ALKS to Enter Sleep Disorder Market With $2.1B Avadel Acquisition

Alkermes plc ALKS announced that it has entered into a definitive agreement to acquire Ireland-based Avadel Pharmaceuticals AVDL in a deal valued at up to $20.00 per share in cash, representing a total transaction value of approximately $2.1 billion.

The transaction is expected to be closed in the first quarter of 2026, subject to customary closing conditions.

The deal represents a 38% premium to Avadel’s volume-weighted average trading price over the past three months and a 12% premium to AVDL’s closing price on Oct. 21, 2025.

ALKS' Price Performance

Year to date, shares of Alkermes have increased 8.1% compared with the industry’s rise of 10.5%.

More on ALKS' Latest Acquisition Deal

Alkermes will purchase all outstanding ordinary shares of Avadel for $18.50 per share in cash at closing. Avadel shareholders will also receive a non-transferable contingent value right (CVR) worth up to an additional $1.50 per share, payable if the FDA grants final approval to Lumryz for treating idiopathic hypersomnia in adults by the end of 2028.

Alkermes plans to fund the acquisition using its existing cash reserves, along with additional financing through new debt issuance. As of June 30, 2025, Alkermes had cash and cash equivalents of $1.05 billion.

Avadel’s lead commercial product Lumryz is approved as the first and only once-at-bedtime oxybate for extended-release oral suspension for the treatment of cataplexy or excessive daytime sleepiness in patients aged seven years and older with narcolepsy.

As of June 30, 2025, around 3,100 patients were on Lumryz therapy. In the first six months of 2025, Lumryz generated sales worth $120.6 million, reflecting an increase of almost 76% on a year-over-year basis.

Lumryz's net revenues are expected to be in the band of $265-$275 million in 2025, positioning the drug for a robust growth trajectory.

ALKS’ Motive Behind the AVDL Deal

The potential acquisition of Avadel will help Alkermes to step into the sleep medicine market, which holds significant growth opportunities. The acquisition will add Avadel’s Lumryz to Alkermes’ commercial portfolio.

The deal also looks like a good strategic fit for Alkermes as it complements its current pipeline development activities.

Alkermes is developing alixorexton, a novel, investigational, oral, selective orexin 2 receptor agonist for the treatment of narcolepsy type 1 and type 2 and idiopathic hypersomnia.

The phase II Vibrance-1 study is evaluating alixorexton, for treating adults with narcolepsy type 1 (NT1).

The phase II Vibrance-2 study is evaluating the safety and efficacy of alixorexton versus placebo in adults with narcolepsy type 2 (NT2). Data from the Vibrance-2 is expected later in 2025. In April 2025, Alkermes initiated the phase II Vibrance-3 study, evaluating alixorexton in adults with idiopathic hypersomnia. Top-line data from this study is expected in mid-2026.

The integration of Avadel’s operations is expected to generate cost synergies and improve operational efficiency as Alkermes readies for the potential commercial launch of alixorexton, its lead orexin program.

Alkermes' portfolio of orexin 2 receptor agonists also includes ALKS 4510 and ALKS 7290, which are currently in phase I studies.

ALKS' Zacks Rank & Other Stocks to Consider

Alkermes currently carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the biotech sector are Chemomab Therapeutics CMMB and Castle Biosciences CSTL, each carrying a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Chemomab Therapeutics’ 2025 loss per share have narrowed from $2.00 to 60 cents. Loss per share estimates for 2026 have narrowed from $2.80 to $1.00 during the same period. CMMB stock has plunged 57.4% year to date.

Chemomab Therapeutics’ earnings beat estimates in three of the trailing four quarters, while meeting the same on the remaining occasion, with an average surprise of 26.25%.

In the past 60 days, estimates for Castle Biosciences’ 2025 loss per share have narrowed from 65 cents to 64 cents. Loss per share estimates for 2026 have narrowed from $2.10 to $1.82 during the same period. CSTL stock has lost 10.9% year to date.

Castle Biosciences’ earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with an average surprise of 100.91%.

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This article originally published on Zacks Investment Research (zacks.com).

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