Staring down the barrel at a potential year-long wait for full approval for a narcolepsy drug, Avadel is getting antsy with regulators and slashing staff to buoy its cash runway ahead of a commercial launch.
The company has elected to cut nearly 50% of its staff to save as much as $14 million a quarter, according to an announcement Thursday. As the company has ramped up commercial efforts for FT218, operating costs have more than doubled in the first quarter of 2022 topping $21.6 million compared to the same quarter a year ago. The layoffs are expected to extend Avadel’s $100 million cash runway, but will also result in a $3-4 million restructuring charge due primarily to severance costs.
The downsizing underscores how Avadel is taking every measure possible to save cash ahead of the commercial launch for FT218, a once-nightly treatment for excessive daytime sleepiness or cataplexy in patients with narcolepsy. It follows a decision by the FDA last month to request certification of Avadel’s Risk Evaluation and Mitigation Strategy (REMS) patent. Such patents are used to validate a REMS program, a plan outlined by drug manufacturers to assuage fears of adverse safety events. Requiring additional certification is what delayed the approval timeline for FT218 into 2023.
“Nearly every day we hear from disappointed patients who are waiting for a once at bedtime oxybate treatment option,” said CEO Greg Divis in a statement. The company, too, is chomping at the bit, pursuing “every available pathway to accelerate the decision" by the FDA.
Avadel is trying to check off every regulatory box as quickly as possible. It’s reviewed and accepted a final label and is wrapping up edits on the REMS program to support tentative approval. But the company is also working with federal courts in Delaware to delist the patent for the REMS plan, which could accelerate the decision.
When the request for certification was announced, Avadel noted that full approval could be granted sooner if a court finds that the patent is either unenforceable or invalid. The wait could also be circumvented if a court decides the FDA shouldn’t have requested additional certification.
One could understand Avadel’s rush: the company estimates the market opportunity for its med is roughly $3 billion. But amid rising costs, the company recognizes it’s a race to the finish line.