Facing the fact that Lundbeck’s unexpected offer for Avadel Pharmaceuticals was sweeter, Alkermes has come back to the negotiating table with a higher bid it believes can seal the deal.
Alkermes and Avadel have reached an accord on a new offer that would see Alkermes pay up to $22.50 per Avadel share to acquire the company, according to a Nov. 19 press release. The upgraded bid features $21 per Avadel share in cash as well as a $1.50 per share contingent value right (CVR) tied to the potential FDA approval of Avadel’s narcolepsy drug Lumryz in idiopathic hypersomnia by the end of 2028.
All told, the souped-up bid values Avadel at $2.37 billion, contingent upon the Lumryz milestone paying out, Alkermes said in its release.
Both companies’ boards have blessed the amended deal and currently expect the acquisition of Avadel to close in 2026’s first quarter. Meanwhile, Lundbeck, which cut in on Alkermes’ courtship of Avadel last week, has yet to tender an adjusted offer of its own.
At the start of the month, Alkermes appeared set to purchase its Dublin compatriot Avadel for up to $2.1 billion. Last week, Lundbeck made a surprise bid reportedly valuing the company at up to $2.4 billion.
The terms of Lundbeck’s offer differed slightly from Alkermes’, which floats a potential cash sweetener exclusively around Lumryz’s regulatory success. For its part, Lundbeck put up a bid consisting of $21 per ordinary Avadel share and a CVR that could have triggered two more $1 per share payments tied to future sales of Lumryz and Avadel’s recently acquired sleep asset valiloxybate.
Earlier this week, before Alkermes had beefed up its pitch, Avadel acknowledged that Lundbeck’s unsolicited bid constituted a “superior company proposal.”
That distinction was critical as it gave Alkermes five business days to sit back down at the negotiating table with Avadel to potentially improve its proposal under the companies’ original transaction agreement.
While Lundbeck’s offer had a slightly higher overall value than the new bid proposed by Alkermes, Avadel has determined that "the terms of the CVR in Alkermes' increased offer are superior to the terms of the CVR included in the Lundbeck proposal, which was determined to be unlikely to be achieved," according to Alkermes' release.
Alkermes first unveiled its Avadel acquisition plan in late October, at the time floating $18.50 per share for Avadel with a $1.50 per share CVR based on Lumryz’s prospective idiopathic hypersomnia nod.
The Dublin-based company is hoping to use the acquisition as a springboard into the sleep market, where Avadel’s narcolepsy drug Lumryz is expected (PDF) to reel in sales between $265 million and $275 million this year.
By leveraging Lumryz’s existing spot in the market, Alkermes is hoping to carve out a niche for itself ahead of the potential future launch of its sleep disorder asset alixorexton. Alkermes currently plans to kick off a phase 3 trial of alixorexton in narcolepsy in next year’s first quarter.