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Investing.com - Jazz Pharmaceuticals (NASDAQ:JAZZ) stock rose after RBC Capital reiterated an Outperform rating with a $151.00 price target following a settlement with Avadel Pharmaceuticals over oxybate franchises. For comprehensive analysis of pharmaceutical companies and their competitive positions, InvestingPro offers detailed research reports covering 1,400+ stocks, including key players in the pharmaceutical sector.
The settlement requires Jazz to make a $90 million upfront payment to Avadel while receiving a 3.85% royalty on Lumryz sales through 2028, followed by a 10% royalty from 2028 through 2036. Jazz will not challenge future approvability of Lumryz and will grant Avadel a license on all relevant patents that could be asserted.
RBC estimates Lumryz sales could reach approximately $800 million in future years, with the royalty stream potentially peaking around $80 million. The firm values the deal at approximately $4 per share, representing about 2.5% upside for Jazz. Want to make more informed investment decisions? InvestingPro subscribers gain access to exclusive financial metrics, Fair Value calculations, and professional-grade analysis tools to evaluate pharmaceutical companies and their growth potential.
According to RBC, the settlement removes a persistent overhang for Jazz that had existed since 2021, which potentially carried a low risk of finding Jazz’s patents invalid or infringing. The agreement also helps Jazz mitigate some of the coming erosion of their oxybate franchise due to both generics and Lumryz competition.
RBC continues to model Jazz’s oxybate franchise (across Xyrem, Xywav and authorized generics) to peak in 2025/2026 at approximately $2 billion in revenue opportunity, before declining to around $750 million by 2034. Discover more deep-dive analysis of pharmaceutical companies and their revenue projections with InvestingPro’s ProPicks and comprehensive industry research tools.
In other recent news, Alkermes reported total revenues of $390.7 million for the second quarter of 2025, with proprietary product net sales increasing by 14% year-over-year to $307.2 million. The company remains optimistic about meeting its financial expectations for the year, citing strong sales of its proprietary products and developments in its narcolepsy treatment pipeline. Alkermes also announced its acquisition of Avadel Pharmaceuticals for up to $2.1 billion, which includes a cash payment of $18.50 per share and a contingent value right of up to $1.50 per share. This acquisition will integrate Avadel’s FDA-approved LUMRYZ, the only once-nightly oxybate treatment for narcolepsy, into Alkermes’ portfolio. RBC Capital raised its price target for Alkermes to $47, maintaining an Outperform rating, following the acquisition announcement. UBS also increased its price target for Alkermes to $46, up from $42, based on a higher enterprise value-to-2030 estimated sales multiple. These developments indicate a focus on expanding Alkermes’ commercial base and enhancing its growth prospects.
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