Sodium Oxybate

Alkermes will pay $18.50 per share for Avadel and potentially tack on a contingent value right of $1.50 per share if the FDA approves Lumryz for idiopathic hypersomnia by the end of 2028. With plans to pay up to $2.1 billion to acquire its Dublin, Ireland, neighbor Avadel Pharmaceuticals, Alkermes is hoping to gain an immediate growth driver in narcolepsy drug Lumryz. But perhaps more importantly, according to Alkermes, is that the deal lays the groundwork for the potential commercialization of its own narcolepsy candidate, alixorexton.Under the deal, Alkermes will pay $18.50 per share for Avadel and potentially tack on a contingent value right of $1.50 per share if the FDA approves Lumryz for idiopathic hypersomnia by the end of 2028, the companies said in an Oct. 22 press release. The transaction, worth up to $2.1 billion, represents a 12% premium on Avadel’s share price at close on Tuesday. Compared to Avadel’s weighted average trading price over the past three months, the premium nets out to 38%.Alkermes aims to close the deal in the first quarter of next year. The Avadel purchase is expected to provide an immediate revenue boost for Alkermes, which reported sales of $1.56 billion last year, down 6% from 2023. Last month, at the World Sleep 2025 Congress, Alkermes presented promising phase 2 results for its sleep disorder asset alixorexton and touted the long-acting orexin 2 receptor agonist as the first drug in its class to “demonstrate clinically meaningful and statistically significant impact on wakefulness, cognition and fatigue with once-daily dosing.”Alkermes plans to initiate a phase 3 trial of alixorexton in narcolepsy in 2026's first quarter. By the time it potentially gains approval later in the decade, Alkermes expects to have a significant presence in the market, thanks to its commercialization of Lumryz through the proposed Avadel buyout. “Most important, from our perspective, is it puts us in the sleep market immediately upon closing,” Alkermes CEO Richard Pops said on a Wednesday morning conference call addressing the acquisition. “We will have a product that is doing a quarter of a billion dollars a year in sales—interacting with the key sleep centers, the key sleep physicians, the key sleep nurses, understanding the payment dynamics, the patient access journey," he continued. "All that stuff is the prosaic, working part of launching pharmaceutical company drugs in this world.”Over the last two decades, Alkermes has become well-versed in entering a market with a new drug, given its experience with alcohol and opioid dependence drug Vivitrol, schizophrenia treatment Aristada and schizophrenia and bipolar disorder therapy Lybalvi.“In a new disease category, it’s just going to allow us to burn in all those relationships, years in advance of launching alixorexton,” Pops added.Meanwhile, since its approval in May of 2023, Avadel's Lumryz has proven to be a formidable challenger to the dominant franchise in the narcolepsy market, Jazz Pharmaceuticals’ Xyrem and Xywav.One advantage of Lumryz—which is a different formulation of the same sodium oxybate compound underpinning Jazz's drugs—is that it can be taken once daily at bedtime as opposed to Xyrem and Xywav, which are taken twice nightly, including once in the middle of the night, requiring patients to wake for a second dose.In the first half of this year, Jazz reported combined sales of its narcolepsy duo at $833 million, which was a 3% increase year-over-year. Meanwhile, sales are quickly scaling up for Lumryz, which reached $51 million in the first quarter and $68 million in the second quarter. Avadel projects 2025 sales to fall between $265 million and $275 million.“We’ve watched the Avadel team build and scale a high-performing commercial organization, driving strong demand,” said Pops. “New-patient starts of Lumryz have outpaced [its competitor] by more than 2 to 1 since launch.”Pops expects the growth to continue. Lumryz counted 3,100 users as of the end of the second quarter and there are an estimated 50,000 patients eligible to take oxybate therapies in the U.S., according to the Alkermes chief. Following the companies' announcement, Avadel's stock price was trading up around 4% late Wednesday morning, while Alkerme's increased by around 0.5%. “This transaction represents a compelling outcome for our shareholders and a powerful validation of our strategy, execution, commercial capabilities and the differentiated value of Lumryz,” Greg Divis, the CEO of Avadel, said in a statement addressing the deal. 

Alkermes will buy Avadel Pharmaceuticals in a deal worth up to $2.1 billion, giving it a daytime sleepiness drug that’s expected to rake in as much as $275 million this year. Alkermes has agreed to pay $18.50 per share and will tack on an additional $1.50 per share if narcolepsy drug Lumryz is approved for idiopathic hypersomnia in adults by the end of 2028, according to Wednesday’s announcement . The deal is expected to close in the first quarter of 2026. Lumryz is Avadel’s top asset. First approved in May 2023 for adults with narcolepsy, the label has since been expanded to include kids as young as 7 years old. And revenue has quickly followed. Avadel reported in August that the drug brought in $68.1 million in second-quarter sales, a 64% jump compared to the same period last year. The company guided then that the drug could have as much as $75 million in third-quarter revenue this year and raised the full-year guidance to $265 million to $275 million in sales. As of the end of June, 3,100 patients were being treated with Lumryz, Avadel reported. Alkermes is also slated to have a key overhang removed, should the acquisition be completed. Avadel said Wednesday that it reached a global settlement with Jazz Pharmaceuticals over Lumryz and Jazz’s rival drug Xywav. The two companies agreed to stop suing each other over their respective patents, and that Avadel will pay future royalties to Jazz until February 2036. Taking ownership of Lumryz would be a boost for Alkermes following a mixed data readout last month from its own narcolepsy drug candidate. The company said its clinical-stage asset alixorexton improved how long patients would stay awake in a Phase 2 study, but also reported a high rate of vision-related side effects. Almost 30% of patients on the drug’s highest dose reported blurry vision, according to data presented at the World Sleep Congress in September.