Alkermes plc increased its bid for Avadel Pharmaceuticals to a total of $2.37 billion, or $22.50 per share. The offer consists of $21.00 in cash and a $1.50 contingent value right (CVR) that will pay an additional $1.50 per share if U.S. FDA approval for LUMRYZ as a treatment for idiopathic hypersomnia is granted by the end of 2028. The new bid surpasses Denmark’s Lundbeck offer of $2.40 billion, which values Avadel at $23.00 per share—$21.00 in cash and a $2.00 CVR that is triggered by sales targets for LUMRYZ and valiloxybate by 2027 and 2030, respectively. The Alkermes bid represents an increase from the original offer announced on October 22, 2025, which valued Avadel at $18.50 per share plus a CVR and totaled roughly $2.10 billion.
The CVR structure is a key differentiator between the two bids. Alkermes’ CVR is tied to a regulatory milestone—FDA approval for LUMRYZ in idiopathic hypersomnia—while Lundbeck’s CVR is linked to commercial sales targets. Avadel’s board concluded that the regulatory trigger offered a more realistic path to additional value, making Alkermes’ terms superior to Lundbeck’s, which were deemed unlikely to be achieved. This assessment underscores the importance of the CVR design in the board’s valuation of the offers.
Strategically, the acquisition expands Alkermes’ sleep‑medicine portfolio and provides immediate access to LUMRYZ, the first once‑at‑bedtime sodium oxybate formulation for narcolepsy. LUMRYZ generated $77.5 million in net product revenue in Q3 2025, a 55% year‑over‑year increase, and Avadel projects 2025 net revenue of $240–$260 million. The deal also gives Alkermes a commercial platform that complements its own orexin‑2 receptor agonist pipeline, positioning the company to become a leader in central disorders of hypersomnolence.
Market reaction to the announcement was swift. Avadel’s shares rose 1.57 % in pre‑market trading on November 19, reflecting investor confidence in the higher valuation and the certainty of the new bid. Alkermes’ shares fell 0.24 % on the same day, a modest dip that analysts attribute to the higher financial commitment required to fund the acquisition. The bidding war has already driven Avadel’s stock higher in recent days, with a 10‑year high reached during the earlier stages of the competition.
Alkermes secured a $1.5 billion bridge loan facility to finance the transaction, ensuring compliance with the Irish Takeover Code and providing liquidity for the deal. The acquisition is expected to close in the first quarter of 2026, pending regulatory and shareholder approvals. The deal represents a significant strategic investment for Alkermes, aligning its growth strategy with a proven product and a robust commercial infrastructure.
The transaction illustrates how a well‑structured CVR and a clear regulatory milestone can tip the balance in a competitive bidding environment, while also highlighting the importance of financing arrangements and market reaction in the valuation of M&A deals.
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