Shares of Avadel Pharmaceuticals (AVDL -3.82%) had skyrocketed 33.5% higher at 11:09 a.m. ET on Tuesday. The big jump came after the company issued a statement earlier today about its stock's volatility on Monday, which had led to a temporary trading halt.
Avadel CEO Greg Divis stated, "The company is not aware of any new information, including the ongoing review of the FT218 NDA [New Drug Application], that caused yesterday's share price movement and brief trading halt." He added, "We are advancing our launch preparations, and look forward to bringing this important treatment to people with narcolepsy."
Avadel's shares fell 36% on Monday. The company's only news yesterday was the release of patient questionnaire results from the ongoing open-label Restore clinical study evaluating the long-term safety and tolerability of FT218 in treating narcolepsy.
There really wasn't anything in those interim results that would have caused the biotech stock to plunge. Actually, the sell-off didn't happen until later in the afternoon, while Avadel's announcement of its questionnaire results came on Monday morning.
Based on Divis' public statement, it seems likely that rumors about a potential negative decision from the U.S. Food and Drug Administration (FDA) for FT218 caused Avadel's shares to sink on Monday. However, the company's clarifying comments today put investors at ease.
The FDA originally set a PDUFA date of Oct. 15, 2021, for completing its review of FT218. However, the agency told Avadel last October that it wouldn't meet that deadline. The FDA's review of the regulatory filing for the drug is still ongoing.
Avadel said in its fourth-quarter update in March that the FDA continues to "have no outstanding questions or information requests and do[es] not currently need any additional data." The company -- and its shareholders -- are still playing the waiting game for now.