Truist thinks Alkermes can make counter offer acceptable to Avadel board

After Avadel (AVDL) announced an unsolicited proposal from Lundbeck (HLBBF) to be acquired for up to $23 per share, Truist argues that the proposal “would only make sense” if Lundbeck had a mid-late stage orexin agonist in the pipeline for Avadel to be of strategic value given the view of oxybates as a declining class once orexin agonists are approved. Given Alkermes’ (ALKS) strong balance sheet with no debt, the firm thinks Alkermes can make a counter offer that is acceptable to Avadel’s board and proceed with its own proposed acquisition. Truist maintains a Buy rating and $50 price target on Alkermes shares.