Alkermes Acquires FDA-Approved Narcolepsy Drug 'Lunris' Amid Regulatory Variables

Alkermes plc (NASDAQ: ALKS) completed its acquisition of Avadel Pharmaceuticals plc (NASDAQ: AVDL), the holder of the FDA-approved narcolepsy therapy LUMRYZ, on February 12 (U.S. local time). Through this transaction, Alkermes adds the once-nightly, extended-release sodium oxybate formulation LUMRYZ and its follow-on pipeline candidate valilloxybate to its commercial and R&D portfolio. LUMRYZ received final FDA approval in 2023 for treating cataplexy and excessive daytime sleepiness (EDS) in adult narcolepsy patients, and its indication was expanded in 2024 to include pediatric and adolescent patients aged seven and older.

Alkermes funded the roughly $2.1 billion acquisition with approximately $750 million of on-hand cash and a new $1.525 billion loan maturing in 2031. Avadel shareholders will receive $21.00 in cash per share plus a contingent value right (CVR) worth up to $1.50 per share. The CVR provides for an additional cash payment if FDA grants final approval for LUMRYZ’s adult idiopathic hypersomnia (IH) indication by the end of 2028, making regulatory outcome a key value driver.

Headquartered in Ireland, Avadel is a biotech focused on central nervous system and sleep disorders, concentrating on the U.S. narcolepsy market with LUMRYZ. In May 2023, LUMRYZ became the first—and only—once-nightly oxybate therapy approved by the FDA for adult narcolepsy, receiving orphan drug exclusivity for that indication. In October 2024, its label was expanded to cover patients aged seven and older, earning pediatric rare disease exclusivity through October 2031. Due to risks of central nervous system depression and abuse potential, the FDA imposed a black-box warning and requires distribution under a dedicated Risk Evaluation and Mitigation Strategy (REMS).

The deal follows a period of shareholder activism and a bidding contest. In mid-2025, activist fund ASL Strategic Value criticized Avadel’s LUMRYZ launch plan, calling for a full board replacement, strategic‐options review, and a litigation-linked CVR tied to potential recoveries from its lawsuit against Jazz Pharmaceuticals. In October 2025, Alkermes offered about $2.1 billion in cash, prompting Denmark’s Lundbeck to submit a higher bid in November. Alkermes then raised its offer to outbid Lundbeck and secured preferred-bidder status. In January 2026, Avadel shareholders approved the merger with approximately 97% support, cementing Alkermes’s victory in the acquisition of this FDA-approved sleep-disorder portfolio.