Alkermes plc (NASDAQ: ALKS) has increased its acquisition offer for Avadel Pharmaceuticals plc (NASDAQ: AVDL) in a strategic countermove that aims to outmatch a competing proposal from H. Lundbeck A/S. The revised transaction, announced on November 19, 2025, values Avadel at up to $2.37 billion and includes an enhanced contingent value right (CVR) linked to future regulatory milestones for LUMRYZ, Avadel’s once-at-bedtime oxybate therapy.
Under the new terms, Alkermes will offer $21.00 per share in cash and one non-transferable CVR per share, with the CVR entitling Avadel shareholders to an additional $1.50 if the U.S. Food and Drug Administration grants final approval for LUMRYZ in idiopathic hypersomnia by the end of 2028. The enhanced structure was enough to persuade Avadel’s board of directors to declare that the rival bid from Danish pharmaceutical firm H. Lundbeck A/S no longer qualified as a superior proposal under the acquisition agreement.
The transaction, which has received board-level approval from both Alkermes and Avadel, is expected to close in the first quarter of 2026, subject to regulatory approvals and standard closing conditions.
Why Alkermes’ CVR tipped the balance in its favor over Lundbeck’s bid
The defining factor in Avadel’s rejection of Lundbeck’s proposal was the design and perceived achievability of the contingent value right component. Although both offers included the same upfront cash of $21.00 per share, Avadel’s board determined that the terms offered by Alkermes for the CVR were more favorable. The board assessed the probability of payment under Alkermes’ CVR as materially higher compared to the less certain terms included in the CVR proposed by Lundbeck.
This decision followed a detailed review with external legal and financial advisors, including Goodwin Procter LLP and Arthur Cox LLP. Avadel initially announced on November 14, 2025, that it had received an unsolicited proposal from Lundbeck which it believed could represent a superior offer. However, after Alkermes submitted a revised proposal on November 18, Avadel’s board determined that Alkermes’ enhanced bid offered a more reliable outcome for shareholders, leading to the withdrawal of its earlier “superior proposal” designation.
What are the financial terms and FDA milestone details included in the amended deal
The revised transaction agreement between Alkermes and Avadel includes a base consideration of $21.00 in cash per Avadel share and a CVR that could provide an additional $1.50. The CVR will be payable if the U.S. Food and Drug Administration grants final approval for LUMRYZ for the treatment of idiopathic hypersomnia in adults by the end of 2028. This adds a second potential indication to the drug’s existing approval for narcolepsy, significantly expanding the commercial potential of Avadel’s lead asset.
The full CVR terms are outlined in an agreement that will be included in upcoming Form 8-K filings with the U.S. Securities and Exchange Commission. Avadel is also expected to file a definitive proxy statement detailing the revised offer, which will be available to shareholders ahead of a formal vote on the transaction.
J.P. Morgan is serving as exclusive financial advisor to Alkermes, while Paul, Weiss, Rifkind, Wharton & Garrison LLP and McCann FitzGerald LLP are serving as legal counsel. Alkermes has secured fully committed financing to support the transaction, with Cleary Gottlieb Steen & Hamilton LLP advising on the funding structure. On Avadel’s side, financial advisory is being led by Morgan Stanley and Goldman Sachs, with legal counsel from Goodwin Procter LLP and Arthur Cox LLP.
How LUMRYZ strengthens Alkermes’ neuroscience-focused commercial strategy
Alkermes is positioning the acquisition as a strategic extension of its central nervous system product portfolio. The addition of LUMRYZ, an FDA-approved extended-release oxybate therapy, supports Alkermes’ expansion into sleep-related disorders. The drug, already indicated for narcolepsy in patients aged seven and older, represents a logical adjacency to Alkermes’ commercial assets in schizophrenia, bipolar I disorder, and substance use disorders.
By acquiring Avadel, Alkermes secures both a revenue-generating asset and a platform for potential label expansion into idiopathic hypersomnia, a condition that remains underserved despite increasing diagnostic awareness. Analysts tracking Alkermes believe the deal aligns with the firm’s recent pivot toward higher-margin specialty assets, particularly those with near-term market expansion potential.
The biopharmaceutical firm is also expected to benefit from Avadel’s commercial infrastructure and R&D capabilities, which are already aligned with Alkermes’ therapeutic focus.
Why Lundbeck’s unsolicited bid ultimately fell short despite matching the cash value
H. Lundbeck A/S entered the picture on November 14 with a proposal that equaled Alkermes’ $21.00 per share cash offer but introduced its own version of a CVR. Initially, Avadel’s board announced that Lundbeck’s proposal met the definition of a “Company Superior Proposal” under the terms of the original October agreement with Alkermes. This triggered a mandatory negotiation window in which Avadel was required to engage with Alkermes in good faith for at least five business days.
Alkermes responded promptly on November 18 with a revised proposal that included the now-superior CVR terms. After further consultation with its advisors, Avadel’s board determined that the revised Alkermes offer provided greater overall value and certainty for shareholders.
As a result, the board concluded that the Lundbeck bid no longer constituted a superior proposal, and Avadel reaffirmed its recommendation to accept the Alkermes offer.
What are the next steps in the transaction timeline and shareholder process
The acquisition is still subject to regulatory clearance and shareholder approval. Alkermes and Avadel have amended their original transaction agreement to reflect the new CVR terms and extended the end date for deal closure, maintaining a target of the first quarter of 2026.
Both companies will file relevant transaction documentation with the U.S. Securities and Exchange Commission. Avadel’s shareholders are expected to receive the definitive proxy statement in the coming weeks, which will include the full terms of the amended agreement and a recommendation from the board.
No further action is required at this time from shareholders, but Alkermes and Avadel have encouraged investors to review the upcoming filings in detail once published.
How investors are reacting to the revised acquisition and future LUMRYZ prospects
Avadel Pharmaceuticals plc shares have been trading close to the $21.00 level since the initial Alkermes offer, with the revised CVR adding optional upside that investors appear to value conservatively given the multi-year timeline to FDA approval. However, institutional holders appear aligned with the board’s assessment that the new CVR terms are both attainable and strategically compelling.
Shares of Alkermes plc have traded with minimal volatility since the revised deal was announced. Analyst commentary has generally characterized the transaction as strategically sound, though accretion will depend on the pace of LUMRYZ revenue growth and progress toward idiopathic hypersomnia approval.
Alkermes’ investor base has typically favored a balanced approach between R&D investment and commercial asset optimization, and the Avadel acquisition may offer both. LUMRYZ’s expanded indication, if approved, could add significant revenue over the long term and position Alkermes more firmly in the sleep disorder therapeutics segment.
Key takeaways from Alkermes’ revised acquisition bid for Avadel
- Alkermes plc has increased its acquisition offer for Avadel Pharmaceuticals plc to a maximum of $2.37 billion, including $21.00 per share in cash and a contingent value right (CVR) of $1.50 per share tied to FDA approval milestones.
- The CVR payout is contingent on the U.S. Food and Drug Administration approving LUMRYZ for idiopathic hypersomnia in adults by the end of 2028.
- Avadel’s board initially identified an unsolicited offer from H. Lundbeck A/S as a superior proposal but later reversed course after Alkermes submitted enhanced CVR terms.
- Both offers proposed the same upfront cash consideration, but Alkermes’ CVR was viewed as more achievable and financially compelling, leading Avadel to reaffirm its support.
- The acquisition has been approved by both boards and is expected to close in Q1 2026, subject to regulatory approvals and shareholder vote.
- J.P. Morgan is advising Alkermes, with legal support from Paul, Weiss and McCann FitzGerald. Avadel is advised by Morgan Stanley and Goldman Sachs, with legal counsel from Goodwin Procter and Arthur Cox.
- The acquisition strengthens Alkermes’ position in central nervous system therapeutics, especially in the sleep disorder segment, complementing its commercial and development portfolio.
- Institutional investor sentiment appears stable, with Avadel’s share price hovering around the offer level and mild upside priced into the CVR component.
- Analysts are focused on the regulatory path for LUMRYZ’s expanded indication and how Alkermes will integrate Avadel’s assets into its existing operations.
- Shareholders will receive a definitive proxy statement in the coming weeks and are urged to review the final CVR agreement and voting instructions.
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