Avadel (AVDL) stock remains suspended following $21 Alkermes acquisition, new SEC filing disclosed

Avadel Pharmaceuticals plc recently underwent changes when Two Seas Capital divested its entire stake in the company as of December 31. This move came amidst a pending merger with Alkermes that led to the suspension of trading in Avadel shares. The stock’s trading halt came after the final close on February 11 at $21.64, just slightly above the $21 per share cash offer in the merger deal.

Following an Irish High Court-approved scheme of arrangement, Avadel confirmed that the acquisition officially took effect on February 12. Investors holding shares as of late February 11 are entitled to receive $21.00 in cash per share along with a non-transferable contingent value right (CVR). This CVR offers a potential $1.50 payout contingent on specific milestones being met by December 31, 2028, related to FDA approval of LUMRYZ for idiopathic hypersomnia and legal proceedings involving Jazz Pharmaceuticals.

The process also involved the delisting of Avadel from Nasdaq and the termination of its U.S. reporting obligations. Additionally, the company canceled its at-the-market share sale plan and prepaid about $60.2 million to settle a royalty deal connected to LUMRYZ. Post-effective amendments to Avadel’s old shelf registration took effect on February 13, a customary procedure after a cash-out merger and delisting.

Alkermes CEO Richard Pops described the closure of the deal as a significant milestone for the company as it ventures into the field of sleep medicine. The acquisition was financed through approximately $750 million in cash and $1.525 billion in term loans maturing in 2031. Management plans to reveal financial targets for 2026 on February 25, alongside financial results for the quarter and year ended December 31, 2025.

Traders are currently focused on administrative tasks concerning the merger, such as finalizing entitlements, determining the cash payout schedule, and registering the CVR with brokers and custodians. The CVR, while offering potential additional payouts, is non-transferable and subject to expiration if the stated milestones are not achieved by the end of 2028. There are regulatory and legal obstacles that could impact the outcome of the CVR.

With Avadel off the market, attention shifts to Alkermes and the potential of LUMRYZ beyond treating narcolepsy. The company’s ability to compete and innovate in the field of sleep medicine will be closely monitored to see if it can maintain its position against established industry players.