Alkermes Pivots Deeper Into Sleep Medicine After Avadel Deal, Details Orexin Phase 3 at TD Cowen

Key Points

• Alkermes says the completed acquisition of Avadel and its product LUMRYZ makes the company “a major player in the sleep medicine market,” using its cash-generative commercial portfolio to fund an expanded orexin franchise and support a smoother commercial launch for alixorexton.
• The Phase 3 program for alixorexton includes three pivotal studies (two NT1, one NT2) with the Maintenance of Wakefulness Test (MWT) as the primary endpoint and the Epworth Sleepiness Scale (ESS) included; trials will test once-daily and optional split‑dose regimens informed by Phase 2 data and carry a Breakthrough Therapy designation.
• Alkermes positions a potential “two‑agent” approach—combining daytime orexin agonists with nighttime oxybates—for treating narcolepsy’s 24‑hour symptoms, notes generally mild-to-moderate tolerability (most commonly transient insomnia and dose‑dependent polyuria), and is advancing follow-on orexin programs such as ALKS‑7290 in ADHD.

Alkermes NASDAQ: ALKS Chairman and CEO Richard Pops told attendees at the 2026 TD Cowen Healthcare Conference that the company entered 2026 with what he described as a strong, cash-generative base business and an expanding focus on sleep medicine, highlighted by its orexin program and the completed acquisition of Avadel.

Company transition and increased focus on sleep medicine

Pops said 2025 brought significant change for Alkermes, particularly in the second half of the year, and framed those developments as part of a longer transition from a royalty-driven business to a proprietary products company. He said the business is consolidating around sleep medicine through development of alixorexton and the “orexin franchise,” and through the addition of Avadel’s product LUMRYZ.

With the acquisition completed, Pops said Alkermes now views itself as “a major player in the sleep medicine market,” positioning the company for what it expects will be the eventual launch of alixorexton. He emphasized that the company’s commercial portfolio is producing cash that can fund pipeline expansion.

Why Alkermes acquired Avadel and added LUMRYZ

Pops said investors initially reacted with surprise to the Avadel deal, but he argued the logic becomes clearer when considering two factors: the ongoing role of oxybates in narcolepsy care and the way a marketed narcolepsy product can support alixorexton’s future launch.

He said Alkermes expects oxybates to remain an important part of the treatment paradigm, potentially growing in relevance as diagnosis and treatment rates rise toward disease prevalence. Pops also said establishing a commercial presence in specialized sleep centers ahead of an orexin launch could “shift the launch curve” for alixorexton “up and to the left,” especially as competitors also enter the market.

In evaluating the transaction, Pops said Alkermes considered both the expected cash flows from LUMRYZ sales and the potential impact on the valuation of alixorexton’s launch. He described Avadel’s staff as largely commercial and said the team’s experience fits Alkermes’ approach to building commercialization capabilities, citing Alkermes’ own experience with LYBALVI and VIVITROL.

Narcolepsy treatment needs and the company’s “two-agent” opportunity

Pops described narcolepsy as a “24-hour disease,” combining excessive daytime sleepiness with fragmented nighttime sleep. He said patients who use oxybates often experience meaningful benefit from sleep consolidation, and he expects that to remain important even as orexin agonists become available as daytime wake-promoting agents. He added that his perspective has evolved, noting that while orexin therapy may reduce the need for nighttime treatment for some patients, others may continue to value oxybate-driven nighttime improvements.

He also highlighted a gap between estimated U.S. prevalence and treatment, citing a figure of roughly 200,000 people with narcolepsy and about 80,000 treated. Pops said new effective oral medications can contribute to convergence between prevalence and diagnosis/treatment rates, which in turn could support ongoing oxybate use.

Looking ahead, Pops said Alkermes believes some patients could benefit from a combination of daytime and nighttime agents, and suggested Alkermes may be uniquely positioned to study that approach because it will have both an oxybate and an orexin program.

Orexin program: dosing strategy, Phase 3 design, and endpoints

Pops said the safety, tolerability, and efficacy profile for orexin 2 receptor agonists has become clearer over the past year as more data have emerged, including results from Alkermes’ VIBRANCE-1 and VIBRANCE-2 studies and Takeda’s Phase 3 work. He said Alkermes’ Phase 2 experience informed a dosing strategy that includes both once-daily dosing and an optional “top-up” or split-dose approach intended to extend wakefulness later in the day for certain patients.

He said feedback from investigators and patients in NT1 suggested some patients wanted wakefulness to persist into evening hours. He added that NT2 data showed the drug effect “came off earlier in the day” on average versus NT1, reinforcing the idea that split dosing could support longer duration. Pops said Alkermes’ larger Phase 2 dataset, including a 90-patient NT2 cohort, enabled modeling of exposure and wakefulness to help select split-dose regimens for Phase 3.

Describing the Phase 3 program, Pops said Alkermes worked with regulators to shape its plan and noted a Breakthrough Therapy designation received at the end of the prior year. The Phase 3 program includes three studies:

• Two NT1 studies: 12-week, parallel design, three dosing arms each; primary endpoint is the Maintenance of Wakefulness Test (MWT), with Epworth Sleepiness Scale (ESS) also included; cataplexy rates will be evaluated; studies will test once-daily and split dosing.
• One NT2 study: 12-week duration with four arms; MWT primary endpoint and ESS included; additional secondary endpoints such as fatigue and cognition will continue to be collected, though Pops emphasized the “classic approvable endpoints.”

Pops declined to provide a timeline for Phase 3 data, saying it was too early and emphasizing the importance of site initiation and data quality. He also said Alkermes learned in Phase 2 that site-to-site variability affected measures such as MWT administration, cataplexy capture, and differentiation among NT1, NT2, and idiopathic hypersomnia (IH), and said the company will apply those learnings in Phase 3 to improve signal quality.

On interpretation of MWT, Pops cautioned against focusing on maximizing scores, calling it an “illusion” and stressing that MWT is not commonly used clinically. He argued treatment goals should emphasize a return to normalcy, including patient-reported sleepiness (ESS) and broader domains like fatigue and cognition. He also said NT2 results can be misunderstood when average MWT values reflect a mix of responders and non-responders, while many patients reported normalcy on ESS at the 18-mg dose in Phase 2.

IH readouts, tolerability, and additional orexin programs

Pops said IH represents an opportunity but described it as a “vague diagnosis” with heterogeneity in presentation. He said Alkermes’ confidence in orexin for IH comes from its Phase 1b work and NT2 data, which he said show a wakefulness signal that can “power through” variability. He said Alkermes expects IH to resemble NT2 and noted the IH study includes a split-dose regimen to test whether later-day wakefulness improves; while MWT is not the endpoint in IH, he said the company will measure it to better understand wakefulness patterns.

On the oxybate side, Pops noted that XYWAV is approved for IH and said the IH study Avadel ran mirrors that work, with the key difference being once-nightly dosing that avoids a middle-of-the-night wake-up. He said Alkermes attached a contingent value right (CVR) to those data and expects results in Q2.

Regarding tolerability of orexin agonists, Pops said side effects seen across datasets have generally been mild-to-moderate and largely transient. He said insomnia has been the most commonly reported side effect and suggested it may reflect circadian rhythm disruption rather than direct pharmacologic stimulation, noting it typically diminishes within about two weeks. He also cited polyuria (urinary frequency) as a more persistent, dose-dependent on-target effect that has generally been mild-to-moderate and not a frequent cause of discontinuation, and said dose flexibility may help manage it. Pops added that investor attention to visual effects has decreased as more data have accumulated.

Pops also discussed follow-on orexin programs, including ALKS 7290 in ADHD, with proof-of-concept data expected in the back half of the year. He said preclinical work suggests orexin circuitry relates to vigilance and attention and that orexin 2 receptor agonists have looked strong as monotherapy in ADHD models. He also pointed to fatigue as another adjacency, citing rapid and persistent improvements on the PROMIS Fatigue Scale in narcolepsy studies. In addition, he described Phase 2 NT1 findings using the British Columbia Cognitive Complaints Index and PROMIS Fatigue Scale, saying many patients reported normal levels by the two-week timepoint and that benefits persisted through double-blind and open-label periods; he said similar effects were observed in NT2 but were less visually obvious due to variability, with more data planned for presentation at the SLEEP meeting.

On business development, Pops said Alkermes is not currently looking to license out orexin indications and wants to see how the strategy plays out. He said the company remains open to “tuck-in” deals that leverage its clinical, scientific, and commercial infrastructure, but emphasized focus on executing its late-stage and early-stage pipeline alongside its commercial portfolio.

About Alkermes NASDAQ: ALKS

Alkermes plc is a biopharmaceutical company focused on developing innovative medicines to address unmet needs in the central nervous system (CNS). The company applies its proprietary drug delivery technologies and therapeutic expertise to advance treatments for addiction, schizophrenia, bipolar I disorder and depression. Alkermes' portfolio includes both commercial products and a pipeline of investigational therapies designed to improve patient outcomes and support long-term disease management.

Alkermes' commercial franchise features several approved products.

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