Alkermes Ups Its Bid for Avadel to $2.37B With Superior CVR Terms, Overtaking Lundbeck’s Proposal in Intensifying Battle for Narcolepsy Pipeline
Alkermes has raised the stakes in one of 2025’s most closely watched neuroscience acquisitions, announcing an increased offer to acquire Avadel Pharmaceuticals that pushes the deal’s total potential value to $22.50 per share. The revised bid consisting of $21.00 in cash plus a $1.50 contingent value right (CVR) tied to FDA approval of LUMRYZ™ for idiopathic hypersomnia values Avadel at up to $2.37 billion, assuming the milestone payment is achieved.
The move comes just days after Avadel’s board declared an unsolicited takeover proposal from H. Lundbeck A/S as a “Company Superior Proposal.” With today’s announcement, Alkermes has effectively countered that bid and now won Avadel’s renewed support marking a decisive shift in a competitive three-way negotiation that underscores the strategic importance of the LUMRYZ franchise and Avadel’s hypersomnia pipeline.
What You Need To Know
- Alkermes increases its Avadel offer to $22.50/share (cash + CVR), valuing the deal at up to $2.37B.
- Avadel’s board withdraws support for Lundbeck’s competing proposal after assessing Alkermes’ superior CVR terms.
- The deal is expected to close in Q1 2026, pending shareholder and regulatory approvals.
- The transaction strengthens Alkermes’ neuroscience and sleep-medicine portfolio built around LUMRYZ.
Alkermes Retains Deal Lead After Strengthening CVR Terms
Avadel confirmed that after a detailed evaluation with its financial and legal advisors, it determined that Alkermes’ improved CVR structure now exceeds the value and attainability of the CVR included in the Lundbeck proposal. While the two offers matched on upfront cash ($21.00 per share), Avadel’s board concluded that Lundbeck’s CVR was “unlikely to be achieved,” whereas Alkermes’ milestone tied to FDA approval for LUMRYZ in idiopathic hypersomnia by end of 2028 offered clearer and more achievable value.
In response, Avadel formally reversed its earlier position and no longer considers Lundbeck’s offer superior.
For Alkermes, the move signals a strong strategic commitment to sleep-disorder therapeutics, particularly across narcolepsy and idiopathic hypersomnia, where LUMRYZ has established a differentiated position as the first once-nightly oxybate formulation for cataplexy and excessive daytime sleepiness.
The boards of directors at both Alkermes and Avadel have unanimously approved the amended deal structure, which stems from an updated Transaction Agreement signed on November 18, 2025. The companies continue to expect the deal to close in Q1 2026, contingent on shareholder approval, regulatory clearance, and an extended End Date outlined in the revised terms.
Shareholders of both organizations are encouraged to read the forthcoming proxy materials, including Avadel’s definitive proxy statement, which will describe the amended scheme and voting procedures in detail.
A Competitive Bidding Environment Fueled by Pipeline Value
The bidding war reflects the intense commercial and clinical potential of LUMRYZ an FDA-approved, once-nightly extended-release oxybate formulation that addresses longstanding adherence, safety, and quality-of-life challenges associated with twice-nightly sodium oxybate products.
Avadel’s platform, which focuses on re-engineering established therapeutics to better meet patient needs, has drawn strong bidder attention due to:
• A growing market for long-acting sleep therapies
• Expanding indications across hypersomnia and narcolepsy
• Attractive single-dose nightly administration that differentiates LUMRYZ from legacy competitors
• Development potential in new neurological disorders
Lundbeck’s Bid: A Catalyst That Reshaped the Final Negotiation
Lundbeck’s unsolicited proposal, received November 14, temporarily shifted the transaction’s trajectory. Avadel disclosed on November 17 that the bid constituted a Company Superior Proposal, forcing Alkermes to reassess its terms under the break-glass rights built into the original October deal.
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But the decisive factor wasn’t cash it was the comparative strength and viability of the CVRs tied to regulatory milestones. Avadel’s board concluded that Alkermes’ CVR not only offered clearer alignment with product timelines but also delivered a higher probability of payment materially surpassing Lundbeck’s.
This dynamic highlights how CVRs, once a niche mechanism, now increasingly serve as pivotal levers in biotech M&A, especially in deals where core value is tied to regulatory outcomes.