, when you talk to physicians, I mean, is there a segment of physicians who still prefer a low sodium version? Or, like, if yes, what percentage is that? Yeah, I don't think we've met any physician who doesn't understand and appreciate and recognize the value that once-nightly LUMRYZ can offer to their patients from that standpoint. Certainly, sodium is an area that has been in the marketplace for sure, and depending on the physician, to some, it's more prevalent than others. But I don't think anybody that we've talked to, and we have a chance to discuss the benefits of LUMRYZ, doesn't see the opportunity for LUMRYZ. And, you know, again, I think as the market has evolved, for sure, if I just look at what occurred in Q2 in terms of net patient adds, LUMRYZ added five hundred net patient adds, and the mixed salts product added twenty-five. Mm-hmm. So from that standpoint, we feel good about the foundation we're building, recognizing that there's a whole lot more to be done. Got it. And I'm really interested in the naive side of it as well, because it pretty like... I mean, are you bit positively surprised by the naive patients as well, or do you think it is also going as per the plan? Because I thought that it probably the patients who tried oxybate before they dropped out, they are probably going to be the easy one, but that's not the They are the third one right now, right, in terms of segments? Yeah. The previously treated who discontinued are the third segment from that standpoint. You know, I think our hypothesis going into it, that that was going to be the hardest segment- Right because they had some negative experience that resulted in them discontinuing, whatever that may be. Mm-hmm. We're pleased to see that segment really begin to build and become a real segment, for sure. I don't think we're surprised by the naive patient population, and all patients matter to us, right? Right. So every physician, every treater is on their own adoption curve. The type of patient they would like to treat is, you know, on their own adoption curve, and, you know, we wanna meet them where they're at, and we think LUMRYZ offers them another really important option for their patients, and we're pleased with the progress to date, with, again, a whole lot more to be done. Got it. So when you look forward, like, few more quarters or call it a couple of more years, I mean, how do you see the market evolving? I mean, do you continue to see, like, the similar mix of naive versus experienced patient coming in, or how do you think the market will evolve from here? Well, you know, again, trying to predict the future- Right You know, it is always an interesting phenomenon. But I think when we think about how the market's going to evolve, where it is today, what may or may not happen in the future with generics in 2026 and beyond, I think our perspective is that what makes LUMRYZ a unique opportunity is the market opportunity, the segment we're pursuing and offering our innovation to patients goes beyond competing for three thousand new starts every year, and that's it. So the crowded nature or the evolution of this marketplace, all fighting for new starts, will continue to be the case, and we're pleased with the progress we've made in terms of our share in naive patients. But our market segment is much larger than that, with, you know, now probably less than sixteen thousand twice nightly oxybate patients on the marketplace because, you know, LUMRYZ's availability, plus previously discontinued. We think these are segments that are unique to us. So we think the pie or the market opportunity that we have to continue to build the LUMRYZ franchise in narcolepsy is robust and provides significant opportunity for continued growth over that, your time frame and beyond. Got it. That completely makes sense. And then, there is some, like, one more interesting data that you reported in the post-hoc analysis. There was this, weight loss, in the phase three REST-ON trial. Can you talk a little bit about that and importance of that? The data we published demonstrated in post-hoc analysis that there was weight loss for patients who are on LUMRYZ. At At its core, we got those questions from physicians. Mm-hmm. Right? Did we see weight loss in our pivotal trial? So we had captured that data, and so in order to, candidly, to effectively answer that question appropriately through our medical department, we think having peer-reviewed, published data is important. But I do think if you scan the literature, you would see weight loss in oxybates elsewhere as well. So again, presenting that data and publishing it is important just to be able to have the evidence to support and answer the questions if inquired. Got it. Got it. I mean, so I did talk about that, so one other question is, like, I mean, I think in 2025, you will get some Medicare and Medicaid coverage as well, so can you talk to that and when that eligibility window opens up, how would you, how much incremental access you would expect at that point? So the decisions around Medicare coverage for twenty twenty-five, and why that's important to us, is because when we got the approval for LUMRYZ, it was too late to bid for twenty twenty-five contracts. Yeah. And 2024 was way late. So we really have had very little coverage in the Medicare segment. So the first question is, is there a lot of Medicare business in narcolepsy? And if you look at the split of payers, looking at our business today, which I think is fairly commensurate to the data we can see in the twice nightly's, it's 80%-85% commercial. And the balance is really split nearly evenly between Medicare and Medicaid, with a little bit of all other taking a little bit of that. And all other can be other government plans, VA, DOD. So it is a, you know, mid- to upper single-digit percentage of patients who are Medicare. For us, because we haven't had coverage, where we haven't had coverage, we've been supporting those patients through our patient assistance program. Formulary decisions for 2025 will begin to take shape as we get into Q4 of this year. Our expectation is that we'll be added to some Medicare formularies, and some of that coverage, those coverage policy decisions will be in effect. We should see our 85% coverage in commercial to then begin to expand with more Medicare coverage as well as we enter 2025. The exact percent in numbers is still TBD because we're waiting for some of those decisions. Got it. So have you disclosed what percentage of coverage you have right now on in commercial plans? On the commercial plans, we have about 85% coverage in commercial plans today. We have, you know, contracts in place with all the top three GPOs, and we have coverage policy decisions down through about 85% of the lives that exist underneath those GPOs. Great. Okay. So the other expansion you could see is probably the pediatric expansion. Again, can you help us understand, like, how big that unmet need is in pediatric patients? And then how should we think about the uptake in that segment as well? Yeah, the pediatric population is interesting because, arguably, it's much larger than what it really is today, and in terms of how patients manifest themselves for treatment. And primarily because it takes a long time for a patient who usually presents symptoms of narcolepsy in adolescence, and it takes anywhere from eight to 15 years for that diagnosis to actually get confirmed. So that's why in our pivotal trial, which was 100% naive patients in narcolepsy, the average age was 31, right? To going on oxybate. So the byproduct of that is that the total percent of patients, of pediatric patients, that represent current oxybate therapy is about 5%. So it's relatively small overall from that perspective. But I will say that we have gotten more than our fair share of phone calls from parents who are certainly interested in the opportunity for LUMRYZ for a once-nightly option should we get our final approval. Because the burden just isn't on the child in the case of the child. It's on the caregiver as well. Right. Right? Who's waking up every night to support? So, you know, we have an action date coming up in a few days, quite frankly. The current action date is September 7, which is a Saturday. So, you know, we'll see what our friends at FDA does between now and then. It's my birthday. Happy birthday. So, another question I wanted to ask, I mean, like, I think this is like. It goes back to, like, in discussing with the physicians and all, like, when you, when you talk to physicians, oftentimes we have seen with the orphan diseases is that there's some stickiness in the market, and there was a drug which has been there for a long time. Not so much with physicians, sometimes with the patients as well. So, when you talk about LUMRYZ, I mean, obviously, once-daily is a benefit there. Do you hear some inertia, and what kind of education and awareness you have to do to make sure that if there is an inertia, it kind of goes away? Yeah. I don't think LUMRYZ is unique. The market is unique. Narcolepsy is unique in that regard to other kind of chronic conditions. I would say that inertia and, you know, "We've made a progress, and my patient's doing okay," is some feedback we hear from physicians while we're out talking to them and as reasons to, you know, keep maintain the status quo. From that perspective, I would say that there is a lot. You know, that would, that could ultimately infer, is this a mature market? Right. From that perspective, I think it's anything but mature from my perspective, because what looks like a fairly static market at the top is really a market that churns a lot underneath it, right? From that perspective, and you know, there's no better example for us in that if you look at the source of our businesses that we talked about, you know, switch, previously treated and discontinued, and naive, almost one in five of our enrollments come from a doctor that we don't actively target. Oh, wow. Right? So, to us, that. You know, we're very focused on the high-value targets, but we have physicians who have never written an oxybate before, who have written for LUMRYZ, right? And we have physicians who maybe wrote one oxybate in the last 12 months, who have written numerous for LUMRYZ. So again, to us, there's untapped opportunity beyond the highest value that we think makes it, you know, not a mature market. But do we hear, like, the notion of inertia or a patient is, you know, they're doing fine, we don't wanna rock the boat? Yeah, we hear it. You know, for us, it's about continuing to meet the physician where they are, educating and activating patients to advocate for their care, and trying to, you know, create the right sort of intervention at the right time for both patient and physician to find the right patient for that physician to try, but again, I think all of our research and our insights in the launch would tell us that nobody has said no to LUMRYZ, right? Mm-hmm. We just got to continue to find the right patient for physicians to get more and more experience and if you look, if we longitudinally look at, like, how long does it take a physician to actually write the first script, and that's across the board. Some do it in one call, some do it in 10 calls. Right. But the time to the next script is usually shorter, and the time to the next script after that is usually shorter as well. So, hence why there's such an importance and focus on the highest value targets, which is where all the patients are. Got it. So, I mean, you bring out an interesting point about the mature market, and, I mean, it's probably like you're saying, it is not mature, and I want to bring up one point you mentioned, like 3,000 or so new patients coming into for narcolepsy, but if you look at, I mean, your competitors' annual slides, the net number is about 10,000 or so. So what I want to understand is that those who discontinue, what happens to those patients, and how big is that opportunity? Yeah, so if you look at kind of historical, you know, I would say prior to our launch or the launch of the AG, you saw a pretty flat. What you would look at and say, "The market's about 15-16 thousand patients on therapy every year, year in and year out." But if you really peeled that back, what you found was a fair amount of churn. Mm-hmm. Like, you saw about 3,000 new starts a year- Mm-hmm. Of which 50% discontinued in the first year, right? So you saw 1,500 of those 3,000 stop, and then you saw somewhere in the neighborhood of another 1,500 discontinue, right? To be able to stay steady, stay at, let's call it, 16,000 patients. So we don't know all the details or the specifics, but that's what it looks like to us. So what looked like as a steady, static, mature market was actually much more dynamic, and it is much more dynamic because there are discontinuations from that standpoint that happen early on in treatment, especially with naive patients who are newly exposed to oxybate, which can induce adverse events or create other issues for patients. So from that standpoint, what happens to them? You know, what has happened to them historically has been they haven't been lost to care. Over 90+% of previously oxybate discontinued patients are still under care of that same physician who treated them with an oxybate to begin with. Good. So when we look at that data over the last four years, we would say that that number, maybe it's five years now, that number is upwards of approaching 15,000 patients. Okay. who have tried oxybate and have discontinued, right? Based upon the claims data set that we've looked at. So for us, that is a very unique patient population for us that we think is really opportunistic. Now, not all of them will be candidates for LUMRYZ, because maybe their experience warranted them not to stay on oxybate, would be the same reason for them not to go on LUMRYZ. But we've seen that market develop in the last 12 months to be a real market, where hundreds of patients are coming back onto therapy and staying on therapy. Got it. Got it. Another topic I want to discuss: you also were thinking about plans for no or low sodium version, so where are you with that, and anything that you can share? Yeah, I think our commentary publicly has been, you know, we have a target to try to use our technology and to formulate a once-nightly, low or no-sodium product with the product profile of it being bioequivalent to LUMRYZ. Mm-hmm. That is the goal. Can we make it bioequivalent to LUMRYZ? There's a number of things that we have to navigate to pursue that, both from, you know, what's in the public domain now, as well as what are the what I would just describe, the formulation, technical challenges of removing an important component of sodium oxybate, which is the salt, which acts as a counter ion to the formulation, which, in essence, prevents an impurity from forming. So if you strip that salt, one salt out, you can replace it with other salts, which is what has been done with the mixed salts product, or you have to find another way to try to solve that from a technical standpoint. So that's what our team is working on, are different novel approaches to really pull the sodium out or down at a level that allows them to add something else in, to serve as the balance that's needed to prevent an impurity from forming. We're quite convinced, as we solve that, we can coat it with our technology and expertise and release it accordingly to our technology. But we're working on a number of different approaches to solve that right now. Got it. Helpful. So now that you have like, or you are launching and you have a product, which is doing well in the market, how do you think about capital allocation plan and think about developing the pipeline beyond that? Also, I mean, there is some thought about there could be orexins, there could be other technologies in narcolepsy market. So what is your strategy there? Yeah, so maybe Tom can cover the balance sheet. Right. And kind of, you know, where we are from that standpoint. I'm happy to talk about, you know, the pipeline and, you know, what's, what else is happening in the marketplace. Yeah. From a financial statement standpoint, we really have made great progress. You know, in Q2, we were, as I like to describe it, right on the cusp of break even, with $41.5 million in net revenue and cash operating expenses on an adjusted basis of $40 million. So we were right there. Our guidance for cash OpEx for the remainder of the year is about $40-$45 million on a quarterly basis. And with the balance sheet where it is, we have no debt. We have a small royalty obligation of, we took a $30 million draw last year, a $1.5 billion market cap. You know, we think about capital allocation in several different ways. You know, given that we're very, very close to cash flow break even and a cost structure that's highly leverageable, LUMRYZ, you know, should be a significant cash generator for the company, on a go-forward basis. And again, coming back to the capital question around capital allocation, we will. We're We're obviously focused on the launch of LUMRYZ. We will look for opportunities to continue to invest in the launch of LUMRYZ to accelerate the launch. And beyond that, we think about business development opportunities for the continued growth of Avadel. We brought on board a chief business officer about three months ago. She's very active. She's out looking at different opportunities. You know, the ways to deploy capital, you know, the way we think about it primarily, is to invest back in the business, both for the growth of LUMRYZ for narcolepsy, as well as for the growth of Avadel overall, you know, seeking other opportunities. My only additional comment is, you know, our focus is unwavering on the launch of LUMRYZ and narcolepsy. That is the priority of the company right now, and then to begin to build out how do we build out a pipeline. Obviously, we're looking at other opportunities in that regard, for sure. But rest assured to our investors, our focus is to continue to accelerate the launch and build LUMRYZ to realize its full potential. In terms of the marketplace or the landscape around orexins, again, I think there's a lot of excitement about the potential therapeutic benefit of an orexin in terms of its wakefulness. I think there's a lot more that's going to be learned over time. We like to... Although you talk to a lot of clinicians about this, we like to focus a lot of our in-depth discussions with who we think are some of the thought leaders in this space. There's one out of Stanford who actually was one of the discoverers of the orexin, you know, deficiency discovery. I think from his viewpoint, and not to speak for him, you know, there's a lot of excitement about orexins. He views the combination of orexins and oxybates as a real potential future combination therapy in narcolepsy for narcolepsy patients. So for us, it's important for us to be as close and as involved in that space as we can, and to, you know, understand what's going on, and most importantly, continue to, you know, demonstrate our abilities to enter into a market and be successful and launch products, because that is an asset and a capability that I think is important for us to continue to build and demonstrate. Got it. Well, this is very helpful. Any questions from the audience? All right, so one question, I mean, I'll ask you. So, fast-forward one year, September two thousand and twenty-five, I hope you are here. And if I ask you this question, so like, what would you... What would make you look back at the year and say, "It was a great year for us? Again, I think, you know, many a truth are said in jest, but I would say important for us is to continue to execute the launch. Mm-hmm. You know, we talked to a lot of you in the audience. We look forward to continuing to address and put legal matters behind us from that standpoint. We would much rather talk about the business from that perspective. But ultimately, I think we're very focused on, you know, where our value drivers are right now, and to come back here and update on those key progresses, and including, you know, what's happening in the launch and where we sit today, and how we've grown and evolved the business, and our balance sheet and everything else, you know, across these topics that we've talked about. So we appreciate the chance to be here, and if the offer is extended right now to be here next year, we'll be here next year. We'll be here next year. Thank you. Thank you. I appreciate it. Thank you very much.