Shares of Avadel Pharmaceuticals (NASDAQ:AVDL) are down 14% as of 1:29 p.m. EDT today after the Food and Drug Administration said it would need more time than originally thought to review FT218 -- Avadel's candidate to treat narcolepsy.
After accepting a company's approval filing, the FDA provides applicants with a date known as the Prescription Drug User Fee Amendments date -- or PDUFA date. It's intended to give drugmakers insight into the review timeline.
In some instances -- like that of Avadel's FT218 -- the agency misses its target. In this case the PDUFA date was Oct. 15. Although no new date has been given, the FDA did inform the company that no action is likely to be taken in October. Investors clearly weren't expecting the delay. The stock had been up more than 50% in the past three months prior to today's announcement.
To date there have been no red flags. The double-blind, placebo-controlled phase 3 clinical trial for FT218 was completed in March 2020, just as the pandemic took hold in the U.S. The treatment proved effective and safe at all three doses administered. The company still hasn't been notified of any deficiencies in its application, and the FDA has said it will provide a new date as soon as possible.
There may also be some pressure from patients for the agency to act quickly. According to the company, there are about 170,000 people with narcolepsy in the U.S. Avadel's once-at-bedtime treatment may actually outperform an already approved twice-nightly formulation. In addition, eligible patients have ranked the once-per-night dosing as the most important factor in choosing a treatment. That market opportunity should give shareholders some patience as they wait for the FDA's new action date.