Novartis AG (ADR) (NYSE:NVS) announced it will acquire San Diego-based biopharmaceutical firm Avidity Biosciences (NASDAQ:RNA), which is developing RNA therapeutics for genetic neuromuscular diseases, in a transaction valued at approximately US$12 billion.
The deal, unanimously approved by the boards of both companies, is designed to enhance Novartis’ neuroscience pipeline with Avidity’s late-stage programs and its proprietary Antibody Oligonucleotide Conjugates (AOCs) platform, a muscle-directed RNA delivery technology.
The acquisition supports Novartis’ xRNA strategy and is expected to raise the company’s projected 2024 to 2029 sales compound annual growth rate (CAGR) from 5% to 6%.
“Avidity’s pioneering AOC platform for RNA therapeutics and its late-stage assets bolster our commitment to delivering innovative, targeted and potentially first-in-class medicines to treat devastating, progressive neuromuscular diseases,” Novartis CEO Vas Narasimhan said.
Under the agreement, Novartis will acquire all outstanding shares of Avidity for US$72 per share in cash, representing a 46% premium to Avidity’s closing price on October 24.
Before the acquisition is completed, Avidity will spin out its early-stage precision cardiology programs into a new entity, “SpinCo,” which will be distributed to Avidity shareholders. The acquisition remains subject to customary closing conditions, including regulatory and shareholder approvals, and is expected to close in the first half of 2026.
Shares of Avidity surged 43.4% on the news to about $70, while Novartis shares were down 1.5% at about $128.