In a report released today, Andrew Tsai from Jefferies downgraded Avadel Pharmaceuticals to a Hold, with a price target of $20.00.
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Andrew Tsai has given his Hold rating due to a combination of factors surrounding Avadel Pharmaceuticals. The primary reason is the impending acquisition by Alkermes (ALKS), which is expected to close in the first quarter of 2026. This acquisition, valued at up to $2.1 billion, includes both upfront payments and contingent value rights tied to the approval of Avadel’s leading drug, Lumryz, for idiopathic hypersomnia (IH).
The Hold rating also considers the ongoing growth potential of Lumryz in the narcolepsy market, with expectations of significant peak sales. However, the legal settlement with Jazz Pharmaceuticals, which includes royalty agreements and restrictions on Lumryz’s sales in IH until 2028, adds a layer of complexity to the company’s future prospects. Additionally, the development of a new salt-free version of Lumryz and its potential approval by 2028 further influences the rating. These factors collectively suggest a cautious approach, justifying the Hold rating.
According to TipRanks, Tsai is a 5-star analyst with an average return of 16.2% and a 57.64% success rate. Tsai covers the Healthcare sector, focusing on stocks such as Sarepta Therapeutics, Xenon, and Praxis Precision Medicines.