Novartis to Acquire Avidity Biosciences for $12 Billion, Expanding Neuromuscular Disease Portfolio
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Novartis has announced a definitive agreement to acquire Avidity Biosciences, a San Diego-based biotechnology company specializing in innovative RNA therapies for neuromuscular diseases, in a deal valued at approximately $12 billion. The acquisition, revealed in a press release on Sunday, positions Novartis to considerably bolster its neuroscience strategy and pipeline of potential first-in-class treatments.
The all-cash offer of $72 per share represents a substantial 46% premium over Avidity Biosciences’ closing share price on Wall Street, according to the Basel-based pharmaceutical giant. This valuation underscores the strategic importance of AvidityS differentiated RNA platform and its advanced-stage development programs. A company release stated that the deal is expected to contribute to a revenue growth increase of 5-6% for novartis between 2024 and 2029.
Targeting Neuromuscular Diseases with innovative Therapies
Avidity Biosciences focuses on developing RNA therapies to address severe genetic neuromuscular diseases. This acquisition provides Novartis with access to cutting-edge technology and a portfolio of programs designed to treat conditions with significant unmet medical needs. According to Novartis, these programs will complement its existing pipeline and accelerate the development of novel therapies.
Why is this happening? Novartis aims to strengthen its position in the rapidly growing field of neuromuscular disease treatment.Avidity’s RNA technology is considered highly valuable, offering a new approach to tackling genetic disorders.Who is involved? The key players are Novartis, a global pharmaceutical leader, and Avidity Biosciences, a biotechnology firm specializing in RNA therapies. What is the deal? Novartis will acquire Avidity for $12 billion in an all-cash transaction. how will it work? Novartis will pay $72 per share,a 46% premium over Avidity’s previous stock price.
The transaction includes a strategic restructuring involving Avidity’s precision cardiology programs. These programs will be transferred to a newly formed company, dubbed “Spinco.” Shareholders of Avidity Biosciences will recieve one share of Spinco for every ten shares of Avidity held, or a cash payment shoudl Spinco assets be sold. This arrangement aims to maximize value for Avidity shareholders while allowing Novartis to focus on its core neuromuscular disease focus.
How did it end? The deal is expected to close in the first half of 2026, pending regulatory approvals and shareholder votes. Until then, both companies will operate independently. Novartis intends to integrate Avidity’s neuromuscular programs while spinning off its cardiology assets into a separate entity,”Spinco,” to benefit shareholders.
Regulatory Approval and Timeline
The boards of directors of both Novartis and Avidity Biosciences have unanimously recommended approval of the transaction.Though, the deal remains subject to regulatory approvals and a vote by Avidity shareholders. The companies anticipate finalizing the acquisition during the first half of 2026. Until then, Novartis and Avidity Biosciences will continue to operate as independent entities.
This acquisition marks a significant move for Novartis, solidifying its commitment to innovation in the treatment of debilitating neuromuscular diseases and positioning the company for sustained growth in the coming years.
