Avadel Shares Rise as Shareholders Approve Alkermes Takeover
The shareholder vote clears a key hurdle for the $2.1 billion deal, bringing Avadel's narcolepsy drug LUMRYZ a step closer to Alkermes' portfolio.
Avadel Pharmaceuticals (NASDAQ: AVDL) saw its shares gain ground after the company announced Tuesday that its shareholders have voted to approve its proposed acquisition by Alkermes plc (NASDAQ: ALKS).
The approval marks a critical milestone in the merger process, removing a significant uncertainty and advancing the roughly $2.1 billion transaction toward its expected close in the first quarter of 2026. Avadel stock was trading around $21.50 following the news, near its 52-week high of $23.57 and notably above the cash portion of the acquisition offer, signaling investor confidence that the deal will be finalized.
Alkermes first announced its definitive agreement to acquire Avadel on October 22, 2025. The deal is structured to provide Avadel shareholders with $18.50 in cash for each share they hold. Additionally, the agreement includes a non-transferable Contingent Value Right (CVR) that could deliver an extra $1.50 per share. This potential payout is tied to the U.S. Food and Drug Administration (FDA) granting approval for Avadel's flagship drug, LUMRYZ, for an expanded indication in treating idiopathic hypersomnia by the end of 2028.
The strategic centerpiece of the acquisition is LUMRYZ, a once-at-bedtime formulation of sodium oxybate for the treatment of narcolepsy. Its approval and successful launch represent a major competitive entry into a market long dominated by Jazz Pharmaceuticals. For Alkermes, a biopharmaceutical company focused on neuroscience and oncology, the addition of LUMRYZ is a significant strategic move. It immediately diversifies Alkermes' revenue base and strengthens its commercial portfolio in central nervous system (CNS) disorders.
In a regulatory filing announcing the shareholder approval, Avadel confirmed that the final voting results of the special meeting of shareholders satisfied the conditions for the merger to proceed. The transaction remains subject to customary closing conditions, including regulatory approvals.
Alkermes has stated it expects to finance the acquisition using its cash on hand and the issuance of new debt. The deal was presented as being immediately accretive to Alkermes upon closing. For Avadel shareholders, the deal's structure offers immediate cash liquidity at a premium, combined with a potential future upside if LUMRYZ achieves its next major clinical milestone.
Shares of Alkermes were trading slightly down at $29.62 on Tuesday. With a market capitalization of approximately $4.9 billion, a successful integration of Avadel's nearly $2.1 billion market cap operation is a substantial undertaking. However, analysts have set an average price target of $43.69 for ALKS stock, suggesting Wall Street sees long-term value in the company's strategy, including this acquisition.
The path now seems clear for the two Irish-domiciled, U.S.-listed companies to combine, creating a stronger entity in the competitive biopharmaceutical landscape with a sharpened focus on treating complex CNS diseases.