The takeaway from Avadel Pharmaceuticals Plc's (AVDL:NASDAQ) recent Q4/21 earnings report is the biopharma is currently well-positioned financially and operationally, reported analyst Francois Brisebois in a March 18 research note.
Financially, the company beat expectations in Q4/21 with a reported earnings per share (EPS) of ($0.38). Oppenheimer's EPS estimate was ($0.49) and the Street's, ($0.41). Brisebois attributed the favorable result to the biopharma exercising "good opex discipline."
Avadel has a strong balance sheet, having $157 million in cash at year-end. Maturity of the company's convertible note was extended to 2/01/23, "a real positive," noted the analyst.
Operationally, Avadel is advancing its lead drug candidate FT218 as a potential treatment of narcolepsy-induced excessive daytime sleepiness and cataplexy. The company expects feedback from the U.S. Food and Drug Administration (FDA) soon pertaining to its review of the biopharma's new drug application, Brisebois wrote. Management still believes Avadel will not need to obtain ODE to receive full FDA approval.
"We are encouraged to see that there have been no outstanding questions [from the FDA]," wrote Brisebois.
The analyst highlighted that in the meantime Avadel continues to prepare for the commercial launch of FT218 and has made progress in that regard. For instance, the biopharma already conditionally hired 90% of its sales force. The company will likely need another five to six months post approval to get fully ready.
"As [Avadel is] still a development story, we are pleased to see that management is focusing on their launch readiness," wrote Brisebois.
Also encouraging is interim data from Avadel's RESTORE study of FT218, Brisebois noted. Results showed that tolerability of the drug over 18 months is consistent with sodium oxybate's safety profile. Further, patients experienced clinically significant improvements in subjective and objective measurements of narcolepsy symptoms.
Oppenheimer has an Outperform rating and a $16 per share price target on Avadel. Its current share price is around $7.32.
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Disclosures for Oppenheimer & Co. Inc., Avadel Pharmaceuticals, Inc. (AVDL), March 18, 2022
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