Novartis and Avidity have announced that their boards of directors have reached agreement on the acquisition of Avidity for $72 per share, a total transaction value of approximately $12 billion. The premium is approximately 46% above the closing price and approximately 62% above the 30-day average. The acquisition is a great bonus on top of the 61% net return of the Genetics Fund since the start of the second half of 2025.
Yesterday Novartis announced that the board of directors of Avidity Biosciences and Novartis have agreed to acquire Avidity for $72 / share, representing around $12 billion.
The offer of $72 per share, represents a premium of approximately 46% over Avidity’s closing share price on October 24 of $49.15 and approximately 62% over Avidity’s 30-day volume weighted average price of $44.42.
Cardiology and License Deals separated into SpinCo
As part of the deal a spin-out company ‘SpinCo’ will be created and the following assets will be transferred to SpinCo:
- It’s pipeline of early stage cardiology medicine candidates
- The license deals with multinationals Eli Lilly and BMS
Rights to continue the development of Avidity’s proprietary RNA-platform, including next-generation technology improvements, for applications in the cardiology field.
Holders of Avidity shares will receive on top of the $72 per share:
- A distribution of 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 prior to the closing if certain SpinCo assets are, or SpinCo itself is, sold to a third party. SpinCo is expected to begin trading as a new public company following the spin-off and capitalized with $270 million in cash.
License deals terms
- The license deal with BMS can generate over $2 billion in milestone payments plus royalties.
- The deal with Eli Lilly can generate up to $405 million per product plus royalties for up to 6 products.
Nice addition to performance Genetics fund
The Avidity acquisition is a nice bonus on top of the 61% gain of the Genetics Fund (as of last Wednesday’s valuation date) since the start of the second half of 2025
Novartis gains sought after muscle disease products
Novartis will gain a pipeline in neuromuscular conditions and access to a differentiated RNA-targeting delivery platform. The agreement includes three late-stage medicine candidates for the treatment of Duchenne muscular dystrophy and two other severe muscle diseases.
Right of first refusal triggered
The transfer of assets to SpinCo includes certain Avidity assets that trigger a right of first negotiation with a license partner of Avidity that has been notified concurrently with the announcement.
Aescap percentage
At the closing of Nasdaq on Friday, before the announcement of the news, the position of Avidity in the Aescap Genetics fund represented 5,9%. Around 10% of the Aescap Life Sciences fund is currently invested in the Aescap Genetics fund.
The fund owns shares of Avidity from the inception of the fund, and were acquired for $14.7.
Reference to Q3 quarterly report
We wrote about a potential acquisition of Avidity by Novartis, including a nice anecdote, in our Genetics Q3 newsletter, see below.
Acquisition Rumors
•There are rumors of a potential acquisition by Novartis or another multinational. One online post showed a helicopter landing on a tall office building, with the caption noting that Avidity has offices there.
•During a recent breakfast with the CEO in New York, she remarked with a smile that their office does not have a helipad on the roof.
