A Novartis AG sign on a building on the company’s headquarters campus in Basel, Switzerland, Monday, January 8, 2023.
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Swiss pharmaceutical giant Novartis agreed to acquire a biotechnology company avidity bioscience The company announced Sunday that it had won about $12 billion.
Novartis will pay Avidity shareholders $72 in cash per share, a 46% premium to Friday’s closing price.
The transaction is expected to close in the first half of 2026, after Avidity spins out portions of its business, including its early-stage precision cardiology program, the company said in a statement.
“The Avidity team has built a powerful program to deliver industry-leading RNA therapeutics to muscle tissue,” Novartis CEO Vasu Narasimhan said in a statement. “We look forward to developing these programs to meaningfully change disease trajectories for patients.”
As a result of the acquisition, Novartis has raised its forecast for compound annual revenue growth from 5% to 6% from 2024 to 2029.
Bloomberg News first reported that the companies were close to a deal, citing people familiar with the matter. Novartis and Aviditi did not immediately respond to CNBC’s requests for comment.
Avidity specializes in developing an innovative class of ribonucleic acid (RNA) therapeutics called antibody-oligonucleotide conjugates. RNA-based therapeutics are a relatively new class of medicines that treat or prevent diseases by changing the way genes are expressed.
Avidity’s deal comes as Novartis strengthens its research and development department. Earlier this year, the company pledged to invest $23 billion to build out its U.S. infrastructure, including plans to build a second research and development center in San Diego.
The pharmaceutical giant also signed two important deals this year with Anthos Therapeutics and Regulus Therapeutics to ramp up the development and manufacturing of cardiovascular and kidney disease treatments.
Avidity stock closed at $49.15 on Friday. The company’s market capitalization is about $7.2 billion, up nearly 70% since the beginning of the year. Novartis stock closed at $130.36 on Friday.
