The U.S. Food and Drug Administration (FDA) has expanded the approval of Avadel Pharmaceuticals' sleep disorder drug, Lumryz, to include children aged 7 years and older. This decision broadens the drug's use and intensifies competition with Jazz Pharmaceuticals' treatments. Lumryz, which was initially approved for adults in 2023, is now authorized to treat pediatric patients suffering from cataplexy or excessive daytime sleepiness (EDS), both symptoms of narcolepsy. Narcolepsy is a chronic neurological disorder affecting the brain's ability to regulate sleep and wake cycles, with a significant number of patients also experiencing cataplexy.

Lumryz distinguishes itself from Jazz Pharmaceuticals' Xyrem and Xywav by offering a once-nightly dosing regimen, eliminating the need for a middle-of-the-night dose. This feature is particularly beneficial for families and caregivers of pediatric patients, as it reduces the burden of waking up at night to administer medication. The drug contains sodium oxybate, a central nervous system depressant that increases deep sleep duration. Despite its benefits, Lumryz comes with a boxed warning due to its potential for abuse and misuse and is available only through a restricted program under a Risk Evaluation and Mitigation Strategy (REMS).

The FDA's approval also grants Lumryz orphan-drug exclusivity for pediatric narcolepsy patients until October 2031. Analysts from Jefferies project that the pediatric approval could boost Lumryz's annual sales by $50 to $100 million, adding to the expected peak sales of $550 million to $1 billion. In contrast, Jazz Pharmaceuticals reported $569.7 million in Xyrem sales and $1.27 billion from Xywav last year.

Avadel's shares rose following the announcement, reflecting investor confidence in the drug's expanded market potential. The approval was initially expected in September but was delayed as the FDA continued its review. This expansion marks a significant milestone for Avadel, which has been actively developing transformative treatments for sleep disorders, including a Phase 3 trial for idiopathic hypersomnia.

The approval of Lumryz for pediatric use is supported by data from the Phase 3 REST-ON trial, which demonstrated significant improvements in sleep latency and reductions in cataplexy attacks. The trial's success underscores Lumryz's efficacy and safety, paving the way for its broader application in treating narcolepsy across different age groups.