Alkermes Sweetens Deal to Acquire Avadel, Outbidding Lundbeck in Pharmaceutical Industry Shake-up

In a dramatic turn of events in the pharmaceutical industry, Alkermes has increased its offer to acquire Avadel Pharmaceuticals, outmaneuvering a surprise bid from Lundbeck. The intensifying acquisition battle highlights the growing importance of sleep disorder treatments in the pharmaceutical landscape.

Alkermes Raises Bid in Response to Lundbeck's Surprise Offer

Alkermes has amended its initial proposal to acquire Avadel Pharmaceuticals, offering up to $22.50 per share in a deal that could value Avadel at $2.37 billion. This improved offer comes in response to Lundbeck's unexpected bid last week, which had temporarily disrupted Alkermes' plans.

The new deal structure from Alkermes includes $21 per Avadel share in cash, with an additional $1.50 per share contingent value right (CVR) tied to the potential FDA approval of Avadel's narcolepsy drug Lumryz for idiopathic hypersomnia by the end of 2028. Both companies' boards have approved the amended agreement, with the acquisition now expected to close in the first quarter of 2026.

Strategic Implications for the Sleep Disorder Market

Alkermes' pursuit of Avadel underscores the Dublin-based company's ambition to establish a foothold in the lucrative sleep disorder market. Avadel's narcolepsy drug Lumryz is projected to generate sales between $265 million and $275 million this year, providing Alkermes with an immediate revenue boost upon acquisition.

The acquisition also aligns with Alkermes' development plans for its own sleep disorder asset, alixorexton. The company intends to leverage Lumryz's market position to pave the way for alixorexton's potential future launch, with a phase 3 trial in narcolepsy scheduled to commence in the first quarter of next year.

Lundbeck's Bid and Industry Dynamics

Lundbeck's intervention in the Alkermes-Avadel deal reflects the Danish drugmaker's ongoing strategic shift. As part of its "Focused Innovator" strategy, Lundbeck is transitioning to a partnership model in Europe and beyond, aiming to concentrate on higher-value, innovative drug products, particularly its medications Vyepti and Rexulti.

While Lundbeck's offer initially appeared more attractive, valuing Avadel at up to $23 per share, Avadel's board ultimately determined that the terms of Alkermes' increased offer, particularly the structure of the CVR, were superior to Lundbeck's proposal.

This acquisition battle follows closely on the heels of another recent bidding war in the pharmaceutical industry, where Pfizer and Novo Nordisk vied for control of obesity biotech Metsera. These events underscore the intensifying competition for assets in high-growth therapeutic areas and the industry's ongoing consolidation trends.