Alkermes to Acquire Avadel in $2.1B Deal, Expanding Sleep Medicine Portfolio
Alkermes plc has announced plans to acquire Avadel Pharmaceuticals in a deal valued at up to $2.1 billion, marking a significant expansion into the sleep medicine market. The acquisition will bring Avadel's narcolepsy drug Lumryz under Alkermes' fold, providing an immediate revenue boost and laying the groundwork for the potential launch of Alkermes' own narcolepsy candidate, alixorexton.
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 per-share purchase price of $20 represents a 38% premium to Avadel's weighted average trading price over the last three months.
Richard Pops, CEO of Alkermes, described the transaction as "a pivotal step in Alkermes' strategic evolution," emphasizing the accelerated entry into the sleep medicine market. The acquisition is expected to close in the first quarter of 2026, subject to shareholder approval and regulatory clearances.
Lumryz Performance and Market Potential
Lumryz, Avadel's once-daily sodium oxybate formulation for narcolepsy, has shown strong performance since its FDA approval in May 2023. The drug is projected to generate between $265 million and $275 million in net revenues for 2025. As of June 30, approximately 3,100 U.S. patients were receiving Lumryz treatment.
Alkermes sees significant growth potential for Lumryz, with an estimated 50,000 patients eligible for oxybate therapies in the U.S. The company noted that new patient starts for Lumryz have outpaced its competitor by more than 2 to 1 since launch, positioning it as a formidable challenger to Jazz Pharmaceuticals' Xyrem and Xywav franchise.
Alkermes' Sleep Medicine Pipeline
The acquisition strategically aligns with Alkermes' development of alixorexton, a long-acting orexin 2 receptor agonist for narcolepsy and idiopathic hypersomnia. Alkermes recently presented promising Phase 2 results for alixorexton at the World Sleep 2025 Congress, demonstrating clinically meaningful improvements in 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. The company anticipates that the Avadel acquisition will provide valuable commercial infrastructure and market experience to support the potential launch of alixorexton later in the decade.
References
- Alkermes’ up to $2.1B Purchase of Avadel Sets Groundwork for ‘Strategic Evolution’
With Avadel under its fold, Alkermes expects to accelerate its expansion into the sleep market, laying the foundation for its late-stage narcolepsy asset alixorexton.
- Alkermes expands sleep portfolio with acquisition worth up to $2.1B
Analysts called the proposed purchase of Avadel Pharmaceuticals a “clear” strategic fit for Alkermes, handing it an already marketed product for excessive daytime sleepiness.
- Alkermes plots $2.1B acquisition of Avadel and its long-acting narcolepsy drug Lumryz
With plans to pay $2.1 billion to acquire its Dublin, Ireland, neighbor Avadel Pharmaceuticals, Alkermes is hoping to gain an immediate growth driver in narcolepsy drug Lumryz. But perhaps more importantly, the deal lays the groundwork for the potential commercialization of Alkerme's own narcolepsy candidate alixorexton.
Explore Further
What is the competitive landscape of narcolepsy treatments in the U.S., and how does Lumryz compare to Jazz Pharmaceuticals' Xyrem and Xywav?
What are the projected revenue figures for Lumryz beyond 2025, and how does Alkermes plan to scale its market reach?
What are the key efficacy and safety data from Phase 2 clinical trials of Alkermes' alixorexton?
How does the acquisition of Avadel Pharmaceuticals strengthen Alkermes' commercial infrastructure for the launch of alixorexton?
Are there other biopharma companies pursuing similar acquisitions or partnerships in the sleep medicine space?