Okay. All right. We're going to get started in our next session. I'm Andrew Tsai, Senior Biotech Analyst at Jefferies. Thanks for tuning in. It's my pleasure to have the Avadel team. To my direct right is Greg Divis, CEO. To his right, Tom McHugh, CFO. And to his right, Susan, I believe—I'm sorry, I missed your last name. Rodriguez. Rodriguez. Yes. Chief Commercial Officer. Chief Operating Officer. Chief Operating Officer. Thank you for joining us today. Maybe spend the next couple of minutes talking about the Avadel story and walk us through milestones. That would be great. Yeah. First of all, thanks, Andrew, for the opportunity to be here and to participate in the conference. We really, really appreciate it. You know, Avadel is a really—like LUMRYZ, is a transformational story. Over the last five years, the company has really transformed itself from what was once a generic hospital business to now a high-growth biopharmaceutical company with a lead program with LUMRYZ as our first commercially launched product, a next-generation, highly positively disruptive standard of care for patients who suffer from hypersomnia and specifically narcolepsy. We've been in the market now for two years and have made tremendous progress, which I'm sure we'll talk about from that perspective, and are working on what's next for us as well from a lifecycle management and pipeline expansion standpoint off the back of LUMRYZ and the innovation of our next-generation oxybate. From a milestone perspective, I would say over the next—for the balance of this year, there's a couple of things for sure that are really, really important. Number one is obviously our launch and the continued growth and adding net patients and building our revenue and continuing our pursuit to market leadership over the next number of years in narcolepsy. Obviously, first and foremost, as our priority in terms of measuring our results quarter in and quarter out from that perspective. In addition to that, we're deep into our phase III trial for LUMRYZ in idiopathic hypersomnia. So we do expect this year, by the end of this year, to complete enrollment in that trial, to have readout of that trial in the first part of next year, and begin our process and progress toward filing an NDA. In this regard, just last night, we received from FDA notification that LUMRYZ for idiopathic hypersomnia has been granted Orphan Drug Designation, which is an important first step in the regulatory and potential approval process to be granted eventually orphan exclusivity, much like we've had already occur on two different occasions in narcolepsy for LUMRYZ in patients—in adult patients with narcolepsy and subsequently pediatric patients in narcolepsy. This is the third time that the FDA has weighed in, recognizing the novel innovation of LUMRYZ as awarding it orphan drug exclusivity, in this case, designation under the basis that it's a major contribution to patient care and under the consideration of granting it clinical superiority. Congratulations. Thank you. On that front, I'm actually curious before we dig into the launch, actually, what did you give the FDA in terms of the data for them to even give you an ODD? We obviously have a number of different data points and data sets that have been supportive both in narcolepsy and additional data and research that we conducted subsequent to that, relative specifically to IH and the importance of a condition where, unlike narcolepsy that is primarily characterized by patients and people with narcolepsy having trouble staying awake, idiopathic hypersomnia is one where patients have a hard time waking up, right? The notion of having to forcibly awaken to take a middle-of-the-night dose can be challenging for sure, at least what we hear from clinicians. The value proposition from a clinician's perspective for LUMRYZ is quite high for idiopathic hypersomnia and quite interested in it. We've taken a lot of those insights and a lot of the research and compiled our requisite submission for the basis of granting LUMRYZ Orphan Drug Designation, and we'll continue to build that body of evidence between now and our approval when we submit for full approval and orphan exclusivity. I think we feel really good about the fact that we have two of those. We've been through this process now twice with FDA, and in both times, we've ended up with full orphan exclusivity. I see. I'm debating whether to ask more or go back to the launch, but maybe one more question is, do you then foresee Jazz to try to block you somehow with this new designation or litigate against the FDA actually? I think that's what happened last time. That's a better question for them. I see. Ultimately, the goal is generate your phase III data with LUMRYZ in early 2026, file, get it approved, and with this ODD, it's my understanding that maybe the FDA gives you an Orphan Drug Exclusivity and removes it from XYWAV potentially for IH. Yeah. It's not necessarily removing it from an existing orphan exclusivity. It's demonstrating clinical superiority through the guidance of what the Orphan Drug Act requires to demonstrate clinical superiority. We've demonstrated that enough in our submission to be granted designation. That will have to be evaluated, confirmed upon the full approval, much like that happened in narcolepsy, right? Both in adults and pediatrics. We got designation, and then subsequent with our NDA filing and approval, we were granted orphan exclusivity on the basis that LUMRYZ was deemed to be clinically superior on its major contribution to patient care. I see. So somewhat of a tried-and-true pathway in a sense. Okay. And so going back to the launch, again, congratulations on that. You've launched LUMRYZ since June of 2023. How would you rate your execution over the past two years? And what would you say are the key drivers for continued uptake in 2025? Yeah. I mean, we're two years into the launch now. There's been a tremendous amount of learnings, and there's a lot of different ways we can characterize the execution. We're very proud of the progress we've made going from a few years ago just having 25 or 30 employees to now having a fully launched and commercial organization that has made really significant inroads into the market with a lot more opportunity to be had. We're proud but not satisfied. That's kind of how I would describe it, with a lot more to be done for sure. You can measure progress in a lot of different ways, but there hasn't been a quarter, a month, a quarter, or a year that has gone by where we haven't gained new prescribers, added more patients, brought in new physicians who've never written an oxybate before. All of these are very promising indicators to the interest in LUMRYZ as the next generation oxybate and really elevating the standard of care for patients who are eligible and need to be on oxybate. We're the only oxybate that can assure that that patient every night is getting its full treatment every single night, consistently delivered night after night after night. We believe over time that will ultimately portend to patient benefits in terms of not just having to wake up in the middle of the night, but ideally in terms of improving their treatment experience from that standpoint. We're presenting data next week at the sleep meeting that we've completed a real-world evidence study where we've switched patients from first-generation oxybates to LUMRYZ. As what has been reported and will be reported next week was patients experienced a significant clinical benefit in terms of improving their daytime sleepiness and improving their ESS score. Again, in the real world, which is what matters now, we're seeing really good results from that perspective. We have continued to execute with a lot more to go from that standpoint. The drivers of that are really straightforward. We think about that in three buckets. We think about it as how do you drive demand kind of at the top of the funnel? How do you pull through those patients faster and at a higher reimbursed rate once they're going through the process? Then how do you keep them on therapy? We have talked ad nauseam about the investments we have made effective January 1st to positively impact all three of those steps along the journey. We have seen progress in all three of those areas. In Q1, as we have noted, we saw more patient starts. We saw an improvement and an acceleration of switch patients. All very positive signs. We saw patients start faster. We saw higher reimbursed rate patients go on therapy. The net effect of that, with the positive trends in our persistency efforts, is we had a 50% growth in net patient adds in Q1 over Q4 of 2024. These are the major drivers. These are the areas where we continue to focus. We continue to learn and improve and make the right adjustments. We will continue to do that as we go forward as we are still very early in the launch. Great. Thanks. Remind us, what is the total addressable market in terms of number of patients for an oxybate like LUMRYZ? Also remind us, how many patients do you need to break even? Are you there yet? Yeah. It's one of the very unique opportunities for LUMRYZ and the innovation that is LUMRYZ in that where we are sourcing patients and the market opportunity for which we can draw patients into our program is very different than that of the other oxybates because we have what we think upwards of 50,000 potential patients who could be on LUMRYZ that come from three primary sources, about 14,000 patients based on the data we can analyze who are currently on a twice-nightly oxybate of some sort, right? Then you've got another, excuse me, 14,000-15,000 patients based on historical claims data who have been on an oxybate and previously discontinued. And then, of course, you have every year anywhere from 3,000, 4,000, 5,000 patients who are starting new, truly new de novo to oxybate each and every year. Those three over the next number of years creates a large patient population for us to draw patients from. Every quarter since launch, just like we've added more prescribers, more patients, and prescribers who've never written an oxybate, we are adding patients from each one of those segments every single quarter since launch. Again, all very positive signs and all a reflection of what we think is the innovation and that is the next generation oxybate and LUMRYZ. In terms of your question about break even, Tom can maybe provide more specifics, but in short, yes, we've reached a critical mass of patients on therapy that every patient we add from this point going forward, and obviously the more that are reimbursed, the better, should ultimately drop to the bottom line. Our cost structure is, for all practical purposes, built, and any changes to that up or down would be relatively immaterial on a percentage basis. We feel we're well built from an infrastructure standpoint. We'll always look for ways to invest to grow the launch and improve our performance from that standpoint, but we're really pleased at where we're at at this point and the efficiency of our cost structure to drive free cash flow. Yeah. In fact, Andrew, when we reported our Q1 results just a few weeks ago, it represented our third consecutive quarter of adjusted operating income and adjusted positive operating income, which is simply a function of just backing off non-cash operating expenses. To Greg's point, it's a high leverage of cost structure. As a reference point, year over year, Q1 of 2024 versus Q1 of 2025, our operating expenses actually went down 3% at the same time while we're driving patient growth and revenue growth. It's a really, really high leverage of cost structure. Every patient's important. Greg just described the patient segments, the sources of business for LUMRYZ. Every patient is important. Every patient we're adding at this point only drives us further and further above and beyond break even. How many patients do you think you need to maintain break even? What is that range? We're effectively there. We reported 2,800 patients, total patients on therapy as of March 31st, over 2,000 of whom are reimbursed. Got it. Got it. Thanks. What is your percentage mix amongst the three subsegments today? How do you foresee that mix to evolve over time? I think this is an important point. As we reported some of the Q4 results where we saw the percentage of patients between switch, return to oxybate, and new to oxybate patients, you saw over the course of 2024, the percentage of switch patients trend down and the percentage of the other two categories go up, in particular, new to oxybate. In Q1 of this year, we've seen that trend reverse, right? We not only grew patient starts, we actually accelerated the pace of switch patients. Switch patients have grown from those percentages and are at a higher percentage in Q1. That trend generally has continued through Q2. I think through the changes we've made, the team members we've added, the programs we've initiated, and the focus we've had, we've been able to see positive trends and momentum in that regard. Great. I guess to me, the switch and naive patient populations seem to drive much of your mix. The former oxybate users, there's a big population. I think you mentioned maybe 15,000 or more out there, but they don't seem to be a greater percentage of your mix. At its core, why is that the case? Is it because fundamentally they've already—I mean, both of your drugs, yours and Jazz, are oxybate. Hence, maybe they dropped out due to lack of efficacy, safety. What I can think of is maybe they dropped out due to once-nightly dosing. My question is, what proportion of that 15,000 truly did drop out because of the once-nightly factor that would be truly amenable to your drug? Yeah. You can get macro commentary and macro research to help give you some general guidance. At the most, what's most important is what happens between the physician and the patient. This is a large patient population. The most important thing for us in this regard is that over 90% of those patients are still under care by the same physicians we're targeting today. We have seen, like all of other metrics, every month, every quarter, 20-25%, some months higher, of our patient starts coming from this segment, right? This is a real segment for us, and it's a segment we'll continue to target. With the discontinuations that occur with the twice-nightly patients, it's a segment that continues to repopulate itself from that perspective. We think it's going to be there for quite some time. That opportunity will only continue to grow as we amass more patients and there's more patient experience and more patient commentary about coming back in. Some of those have come back in who had problems with the middle-of-the-night dosing. Some have come back in who had adverse event or efficacy-related matters. We've gotten all sorts from that perspective. What's most important is that they're still under care by the same clinicians. We're targeting them and believe over time we can continue to build this group of potential LUMRYZ patients who can benefit from our innovation. Yeah. Maybe I'll just add that, Andrew, it's a patient segment that we would view as exclusively to the benefit of LUMRYZ. Since they have previously tried and discontinued on a twice-nightly for whatever reason it may be, the logical choice, of course, is a once-nightly option and the benefits that LUMRYZ offers. It's a large segment. We continuously size it about 15,000 patients, but again, exclusively to the benefit of LUMRYZ. Good point. Within the naive patient population, for, let's just say, every 10 new patients that go to an oxybate, what's the proportion of those patients going to LUMRYZ versus Jazz's products right now? Yeah. I think it's hard to really understand that because the data is just not available by and large. What we can say from what we can see, we continue to grow our share penetration in that segment. In particular, when we look at our penetration of new to brand, in particular to our early adopters, we've gathered or garnered a significant amount of share in the new-to-brand patient population, while our total share has grown quite nicely in our early adopters. That represents a large portion of our volume launched to date. Now we're expanding that to the broader universe, which is really propelling some of our positive trends here in the first part of 2025. Got it. And then one more within this subpopulation because it is ultimately one of the key drivers of your growth is to blunt dropout rates for de novo patients. My understanding is even for your set of patients new to oxybate, the discontinuation rates can trend closer to what Jazz had been seeing, which is maybe closer to 50%. But you are doing market education efforts. So where do you think, with improved marketing or education efforts, where do you think the discontinuation rates can ultimately go to? Yeah. To be really clear, to state something, at all time points on patients, LUMRYZ shows a better discontinuation rate versus first-generation oxybates, right? A lot of that was occurring before we implemented all of our interventions, which went into effect on January 1st of this year, where we have expanded our field support teams, we expanded our nurse teams, we have developed and are delivering a much more comprehensive patient support initiative, not just getting patients on therapy, but helping them navigate through the treatment experience, especially those early in the treatment experience, and especially those who are new to oxybate because those are the patients who have the largest jump from having zero oxybate exposure to 4.5 grams as the starting dose. That is where you see the most adverse events. We're very, very pleased and really excited about the progress we've made on that front just in the first four or five months of this year. What we thought may take us a little while to have an impact, we saw that impact immediately in Q1. We saw a decrease in our—a pretty meaningful decrease in our discontinuation rates, in particular, new to oxybate patients, and in particular, in the first 30, 60, 90 days of therapy during the first quarter of this year. That momentum has carried on in Q2, where we saw how we calculate discontinuation rate inside of a quarter. We saw it improve in Q1, and it has continued to improve in Q2. These are all positive signs that demonstrate that the decisions we made, the investments we made, the initiatives we're deploying were all the right ones. We just have to continue to execute. To your question is, where's the floor? I don't have an answer to that right now because we haven't hit it, but we're going to try to make it as low as it possibly can be. We're working on things we can do to make it even better as we go forward. Great. Thank you. For first quarter, you did not necessarily provide color on the number of patients who had initiated therapy, although you previously have guided to where you want to be by year-end. Can you confirm that the pace of additions in Q1 was similar to fourth quarter? There was no deceleration, but rather continued growth. Yeah. We can confirm that we started more patients in Q1 than we did in Q4. We had growth from all patient types, all patient segments, with the acceleration in switch the greatest. We're two months into Q2. Can you then also confirm you're getting continued growth, if not more? Yeah. I think the momentum and the initiatives we deployed in Q1 that began to take effect, we're seeing that carry on in Q2. Yeah. Specifically, Andrew, we were providing guidance for Q2 revenue in the range of $61 million-$63 million. We're very confident in that, of course. We have a very clear line of sight to achieving that. As Greg has noted, the metrics that drive, whether it be patient growth, drive revenue, we continue to see improvement across metrics. Ultimately, I'm sorry, but ultimately, the most important metric is net patient adds, right? Net patient ads and reimbursed net patient adds are really most important. Speaking of net patient adds, we did hit a low point in fourth quarter and seemed to bounce back to your point about blunting discontinuations. It did bounce back a little bit about Q1. One, two, three, four, five years down the road, is it fair to assume Q4 was the trough quarter for LUMRYZ? Q4 was a growth quarter versus we added more patients than what we had before. At the end of the day, our goal is to add as many as we can, right? We want to keep growing where we are from where we are today. That is ultimately the goal. What makes LUMRYZ unique from a market opportunity perspective and a share perspective and a penetration perspective is we're sourcing patients from a much larger patient population than the other oxybates. They're primarily competing in the new to oxybate segment only, which is 3,000-5,000 patients in a given year, depending upon the year. That's 10% of the market opportunity that we're pursuing right now. We think the avenues to continue to grow now and into the future is quite robust. Great. Gross to net inventory for Q2, how should we think about that? Q1 is always impacted by gross to net. It's always the highest quarter that gets impacted with gross to net. What we're expecting to see is an improvement in gross to net as we're into Q2 and then certainly into Q3 as well. Inventory levels, I would say, have stabilized, right? We ended with about three weeks of inventory in the channel at the end of Q1. We're seeing those continuing levels as we continue through Q2. Great. And then orexins, we're going to have a lot of data sets this year. What is your latest stance on orexins? Why LUMRYZ ultimately will not be affected by "competition"? Yeah. I mean, I think, I mean, clearly, the investment community is very excited about the prospects of orexins and the wakefulness aspects of what those drugs can do. What we're most concerned about is what physicians and clinicians think. We do spend a lot of time and invest a lot of energy with not only key opinion leaders who are the experts in the space, but also the clinicians in the field who see a lot of patients, trying to understand where they view orexins, how they view oxybates, and in particular, how they view LUMRYZ and how that may all come together over the next number of years. I think most importantly, LUMRYZ is setting a new standard of care for oxybates and the benefits that oxybates can deliver, which is not just a daytime benefit, right? We remind everyone that narcolepsy has a pentad of symptoms, right? Excessive daytime sleepiness is one of them, but so is hallucinations, so is sleep paralysis, so is disturbed, disrupted nocturnal sleep that affects a lot of patients. These are things that oxybates do very, very well. Very few people, if any, go on oxybates who are not already on a wake-promoting agent because it's a polypharmacy situation. I think our view and our research talking to hundreds of physicians is that there's excitement about the wakefulness aspects of it, of an orexin, and what that may do to not only benefit patients, but expand the treated patient population. In no case have we heard from anyone that the role of oxybates and the role they play in terms of treating both the daytime and the nighttime is going to go away. They're going to play an important role. The ideal combination therapy in the eyes of clinicians is can they be on an orexin and on an oxybate because you get profound wake-promoting aspects as well as obviously the benefits of the nighttime that an oxybate and in our case, LUMRYZ, delivers. I think there's also equally just general excitement about the wakefulness aspects and cautious about how will it play out, what will be the adverse events over time, what will an orexin look like in the real world from that standpoint, and what impact, if any, will that have on the nighttime, right? Good or bad. We do think that based upon our research with physicians, there's an important role for oxybates that will continue to be. We're proud to bring the next generation and continue to work to bring innovation to this category for oxybates to really help patients both address the daytime and the nighttime. Great. Maybe the last few minutes, maybe to spend some time on the litigations, many litigations you've had because it is another piece to the story. You've actually prevailed in many of these cases along the way. Long story short is what can we expect in 2025 in terms of news flow across these cases? I think the most important—no, not the most important, but one important thing to highlight was a decision last week. We will talk about the antitrust case here in a minute. There have been efforts made to try to stay that decision or get it dismissed. Last week, the court again determined that that hearing, that jury trial will occur, will go forward. Avadel is due its day in court the first week of November of this year in a jury trial where we are asserting that we were wrongfully delayed into the market because of a wrongfully listed patent in the Orange Book. As we said on our last call, we will be seeking total recovery in excess of $1 billion because of that delay. That is on track. That is November 4th or 5th or 3rd or the first week, right, when that five-day jury trial commences. In addition to that, there will continue to be the follow-on outcomes of past litigations that have had some decisions in this regard. There will at some point be a decision on what a future royalty rate will be. There will be post-trial motions on the patent litigation, which will continue to pursue our opportunities to invalidate the one patent that we think the jury got wrong. Nonetheless, I would characterize where we are today as a lot of the pivotal decisions have been made. We're moving forward. LUMRYZ is in the market. LUMRYZ is advancing in IH from a clinical trial perspective. For us, we're now, I would say, going more on the offense, right? Whether it's the antitrust case or the four patent cases suits that we filed this year against Jazz, noting that they're infringing our intellectual property with their IH label. Those are the things that will continue to proceed. You recently won an appeal in IH. What is the latest status on that? Can you remind? Yeah. That decision, which came down a little while ago, a few weeks ago, basically overturned the decision to preclude us from doing any more clinical trials and vacated the decision to allow us to proceed and seek approval, right? That is where that is at this stage. I'm sure there'll be additional follow-up and litigation in the district court around this matter. It is also one of the reasons why the decision yesterday to grant this orphan drug designation is another important step in the process where the FDA is saying, based on what we see right now, it's plausible that LUMRYZ could be granted orphan exclusivity on the basis of its major contribution to patient care, just like they've done on two previous occasions. Right. Okay. I think that's all the time we have. Thanks for the updates. Look forward to more. Thank you. Thank you, Andrew.