Alkermes boosts Avadel offer, board backs deal over Lundbeck

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(Reuters) -Alkermes said on Wednesday it has sweetened its offer to buy Avadel Pharmaceuticals, valuing the sleep disorder drugmaker at up to $2.37 billion after a competing proposal from Denmark’s Lundbeck.

The revised offer includes $21 per share in cash and a contingent value right of $1.50 per share, payable if the U.S. Food and Drug Administration approves Avadel’s sleep disorder drug Lumryz for idiopathic hypersomnia by the end of 2028.

Avadel’s board said it now favors Alkermes’ improved bid over Lundbeck’s proposal. While both offers include the same $21-per-share upfront cash payment, Avadel said Alkermes’ contingent payment terms were more likely to be met.

The board called Lundbeck’s milestone-based payments “unlikely to be achieved.”

The bidding war began in October when Alkermes first agreed to buy Avadel for up to $2.1 billion, offering $18.50 per share in cash plus a contingent payment of $1.50.

Lundbeck then made a competing bid of up to $23 per share, which included $21 in cash and up to $2 in payments tied to future U.S. sales performance.

Last week, Avadel’s board said the Lundbeck offer could constitute a “superior proposal” under the terms of its original agreement with Alkermes, allowing the company to engage in discussions with the Danish drugmaker.

Boards of both companies have approved the amended agreement, which is expected to close in the first quarter of 2026.

(Reporting by Kamal Choudhury and Siddhi Mahatole in Bengaluru; Editing by Krishna Chandra Eluri and Tasim Zahid)