Alkermes to acquire Avadel Pharmaceuticals in $2.1B sleep medicine deal

Alkermes is making a decisive move to expand its portfolio beyond mental health and addiction therapies with a $2.1 billion all-cash acquisition of Ireland-based Avadel Pharmaceuticals. The deal, priced at $18.50 per share with an additional $1.50 contingent value right tied to future regulatory milestones, marks Alkermes’ strategic entry into the rapidly growing sleep medicine market.

Avadel’s lead product, Lumryz, has already gained U.S. approval for treating excessive daytime sleepiness and cataplexy in patients with narcolepsy. The drug bears strong resemblance to Jazz Pharmaceuticals’ former blockbuster Xyrem, which generated close to $2 billion annually at its peak. 

Lumryz is now being studied for idiopathic hypersomnia, a condition causing chronic fatigue despite adequate sleep. If approved by 2028, the therapy could deliver a new revenue stream for Alkermes and strengthen its foothold in a market estimated to serve more than 200,000 narcolepsy patients in the U.S. alone.

CEO Richard Pops described the acquisition as a “pivotal step” in the company’s evolution, designed to accelerate Alkermes’ commercial growth at a key inflection point for sleep medicine innovation. The purchase also complements Alkermes’ in-house development of alixorexton, a next-generation drug targeting the orexin-2 receptor — a mechanism at the centre of an intense race among biopharma players.

Investment analysts view Alkermes as the second major contender in the orexin space, following Takeda Pharmaceutical, whose competing candidate, oveporexton, recently delivered positive late-stage results and is projected to reach $3 billion in annual sales.

The acquisition could redefine Alkermes’ competitive positioning, granting it access to an approved product, a promising pipeline, and a market primed for long-term expansion.

Explore how Alkermes’ latest acquisition could reshape the global sleep therapeutics landscape.