Another Bidding War Breaks as Lundbeck Bids for Sleep Biotech Avadel

There’s something in the water in pharma boardrooms. Another bidding war has broken out, this time for sleep biotech Avadel Pharmaceuticals.

Lundbeck has submitted an unsolicited proposal to buy Avadel for about $2.42 billion, according to S&P Capital IQ, narrowly edging out Alkermes’ $2.1 billion offer that arrived at the end of October. Avadel’s shares climbed 18% to $22.71 in pre-market trading on Friday morning. That stock has climbed 35% over the past month.

The deal includes an initial price of $21 per share and could add another $1 per share if Avadel’s narcolepsy drug Lumryz and its investigational hypersomnia and narcolepsy drug valiloxybate collectively hit $450 million in U.S. sales before the end of 2027. Shareholders would get another $1 per share if those sales hit $700 million, bringing the potential deal value to $23 per share, or about $2.42 billion.

Alkermes originally offered to buy out Avadel and Lumryz for $18.50 per share in cash at closing, plus $1.50 per share in a contingent value right if the drug is approved for idiopathic hypersomnia by the end of 2028. That valued Avadel at $20 per share, or a 38% premium to Avadel’s average stock price for the three months prior to the deal announcement.

Since then, the deal appeared on the way to closing. In a third quarter earnings release on Nov. 4, Avadel indicated that the deal would likely close in the first quarter of 2026. Closing was subject to the approval of shareholders.

But now Lundbeck is in play. Avadel said that the offer appears to be superior to Alkermes’. For now, the Alkermes agreement remains in effect, but Avadel will have discussions and negotiations with Lundbeck, according to the release.

The proposal comes a day after New York pharma giant Pfizer closed a deal to buy obesity biotech Metsera after a fierce bidding war with Novo Nordisk. The total racked up to about $9.2 billion after the back and forth.