Alkermes increases offer to acquire Avadel Pharmaceuticals to $22.50 per share

Alkermes (ALKS) and Avadel Pharmaceuticals (AVDL) announced that the companies have reached agreement on the terms of an increased recommended offer under which Alkermes will acquire Avadel for total transaction consideration of up to $22.50 per share, consisting of $21.00 in cash and one non-transferable contingent value right entitling holders to a potential additional cash payment of $1.50 per share, contingent upon final FDA Lumryz approval for the treatment of idiopathic hypersomnia in adults by the end of 2028. In connection with the increased offer, Alkermes and Avadel have entered into an amendment, dated November 18 to the definitive transaction agreement between the parties previously entered into and announced on October 22. The increased offer values Avadel at up to approximately $2.37B, assuming the milestone payment is made. The transaction, as revised by the increased offer and the amendment, has been approved by the boards of directors of Alkermes and Avadel and, subject to the satisfaction of the conditions, it continues to be expected to close in the first quarter of 2026. On November 14, Avadel announced that it had received an unsolicited proposal from H. Lundbeck A/S to acquire Avadel and that the Lundbeck Proposal was reasonably expected to constitute a company superior proposal. On November 17, Avadel further announced that the board of directors of Avadel had determined in good faith, after consultation with its financial and legal advisors, that the Lundbeck Proposal constituted a “Company Superior Proposal” for the purposes of the transaction agreement. Following this determination, Alkermes submitted the terms of its proposed Increased offer to Avadel on November 18. After assessing both the Lundbeck Proposal and Alkermes’ increased offer and revised terms with its outside legal counsel and financial advisors, the board of directors of Avadel has determined that the Lundbeck Proposal no longer constitutes a “Company Superior Proposal” for the purposes of the transaction agreement. In making this determination, the board of directors of Avadel determined that while the upfront cash consideration of $21.00 per share in Alkermes’ increased offer is identical to the cash consideration proposed in the Lundbeck Proposal, the terms of the CVR in Alkermes’ increased offer are superior to the terms of the CVR included in the Lundbeck Proposal, which was determined to be unlikely to be achieved.