Avadel Pharma And RTW Investment Royalty Agreement Amounts to A Whopping $75 Million

On Wednesday, March 29, biopharmaceutical company Avadel Pharmaceuticals announced its royalty agreement with RTW Investments amounting to $75 Million to finance the commercialization of LUMRYZ. At the same time, the business postponed the maturity date of its $96.2 million in convertible notes until 2027.

Terms of Agreement

As per Yahoo Finance, the royalty agreement states that RTW would offer up to $75 million in non-dilutive synthetic royalty financing commitment to Avadel in Exchange for tiered rate and cash royalty payments based on LUMRYZ net sales in the United States. Under a set quarterly sales level, RTW will get royalty rates in the low to high single-digit range. Royalty earnings become accessible if certain regulatory and financial milestones are met, along with other typical closing conditions.

By the terms of the convertible note exchange, the remaining $96.2 million of the current $117.4 million in convertible notes, formerly due in October 2023, will now be due on April 1, 2027. Around $21.2 million in existing notes with the same terms will continue to be outstanding once the Exchange closes. With the usual closing criteria met, the Exchange is set to be completed on April 3, 2023.

About LUMRYZ

LUMRYZ is an Avadel miracle. It is an experimental formulation of sodium oxybate that is meant to be administered once at bedtime to treat cataplexy or excessive daytime sleepiness (EDS) in patients with narcolepsy.

The randomized, double-blind, placebo-controlled REST-ON study, a critical Phase 3 trial to evaluate the effectiveness and safety of LUMRYZ in narcolepsy patients, was finished by Avadel in March 2020. 

LUMRYZ’s long-run effects and usability are now being assessed by Avadel in the open-label RESTORE clinical study.

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