Good morning, and thank you for joining us on our conference call to discuss Avadel's First Quarter 2024 Earnings. As a reminder, before we begin, the following presentation includes several matters that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. These risks and uncertainties are described in Avadel's public filings under the Exchange Act included in the Form 10-K for the year ended December 31, 2023, which was filed on February 29, 2024, and subsequent SEC filings.

Except as required by law, Avadel undertakes no obligation to update or revise any forward-looking statements contained in this presentation to reflect new information, future events or otherwise.

On the call today are Greg Davis, Chief Executive Officer; Richard Kim, Chief Commercial Officer; and Tom McHugh, Chief Financial Officer.

At this time, I'll turn the call over to Greg.

Thank you, Austin. Good morning, everyone, and thank you for joining us to review our first quarter 2024 results.

Following my opening remarks, Richard will provide an update on our launch progress, including our key metrics through March 31. Tom will then review our Q1 financial results, and we will conclude with a question-and-answer session.

I'm pleased to report another quarter of strong execution and results of our LUMRYZ launch. We continue to deliver on our ability to reach the narcolepsy community and drive significant quarter-over-quarter growth across our early launch metrics.

Metrics we believe are critical to building a strong foundation for LUMRYZ both in the near term and in the long term.

While our top business priority and focus remain on the launch of LUMRYZ, during Q1, we also made important progress in our efforts to expand our reach into those living with idiopathic hypersomnia, or IH, as well as pediatric patients with narcolepsy, both of whom can possibly benefit from LUMRYZ and if approved for those uses, offers potentially significant incremental value and future growth opportunities for LUMRYZ beyond narcolepsy.

Since launch last summer, our team has begun to deliver on the promise of LUMRYZ in our pursuit of becoming the market leader and achieving preferred oxybate status among patients and providers. Our early robust uptake among patients and physicians provides unequivocal evidence of this progress and of the opportunity based on the clear unmet needs of oxybate eligible patients.

Evidence that has been further solidified by the consistent and compelling patient caregiver and provider feedback we routinely here.

As we now approach our first full year in the market with LUMRYZ, I continue to be impressed by the relentlessness and the results being delivered by the entire Avadel team. It is their collective efforts, contributions and achievements that have established the initial foundation for LUMRYZ, which we believe positions us very well to achieve our future aspiration and expectation of achieving market leadership.

Underscoring the results we announced this morning, since the launch of LUMRYZ, greater than 2,800 patients have enrolled into Avadel's RYZUP Patient Support Services program in greater than 1,700 cumulative patients have initiated LUMRYZ therapy. In addition, in Q1 of this year, we generated $27.2 million of net revenue.

The results we achieved continued to show the strength and the opportunity of LUMRYZs' position in the evolving narcolepsy treatment landscape.

Now as a team, we are laser focused on the launch of LUMRYZ and ensuring we continue to deliver on the promise of LUMRYZ to the narcolepsy community. And we are well positioned to continue advancing the launch and driving growth for LUMRYZ in narcolepsy and beyond.

In this regard, our launch focus and priorities are very clear, we are also in parallel beginning to make real progress on specific future growth opportunities we believe can deliver additional long-term value for patients, for the company and our shareholders. Our first near-term opportunity is our potential expansion into the pediatric narcolepsy population, which represents approximately 5% of all oxybate treated narcolepsy patients.

Our supplemental new drug application for LUMRYZ has been accepted by the FDA and a target action date is set for September 7. We believe LUMRYZ if approved for this use has the potential to address both patient and caregivers unmet needs while potentially offering a transformational treatment option for pediatric patients and their families.

We look forward to hearing the FDA's decision later this year.

Next, as we have previously shared, we are evaluating LUMRYZ's use for the treatment of IH. During Q1, we've made significant progress on our readiness to initiate a pivotal Phase III trial for IH in the second half of this calendar year.

Similar to pediatric narcolepsy, we have heard from many experts in the field that there is a clear and compelling need for once-at-bedtime LUMRYZ for those suffering from IH due to the associated deep sleep inertia, making it extremely difficult for some patients to even wake up for their second dose of an immediate release oxybate.

We are currently on track to dose our first patient in the second half of this year and plan to provide additional details at that time. Additionally, we are progressing the preclinical development of a potential no or low sodium once-at-bedtime oxybate formulation with a target product profile that is bioequivalent to LUMRYZ.

For this program, we currently expect to provide updates by the end of 2024.

In summary, we have a number of opportunities to continue to build our leadership in the sleep space and most importantly, positively impact even more patients. These opportunities will continue to be supported by our launch execution for LUMRYZ in narcolepsy, which has created a strong foundation for continued growth.

And with that, I'll turn the call over to Richard for details on our commercial progress. Richard?

Thanks, Greg, and good morning, everyone. As Greg commented, our LUMRYZ launch has been off to a strong start this year.

And today, I'm excited to provide some additional context into the encouraging trends we're seeing. We continue to build on the momentum generated since launching LUMRYZ and have made strong progress during the first quarter.

Our team's commitment to bring our much-needed therapy to the narcolepsy community has allowed us to build a strong foundation, and we believe we are well positioned to see continued growth throughout the year.

Now turning to our key launch KPIs. We had more than 2,800 patients enrolled in RYZUP program at the end of March, which demonstrates a nearly 50% increase since the end of December.

Additionally, 1,700 patients initiated therapy as of the end of Q1, representing a greater than 70% increase in cumulative patients who initiated therapy since the end of 2023. Since our launch last June, we continue to build strong and steady positive demand for LUMRYZ.

Looking more closely at the patient segment dynamics. We continue to see patients initiating therapy with LUMRYZ from all 3 patient segments.

Now in comparison to last year, where the majority of patients were switched patients, this year, we are seeing -- beginning to see a more balanced ratio with roughly 50% coming from switches and the other 50% from discontinued and naive patients. Another differentiator from last quarter is that we're seeing a growing number of naive patients on therapy, which signals that LUMRYZ's value proposition is compelling to patients who have not previously been on an oxybate.

Moving to HCPs. More than 2,100 HCPs have completed the REMS certification as of March 31, an increase of more than 300 since the end of December, including those who are experienced oxybate prescribers, and some who previous to LUMRYZ had not written for an oxybate.

As a reminder, there are more than 4,500 HCPs who make up the entire oxybate prescribing universe. And our field teams have been focusing their initial efforts on the 1,600 high-volume oxybate prescribers who represent 80% of the total prescription volume.

For the top 500 prescribers who make up 50% of the total oxybate prescription volume, now 80% of these HCPs have written for LUMRYZ, up from 64% at the end of December.

Gaining the use in the highest volume oxybate prescribers has been a key part of our launch strategy, and we are pleased with the progress we are making with these HCPs. Additionally, we reached an important milestone last month when we introduced our first LUMRYZ patient ambassadors to the narcolepsy community.

Katy, Tyler and Wendy, our amazing people with narcolepsy who want to share their personal journeys and how being treated with LUMRYZ has changed their lives. Our market research continues to show the importance of the patient voice in the narcolepsy treatment journey as patients often receive the therapy, they asked their HCP for.

With the LUMRYZ patient voice now activated, we are unlocking another opportunity to drive the LUMRYZ conversation in HCP offices.

Transitioning to product fulfillment, our overall reimbursement process continues to improve with over 700 new starts in the first quarter. We have seen through a combination of our strong payer coverage and the growing experience with HCP offices that we are getting more patients initiated on therapy, and we continue to see good early signs of persistency with LUMRYZ when compared to twice-nightly oxybate.

Lastly, on the payer front, we have payer coverage policies in place with the 3 largest PBM-owned GPOs. Additionally, we recently gained coverage with a large PBM group, Prime Therapeutics taking overall commercially covered lives to about 85%.

Overall, we exited Q1 with growing momentum, and we are thrilled to see the results of our team's relentlessness and dedication to the narcolepsy community, materialize and grow quarter-over-quarter. We believe LUMRYZ is positioned for long-term growth and is on track to becoming the preferred oxybate for the narcolepsy community.

And now I'll turn the call over to Tom to discuss our financials. Tom?

Thank you, Richard. Good morning, everyone.

And before I begin, I'll note that full financial results are available in the press release issued this morning and in the 10-Q. We are pleased to report that we generated $27.2 million net revenue and gross profit of $25.7 million for the quarter ending March 31, 2024.

And additionally, as of March 31, there was approximately 1 month of demand in the channel, which is consistent with prior quarters.

Turning to operating expenses. We reported a total of $51.7 million of GAAP operating expenses for the first quarter of 2024 compared to $28.3 million in the prior year.

The increase in year-over-year operating expenses is primarily attributable to launch-related costs and higher compensation and legal costs. GAAP operating expenses in the first quarter of 2024 includes $6.5 million of noncash charges comprised of stock-based compensation of $5.4 million and depreciation and amortization of $1.1 million.

After adjusting for these items, cash operating expenses were approximately $45 million for the quarter. This is at the upper end of our previously communicated guidance of $40 million to $45 million of quarterly cash operating expenses and is due primarily to higher legal costs related to the patent trial that took place at the end of February.

For the remainder of 2024, we expect that recurring quarterly cash operating expenses will be in the range of $40 million to $45 million, and noncash operating expenses will be in the range of $5 million to $7 million. We believe that net cash used for operations will be materially lower after taking into account expected cash receipts from continued LUMRYZ sales.

With respect to the balance sheet, as of March 31, we had approximately $89 million of cash, cash equivalents and marketable securities compared to $105 million as of December 31, 2023. With our current plans and assumptions, we maintain that we can achieve breakeven when there are approximately 1,300 to 1,500 commercially reimbursed patients and that we can achieve this milestone during 2024.

In addition to the number of reimbursed patients on therapy, our expectations regarding the timing of achieving breakeven, taking into account a number of other assumptions, including how quickly patient demand grows, net pricing LUMRYZ and operating expenses.

Closing out today's financial updates, we pay close attention to the sell-side estimates and at this time, we are comfortable with current consensus of approximately $162 million for the full year including the possibility that 2024 revenue could be higher if actual results such as the rate of increase in reimbursed patients, the total number of reimbursed patients who are treated with LUMRYZ and net pricing outperform the assumptions currently used by the sell side.

With that, I'll turn the call back to Greg for closing remarks.

Thank you, Tom. With our LUMRYZ launch well positioned for continued growth this year and our meaningful expansion opportunities in the sleep space, the value we are creating today is laying a strong foundation for the long term.

We thank you, as always, for your support and look forward to providing future updates on our progress.

And with that, we will open the call for questions. I'll turn it over to the operator.

Congrats on the progress and the slope of the curve and such. My question is around the patient additions in treated patients this quarter, seemingly grew faster than the actual sales number.

So can you help us reconcile the reported sales number? Was it driven more by onetime headwinds like higher gross to net or maybe even free drug use?

Or was it more driven by "permanent patient discontinuation rates increasing?"

Richard, do you want to start with that?

Yes. Thanks for the question, Andrew.

Yes. So I think overall, to your point, we're very pleased with our early launch metrics, having another 900 patient adds in to RYZUP in 700 patient initiations.

At this stage of the launch, the most important thing we really focused in on is getting patients on therapy, a, for that patient experience and b, to get ACP offices used to prescribing and hearing those patient experiences as well. So that's really been our focus.

To your point, there are some headwinds that we experienced as an industry in Q1 with higher deductibles and other things that impact our co-pay. So we expect those to have settled down.

And maybe one last comment on your discontinuation rates. We're pleased with our early discontinuation rates that we see.

They are numerically lower than what we see historically with the price net lease.

So I'll turn this around -- once again, we're really pleased with our early launch KPIs and maybe I'll turn it over to Greg to add some more color.

Yes. I think that for us, most important for us is patient initiations and getting and keeping people on therapy.

And I think the team has done an excellent job in that regard to the launch. And from a persistency standpoint, I think we remain really bullish on how that will translate to revenue over time.

So I was just wondering, in terms of RYZUP, that metric, do you ever see -- I know it just for to know exactly how quickly patients move from RYZUP to on therapy. But are there cases where they just -- they do not.

They enter RYZUP and they never get the therapy? If so, what would be the reasons for that?

Richard, can you please take that.

Yes, sure. I'll take that, Greg.

Yes. So great question, Frank.

Yes, as far as RYZUP is concerned and I would say any new therapy that comes to marketplace. There are patients who "abandoned the process along so that they do not ever get to initiate therapy".

That's -- we're not immune to that either. That embedment rate for us is very low and has stayed relatively consistently low throughout our entire launch.

So we've seen very good sticktoitiveness. And Frank, it's the same reasons for almost any product.

Sometimes the patients lose interest, it could be insurance, it could be something else has come up in their life. We don't really get all out all of those details.

But once again, our abandonment rate has been relatively low for patients entering RYZUP.

And then in terms of the pediatric endpoint, you mentioned 5% of the population, but how often do these patients once they're on something that seems to work. Obviously, there's discontinuation.

We're going to follow that with time to see if it's better with you guys. It seems like it's trending well.

But that 5% pediatric population, do you guys see that as much bigger than 5% kind of as a read-through where if these -- obviously, it takes a lot of time to diagnose, but if the diagnosis gets quicker, you get pediatrics and then they probably don't want to change what they're on when they become adults. Is there any upside to that 5%?

Well, I think we agree with all of your thoughts, Frank, from that perspective. We think that the actual market opportunity is likely -- from a pediatric perspective is likely materially larger than what's actually being treated today, predominantly because the condition is really a condition of adolescents, right, where initial symptoms predominantly present earlier in life.

Your comment about the time to proper diagnosis is a major challenge and has been for quite some time from that perspective.

So we do think the total opportunity is actually larger than what the actual treated pool is today, no different than how we think about adults. So for us, I think the opportunity to bring something new that doesn't disrupt the entire family, we think offers opportunity both for currently treated and potentially patients who aren't being treated today.

Okay. Great.

And in terms of IH, it seems intuitive if these patients need to sleep and are still restless, are you getting a lot of feedback that waking up in the middle of night is a problem? Or is it not a big deal for these patients?

Richard, do you want to comment on that?

Yes. I think for IH, it really comes down to more of the sleep inertia.

A lot of these folks just have sleep inertia where they're just unable to wake up during the middle of the night to take a second dose. So that's really the key area of feedback and research that we hear about is oxybates are very effective.

But if you can't wake up to take a second dose, you're getting a subtherapeutic dose.

Congrats on all the progress. I had a couple of questions just around LUMRYZ.

Can you sort of quantify what are the net number of patients on treatment currently. And with regards to net price, how has that progressed in first quarter and as you comment on your confidence in being able to achieve or potentially beat where the consensus stands today, what are the assumptions you're making with regards to net price evolution through the course of the year?

Richard, do you want to take the first? And Tom, the second?

Yes. Sure.

I mean -- yes, thanks, Ami, right now, we're really clearly focused on our early launch metrics. There's a lot of dynamics that are going on here.

And at this stage at a time, we really believe that RYZUP enrollment in patients who have initiated therapy are really the right view to look at things. We're going to continue to look at these metrics.

And in the future, we will be transitioning to other metrics like patients who are actually on therapy at this time as well. There's a lot of dynamics at this stage of the launch, but we do tend to shift to that in the future.

Yes. Ami, it's Tom.

So with respect to the second part of your question on net pricing, we've consistently pointed to an expectation that on average, patients will generate about $120,000 of net revenue per year. I will share with you, we're at that point now.

The expectation has always been that when we have more patients continuing on therapy. As Richard just noted, the new patients coming in would represent the tipping point, as I've called in the past.

The other thing that can effect net pricing, one of them is certainly compliance. It's in where patient took every -- dose everyday of the year and net revenue goes up, of course.

But that's certainly one of the variables. And the other is the gross to net themselves, which as we commented earlier, there were some -- we're not unique in that regard.

Gross to net is a percentage of net revenues -- as a percentage of revenues go up during Q1, that tends to settle down over the course of the rest of the year.

Yes. The only comment I'll -- add Ami, if I may.

The only comment I'll add generally on metrics and KPIs. I think we've got our eyes set that as the launch continues to mature a little bit, and some of these variables get a little bit more mature that really drive and ultimately result in kind of net average patients or net exit patients on therapy that we will transition to that during the course of this year.

What our intention is to do that and have an overlapping quarter where we continue with the same metrics and add in patients on therapy. And then ultimately, I think where we'll net out over time is just patients on therapy.

Got it. If I may ask one more question.

As I think about the total number of patient adds to RYZUP over the last couple of quarters, it seems that you're continuing to see growth in average monthly patient adds per quarter over the last 3 quarters for which we have the data. Can you just talk about sort of the momentum as you see progressing through the course of the year?

I'm sort of seeing kind of an increase by 100 new patient adds per quarter in addition to sort of the previous quarter. And I'm just sort of trying to understand how should we be modeling that trend as we go through 2024?

Richard, do you want to comment?

Yes. No, it's a great observation.

I think, Ami, first, we're just very pleased with the strong and steady positive growth we've seen with LUMRYZ and really just the feedback that we've heard from offices. Over the last couple of quarters, we've sort of been commenting on the net sort of over 900 patient adds into price up.

It's hard to predict exactly where this is going forward. But we're only reporting on our third quarter a full launch.

And we think steady positive growth is a good and positive thing. So that trend of those 900-ish adds every quarter we'd like to continue that trend at a minimum going forward.

Just have a couple of questions. So -- and I apologize if I missed these, if you mentioned these details.

Can you talk to the percentage of LUMRYZ patients who have actually been on Xywav, that's number one.

Number two, can you talk to the lag time between enrollment and RYZUP and initiation of therapy and how that lag time differs between patients who have access and patients who don't have access or don't have good access. So that's the second question.

And then the last question is on idiopathic hypersomnia. Is it fair to assume that, that's going to be a randomized withdrawal design similar to the registration study that Jazz were in for Xywav?

Thanks, David. Richard, maybe you take the first 2.

Yes, sure. No problem.

Thanks, David. So as far as the percentage of the Xywav patients, so the majority of our uptick launch through date right now, the majority of our enrollments and patients initiated are patients who have switched from twice-nightly oxybate and the majority of those are Xywav patients.

So if you take more than 50% of overall enrollment, and more than 50% of those, it's somewhere north of 25% to 30% of the patients who have switched from Xywav.

And if you look overall as far as the lag time or the timing to get that initiation through RYZUP for the enrollment into a patient started. To your point, it is very different for the 2 groups, those who are covered in essence, meet all the prior authorization criteria.

Those are averaging still right about 30 days, about a month for us to get those initiated. And those without coverage are much longer are being measured in months.

Several we can still get through in a shorter period of time. The range is quite large.

But if you don't have a coverage policy, those when stuff we take as -- those time lines are measured in months and definitely not in weeks.

Greg, I guess, I'll turn it over back to you for IH.

Yes. I think Dave, we haven't said explicitly with the trial design as yet.

That will become public certainly over the summer as it gets posted on clinicaltrials.gov and whatnot. But what I will say is that there's been a handful of companies who have done studies in this area with full support of FDA.

We'll obviously engaged with FDA on this process. And I think it's fair to say that those proxies are good proxies for how our trial will -- what our trial design look like as we go forward.

Two questions. First, what's your sense of how many patients are actually on oxybate this past quarter, just in total between all the companies involved?

And second of all, can you just give us an update on the litigation that's still outstanding?

Richard, do you want to answer the first one to the cost of our ability.

Sure. Yes.

It's a great question, Marc. The data is becoming a little more fragmented across the different oxybates as we go forward right now.

So I can't say we have a perfect answer for you today. But what we can say is we definitely see growth in segments that were really not there prior to LUMRYZ coming in the marketplace.

A couple of notable ones are in patients who had previously discontinued twice-nightly oxybates who are now on LUMRYZ. And also that we have people -- HCPs writing for LUMRYZ who had never written for an oxybate previously as well.

So we are definitely piecing those numbers together through our claims and reports from other oxybate companies. And our overall view is the market is growing.

It's just hard for us to give you an exact number at this stage, but we're definitely working on that.

Yes. And regarding the litigation, I'll just describe it this way, kind of generally, right?

There's a couple of near-term hearings upcoming. The APA hearing in terms of the suit against FDA is scheduled for this Friday at 2:00 p.m.

in the D.C. Federal Court.

As noted previously, we intervened alongside FDA and the Department of Justice. And we'll make our own arguments in support of the government this Friday.

So that's the APA status. In terms of the Delaware Patent Litigation, obviously, we had the ruling a couple of months back on -- from the jury and the royalties and whatnot.

The next stop there is a hearing on June 4. And that's along this process in Delaware.

So we'll be glad to get those 2 hearings behind us and continue to move forward with our launch and outside of those comments, there probably isn't much else to say right now in terms of what's near term on the litigation.

Sorry I'm joining a little bit late, so maybe if something is repeated, let me know. On this first question, like, can you clarify like on this 1Q pricing or inventory dynamics of what you saw with LUMRYZ?

It seems the patient adds were pretty encouraging, but the revenue came in a little bit lighter versus how the patient numbers are. And then secondly, so Jazz noted on their first quarter call that there are some of these patients that came off Xyrem because it's not in formularies.

And for those patients who are in transition, do you think LUMRYZ can be an attractive option now. How much of these patients do you think you stand to benefit from during this year?

Thanks, Ash. Tom, can you take pricing and inventory?

And maybe, Richard, you can take the other comment.

Ash, I'd say that pricing inventory came in as we expected it to. I commented on an earlier question that average net revenue per patient, we're currently annualizing to about $120,000 per year.

The inventory in the channel has consistently been at about a month, and that's going back to when we first launched. So really no surprises there relative to revenue.

Yes. And as far as the changes in formulary, yes, there clearly were several changes in formulary in many cases where the branded twice-nightly sodium oxybate and/or the AG were no longer being covered.

So those patients have definitely been a focal point for us, and they've been going on for a while. So we definitely see that as a unique opportunity going forward here with some of the payers as well for LUMRYZ.

I just want to build on others. We've heard from piecing together Jazz and your commentary today, it does seem clear that you are seeing market growth now that you're driving some market growth from where the market was before you entered.

And I'm just wondering going forward, now you're at a 50-50 mix, where do you see that playing out in mix as you go forward? Because I'm seeing Xyrem is highly eroded now, right?

And a lot of those patients have moved to both the AG and Xywav both and your product. Do you need to take patients away from Xywav to meet your targets?

Or are you feeling like through this year, your comfort versus estimates rest on your opportunities in other buckets?

Richard, do you have any -- maybe opening comments on it?

Yes. Oren, it's a great perspective.

So first, we're just very pleased to sort of see continued demand for all 3 patient segments, the switches, the previously discontinued and naives. Going forward, we anticipate to still have robust representation from all 3 segments.

And as we talked before, so yes, there was a little bit of an increase in naive patients. But the proposition for switch patients is as strong as it's ever been.

If they've been on a twice-nightly sodium oxybate or a twice-nightly mixed salt version. So we do anticipate demand coming from all 3 patient segments going forward.

The composition may switch a little bit over time here, but we do definitely anticipate all 3 segments being represented for the rest of this year.

Okay. And I was hoping on and off the call, so I apologize if I misheard, but I thought I heard you say 700 patient starts in the quarter.

I wasn't -- if I heard correctly, I don't believe that's a metric you've given us in the past. Is that -- does that mean new patients initiated on paid therapy?

And do we know what that 700 on top of what before, I'm trying to see if we can piece together a patient on therapy number that's initial.

Richard, do you want to clarify?

Yes, Yes. Oren, so just to be very clear, we had announced that we had over 1,700 patients initiated cumulatively through the end of the first quarter.

We were at about 1,000 at the end of Q4. So that's -- in Q1 additional 700 over patient initiations that occurred in Q1.

So just to clarify. So this is the same metric that we've given before.

So it's just sort of taking the 1,700 and subtracting how we ended up in 2023.

A lot has been asked, maybe just a couple around the edges here. Now that we have more patients from the naive and previously discontinued groups on drug, if we think about persistency specifically in these groups on LUMRYZ or trends in the larger population of people -- patients on drug, now that they're a bigger portion of your patients have trends and discontinuations at the one kind of 2-month time frame ticked up at all from these patients as they become a larger part of the mix.

Basically, is there a higher level of discontinuation with these 2 patient populations?

Yes, Richard?

Yes, thanks for the question, Chase. Yes.

No, overall, our discontinuation rate across all 3 segments is very strong. And if we look at our overall composition, it is lower than what we saw traditionally for twice-nightly oxybates.

For the naive and the discontinued like it was really just this quarter where they sort of stepped up in the representation. We are seeing slightly lower rates compared to the switch patients, but not meaningfully lower.

So it's still relatively early on. So we're going to definitely watch those trends.

So as I mentioned, it's lower, but what we had sort of articulate is not meaningfully lower at this stage.

Awful color. And then maybe another one for you, Richard.

As we think about the pediatric opportunity. Obviously, Medicaid is a very important payer there.

Can you update us on how coverage looks for LUMRYZ with Medicaid generally today? I know it's likely to be different state to state, but just general color there.

Yes. We are going through the process, Chase.

And Medicaid, as you know, takes a very, very, very long time. So we haven't really had a significant amount of Medicaid usage come through at this stage.

And we'll provide more updates as we make more progress there. We also do have other assistance programs if patients are covered through our patient assistance.

But at this stage right now, we've got -- we're still early in the process as far as getting our Medicaid coverage.

Got it. And then 85% commercially covered lives plus there is an impressive number.

Maybe anywhere else that you're hearing from physicians as far as kind of key sticking points as far as coverage goes as far as making this -- where you can kind of block and tackle from here to make this an easier -- the easiest as possible kind of writing experience for them? And then just lastly, as far as any impact from change, the change in disruption cyber attack on the quarter.

Did we see any change in fill rates there? Was that kind of part of what it might have affected the quarter?

Yes, sure. So as far as the -- to your point, Chase, we're really pleased with our commercial coverage.

The team has done an excellent job in securing those nearly 85% commercial covered lives. And I would say, in general, we're sort of in the same situation now with other established products where there's just always going to be some bumps on roads for some patients going through.

Now it's have the patients met all the PA criteria and those sorts of things, even though that they're covered. So we have an outstanding field reimbursement team that's there to actually help walk offices through every step.

And our goal is to really help sort of guide every new patient initiation through with our field reimbursement team to make it as easy as possible for the offices. And as far as your change health common is concerned, thus far, we have not seen any meaningful impact to any of our fill rates being impacted by them.

Congrats on the quarter. I was just wondering if you could provide a little more detail in terms of the distribution of patients initiating therapy.

I understand 50% is both discontinued in naive, but can you provide a further breakdown of those 2 segments?

Yes. Sure, Myriam.

Thanks for the question. So yes, as we said, sort of we've seen -- if we look at the overall gestalt of all of our patients thus far, the majority are switch patients Q1 was where we sort of saw more of a balance between the switches and the discontinued/naive.

And of those discontinued naive, they're moderately balanced, but there definitely has been growth almost quarter-over-quarter for the Naive segment within that other bucket. So it's a little bit more balanced in Q1, and we'll sort of see where the trend is going forward, but it's been nice to see the naive segment start to tick up here over time.

Okay. Got it.

And in terms of the IH opportunity, are there any important differences between IH and narcolepsy patients when it comes to cardiovascular risk or any relevant comorbidities when it comes to sodium intake?

Richard, do you have any general thoughts?

Sure. I'm sorry about that, Greg.

Yes, in general, no. These are still generally younger patients, less of a Medicare population overall.

So a general statement, it would be not really that we see from our data.

Congrats on the quarterly results. Given your success in terms of adding prior Xywav patients to LUMRYZ, how important is it to have a low sodium offering in the market.

And I guess second part of that question is how difficult will it be to create a low sodium bioequivalent LUMRYZ?

Yes. I think our view has been very consistent on this topic from the beginning, which is that we think all patients should have the opportunity to have an uninterrupted night sleep.

And for the subset of patients who are at risk for sodium, if we have the ability to formulate and develop and bring that opportunity, to the marketplace, then we're certainly going to do the work to try to accomplish that.

So from our perspective, it isn't a requirement to have a successful once-nightly LUMRYZ franchise because we do believe that data on sodium speaks for itself. That being said, we certainly know there's patients out there who could benefit from both a lower sodium version and once-at-bedtime LUMRYZ.

So therefore, we're doing the work. In terms of the difficulty of it, it's a formulation challenge in and of itself, given how the active moiety performs in this sort of situation, but we certainly have our best and brightest working with our third-party partners on this, and we look forward to giving you an update later this year.

Thank you. And most importantly, thank you, everyone, for joining us today.

Thank you for your time, and we wish you a great day, and we look forward to future updates and any follow-up during the course of today and over the next couple of weeks. Have a great day.

Thank you.