Novartis and Avidity announced that the boards of directors of Avidity Biosciences and Novartis have agreed to the acquisition of Avidity for $72 per share, representing a total consideration of approximately $12 billion.
The $72 per share offer represents a premium of approximately 46% over Avidity’s closing price on October 24 of $49.15 and approximately 62% over Avidity’s 30-day average price of $44.42.
Cardiology and licensing agreements to SpinCo
As part of the agreement, a spin-off company called “SpinCo” will be formed and the following assets will be transferred to SpinCo:
A pipeline of drug candidates for cardiology.
The license agreements with multinationals Eli Lilly and BMS.
Rights to continue the development of Avidity’s RNA platform for applications in cardiology.
In addition to the $72 per share, shareholders will receive:
One SpinCo share for every ten Avidity shares they own, and/or
A pro rata cash distribution of the proceeds received by Avidity prior to the closing of the deal if certain assets of SpinCo, or SpinCo itself, are sold to a third party. SpinCo is expected to trade as a new publicly traded company after the spin-off and receive $270 million in start-up capital.
The license agreement with BMS could generate more than $2 billion in milestone payments, plus royalties.
The agreement with Eli Lilly for up to six products could generate up to $405 million per product, plus royalties.
A nice addition to the Genetics Fund’s return
The acquisition of Avidity is a nice bonus on top of the Genetics Fund’s net return of 61% (measured on our last valuation date) since the start of the second half of 2025.
Novartis acquires sought-after products for muscle diseases
Novartis acquires a pipeline for neuromuscular disorders and access to a differentiated RNA platform. The agreement includes three drug candidates for the treatment of Duchenne muscular dystrophy and two other serious muscle diseases.
Right of first refusal activated
The transfer of assets to SpinCo includes certain Avidity assets that activate a right of first refusal with an Avidity license partner, which was announced simultaneously with the announcement.
has been informed of the acquisition.
Aescap percentage
At the close of Nasdaq on Friday, prior to the announcement of the news, Avidity’s position in the Aescap Genetics fund represented 5.9%. Approximately 10% of the Aescap Life Sciences fund is currently invested in the Aescap Genetics fund.
The fund has held shares in Avidity since the fund’s inception, which were acquired for $14.7.
Reference to the Q3 quarterly report
In our Genetics Q3 newsletter, we wrote about a possible acquisition of Avidity by Novartis, see below.
“There are rumors about a takeover of the company by Novartis or another multinational. For example, there was an internet post showing a helicopter landing on a tall office building and the comment that Avidity has its offices there. During a recent breakfast with the CEO in NY, she simply smiled and said that their office does not have a helicopter pad on the roof.”