Alkermes expands sleep portfolio with acquisition worth up to $2.1B

Core Insights - Alkermes is set to acquire Avadel Pharmaceuticals for $18.50 per share, totaling approximately $2.1 billion, which includes a potential additional payment of $1.50 per share contingent on FDA approval for Lumryz by 2028 [2][3] - The acquisition aims to enhance Alkermes' position in the sleep medicine market, particularly with the launch of its own drug, alixorexton, which targets narcolepsy [4][5] - Analysts view Alkermes as the second player in the narcolepsy drug market, following Takeda Pharmaceutical, which is advancing its own drug, oveporexton, with projected annual sales of $3 billion [6] Company Strategy - The acquisition of Avadel is seen as a strategic move to accelerate Alkermes' entry into the sleep medicine market at a critical time [4] - Avadel's existing commercial infrastructure is expected to support the launch of alixorexton, providing operational efficiencies and potential cost synergies [7] Market Context - Lumryz, Avadel's main asset, is approved for treating excessive daytime sleepiness and cataplexy, with a market potential similar to Xyrem, which peaked at nearly $2 billion in annual sales [2][3] - The U.S. narcolepsy patient population is estimated to be between 100,000 and 200,000, indicating a significant market opportunity for sleep-related medications [5]