Novartis to Buy Avidity Biosciences in $12B Deal for RNA Drugs
The all-cash offer of $72 per share represents a 46% premium, bolstering the Swiss drugmaker's pipeline with promising treatments for muscular dystrophy.
Swiss pharmaceutical giant Novartis AG has agreed to acquire Avidity Biosciences Inc. in a $12 billion all-cash deal, a significant move to deepen its expertise in RNA-based therapies and strengthen its late-stage neuroscience pipeline.
The deal, announced Sunday, values Avidity at $72.00 per share. This represents a substantial 46% premium to the company's last closing price of $49.15 on Friday, signaling Novartis's strong conviction in Avidity's technology and drug candidates.
At the heart of the acquisition is Avidity's proprietary Antibody Oligonucleotide Conjugate (AOC) platform, which is designed to solve a critical challenge in genetic medicine: delivering RNA-based drugs directly to specific types of cells, particularly muscle tissue. This technology combines the precision of monoclonal antibodies with the therapeutic power of oligonucleotide-based treatments to target the root cause of diseases.
"We are excited to welcome Avidity Biosciences into the Novartis family," said a Novartis spokesperson in an official company statement. "Avidity's innovative AOC platform and promising pipeline of muscle-targeting therapies are highly complementary to our strategic focus on advancing transformative treatments for neuromuscular diseases."
Novartis will gain control of Avidity's portfolio of clinical-stage programs aimed at rare muscular disorders. These include promising treatments for myotonic dystrophy type 1 (DM1), facioscapulohumeral muscular dystrophy (FSHD), and Duchenne muscular dystrophy (DMD), conditions with significant unmet medical need.
The $72 per share offer surpasses the consensus analyst price target of approximately $68 for Avidity stock, underscoring the premium Novartis is willing to pay to secure a leading position in the targeted RNA therapeutics space. Prior to the announcement, Avidity's shares had traded in a 52-week range of $21.51 to $56.00.
A key component of the agreement involves Avidity's early-stage cardiology programs. Before the acquisition closes, these assets will be spun off into a new, independent public company, referred to as "SpinCo." This move allows the core acquisition to focus squarely on Avidity's advanced neuromuscular franchise while enabling the cardiology assets to develop separately.
The acquisition is the latest in a series of major deals in the biopharmaceutical sector, where large drugmakers are looking to replenish their pipelines by acquiring smaller, innovative biotech firms with promising late-stage assets. For Novartis, this deal is expected to enhance its sales growth outlook for the latter half of the decade, according to reports.
The transaction, which has been approved by the boards of both companies, is expected to close in the first half of the coming year, subject to approval from Avidity's shareholders and customary regulatory clearances.