On October 22, 2025, Alkermes plc (Nasdaq: ALKS) and Avadel Pharmaceuticals plc (Nasdaq: AVDL) announced a definitive merger agreement reflecting a major shift in the sleep medicine sector and the broader biopharmaceutical industry. The all-cash transaction, valued at up to $20 per Avadel share, comprises an $18.50 cash payment plus a contingent value right (CVR) for an additional $1.50 per share linked to final FDA approval of LUMRYZ™ for idiopathic hypersomnia. This structure represents a transaction value of approximately $2.1 billion and a 38% premium to Avadel’s three-month average share price, indicating strong confidence in Avadel’s commercial prospects.
The acquisition marks Alkermes’ strategic expansion into the sleep medicine market—a key area of growth for the company. With this move, Alkermes augments its existing neuroscience and rare disease franchise by adding Avadel’s FDA-approved LUMRYZ™ (sodium oxybate), a once-at-bedtime treatment for cataplexy or excessive daytime sleepiness in narcoleptic patients aged seven and older. LUMRYZ™ distinguishes itself as the market’s only once-nightly oxybate, offering significant convenience and competitive advantage over the twice-nightly alternative. Since its 2023 launch, LUMRYZ™ has experienced rapid adoption, with over 3,100 patients on therapy as of June 2025 and new patient starts outpacing competitors more than two-to-one. Net revenues are projected between $265–275 million for 2025, backed by a U.S. narcolepsy market of over 50,000 eligible patients.
Alkermes’ acquisition is expected to be immediately accretive to earnings and profit margins, providing the scale and financial strength to accelerate both commercial and clinical development programs. For Alkermes, the deal offers a robust foundation to support its late-stage developmental pipeline, specifically its orexin 2 receptor agonist candidates—alixorexton, ALKS 4510 and ALKS 7290—for narcolepsy and idiopathic hypersomnia. The combined company harnesses both organizations’ commercial expertise and operational infrastructure, streamlining R&D and driving cost synergies.
Leadership at both Alkermes and Avadel have expressed optimism about the transaction. Alkermes’ CEO Richard Pops described the acquisition as “a pivotal step” in the company’s evolution—a move that bolsters Alkermes’ entry into sleep medicine as it prepares to advance alixorexton into phase 3 trials. Avadel’s CEO, Greg Divis, characterized the merger as a validation of Avadel’s strategy, highlighting the differentiated value of LUMRYZ™ and the company’s dedication to sleep disorder patients.
Under the transaction’s terms, Alkermes will fund the acquisition with cash on hand and new debt, subject to regulatory and shareholder approvals. Both boards have unanimously approved the deal, targeting a closing date in the first quarter of 2026. Financial and legal advising teams include J.P. Morgan, Morgan Stanley, Goldman Sachs, Paul Weiss, and Cleary Gottlieb.
With this acquisition, Alkermes solidifies its position as a leader in neurological and sleep disorder treatments, accelerating the pace of innovation in a space with significant unmet patient needs. The combined organization is set to pursue further label expansions for LUMRYZ™, bring new therapies to market, and deliver increased value to shareholders and patients alike.
The landmark agreement between Alkermes and Avadel Pharmaceuticals underscores the accelerating consolidation trend within the life sciences sector, where innovative therapies and commercial scale are driving strategic acquisitions. The addition of LUMRYZ™ to Alkermes’ portfolio not only diversifies its product base but strengthens its market position in a segment characterized by high unmet medical need and strong growth potential.
Alkermes’ entry into the sleep medicine market will leverage Avadel’s proven commercial infrastructure and rare disease expertise, enabling more efficient launches and access for future products. The transaction also sets the stage for Alkermes to explore global expansion opportunities for LUMRYZ™ and other pipeline assets, while supporting additional indications such as idiopathic hypersomnia and leveraging Avadel’s salt-free, once-at-bedtime oxybate candidate.
As the two organizations integrate, operational synergies are expected to improve profitability and streamline R&D processes for advancing both existing therapies and new clinical programs. The merger, backed by reputable financial advisors and committed financing, represents a pivotal moment for stakeholders, positioning Alkermes as an emerging leader in neurology and sleep disorder therapeutics with a stronger foundation for future innovation and patient impact.
