Novartis Avidity Biosciences in talks
Signage for Novartis AG at a building in the company’s headquarters campus in Basel, Switzerland, on Monday, Jan. 8, 2023.
Bloomberg | Bloomberg | Getty Images
Swiss pharmaceutical giant Novartis has agreed to acquire biotechnology company Avidity Biosciences for approximately $12 billion, as announced on Sunday.
Novartis will pay Avidity shareholders $72 a share in cash, marking a 46% premium to the company’s closing price on Friday.
The acquisition is set to be finalized in the first half of 2026, following Avidity’s divestiture of certain business segments, including its early-stage precision cardiology programs, according to a statement.
“The Avidity team has developed strong programs focused on advanced delivery of RNA therapeutics to muscle tissue,” stated Novartis CEO Vas Narasimhan. “We are eager to advance these programs to significantly impact the course of diseases for patients.”
Following the acquisition, Novartis has revised its sales compound annual growth rate forecast for the period between 2024 and 2029 to 6% from 5%.
Initial reports of the impending deal between the two companies were brought to light by Bloomberg News first reported, citing an informed source. Novartis and Avidity have yet to respond to CNBC’s requests for comments.
Avidity specializes in the development of a novel class of ribonucleic acid (RNA) therapeutics known as antibody oligonucleotide conjugates. RNA-based therapeutics represent a relatively new category of medications that function by modulating gene expression to treat or prevent diseases.
The acquisition of Avidity comes as Novartis intensifies its research and development efforts. Earlier this year, the company committed to investing $23 billion in expanding its U.S.-based infrastructure, which encompasses plans to establish a second R&D center in San Diego.
Moreover, the pharmaceutical giant has sealed pivotal agreements with Anthos Therapeutics and Regulus Therapeutics in the current year to enhance its portfolio of cardiovascular and kidney disease treatments.
On Friday, Avidity shares concluded at $49.15. The stock, boasting a market capitalization of approximately $7.2 billion, has surged by nearly 70% since the start of the year. Novartis shares wrapped up Friday at $130.36.
