Novartis said it is acquiring Avidity Biosciences for approximately $12 billion, the companies said Sunday, in a deal designed to bolster the buyer’s neuroscience pipeline with three late-stage programs.
Headquartered in San Diego, Avidity is developing a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs) for what it calls serious genetic neuromuscular diseases.
The AOC approach has enabled Avidity—and will allow Novartis, if the sale goes through—to deliver RNA to muscle tissue via TfR1 mAb, with the goal of enabling modulation of the genetic mechanism of disease.
“Our goal is to be able to overcome one of the challenges around delivery of oligos. One of the natural places you go to is muscle because there are a whole range of rare genetic diseases which are ideal for an oligo approach,” Avidity president and CEO Sarah Boyce told GEN in 2021.
Buying out Avidity also helps Novartis to fulfill its commitment to building a portfolio and pipeline of treatments that apply RNA in various ways—an approach Novartis labels “xRNA.”
Avidity’s AOC-based pipeline includes three programs in registrational phases and is set to submit Biologics License Applications (BLAs) over the next 12 months:
Del-zota: Delpacibart zotadirsen is an Exon 44-targeting AOC designed to treat Duchenne muscular dystrophy (DMD), under evaluation in the Phase II EXPLORE44OLE (NCT06244082) trial following completion in November 2024 of the Phase I/II EXPLORE44 (NCT05670730) study.
Del-desiran: Delpacibart etedesiran is a DMPK-targeting AOC indicated for myotonic dystrophy type 1 (DM1), being studied in the Phase III HARBOR trial (NCT06411288).
Del-brax: Delpacibart braxlosiran is an AOC intended to treat facioscapulohumeral muscular dystrophy (FSHD) by targeting DUX4, being assessed in the Phase III FORTITUDE-3 trial (NCT07038200).
Avidity says it has aligned with the FDA on a path toward accelerated approval for del-zota, while the latter two programs are on track to be the first globally approved drugs for their respective conditions.
“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 in a statement.
Also in Avidity’s pipeline are preclinical AOC programs that include AOC 1045, a DMD program designed to target Exon 45; AOC 1072, a program targeting protein kinase AMP-activated non-catalytic subunit Gamma 2 (PRKAG2) syndrome; AOC 1086, a program against phospholamban (PLN) cardiomyopathy; a rare neuromuscular disease program with an undisclosed target; and an unspecified number of additional DMD programs, also with undisclosed targets.
“The Avidity team has built robust programs with industry-leading delivery of RNA therapeutics to muscle tissue. We look forward to developing these programs to meaningfully change the trajectory of diseases for patients,” Narasimhan added.
Cardio-focused spinout
Avidity’s early-stage precision cardiology programs will be spun out into a publicly traded company named SpinCo—including AOC 1072, AOC 1086, and collaborations with Bristol Myers Squibb (BMS) and Eli Lilly.
BMS and Avidity in 2023 announced an expanded, up to $2.3 billion partnership, a global licensing and research collaboration focused on discovering, developing, and commercializing “multiple” cardiovascular targets. BMS committed $100 million upfront ($60 million cash and a $40 million purchase of Avidity stock). Avidity initially partnered with MyoKardia, which BMS acquired in 2020.
Lilly inked a global licensing and research collaboration with Avidity focused on developing treatments in immunology and other indications. Lilly agreed to pay Avidity $20 million cash upfront, invest $15 million in Avidity, and commit up to approximately $405 million per target in payments tied to achieving development, regulatory and commercialization milestones, plus tiered royalties ranging from the mid-single to low-double digits on product sales.
SpinCo is expected to begin trading as a new public company following the spin-off and capitalized with $270 million in cash. SpinCo’s CEO will be Kathleen Gallagher, now Avidity’s chief program officer, while Boyce will become the spinout’s board chair.
“Avidity has expanded the possibilities of what RNA therapeutics can deliver to patients by advancing innovative science and creating an organization with a strong commitment to providing access to our potential medicines,” Boyce stated.
Long-term strategy
Novartis reasons that buying Avidity will help it achieve its long-term neuroscience strategy of launching several new neuro treatments in coming years for genetically-defined diseases with high unmet need. Those treatments are “expected to unlock multi-billion-dollar opportunities with planned product launches before 2030,” Novartis said in its announcement of the deal.
As a result, Novartis expects those new treatments to help it recoup billions in sales it expects to lose as some of its best-selling drugs have either lost or will lose patent exclusivity in coming years surpassing $20 billion—$7.386 billion during the first and second quarters of 2025, and $13.875 billion all of last year.
Those “patent cliff” drugs include:
Entresto® (sacubitril/valsartan), a combination neprilysin inhibitor, and angiotensin II receptor blocker for heart failure. The drug lost U.S. exclusivity this year and will lose European Union exclusivity in 2026.
Promacta® (eltrombopag), indicated for forms of thrombocytopenia and severe aplastic anemia. The thrombopoietin receptor agonist’s exclusivity expired this year in Europe, where it is marketed as Revolade®, after its composition of matter patent expired earlier.
Jakavi®, the ex-U.S. version of the blockbuster kinase inhibitor Jakafi® (ruxolitinib), which Incyte markets in the U.S. for myelofibrosis, polycythemia vera, and graft-vs.-host disease. Jakavi’s European exclusivity will end in 2027.
Tasigna® (nilotinib), a kinase inhibitor whose indications include Philadelphia chromosome-positive chronic myeloid leukemia. Its composition of matter patents have expired in both the U.S. and Europe.
Entresto generated $4.618 billion in the first half of this year and $7.822 billion globally in 2024. Promacta/Revolade, $1.048 billion and $2.269 billion; Jakavi racked up $1.016 billion and $1.936 billion; and Tasigna, $704 million and $1.848 billion.
Novartis is set to release third quarter results on Tuesday.
“This news comes on the heels of speculation that began in August,” commented Joseph P. Schwartz, senior managing director, rare diseases, and a senior research analyst with Leerink Partners, in a research note Sunday. “(It) does not surprise us given the strength and execution of RNA’s management team: they have made their consistent data and strong strategy look easy across all three of their neuromuscular programs.”
“We think RNA’s programs will be a very valuable addition to NVS’ neuromuscular pipeline, which already includes Zolgensma® for spinal muscular atrophy/SMA, and will benefit from NVS’ global commercialization capabilities,” Schwartz added.
46% premium
Novartis plans to acquire all outstanding shares of Avidity through a merger with a newly formed indirect wholly owned subsidiary. Novartis plans to pay $72 cash for each share of Avidity common stock at closing, representing a 46% premium above the Friday closing share price of $49.15 for the company’s stock, which trades its shares on NASDAQ under the fitting symbol RNA.
The share price also represents an approximately 62% premium above Avidity’s Friday closing 30-day volume weighted average price of $44.42.
Avidity common stockholders will receive one share of SpinCo for every ten shares of Avidity they hold, and/or a pro rata cash distribution of the proceeds received by Avidity before the closing if SpinCo or any of its assets are sold to a third party.
Novartis’ acquisition of Avidity is subject to a spinoff or sale of SpinCo, as well as customary closing conditions that include regulatory approvals and approval of Avidity stockholders. The boards of both companies have already approved the acquisition transaction, which is set to close in the first half of 2026.
“We are confident that this transaction with Novartis maximizes value for our investors and will support the global expansion of our neuroscience pipeline,” Avidity CEO Boyce added.
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