What happened

Shares of Avadel Pharmaceuticals (AVDL) were up as much as 45.5% for the week as of late Friday afternoon, according to data provided by S&P Global Market Intelligence. The healthcare stock closed at $10.48 a share last week then climbed to as high as $15.78 this Friday. The stock is up more than 114% so far this year.

So what

It was a big week for the company. On Monday, it reported that the Food and Drug Administration (FDA) had approved the company's first product, Lumryz, to treat excessive daytime sleepiness in adults with narcolepsy. The drug, a formulation of sodium oxybate, is the first FDA-approved, once-at-bedtime oxybate for narcolepsy.

Then on Wednesday, the company announced first-quarter earnings where it said it plans an early June launch for Lumryz. The company had no revenue in the quarter and lost $30.8 million, or $0.48 in earnings per share (EPS), compared to a loss of $26.4 million, or $0.45 in EPS loss in the same period last year.

Avadel won a multiyear court battle with Jazz Pharmaceuticals in February to clear the FDA's approval of Lumryz. The decision forced Jazz Pharmaceuticals to delist its '963 patent for narcolepsy drug Xyrem from the FDA's Orange Book.

Now what

The company had $100.9 million in cash as of the end of Q1, and it will put some of that to use in preparing for the launch of its first therapy. It also has a royalty agreement with RTW Investments for up to $75 million to support the commercialization of the therapy. Avadel estimated the once-nightly oxybate market to be worth as much as $3 billion annually.

While it may be a while until the company can turn a profit, its first therapy addresses a fairly large market. A study by Absolute Reports puts the compound annual growth rate of 8.1% for narcolepsy therapies between 2022 and 2028, growing from an $11.6 billion market to a $20 billion market in that period. Narcolepsy is a chronic neurological disorder that affects the brain's ability to control sleep-wake cycles, and it effects 200,000 in the U.S. and 3 million people worldwide, according to the Narcolepsy Network.