DUBLIN, October 22, 2025 – Alkermes (ALKS) agreed to acquire Avadel Pharmaceuticals for up to 2.1 billion, marking its entry into the sleep medicine market through narcolepsy treatment LUMRYZ1. The all-cash transaction values Avadel at 18.50 per share plus potential milestone payments, representing a significant premium to recent trading levels.
- Alkermes acquires Avadel for 18.50 cash plus milestones
- Deal adds FDA-approved narcolepsy drug LUMRYZ to portfolio
- Transaction expected to close in first quarter 2026
Deal Structure and Market Reaction
Under the agreement, Alkermes will pay 18.50 per share in cash for all outstanding Avadel ordinary shares, with additional milestone payments potentially bringing the total consideration to 20 per share2. The acquisition has been approved by both companies’ boards of directors and is expected to close in the first quarter of 20261.
Avadel shares surged following the announcement, while Alkermes stock faced pressure as investors digested the substantial acquisition cost8. The deal represents Alkermes’ largest acquisition to date and its strategic pivot into sleep disorders.
Strategic Rationale
The acquisition centers on Avadel’s LUMRYZ, the first and only once-nightly oxybate treatment for narcolepsy approved by the FDA5. This drug addresses excessive daytime sleepiness and cataplexy in narcolepsy patients, providing Alkermes immediate access to a growing specialty market.
Alkermes expects to finance the transaction through existing cash resources and debt facilities4. The company sees significant commercial potential in combining LUMRYZ with its existing neuroscience portfolio and commercial infrastructure.
Market Context and Competition
The sleep medicine market has attracted increasing pharmaceutical industry attention as awareness of sleep disorders grows. Narcolepsy affects approximately 200,000 Americans, creating a substantial addressable market for effective treatments.
LUMRYZ differentiates itself from existing oxybate treatments through its once-nightly dosing schedule, compared to twice-nightly alternatives. This convenience factor has driven adoption since its commercial launch.
Financial Impact
Alkermes projects the acquisition will be accretive to earnings within the first full year post-closing. The company expects to realize revenue synergies through its established commercial team and distribution network in neuroscience and psychiatry.
The 2.1 billion price tag represents a significant investment for Alkermes, whose market capitalization stands at approximately 4 billion. Management believes the strategic value of entering sleep medicine justifies the premium valuation.
Regulatory and Timeline
The transaction remains subject to customary closing conditions, including regulatory approvals and Avadel shareholder approval. Both companies expressed confidence in securing necessary clearances ahead of the anticipated first quarter 2026 closing timeline1.
Integration planning has already begun to ensure smooth transition of LUMRYZ commercial operations and continued patient access during the combination process.
Not investment advice. For informational purposes only.
References
1“Alkermes plc Announces Agreement to Acquire Avadel Pharmaceuticals plc”. Alkermes Investor Relations. Retrieved October 22, 2025.
2“Alkermes enters sleep medicine market with 2.1 billion Avadel deal”. Reuters. Retrieved October 22, 2025.
3“Alkermes to acquire Avadel for up to 2.1 billion”. Yahoo Finance. Retrieved October 22, 2025.
4“Alkermes plc Announces Agreement to Acquire Avadel Pharmaceuticals plc”. PR Newswire. Retrieved October 22, 2025.
5“Alkermes to acquire Avadel Pharmaceuticals for up to 2.1 billion”. Investing.com. Retrieved October 22, 2025.
6“Alkermes Buys Avadel For 2.1 Billion To Enter Sleep Medicine”. Finimize. Retrieved October 22, 2025.
7“Alkermes (ALKS) to Acquire Avadel Pharmaceuticals in 2.1B Deal”. GuruFocus. Retrieved October 22, 2025.
8“Avadel Stock Rises After Acquisition Offer By Alkermes”. AsiaNet News. Retrieved October 22, 2025.
9“Alkermes (ALKS) to Acquire Avadel Pharmaceuticals for 2.1B”. GuruFocus. Retrieved October 22, 2025.