Investorsยท2025-11-14 16:13Core Insights - A bidding war is emerging in the biotech sector, with Avadel Pharmaceuticals (AVDL) at the center, as Alkermes (ALKS) faces competition from Lundbeck for a potential acquisition [1][2] Group 1: Acquisition Offers - Lundbeck has made an unsolicited bid for Avadel worth up to $2.4 billion, valuing Avadel stock at $23 per share, which includes $21 in cash and $2 tied to contingent value rights (CVRs) [2] - Avadel previously agreed to a $2.1 billion takeover deal from Alkermes, which valued the stock at up to $20 per share, consisting of $18.50 in cash and CVRs worth up to $1.50 per share [2] Group 2: Market Reactions - Following Lundbeck's offer, Avadel's stock surged over 20% to $23.16, while Alkermes' stock fell more than 6% to $29 [4] Group 3: Financial Capacities - Alkermes has $1.1 billion in cash and no debt, with an EBITDA of $380 million, giving it a theoretical deal capacity of $2.7 billion [5] - Lundbeck has $550 million in cash and $1.9 billion in debt, with an EBITDA of $1.3 billion, resulting in a theoretical deal capacity of $3.8 billion [5] Group 4: Contingent Value Rights and Sales Milestones - Lundbeck's deal includes aggressive sales milestones requiring Lumryz and valiloxybate to achieve at least $450 million in U.S. sales annually by 2027 and $700 million before 2030 [7] - Analysts estimate Lumryz will generate $399 million in 2027 and $581 million by 2030, which is below Lundbeck's required sales milestones [7]