In a report released today, Andrew Tsai from Jefferies maintained a Hold rating on Avadel Pharmaceuticals, with a price target of $22.50.
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Andrew Tsai has given his Hold rating due to a combination of factors surrounding the acquisition offer for Avadel Pharmaceuticals by Alkermes (ALKS). The offer includes a cash payment and a contingent value right (CVR), which depends on the approval of a key drug by the end of 2028. Tsai notes that while the deal is likely to close by the first quarter of 2026, the potential for competing bids has diminished, particularly after Lundbeck decided not to increase its previous offer.
The Hold rating also reflects the current market dynamics and the strategic positioning of Avadel’s key product, Lumryz. Although Lumryz has a promising sales trajectory and potential in treating narcolepsy and idiopathic hypersomnia, the full realization of its market potential is still a few years away. Additionally, the settlement with Jazz Pharmaceuticals allows Avadel to sell Lumryz without interference only after March 2028, which adds a layer of uncertainty to its immediate financial prospects.
In another report released on November 20, Wells Fargo also maintained a Hold rating on the stock with a $22.50 price target.