Novartis makes $12bn wager on RNA drugs with Avidity buy

Novartis is poised to make one of its largest takeover deals in its history after agreeing to buy RNA specialist Avidity Biosciences in a deal that could be worth around $12 billion.

The Swiss pharma giant is paying $72 per share for San Diego-based Avidity, which is a 46% premium on the company's closing share price on Friday and comes after rumours of its interest first emerged in the summer.

In return, it gets access to an RNA drug discovery platform designed to generate candidates that can penetrate hard-to-reach tissues and a late-stage pipeline of therapies for rare muscle disorders.

As part of the deal, Avidity will split off some of its early-stage programmes in rare genetic cardiovascular diseases into a new, as yet unnamed company that will be chaired by Avidity chief executive Sarah Boyce and led by Kathleen Gallagher, currently Avidity's chief programme officer.

For Novartis, it marks a return to large-scale M&A with a deal that tops its two largest acquisitions to date, namely its $9.7 billion takeover of The Medicines Company in 2019 and $8.7 billion play for AveXis in 2018.

It also comes after a series of smaller bolt-on deals to boost Novartis' pipeline as it faces the loss of market exclusivity for some big brands, including its top-selling drug – $7.8 billion heart failure therapy Entresto (sacubitril/valsartan) – as well as others like $6.1 billion immunology drug Cosentyx (secukinumab), which will lose patent protection around the end of the decade.

If the deal goes through, Novartis will claim ownership of a biotech that has caused something of a stir in the sector in the last couple of years, fuelled by encouraging results for an experimental therapy for antibody-oligonucleotide conjugate (AOC) delpacibart zotadirsen (del-zota) in a form of Duchenne muscular dystrophy (DMD).

The new type of exon skipping drug is due to be filed for approval in the US in the first quarter of 2026 as a treatment for DMD associated with exon 44 mutations, after a meeting with the FDA that Avidity said "provided a clear path forward" for the programme.

Del-zota will address a relatively small market of around 900 patients in the US, but other candidates in its platform have larger target populations.

Avidity has already reported encouraging clinical results with candidates from its proprietary AOC platform for other neuromuscular disorders, including delpacibart etedesiran (del-desiran) for myotonic dystrophy type 1 (DM1) and delpacibart braxlosiran (del-brax) for facioscapulohumeral muscular dystrophy (FSHD), and has said these also have a clear line of sight to potential launch, with filings due next year.

Del-desiran is already in phase 3, while del-brax is being prepared for phase 3 trials whilst also being prepared for an early, accelerated filing based on positive phase 2 results.

In a statement, Novartis said the three programmes have the potential to unlock "multi-billion-dollar opportunities with planned product launches before 2030." It expects the deal to close in the first half of next year.