Alkermes agrees to buy Avadel for $18.50 a share plus CVR, with JPMorgan bridge loan

Alkermes plc (Nasdaq: ALKS) agreed on October 22, 2025 to buy Avadel Pharmaceuticals plc (Nasdaq: AVDL) for $18.50 per share in cash, plus a contingent value right, or CVR, that could add $1.50 per share. Alkermes disclosed the agreement and a bridge term loan arranged with JPMorgan Chase Bank, N.A. in a Form 8-K. The deal has not closed.

The offer and what must happen before closing

Both boards recommended the deal, announced under Rule 2.7 of the Irish Takeover Rules. In its press release, Alkermes gives total consideration of up to $20.00 per share. It calls that a premium of 38% to Avadel's weighted average trading price over the three months before the announcement, and a premium of 12% to Avadel's closing price on October 21, 2025. Alkermes also says the potential per-share price equals an equity value of approximately $2.1 billion, which counts the CVR.

The deal is to be carried out as a court-sanctioned scheme of arrangement under Irish law, though Alkermes may instead choose a takeover offer. Closing needs approval by Avadel shareholders, sanction by the Irish High Court, registration of the court order in Dublin and US antitrust clearance. Alkermes expects to complete the deal in the first quarter of 2026. Either side can end the agreement if the scheme is not effective 9 months after signing, a deadline that extends to 12 months if regulatory approvals are still pending.

Avadel agreed not to solicit rival proposals, except through a "fiduciary out" in specified circumstances. Avadel may owe Alkermes its documented third-party costs in certain cases, capped at one percent (1%) of the total cash consideration.

The CVR is not a sure payment

The CVR pays out only if two things happen. The first is US Food and Drug Administration approval of LUMRYZ for idiopathic hypersomnia in adults. The second is dismissal with prejudice of pending claims in the US District Court for the District of Delaware, under a settlement and license agreement between Jazz Pharmaceuticals and Avadel's subsidiaries dated October 21, 2025. Both must occur before December 31, 2028. The CVR also cannot count as achieved while an FDA clinical hold on the CVR product is in effect. Without both events, Avadel holders receive only the $18.50 in cash. Neither the release nor the 8-K puts a probability on either event.

Financing, debt and advisers

Alkermes says it will pay for the deal with cash on hand and new debt. The Bridge Term Loan Credit Agreement, dated October 22, 2025 and filed as an exhibit, names Alkermes plc as the "TopCo Borrower" and Alkermes, Inc., a Pennsylvania corporation, as the "U.S. Borrower." JPMorgan Chase Bank, N.A. is administrative agent, sole lead arranger and sole bookrunner. The 8-K exhibits describe fully underwritten financing commitments from JPMorgan of $1.2 billion, to be combined with Alkermes' own cash. The credit agreement also sets out covenants and events of default.

J.P. Morgan is exclusive financial adviser to Alkermes. Paul, Weiss, Rifkind, Wharton & Garrison LLP and McCann FitzGerald LLP are its legal counsel on the transaction, and Cleary Gottlieb Steen & Hamilton LLP advises it on the financing. Morgan Stanley and Goldman Sachs are financial advisers to Avadel, with Goodwin Procter LLP and Arthur Cox LLP as its legal counsel.

Avadel's business rests on one product

Avadel's commercial business is LUMRYZ, which Alkermes calls the first and only once-at-bedtime oxybate for narcolepsy. The release says about 3,100 patients were on LUMRYZ as of June 30, 2025, and that Avadel net revenues of $265 to $275 million are expected in 2025. The 8-K and its exhibits do not give Avadel's cash balance or its net loss.

Chief Executive Officer Richard Pops said that "this all-cash transaction enhances our revenue growth profile and is expected to be immediately accretive." The release ties the deal to alixorexton, an Alkermes orexin 2 receptor agonist that Alkermes plans to move into a phase 3 program in narcolepsy. Alkermes says the deal speeds its commercial entry into sleep medicine, but alixorexton has no approval and the phase 3 program has not started.

Report an error

Companies in this story

ALKSAlkermes plcNASDAQ · IrelandOpen the desk