Avadel Pharmaceuticals (AVDL) AI Stock Analysis

• Market Cap: $2.09B
• Dividend Yield: N/A
• Average Volume (3M): 2.36M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: 79.88%
• EPS Growth: 99.60%
• Country: US
• Employees: 188
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.00
• Shares Outstanding: 97,817,590
• 10 Day Avg. Volume: 1,660,981
• 30 Day Avg. Volume: 2,364,695
• PEG Ratio: 0.27
• Price to Book (P/B): 13.54
• Price to Sales (P/S): 5.91
• P/FCF Ratio: -21.32
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 6.00
• Enterprise Value/Gross Profit: 6.36
• Enterprise Value/Ebitda: 147.31
• 1Y Price Target: $20.29
• Price Target Upside: -5.28% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.19
• Revenue Forecast (FY): $274.35M

• Rating: 59 Neutral
• Price Target: $22.50 ▲(5.04% Upside)

Avadel Pharmaceuticals' overall stock score is driven by strong corporate events and positive technical indicators. However, the company's financial performance is hindered by profitability challenges, and its valuation is impacted by a negative P/E ratio. The stock shows potential for growth, supported by strategic corporate actions and positive market momentum.

Positive Factors

Revenue Growth

Strong revenue growth and cash flow improvements indicate robust business expansion and effective cash management, supporting long-term sustainability.

Strategic Partnerships

The settlement with Jazz Pharmaceuticals secures Avadel's IP rights, reducing legal uncertainties and strengthening its competitive position in the sleep medicine market.

Balance Sheet Health

A low debt-to-equity ratio indicates financial stability and flexibility, allowing Avadel to invest in growth opportunities without significant financial strain.

Negative Factors

Profitability Challenges

Ongoing profitability issues, with negative net profit margin and ROE, highlight operational inefficiencies that may hinder long-term financial performance.

Negative Return on Equity

Negative ROE suggests that the company is not effectively using shareholder equity to generate profits, which could impact investor confidence and future capital raising.

Operating Cash Flow Concerns

Low operating cash flow relative to net income indicates potential liquidity issues, as earnings are not being efficiently converted into cash, affecting operational flexibility.

Avadel Pharmaceuticals Business Overview & Revenue Model

Company Description

Avadel Pharmaceuticals (AVDL) is a biopharmaceutical company focused on developing and commercializing innovative therapies for patients with central nervous system disorders. The company specializes in the field of sleep medicine and is known for its proprietary drug delivery technology, which allows for the development of unique formulations that can enhance the efficacy and safety of existing medications. Avadel's core products include its lead product, FT218, a once-nightly formulation of sodium oxybate, aimed at treating narcolepsy, along with a pipeline of other therapeutic candidates targeting various sleep disorders.

How the Company Makes Money

Avadel Pharmaceuticals generates revenue primarily through the commercialization of its pharmaceutical products, particularly FT218. The company earns money by selling its products to healthcare providers, pharmacies, and patients, often under prescription. Additionally, Avadel may receive milestone payments from strategic partnerships and collaborations with other pharmaceutical companies, which can include co-development agreements or licensing deals. These partnerships can provide upfront payments and royalties based on sales, contributing to the company’s overall revenue. Furthermore, the company may also engage in research collaborations that generate funding for its development programs.

Avadel Pharmaceuticals Financial Statement Overview

Summary

Avadel Pharmaceuticals shows strong revenue growth and cash flow improvements, but struggles with profitability as indicated by negative net margins and returns on equity. The balance sheet is stable with low leverage, providing a solid foundation for future growth.

Income Statement

Avadel Pharmaceuticals has shown a significant improvement in revenue with a 12.41% growth rate in the TTM period. However, the company struggles with profitability, evidenced by a negative net profit margin of -1.32% and a low EBIT margin of 1.93%. The gross profit margin remains strong at 89.64%, indicating efficient cost management. Despite these strengths, the persistent negative net income is a concern.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.03, suggesting minimal leverage. However, the return on equity is negative at -3.73%, indicating inefficiencies in generating returns for shareholders. The equity ratio stands at 49.25%, showing a balanced capital structure but highlighting the need for improved profitability.

Cash Flow

Cash flow analysis reveals a robust free cash flow growth of 552.23% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.10, suggesting that cash flows are not yet fully supporting earnings. The free cash flow to net income ratio is high at 96.68%, reflecting efficient cash conversion despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	248.52M	169.12M	27.96M	0.00	0.00	22.33M
Gross Profit	234.76M	153.84M	27.12M	0.00	0.00	16.59M
EBITDA	10.13M	-35.57M	-149.13M	-97.60M	-82.39M	9.60M
Net Income	-278.00K	-48.83M	-160.28M	-137.46M	-77.33M	7.03M
Balance Sheet
Total Assets	199.45M	164.24M	164.70M	132.78M	247.26M	311.64M
Cash, Cash Equivalents and Short-Term Investments	91.58M	73.78M	105.11M	96.50M	157.22M	221.40M
Total Debt	37.38M	1.70M	2.62M	131.02M	145.00M	130.52M
Total Liabilities	101.22M	90.39M	76.96M	153.93M	169.02M	149.37M
Stockholders Equity	98.22M	73.85M	87.74M	-21.14M	78.24M	162.27M
Cash Flow
Free Cash Flow	35.41M	-46.91M	-128.51M	-71.02M	-77.34M	-48.83M
Operating Cash Flow	35.60M	-46.91M	-128.51M	-70.30M	-77.31M	-48.73M
Investing Cash Flow	10.19M	51.78M	-50.09M	79.70M	56.93M	-69.72M
Financing Cash Flow	5.19M	15.97M	135.34M	14.54M	263.00K	179.68M

Avadel Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVDL, the sentiment is Positive. The current price of 21.42 is below the 20-day moving average (MA) of 21.78, above the 50-day MA of 19.49, and above the 200-day MA of 12.91, indicating a neutral trend. The MACD of 0.41 indicates Positive momentum. The RSI at 58.79 is Neutral, neither overbought nor oversold. The STOCH value of 42.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVDL.

Avadel Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMPH	77 Outperform	$1.20B	11.75	14.84%	―	-0.03%	-27.66%
PCRX	69 Neutral	$1.14B	58.01	2.90%	―	3.14%	―
ANIP	64 Neutral	$1.85B	50.80	7.83%	―	48.87%	―
HROW	61 Neutral	$1.64B	―	-9.54%	―	47.83%	84.72%
AVDL	59 Neutral	$2.09B	-3,894.55	-0.32%	―	79.88%	99.60%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
EVO	46 Neutral	$1.08B	-5.90	-17.46%	―	-1.19%	5.06%

Avadel Pharmaceuticals Corporate Events

Avadel Pharmaceuticals Acquisition Moves Forward with HSR Expiry

On December 8, 2025, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired for the acquisition of Avadel Pharmaceuticals by Alkermes, marking a significant step towards finalizing the transaction. The acquisition, structured as a scheme of arrangement, still requires customary closing conditions, including shareholder approval and court sanction, which could impact Avadel’s market position and stakeholder interests.

Avadel Pharmaceuticals Amends Agreement with Alkermes

On November 18, 2025, Avadel Pharmaceuticals and Alkermes plc amended their original transaction agreement, increasing the cash consideration for Avadel’s shares from $18.50 to $21.00 per share, with the contingent value right remaining unchanged. This amendment followed an unsolicited proposal from H. Lundbeck A/S, which was initially considered superior by Avadel’s board. However, after reviewing both offers, Avadel’s board determined that Alkermes’ revised terms were more favorable, particularly the terms of the contingent value right. The acquisition, valuing Avadel at up to $2.37 billion, is expected to close in the first quarter of 2026, pending conditions and regulatory approvals.

Avadel Pharmaceuticals Receives Superior Proposal from Lundbeck

On November 17, 2025, Avadel Pharmaceuticals announced that its Board of Directors has deemed an unsolicited proposal from H. Lundbeck A/S to acquire Avadel as a ‘Company Superior Proposal.’ The Lundbeck proposal values Avadel at up to $23.00 per ordinary share, totaling approximately $2.4 billion, and represents a 29% premium over Avadel’s closing price before the announcement of its acquisition by Alkermes. Avadel has notified Alkermes of this determination, triggering a five-day period for potential negotiations with Alkermes to amend their existing transaction agreement. During this period, Avadel’s Board will evaluate any revised proposal from Alkermes before making a final decision. Currently, no action is required from Avadel shareholders, and the Alkermes Transaction Agreement remains in effect.

Avadel Pharmaceuticals Receives Acquisition Proposal from Lundbeck

On November 14, 2025, Avadel Pharmaceuticals announced receiving an unsolicited acquisition proposal from H. Lundbeck A/S, offering up to $23.00 per ordinary share, which includes cash and contingent value rights based on future sales milestones. The Avadel Board considers this proposal potentially superior to its existing agreement with Alkermes, which offers up to $20.00 per share. However, Avadel’s Board has not yet determined the Lundbeck proposal as superior and continues to support the Alkermes acquisition while engaging in discussions with Lundbeck.

Avadel Pharmaceuticals Acquired by Alkermes for $2.1 Billion

On October 22, 2025, Avadel Pharmaceuticals entered into a transaction agreement with Alkermes, under which Alkermes will acquire Avadel for up to $20.00 per share, valuing the transaction at approximately $2.1 billion. This acquisition, expected to close in the first quarter of 2026, will make Avadel a wholly-owned subsidiary of Alkermes, enhancing Alkermes’ entry into the sleep medicine market and expanding its commercial portfolio with Avadel’s product, LUMRYZ™. The deal is anticipated to be immediately accretive, enhancing Alkermes’ revenue growth and profitability, while leveraging Avadel’s established commercial infrastructure and expertise in rare diseases.

Avadel Pharmaceuticals Settles Lawsuits with Jazz Pharmaceuticals

On October 21, 2025, Avadel CNS Pharmaceuticals, a subsidiary of Avadel Pharmaceuticals, reached a settlement with Jazz Pharmaceuticals to resolve multiple lawsuits. As part of the agreement, Jazz will pay Avadel $90 million and waive royalties on LUMRYZ sales through September 30, 2025. Both companies will dismiss their lawsuits, and Jazz will grant Avadel a worldwide license for patents related to LUMRYZ. Avadel will pay Jazz royalties on LUMRYZ sales for narcolepsy and other indications. This settlement provides Avadel with long-term clarity on its intellectual property and commercial rights, positioning it to advance its sleep medicines portfolio.