Novartis in Advanced Talks to Acquire Avidity Biosciences for More Than $70 a Share

Swiss pharmaceutical group Novartis is negotiating the purchase of U.S. biotechnology company Avidity Biosciences in a transaction priced at more than $70 per share, according to a person familiar with the matter. An announcement could arrive as early as Sunday, bringing another sizable acquisition to a year that has already seen the Basel-based drugmaker expand its research footprint and pipeline.

The proposed offer represents a premium of roughly 42 percent to Avidity’s closing price of $49.15 on Friday. At that closing level, the California-listed firm carried a market value close to $7.2 billion. A price in excess of $70 would lift the implied valuation well above the $8 billion mark, underscoring Novartis’s interest in Avidity’s emerging technology platform. Both companies declined to comment on the negotiations.

Focus on RNA-Targeted Medicines

Avidity develops a class of RNA-based therapeutics known as antibody oligonucleotide conjugates. These experimental medicines combine monoclonal antibodies with small strands of RNA designed to selectively modify gene expression inside targeted cells. By altering the way specific genes are transcribed, the compounds aim to treat genetic diseases that are difficult to reach with traditional drugs. Although RNA medicines remain a relatively new field, regulators have cleared several therapies in recent years, and pharmaceutical companies are racing to secure promising platforms to diversify their portfolios.

For Novartis, absorbing Avidity would broaden its exposure to genetic medicines while complementing an existing presence in small-molecule, biologic and gene-therapy programs. The Swiss group has been seeking to reinvigorate its pipeline after spinning off its generics unit Sandoz in 2023. Chief Executive Officer Vas Narasimhan has repeatedly highlighted the importance of external innovation, noting that acquisitions and partnerships will play a central role in the company’s growth strategy.

Expansion of U.S. Research Base

The potential purchase follows Novartis’s pledge earlier this year to direct $23 billion toward building out its U.S. infrastructure. Plans include establishing a second research-and-development center in San Diego, augmenting facilities already operating in Cambridge, Massachusetts, and elsewhere. The company has also sealed agreements with Anthos Therapeutics and Regulus Therapeutics to accelerate work on cardiovascular and kidney disease candidates. Those deals highlight a twin approach of organic and inorganic investment as Novartis positions itself among the highest-spending R&D players in the industry.

Adding Avidity’s technology could give Novartis new tools to attack muscle-related and other genetic disorders that currently lack effective therapies. Avidity’s lead program, AOC 1001, targets myotonic dystrophy type 1, a rare inherited muscular disease. The biotech is also advancing candidates in facioscapulohumeral muscular dystrophy and Duchenne muscular dystrophy, conditions marked by progressive muscle weakness for which there are limited treatment options.

Market Reaction and Strategic Rationale

Avidity shares have rallied nearly 70 percent since the beginning of the year amid optimism about early-stage study results and growing investor interest in RNA platforms. Novartis stock finished Friday at $130.36 on the New York Stock Exchange, reflecting a market capitalization above $280 billion. A deal of the size contemplated would represent a modest outlay relative to Novartis’s cash resources and borrowing capacity, while still ranking among the company’s largest acquisitions since the purchase of gene-therapy developer AveXis in 2018.

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Industry analysts say the combination would fit Novartis’s stated goal of pursuing “bolt-on” deals—transactions large enough to add meaningful scientific capability yet small enough to avoid disrupting the balance sheet. Securing Avidity’s assets could also reduce reliance on external partners for next-generation RNA delivery methods, an area viewed as critical to turning genetic insights into viable medicines.

Next Steps

No final agreement has been signed, and talks could still fall apart or lead to different terms, the person familiar with the discussions said. If a deal is reached, it would likely be subject to customary closing conditions, including regulatory review in the United States and possibly other jurisdictions where both companies operate. The timeline for completion would depend on the complexity of those reviews and the speed at which shareholders evaluate the offer.

The discussions emerge as large pharmaceutical companies continue to hunt for innovative platforms that can offset upcoming patent expirations on blockbuster drugs. Consolidation in the biotech sector has accelerated over the past two years, driven by lower market valuations and a need for access to specialized technologies. Should the transaction proceed, Novartis would become the latest big-cap firm to deepen its commitment to nucleic-acid-based therapeutics, joining peers that have recently announced sizable RNA-focused acquisitions.

Investors and industry observers are now watching for a formal statement from either company. A weekend announcement would allow Novartis to brief financial markets before U.S. trading resumes on Monday, minimizing speculation while providing clarity on strategic intent and financial impact.

Crédito da imagem: Bloomberg