Avadel Pharmaceuticals announced that it has expanded its sleep medicine portfolio through an exclusive global license agreement with XWPharma for valiloxybate, a GABAB receptor agonist designed to treat sleep disorders including narcolepsy and idiopathic hypersomnia (IH).

What are the Financial Terms and Milestones Tied to the Licensing Deal?

• Under terms of the deal, Avadel will gain global rights to develop, manufacture, and commercialize valiloxybate outside mainland China, Hong Kong, and Macau.
• XWPharma will receive a $20 million upfront payment, up to $30 million in development milestones, up to $155 million in tiered sales milestones, and additional royalties and milestone payments tied to commercial performance.
• Avadel will pay XWPharma 10% of any annual net sales between $750 million and $3.5 billion as performance-based milestones.
• Avadel will also pay tiered royalties from high single digits to mid-teens on net sales, and an additional $10 million for the first US commercial sale of any new indication beyond narcolepsy and IH once FDA-approved.¹

Avadel Expands Oxybate Pipeline

"The addition of valiloxybate, the only once-at-bedtime, salt-free and artificial sweetener-free, extended-release oxybate, into our portfolio further reflects Avadel’s position as a leader in sleep medicine,” said Greg Divis, CEO, Avadel Pharmaceuticals, in a press release. “The broad adoption of Lumryzdemonstrates the transformative benefits that a once-at-bedtime oxybate therapy can bring to patients and their families. As an innovator in the treatment of sleep disorders, we are excited to add valiloxybate to our pipeline.”

Avadel plans to initiate a pharmacokinetic (PK) study later this year, followed by a pivotal PK trial in 2026, leveraging its existing clinical and commercial infrastructure to potentially enable efficient regulatory progression and a streamlined market launch. The company stated that this formulation could enhance patient access and personalization of care, particularly for individuals sensitive to sodium, while maintaining the proven efficacy of oxybate therapy.¹

Partnership Momentum

“We are pleased to enter into this licensing agreement with Avadel, a recognized leader in the clinical and commercial advancement of once-at-bedtime oxybate therapy and the ideal partner to progress valiloxybate to market,” said James Huang, executive chairman, XWPharma, in the press release. “We are excited for the opportunity to offer access to this innovative therapy to a broad population of those living with sleep disorders.”

The partnership adds to Avadel’s momentum in sleep medicine, following the Orphan Drug designation of Lumryz for IH in June. According to the company, Orphan Drug designation was based on the hypothesis that Lumryz’s once-nightly, extended-release dosing could provide a major contribution to patient care compared to existing oxybate therapies, which require middle-of-the-night dosing.²

Strong Financial Performance Supports Expansion

The agreement also comes as Avadel is experiencing strong commercial momentum with Lumryz. In its announcement of Q2 results last month, the company generated $68.1 million in product revenue, up 64% year-over-year, and achieved positive cash flow, with cash and securities increasing by $15 million from the prior quarter.

Patient growth also remained steady, with 3,100 patients on Lumryz compared to 1,900 a year earlier. Building on this performance, Avadel raised its full-year revenue guidance to $265–$275 million and forecast third-quarter revenue of $71–$75 million.³

Expert Perspective

“I am thrilled that Avadel is continuing to advance its mission to improve the lives of those living with hypersomnolence disorders by building on the team’s expertise in innovation and novel drug delivery system development,” said Anne Marie Morse, D.O., Director of Pediatric Neurology at Geisinger Medical Center at Janet Weis Children’s Hospital. “The plans to develop valiloxybate for the treatment of narcolepsy and IH with a once at nighttime medication delivery system grows our ability to reach and personalize care for more individuals living with these conditions.”

References

1. Avadel Pharmaceuticals Strengthens Sleep Medicine Portfolio with Exclusive License of Valiloxybate from XWPharma Ltd. Avadel. September 3, 2025. Accessed September 4, 2025. https://investors.avadel.com/news-releases/news-release-details/avadel-pharmaceuticals-strengthens-sleep-medicine-portfolio
2. Avadel Pharmaceuticals Receives Orphan Drug Designation from FDA for LUMRYZ™ (sodium oxybate) for Extended-Release Oral Suspension for the Treatment of Idiopathic Hypersomnia. Avadel. June 5, 2025. Accessed September 4, 2025. https://investors.avadel.com/news-releases/news-release-details/avadel-pharmaceuticals-receives-orphan-drug-designation-fda
3. Avadel Pharmaceuticals Reports Second Quarter 2025 Financial Results and Raises 2025 Revenue Guidance. GlobeNewswire. August 7, 2025. Accessed September 4, 2025. https://www.globenewswire.com/news-release/2025/08/07/3129068/0/en/Avadel-Pharmaceuticals-Reports-Second-Quarter-2025-Financial-Results-and-Raises-2025-Revenue-Guidance.html?utm_source=chatgpt.com