Core Viewpoint - Avadel Pharmaceuticals has received an unsolicited acquisition proposal from H. Lundbeck A/S, offering up to $23.00 per ordinary share, which includes cash and contingent value rights, leading the Board to consider it a potential "Company Superior Proposal" compared to its existing agreement with Alkermes [3][5]. Summary by Sections Acquisition Proposal - Lundbeck's proposal includes $21.00 in cash per ordinary share at closing and contingent value rights that could provide an additional $2.00 per share based on sales milestones for LUMRYZ™ and valiloxybate [3]. - The proposal is contingent upon various closing conditions, including shareholder and regulatory approvals [3]. Existing Agreement with Alkermes - Avadel has a definitive transaction agreement with Alkermes, under which shareholders would receive up to $20.00 per ordinary share, consisting of $18.50 in cash and a contingent value right of $1.50 [4]. - The Board's determination regarding Lundbeck's proposal allows for discussions but does not permit Avadel to terminate its agreement with Alkermes [5]. Board's Position - The Board has not yet confirmed that Lundbeck's proposal constitutes a Company Superior Proposal under the existing agreement with Alkermes and has not changed its recommendation in support of the Alkermes acquisition [5][6]. - There is no assurance that discussions with Lundbeck will lead to a definitive agreement [6]. Financial Advisors - Morgan Stanley and Goldman Sachs are serving as financial advisors to Avadel in relation to the acquisition discussions [9][23].

Key Information - The discloser is Avadel Pharmaceuticals plc, which is the offeree in relation to its relevant securities [2][4] - The position was held as of November 4, 2025 [2] - There are no interests or short positions disclosed for the relevant securities [4] Interests and Short Positions - No relevant securities owned or controlled by the discloser [4] - No cash-settled or stock-settled derivatives reported [4] - Total interests and short positions are NIL [4] Interests of Persons Acting in Concert - Total interests held by directors of Avadel Pharmaceuticals plc amount to 794,959 ordinary shares, representing 0.81% of the total issued ordinary share capital [6] - The total number of underlying stock options and other rights held by these directors is 4,347,557 [6] Other Information - No indemnity or other dealing arrangements were reported [9] - No agreements or arrangements relating to options or derivatives were disclosed [9] - A Supplemental Form 8 is not attached [10]

Group 1 - Avadel Pharmaceuticals plc (AVDL) has been added to the Zacks Rank 5 (Strong Sell) List, with a 20.8% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Evolution Petroleum Corporation (EPM) is also on the Zacks Rank 5 (Strong Sell) List, experiencing an 89% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - FMC Corporation (FMC) has seen a 5.5% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Financial Performance - Net product revenue for the three and nine months ended September 30, 2025, was $77,467 and $198,107, respectively, compared to $50,025 and $118,707 for the same periods in 2024, indicating a significant increase driven by the early phases of LUMRYZ launch [187]. - Gross profit for the three and nine months ended September 30, 2025, was $81,583 and $190,280, respectively, compared to $43,870 and $108,242 for the same periods in 2024, reflecting a decrease in the cost of products sold [187]. - Operating income for the nine months ended September 30, 2025, was $7,820, a significant improvement from an operating loss of $39,102 in the same period of 2024 [191]. - Diluted net income per share for the nine months ended September 30, 2025, was $0.05, compared to a diluted net loss per share of $0.46 in the same period of 2024 [191]. - The net income for the nine months ended September 30, 2025, was $4,765, contributing to the positive cash flow from operating activities [203]. - Cash, cash equivalents, and marketable securities increased by $17,800 to $91,577 as of September 30, 2025, primarily due to net cash provided by operating activities of $26,670 [190]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $26,670, a significant increase of $81,450 or 148.7% compared to a net cash used of $54,780 in the same period of 2024 [202][203]. - Investment and other income, net decreased by $2,219 or 71.3% during the nine months ended September 30, 2025, primarily due to lower interest income and higher foreign exchange losses [198]. - Income tax benefit increased by $2,731 or 835.2% during the nine months ended September 30, 2025, driven by the release of uncertain tax positions [200]. Product Development and Regulatory Approvals - LUMRYZ received FDA approval on May 1, 2023, for the treatment of cataplexy or excessive daytime sleepiness in adults with narcolepsy, with seven years of Orphan Drug Exclusivity granted until May 1, 2030 [175]. - A pivotal trial named REVITALYZ has been initiated to evaluate the efficacy and safety of LUMRYZ in treating idiopathic hypersomnia, with an expected enrollment of approximately 150 adults and completion anticipated by the end of 2025 [179]. - LUMRYZ has been granted Orphan Drug Designation for the treatment of idiopathic hypersomnia, based on its potential clinical superiority due to its once-nightly dosing regimen [181]. Expenses and Financial Management - Research and development expenses increased by $24,697 or 226.1% during the nine months ended September 30, 2025, primarily due to $20,000 upfront license fees to XWPharma and costs associated with clinical trials [195]. - Selling, general and administrative expenses rose by $10,419 or 7.6% during the nine months ended September 30, 2025, driven by higher employee-related costs and commercial expenses for LUMRYZ [197]. - The company has a history of net losses from operations, although it was profitable in the quarters ended June 30, 2025, and September 30, 2025 [187]. Strategic Agreements and Transactions - A Settlement and License Agreement was entered into with Jazz Pharmaceuticals on October 21, 2025, resolving multiple lawsuits related to LUMRYZ [182]. - A Transaction Agreement was announced with Alkermes on October 22, 2025, under which Alkermes will acquire Avadel for $18.50 in cash per share, plus a potential additional cash payment of $1.50 per share contingent on specified milestones [183][184]. - The transaction with Alkermes is expected to close in the first quarter of 2026, subject to customary closing conditions including shareholder approval and antitrust clearances [185]. - The company has entered into a Transaction Agreement with Alkermes, which imposes certain operational restrictions but does not hinder funding for operations and capital expenditures [201]. Market and Competitive Landscape - The competitive landscape includes the launch of authorized generic versions of sodium oxybate, which may impact LUMRYZ's market position [187]. - The number of patients treated with LUMRYZ increased to approximately 3,400 as of September 30, 2025, compared to approximately 2,300 patients a year earlier [192]. Cash Flow and Capital Management - Net cash used in investing activities was $4,370 for the nine months ended September 30, 2025, compared to net cash provided of $36,867 in the same period of 2024, reflecting a change of $41,237 or (111.9)% [202][204]. - Net cash provided by financing activities was $4,179 for the nine months ended September 30, 2025, a decrease of $10,911 or (72.3)% from $15,090 in the same period of 2024 [202][205]. - The company anticipates sufficient capital from existing cash, cash equivalents, and marketable securities, along with expected sales from LUMRYZ, to meet operating and capital requirements for the next twelve months [207]. Legal and Regulatory Considerations - The company is subject to potential liabilities from lawsuits and claims, but there were no contingent liabilities as of September 30, 2025, that could materially affect financial position [208]. - The company does not believe inflation had a material effect on its financial condition or results of operations during the nine months ended September 30, 2025, but acknowledges potential future impacts [212]. - A 10% change in foreign currency exchange rates related to euro-denominated assets would have had an immaterial impact on net income for the nine months ended September 30, 2025 [210].

Revenue and Profitability - Generated LUMRYZ™ net product revenue of $77.5 million, a 55% increase compared to third quarter 2024[6] - Net product revenue for Q3 2025 was $77.467 million, a 54.7% increase from $50.025 million in Q3 2024[41] - Gross profit for the quarter was $81.6 million, or 105% of net product revenue, compared to $43.9 million, or 88% of net product revenue, for the same period in 2024[11] - Gross profit for Q3 2025 reached $81.583 million, compared to $43.870 million in Q3 2024, reflecting a significant improvement[41] - Operating income for the nine months ended September 30, 2025, was $7.820 million, a turnaround from a loss of $39.102 million in the same period of 2024[41] - Net income for the quarter was $20 thousand, or $0.00 per diluted share, compared to a net loss of $2.6 million, or ($0.03) per diluted share, for the same period in 2024[14] - Net income for the nine months ended September 30, 2025, was $4.765 million, compared to a loss of $43.789 million in the same period of 2024[41] Expenses - Research and development expenses for the quarter were $27.0 million compared to $3.8 million for the same period in 2024[12] - Selling, general and administrative expenses for the quarter were $52.6 million compared to $40.4 million for the same period in 2024[13] - Research and development expenses surged to $27.010 million in Q3 2025, up from $3.803 million in Q3 2024, indicating increased investment in innovation[41] Cash and Assets - Cash, cash equivalents, and marketable securities were $91.6 million at September 30, 2025, compared to $81.5 million at June 30, 2025[15] - Cash and cash equivalents increased to $79.813 million as of September 30, 2025, up from $51.371 million at the end of 2024[43] - Total assets grew to $199.448 million as of September 30, 2025, compared to $164.236 million at the end of 2024[43] - Total liabilities increased to $101.223 million as of September 30, 2025, from $90.388 million at the end of 2024[43] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $26.670 million, a significant improvement from a cash outflow of $54.780 million in the same period of 2024[45] - The company reported a net change in cash and cash equivalents of $28.442 million for the nine months ended September 30, 2025[45] Patient and Market Developments - Approximately 3,400 patients on LUMRYZ as of September 30, 2025, a 48% increase compared to September 30, 2024[6] - A global settlement with Jazz Pharmaceuticals was announced, allowing Avadel to commercialize LUMRYZ for indications beyond narcolepsy starting March 1, 2028[9] - Patient enrollment in the REVITALYZ study is on track to be completed by the end of 2025[7] Corporate Transactions - Avadel entered into a definitive agreement with Alkermes for a total transaction consideration of up to $20.00 per share, valuing Avadel at approximately $2.1 billion[2]

Core Insights - Avadel Pharmaceuticals reported a significant increase in patient enrollment for LUMRYZ, with approximately 3,400 patients treated as of September 30, 2025, representing a 48% increase from the previous year [1] - The company announced a global settlement with Jazz Pharmaceuticals, resolving all litigation and allowing Avadel to commercialize LUMRYZ for additional indications starting March 1, 2028 [9] - Alkermes is set to acquire Avadel for a total transaction value of approximately $2.1 billion, with the deal expected to close in the first quarter of 2026 [2][3] Financial Performance - Avadel generated $77.5 million in net product revenue from LUMRYZ in Q3 2025, marking a 55% increase from $50.0 million in Q3 2024 [10] - Gross profit for Q3 2025 was $81.6 million, or 105% of net product revenue, compared to $43.9 million, or 88% of net product revenue, in the same period of 2024 [11] - Research and development expenses surged to $27.0 million in Q3 2025, up from $3.8 million in Q3 2024, primarily due to upfront license fees related to valiloxybate [12] Corporate Developments - The REVITALYZ™ study, a Phase 3 trial for LUMRYZ, is on track for patient enrollment completion by the end of 2025 [6] - Avadel has strengthened its sleep medicine portfolio by acquiring an exclusive license for valiloxybate from XWPharma, with an upfront payment of $15 million made in Q3 2025 [7] - The company presented new data at World Sleep 2025 supporting LUMRYZ's efficacy in treating narcolepsy across various patient segments [8] Settlement with Jazz Pharmaceuticals - The settlement agreement with Jazz includes the dismissal of lawsuits and upfront cash consideration for Avadel, along with royalty rights for Jazz on LUMRYZ sales from October 1, 2025, to February 18, 2036 [9]

Group 1 - The markets are experiencing upward movement despite ongoing concerns, including a government shutdown that is approaching its fifth week without resolution [1] - The Biotech Forum offers a model portfolio featuring 12-20 high upside biotech stocks, along with live chat discussions on trade ideas and weekly research updates [1] Group 2 - The article does not provide specific financial data or performance metrics related to the companies mentioned [2][3]

Group 1 - Avadel Pharmaceuticals (AVDL) has accepted a buyout offer from Alkermes plc (ALKS) following the settlement of litigation with Jazz Pharmaceuticals (JAZZ) [1] - This acquisition is part of a series of notable acquisitions in the biotech sector [1] Group 2 - The Biotech Forum, led by Bret, offers a model portfolio of 12-20 high upside biotech stocks, along with live chat discussions and weekly research updates [1]

Core Insights - Alkermes plc (ALKS) has entered into a definitive agreement to acquire Avadel Pharmaceuticals (AVDL) for up to $20.00 per share in cash, totaling approximately $2.1 billion [1][7] - The acquisition is expected to close in the first quarter of 2026, pending customary closing conditions [1] - The deal represents a 38% premium to Avadel's average trading price over the past three months and a 12% premium to its closing price on October 21, 2025 [2] Acquisition Details - Alkermes will pay $18.50 per share in cash at closing, with Avadel shareholders also receiving a contingent value right (CVR) worth up to an additional $1.50 per share, contingent on FDA approval of Lumryz by the end of 2028 [4] - The acquisition will be funded through Alkermes' existing cash reserves and new debt issuance, with cash and cash equivalents of $1.05 billion as of June 30, 2025 [5] Product and Market Impact - Avadel's Lumryz is the first and only once-at-bedtime oxybate approved for treating narcolepsy, with sales of $120.6 million in the first half of 2025, reflecting a 76% year-over-year increase [8] - Lumryz's projected net revenues for 2025 are estimated to be between $265 million and $275 million, indicating strong growth potential [8] - The acquisition allows Alkermes to enter the high-growth sleep medicine market and complements its existing pipeline, particularly its orexin program [9][7] Strategic Fit - The integration of Avadel's operations is expected to generate cost synergies and enhance operational efficiency as Alkermes prepares for the potential launch of its lead orexin program, alixorexton [12] - Alkermes is also developing alixorexton for narcolepsy and idiopathic hypersomnia, with ongoing clinical trials expected to yield data in 2025 and 2026 [10][11]

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