Avadel and Jazz Pharmaceuticals settle patent litigation for $90 million

Avadel Pharmaceuticals plc (NASDAQ: AVDL) and Jazz Pharmaceuticals Inc. announced a global settlement of all litigation between the companies, according to a press release statement.

Under the agreement, Jazz will pay Avadel $90 million and waive royalty rights on past sales of LUMRYZ through September 30, 2025. Jazz also granted Avadel a perpetual, worldwide license to patents that could be asserted against LUMRYZ for current and future indications.

The settlement allows LUMRYZ to be sold for any future FDA-approved indication beginning no earlier than March 1, 2028. Jazz agreed not to challenge the approvability of LUMRYZ for present and future indications, including idiopathic hypersomnia.

In exchange, Avadel granted Jazz a royalty-free covenant not to sue regarding Avadel's patents in connection with Jazz's Xywav and Xyrem products. Starting October 1, 2025, Avadel will pay Jazz ongoing royalties of 3.85% of net sales of LUMRYZ in narcolepsy through February 18, 2036. Future indications will be subject to a 10% royalty rate beginning March 1, 2028.

LUMRYZ is currently approved by the FDA as a once-at-bedtime treatment for cataplexy or excessive daytime sleepiness in patients seven years and older with narcolepsy. The medication received initial approval in May 2023 for adults and expanded approval in October 2024 for pediatric patients.

The companies dismissed their respective lawsuits with prejudice as part of the settlement. Additional details of the agreement are available in Avadel's 8-K filing with the Securities and Exchange Commission.

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