Alkermes Buys Avadel for $2.1B, Entering Narcolepsy Market
The deal gives Alkermes control of Lumryz, a once-nightly narcolepsy drug, in a cash-and-contingent-value transaction.
Alkermes plc (Nasdaq: ALKS) has agreed to acquire Avadel Pharmaceuticals plc (Nasdaq: AVDL) in a deal valued at up to $2.1 billion, a strategic move that catapults Alkermes into the specialized sleep medicine market.
The acquisition centers on Avadel's key commercial asset, Lumryz, a once-nightly treatment for narcolepsy that recently gained significant traction after navigating a contentious legal battle with a key rival.
Under the terms of the agreement announced Tuesday, Alkermes will pay Avadel shareholders $18.50 per share in cash upfront. The deal also includes a non-transferable contingent value right (CVR) that could add another $1.50 per share, bringing the total potential consideration to $20.00 per share. The CVR payment is tied to the U.S. Food and Drug Administration (FDA) approving Lumryz for an additional indication, idiopathic hypersomnia, by the end of 2028.
News of the acquisition sent Avadel’s shares up 3.7% to a new 52-week high of $18.52 in midday trading, aligning closely with the immediate cash portion of the offer. Shares of Alkermes dipped by about 0.9% to $31.17, a common reaction for an acquiring company taking on new expenditures and integration risks.
The deal, which has been unanimously approved by the boards of both Dublin-based companies, is expected to close in the first quarter of 2026, pending approval from Avadel shareholders and customary regulatory clearances.
For Alkermes, the acquisition provides an immediate and substantial entry into the lucrative neurology market, specifically for sleep disorders. Alkermes stated the transaction will be immediately accretive to its earnings upon closing. The company gains a commercial-stage, high-growth product in Lumryz, which is approved to treat cataplexy or excessive daytime sleepiness in narcolepsy patients.
"This acquisition is a pivotal step in Alkermes' strategic evolution," said Richard Pops, Chief Executive Officer of Alkermes, in a statement. He noted that the deal accelerates the company's commercial entry into the sleep medicine market and diversifies its portfolio.
The transaction also provides a strategic advantage for Alkermes' own pipeline. The company is developing alixorexton, a late-stage candidate for central disorders of hypersomnolence. Avadel's existing commercial infrastructure for Lumryz is expected to provide a strong foundation for a potential future launch of alixorexton.
Lumryz represents a significant advancement in narcolepsy treatment with its once-at-bedtime dosing schedule. This profile offers a competitive advantage over older treatments that require patients to wake up in the middle of the night for a second dose. The drug's path to market was notably cleared in late 2024 after a U.S. District Court upheld its FDA approval, rejecting a market exclusivity challenge from Jazz Pharmaceuticals.
"This transaction is a compelling outcome for Avadel shareholders and validates the differentiated value of Lumryz," commented Greg Divis, Chief Executive Officer of Avadel Pharmaceuticals. He added that the deal recognizes the company’s strategic execution and commercial capabilities.
With the deal's structure, Alkermes secures a promising revenue stream while offering Avadel investors a clear premium and a future stake in the expanded success of Lumryz. The acquisition marks a significant consolidation in the narcolepsy treatment landscape, positioning Alkermes as a formidable new player.