Alkermes offers more for Avadel after Lundbeck bid

Alkermes has been forced to raise its offer for narcolepsy drug developer Avadel Pharma, after a rival bid from Lundbeck was deemed superior.

Dublin-domiciled Alkermes said today that it now has a new agreement with Avadel that raises its offer to $22.50 per share, including $21 in cash and another $1.50 that will be payable if Avadel gets an additional FDA approval for its approved narcolepsy treatment Lumryz (sodium oxybate).

That is an increase on its October agreement, which consisted of $18.50 upfront and another $1.50 if Lumryz is approved in the new indication of idiopathic hypersomnia (IH) by the end of 2028 and, according to Alkermes, values Avadel at up to $2.37 billion.

Shortly after Alkermes and Avadel announced their deal, Lundbeck made an unsolicited offer of $23 per share, including $21 upfront, with the remainder tied to the achievement of sales targets for Lumryz and Avadel's follow-up drug valiloxybate.

Alkermes' raised offer was prompted by the Avadel board of directors' determination on Monday that the Lundbeck offer was better, with the sweetened deal offered yesterday, well within the five working day allowance under US financial regulations.

"After carefully assessing both the Lundbeck proposal and Alkermes' increased offer and revised terms with its outside legal counsel and financial advisors, the board of directors of Avadel has determined that the Lundbeck proposal no longer constitutes a 'company superior proposal' for the purposes of the transaction agreement," said Alkermes in a statement.

The decision to switch back to Alkermes likely reflects that getting FDA approval for Lumryz in IH will be an easier route to the additional payment than the combined sales thresholds for Lumryz and valiloxybate laid out in Lundbeck's offer, which were set at $450 million by 2027 and $700 million by 2030. Lumryz has been predicted to make sales of up to $275 million this year.

So far, Lundbeck has not indicated whether it will raise its offer for Avadel further.

The competition for Avadel comes after Pfizer just completed a $10 billion takeover of obesity drug developer Metsera, after having to raise its offer from an initial $7.3 billion after Novo Nordisk tabled a $10 billion offer for the biotech.

While Metsera initially switched its allegiance to Novo Nordisk, Pfizer eventually won the bidding war after it became clear that its offer was less likely to lead to antitrust issues.

Image by Benoît DE HAAS from Pixabay