June 30 (Reuters) - ASL Strategic Value Fund on Monday

urged shareholders of Avadel Pharmaceuticals ( AVDL ) to replace

its board, citing mismanagement in the rollout of the

drugmaker's flagship sleep disorder drug Lumryz since its launch

two years ago.

The hedge fund said Avadel was unable to convert patients to

its drug Lumryz from its rivals, despite the treatment being

what it called "best-in-class", leaving hundreds of millions in

potential revenue unrealized.

Lumryz, which competes with Jazz Pharmaceuticals' ( JAZZ )

treatments, is approved in the United States to treat certain

symptoms of narcolepsy by using a central nervous system

depressant drug called sodium oxybate.

ASL said "constant mis-steps" with the launch of Lumryz and

miscommunication over the last several years with investors had

destroyed significant shareholder value along with the

management's credibility.

ASL said Avadel should have converted 40% to 50% of sodium

oxybate users within two years of launching Lumryz, an

opportunity that could have generated an additional $600 million

to $800 million in revenue.

"The status quo at Avadel is unacceptable," ASL told

shareholders in its letter. The election for the directors will

be held at the company's annual meeting on July 29.

ASL also asked Avadel to hire an investment bank to monetize

the value in Lumryz, adding that the drug could bring $500

million to $1 billion in revenue if approved for idiopathic

hypersomnia, a condition that causes excessive sleepiness.

The fund holds shares worth about $15 million in Avadel

according to a Wall Street Journal report on Sunday.

Avadel told Reuters on Monday that its board has

"consistently engaged with its largest shareholders and

proactively sought their perspectives". The company said it

remains focused on unlocking the full value of Lumryz in

narcolepsy and in future indications.

Separately, Avadel said the U.S. Court of Appeals for the

District of Columbia Circuit gave a favorable ruling in a suit

brought by Jazz regarding the FDA's approval of Lumryz.

The ruling affirms FDA's decision to state that Lumryz's

once-nightly dosing is clinically superior to other similar

treatments.