Lundbeck has ended its bidding war with Alkermes to acquire Avadel Pharmaceuticals, saying that it will not increase its offer for the sleep disorder drug developer beyond the approximately $2.4 billion it proposed more than two weeks ago.
“After a comprehensive assessment of the latest process dynamics, Lundbeck has concluded that increasing the purchase price set out in its nonbinding proposal announced on November 14, 2025, would not meet its strategic or financial criteria for value creation,” Lundbeck said in a statement. “Lundbeck’s disciplined approach requires that any acquisition deliver a compelling benefit, and the evolving parameters of this opportunity no longer supported that threshold.”
Lundbeck insisted that while it was giving up its effort to acquire Avadel, “the strategic rationale for engaging in the sleep disorders space remains fully intact”—namely, the company’s reasoning that an expansion to sleep disorder drugs was a logical extension of its focus on treating people with brain disorders.
The company divides brain disorders into two areas of focus, neurology and psychiatry. Within neurology, Lundbeck’s sub-focus areas include dementias, epilepsies, movement disorders, pain, and headache—and sleep-wake disorders
“Lundbeck continues to assess opportunities that align with its Focused Innovator strategy and remains confident in the long-term potential of its existing neuroscience pipeline,” the company stated.
Lundbeck’s pullout clears the way for Alkermes to acquire Avadel for up to approximately $2.37 billion, as announced on November 19, consisting of up to $22.50 per share, consisting of $21 per share cash, plus $1.50 per share contingent value right (CVR) provision tied to final FDA approval of Lumryz™ for the treatment of idiopathic hypersomnia in adults.
The offer was the second made by Alkermes for Avadel. The first, announced October 22, was up to approximately $2.1 billion, up to $20 a share cash—$18.50 per share upfront payable at deal closing, plus a CVR entitling Avadel shareholders to $1.50 per share, also tied to achieving final FDA approval of Lumryz for idiopathic hypersomnia in adults by the end of 2028.
Unsolicited bid
In between both offers, Lundbeck on November 14 sparked the bidding war by making an unsolicited bid for Avadel of up to approximately $2.4 billion, or up to $23 per share—$21 per share upfront, CVR of up to $2 per share, consisting of:
- $1 per share if Lumryz and valiloxybate together reach total annual net sales for end-use in the United States of at least $450 million in any calendar year by December 31, 2027.
- $1 per share if Lyumryz and valiloxybate collectively reach at least $700 million in total annual net sales in the United States in any calendar year by December 31, 2030.
Valiloxybate is a GABAB receptor agonist that Avadel is developing under an exclusive global license agreement with XWPharma covering all indications, including sleep disorders such as narcolepsy and idiopathic hypersomnia.
Avadel‘s board declared Alkermes’ second offer a “company superior proposal” even though it was less than Lundbeck’s offer. Avadel explained why in a November 19 regulatory filing:
“The board of directors of Avadel determined that while the upfront cash consideration of $21.00 per share in Alkermes’ Increased Offer is identical to the cash consideration proposed in the Lundbeck Proposal, the terms of the CVR in Alkermes’ Increased Offer are superior to the terms of the CVR included in the Lundbeck Proposal, which was determined to be unlikely to be achieved,” Avadel concluded.
At deadline, neither Avadel nor Alkermes have issued statements or filed regulatory filings commenting on Lundbeck’s action.
Avadel stock surge
The bidding war made winners of Avadel shareholders, as the company’s stock surged 29% in the month since the original acquisition was announced, and more than doubled between May 21 and November 21, zooming 152%, before retreating with the broader stock market to a 14% one-month gain and a 136% six-month leap.
On NASDAQ, Avadel shares dipped 0.1% in early-day trading Monday as of 10 a.m. ET, to $21.46 from Friday’s close of $21.49, while Alkermes shares declined 1.1% to $29.24 from $29.58.
Lundbeck’s “A” shares slid 1.1% to DKK 34.60 ($5.39) from DKK 35 ($5.45), while the company’s “B” shares dipped 0.3% to DKK 44.30 ($6.90) from DKK 44.42 ($6.92). Lundbeck’s A shares offer investors 10 votes per share, compared with one vote per B share.
“With a strengthened pipeline and the strategic progress achieved in the past 18 months, Lundbeck continues to operate from a position of strength, supported by a solid balance sheet and a clear capital allocation framework,” the company further stated.
Lundbeck finished the third quarter with cash and cash equivalents of DKK 3.479 billion ($541.898 million), down 25% from DKK 4.664 billion ($726.54 million) at the end of 2024. The company said the decrease reflected repayments of the revolving credit facility it used for its $2.5 billion acquisition of Longboard Pharmaceuticals, completed in December 2024.
