The Medicines Co.

Novartis plans to pay about $12 billion to acquire Avidity Biosciences, a neuromuscular drug developer that is months away from asking the FDA to approve its lead treatment candidate. The Sunday deal, for $72 per share $RNA , will deepen Novartis’ presence in RNA and give it access to three drugs that could be sent to the FDA for approval requests by the end of next year. That includes candidates in late-stage testing for Duchenne muscular dystrophy (DMD), facioscapulohumeral muscular dystrophy (FSHD), and myotonic dystrophy type 1 (DM1). It marks the second-largest biotech acquisition announcement of the year, behind Johnson & Johnson’s $14.6 billion takeover of Intra-Cellular Therapies. Avidity’s platform and 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 the announcement. Rumors of a potential buyout had been swirling for months. The Financial Times first reported talks about a potential deal on Aug. 6. The price announced Sunday represents a major premium of almost double the company’s value the day before the FT report. A few weeks after that report, Avidity shared more data and then raised $690 million from a public offering. The large stock sale cast doubt on whether a buyer would emerge. Novartis is in search of new medicines to reload its pipeline, and Avidity’s three drug candidates could help shore up some of the sales erosion expected from Novartis’ blockbuster heart drug Entresto, which is now facing its first generic competitors . As part of the deal, Avidity will spin out a new company with its early-stage R&D work in precision cardiology, including AOC 1086 and AOC 1072. The spinout will include Avidity’s collaborations with Bristol Myers Squibb and Eli Lilly, it said . Other pharma companies have made similar “spinco” moves when inking acquisitions, such as Pfizer’s Biohaven deal and Lilly’s Scorpion acquisition. Avidity chief program officer Kathleen Gallagher will lead the spinout as CEO, and current Avidity CEO Sarah Boyce will chair the new board.  The new company will be publicly traded and get $270 million in cash to support its pipeline. Earlier this month, Avidity said it expects to submit its first BLA for accelerated approval in the first quarter of 2026. That submission would be for delpacibart zotadirsen in certain patients with DMD. It had initially aimed for an FDA review at the end of this year, but delayed those plans to provide additional manufacturing and quality data. In the second half of 2026, Avidity plans to ask for accelerated approval of another drug, called delpacibart braxlosiran, for treating FSHD. It also plans to seek approval of a third candidate, called delpacibart etedesiran, in patients with DM1. If the FSHD and DM1 programs come to fruition, they could mark the first approved medicines for the conditions, Avidity has said . The company had 391 full-time employees as of Feb. 14, according to an SEC filing . It went public via an IPO in June 2020. The acquisition adds to the recent wave of pharma dealmaking. Avidity is the 11th biotech buyout of the past four weeks, according to an Endpoints News tally, and it marks Novartis’ largest deal in recent years. In 2019, it agreed to pay almost $10 billion to buy The Medicines Company . This year, Novartis has announced M&A moves for anticoagulant antibody developer Anthos Therapeutics , kidney microRNA specialist Regulus Therapeutics , and cardiovascular company Tourmaline Bio . San Diego has been a go-to market for Novartis’ dealmakers. Avidity marks Novartis’ fourth — and largest — biotech buyout in the region in recent years. That shopping spree includes Regulus, the neuro gene therapy maker Kate Therapeutics , and neuromuscular siRNA startup DTx Pharma . The city will be central to its American R&D efforts going forward. Novartis plans to open a $1.1 billion R&D biomedical hub in the city “between 2028 and 2029,” the company said in April as part of a broader push to boost stateside manufacturing and R&D .

Novartis is making one of the largest dealmaking gambles in its history, agreeing on Sunday to spend billions of dollars to acquire biotechnology company Avidity Biosciences, which is working on RNA medicines for rare neuromuscular conditions. Per deal terms, Novartis is paying $72 per share to acquire Avidity. The offer values Avidity at $12 billion and represents a 46% per-share premium to the biotechs $49.15 closing price on Friday.Avidity will concurrently split off early-stage work it's doing in cardiovascular disease into a new, unnamed company thats expected to be publicly traded. That company will be run by Aviditys current Chief Program Officer Kathleen Gallagher and chaired by CEO Sarah Boyce. Avidity stockholders will receive one share in the new company for every 10 of Avidity they own, or a proportional cash payment if certain assets, or the whole company, are sold to a third party.The deal is the years second-largest by total consideration, trailing only Johnson & Johnsons $14.6 billion buyout of Intra-Cellular Therapies in January, according to BioPharma Dive data. It also comes amid a recent upswing in biotech dealmaking thats helped fuel a rally for biotech stocks. There have been eight acquisitions with at least $50 million in upfront cash in October, the most of any month in several years, data show.The Avidity purchase is one of Novartis biggest in years, too. Prior to the acquisition, its largest most recent purchases were a roughly $9 billion buyout of gene therapy maker AveXisin 2018 and a nearly $10 billion deal for heart drug developer The Medicines Company in 2019.Avidity has been working on a technology that can deliver RNA drugs which are largely limited to liver targets into hard-to-reach muscle tissue. The company has a trio of these so-called antisense oligonucelotide conjugates, or AOCs, in late-stage testing for Duchenne muscular dystrophy, facioscapulohumeral muscular dystrophy and myotonic dystrophy type 1 three progressive neuromuscular conditions with limited treatment options. Theyre each meant to restore muscle function and potentially slow disease progression.In August, Avidity said it was on track to submit three approval submissions over the next 12 months. The first, for a subset of people with Duchenne, is expected in the first quarter of 2026. Filings could come for the other two if a pair of studies read out positively. Results from both trials are anticipated in the second quarter next year, Avidity has said. Novartis claimed Sunday that these programs will unlock multibillion-dollaropportunities and help create an industry-leading pipeline that builds on its sales expertise in neuromuscular diseases. The company already sells a gene therapy for spinal muscular atrophy via its buyout of AveXis, and last year added more prospects for myotonic dystrophy and facioscapulohumeral muscular dystrophy through an acquisition of Kate Therapeutics.Aviditys 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, said Novartis CEO Vas Narasimhan, in a statement. 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.The deal is expected to close in the first half of next year. '

Aditum Bio, a biotech investment firm that also runs clinical development for its portfolio companies, has done another licensing deal in China. The firm, which was founded by former Novartis CEO Joe Jimenez, created a new company called Kalexo Bio to house the exclusive global license to a dual-targeted siRNA that’s being tested for lipid management in patients with dyslipidemia and for prevention of high-risk atherosclerotic cardiovascular disease, or ASCVD. Kalexo will pay $12 million in upfront and near-term payments and up to $1 billion in biobucks to get the rights to the experimental drug from Mabwell Bioscience, the companies said Wednesday. Mabwell, based in Shanghai, is currently running IND-enabling studies of the candidate, codenamed 2MW7141, Jimenez told Endpoints News . Mabwell, which trades on the Shanghai stock exchange, is also attempting a listing in Hong Kong as IPO interest surges in that region. The drug developer primarily focuses on oncology but has dabbled in other areas like fibrosis. It’s also made deals with biotechs like Alphabet’s Calico . Kalexo is entering the hot field of siRNAs, which have generated much buzz in recent years. After Jimenez left Novartis, the Swiss pharma giant paid $10 billion in 2019 to buy The Medicines Company and an Alnylam-discovered siRNA treatment. The cholesterol-lowering drug subsequently was approved as Leqvio. More recently, the Alnylam and Medicines Company leaders who developed Leqvio teamed up to create a new siRNA biotech called Corsera Health , with a goal to go after the same cardiovascular problem, which is still one of the leading causes of death. “Many big pharmas shied away from cardiovascular disease because of the large outcomes studies that were required to gain approval,” Jimenez said. “Since the FDA has shown a shift in what it will take to get these drugs approved because of the severity of the disease, we thought it would be very interesting to go after one of the new technologies, and we settled on siRNA.” 2MW7141 goes after two genetically validated targets called PCSK9 and Lp(a), according to Jimenez, who added that “the preclinical data is quite encouraging.” Aditum creates biotech companies around in-licensed assets that are already being tested in humans or on the verge of clinical studies. The Oakland, CA-based firm, which recently set up an office in Cambridge, MA, has a team of more than 50 people who run clinical development for those portfolio companies. The goal is to get strong clinical data that will then attract a pharma buyer, Jimenez previously told Endpoints. Other biotech investors have set up similar models, including TCG Labs Soleil . Jimenez launched Aditum Bio in 2019 with his former Novartis colleague Mark Fishman, the founding president of the Novartis Institutes for BioMedical Research. The duo has already raised three funds, including a $428 million fund that was revealed in January . It’s built more than 10 companies and has five drugs in the clinic, according to Jimenez, and its portfolio includes companies like substance use disorder biotech Tempero Bio. At least one company, Anteris , has shuttered so far. The firm’s highest-profile exit has been Versanis, which took an experimental medicine from Novartis and repurposed it for obesity. Eli Lilly bought Versanis in 2023 for up to $1.9 billion. With Kalexo, Aditum is going back to China. Last November, the firm in-licensed a trispecific T cell engager from Leads Biolabs and set up a company called Oblenio Bio to test it in autoimmune diseases. “Mark Fishman and I built the Novartis Institutes for BioMedical Research in Shanghai, and we employed there many Chinese nationals that are now in the biotech ecosystem,” Jimenez said. “That’s a definite benefit for Aditum, just given the network that we have in the Chinese biotech environment.” Editor’s note: An earlier version of this article incorrectly described Kalexo’s upfront payment. It is $12 million in upfront and near-term payments.