Avadel board backs Alkermes’ higher offer over Lundbeck proposal

By Kamal Choudhury and Siddhi Mahatole

(Reuters) -Avadel Pharmaceuticals said on Wednesday its board has determined that a sweetened offer from Alkermes was superior to a competing bid from Denmark’s Lundbeck.

The revised offer from Alkermes values the sleep disorder drugmaker at up to $2.37 billion and includes $21 per share in cash upfront and up to $1.50 per share contingent on the expanded U.S. approval for Avadel’s Lumryz by the end of 2028.

Needham analyst Ami Fadia called the deal “a positive for Alkermes” and said it is “strategically important” for the company to commercialize its own sleep disorder drug candidate alixorexton and “differentiate itself in the sleep space”.

Lundbeck’s competing bid of up to $23 per share included $21 in cash and up to $2 in payments tied to future U.S. sales milestones for Lumryz and an experimental therapy valiloxybate.

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”.

“We have noted that our offer for acquiring Avadel Pharmaceuticals no longer is considered superior by their Board, and we are currently considering our options,” Lundbeck told Reuters in an email.

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

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 Alkermes and Avadel 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)