Deal Structure and Strategic Rationale

Under the terms of the agreement, Alkermes will pay $18.50 per share for Avadel, with an additional contingent value right of $1.50 per share if the FDA approves Lumryz for idiopathic hypersomnia by the end of 2028. The total transaction value of up to $2.1 billion represents a 12% premium on Avadel's closing share price on October 21, 2025, and a 38% premium compared to Avadel's weighted average trading price over the past three months.

Richard Pops, CEO of Alkermes, emphasized the strategic importance of the acquisition, stating, "This transaction represents a pivotal step in Alkermes' strategic evolution. With the acquisition of Avadel, we are able to accelerate our commercial entry into the sleep medicine market at a critical inflection point."

The deal is expected to close in the first quarter of 2026, subject to customary closing conditions and regulatory approvals.

Lumryz: A Key Asset in the Narcolepsy Market

Avadel's primary asset, Lumryz, is a once-daily formulation of sodium oxybate approved for the treatment of excessive daytime sleepiness or cataplexy in narcolepsy patients. Since its approval in May 2023, Lumryz has quickly gained traction in the market, challenging Jazz Pharmaceuticals' dominant franchise of Xyrem and Xywav.

Lumryz's once-daily dosing regimen offers a significant advantage over Jazz's twice-nightly dosing requirement, which has contributed to its rapid adoption. In the first half of 2025, Lumryz reported sales of $119 million, with projections for full-year 2025 sales between $265 million and $275 million.

Alkermes CEO Richard Pops noted, "New-patient starts of Lumryz have outpaced [its competitor] by more than 2 to 1 since launch." With an estimated 50,000 patients eligible for oxybate therapies in the U.S. and only 3,100 current Lumryz users, there is significant potential for further growth.

Alkermes' Strategic Positioning in Sleep Disorders

The acquisition of Avadel not only provides Alkermes with an immediate revenue stream but also positions the company strategically for the potential launch of its own narcolepsy candidate, alixorexton. Alkermes recently presented promising phase 2 results for alixorexton at the World Sleep 2025 Congress, highlighting it as the first drug in its class to "demonstrate clinically meaningful and statistically significant impact on wakefulness, cognition and fatigue with once-daily dosing."

Alkermes plans to initiate a phase 3 trial of alixorexton in narcolepsy in the first quarter of 2026. By acquiring Avadel and its commercial infrastructure, Alkermes aims to establish key relationships with sleep centers, physicians, and nurses, as well as gain insights into payment dynamics and patient access journeys well in advance of alixorexton's potential launch.