Novartis is in talks to buy U.S. biotech firm Avidity Biosciences for more than $70 a share, Bloomberg News reports

Novartis has agreed to acquire Avidity Biosciences for approximately $12 billion, paying $72 per share, which represents a 46% premium to Avidity's Friday closing price. This strategic acquisition, expected to close in the first half of 2026 after Avidity spins out certain assets, significantly enhances Novartis's pipeline with Avidity's innovative RNA therapeutics, particularly those targeting muscle tissue. Consequently, Novartis has raised its sales compound annual growth rate forecast for 2024-2029 from 5% to 6%, signaling a strengthened R&D outlook and commitment to advanced therapeutic modalities.

Analysis

Novartis has announced a definitive agreement to acquire Avidity Biosciences for approximately $12 billion, offering Avidity shareholders $72 per share in cash. This represents a substantial 46% premium over Avidity's Friday closing price of $49.15, reflecting Novartis's strategic valuation of Avidity's innovative RNA therapeutic assets. The transaction is anticipated to close in the first half of 2026, following Avidity's spin-out of certain early-stage precision cardiology programs.

This acquisition significantly bolsters Novartis's research and development pipeline, particularly in advanced RNA therapeutics targeting muscle tissue, which CEO Vas Narasimhan highlighted as industry-leading. Consequently, Novartis has revised its sales compound annual growth rate forecast for 2024-2029 upwards, from 5% to 6%, indicating a positive long-term financial impact and strengthened outlook from this strategic move.

The Avidity deal aligns with Novartis's broader commitment to expanding its R&D capabilities, evidenced by a $23 billion investment in U.S. infrastructure and other recent therapeutic partnerships. Avidity's stock has already demonstrated strong market confidence, having increased nearly 70% year-to-date prior to this announcement, underscoring the pharmaceutical industry's increasing focus on advanced RNA-based modalities and targeted therapies.

Key Decisions for Investors

• Avidity (RNA) shareholders should consider the guaranteed $72 per share cash offer, representing a significant premium, and assess the opportunity cost of holding until the H1 2026 closing.
• Novartis (NVS) investors should recognize the improved long-term sales growth guidance (5% to 6% CAGR) as a positive signal for pipeline strength, while monitoring the successful integration of Avidity's RNA therapeutic programs.
• Investors in the broader biotech sector should note this acquisition as a validation of advanced RNA therapeutic platforms, potentially indicating continued M&A interest and valuation upside for similar innovative companies.