Novartis has made RNA medicines one of its top strategic goals and it already has RNA therapies for cardiovascular indications. The pharmaceutical giant is now placing one of its biggest ever bets through the $12 billion acquisition of Avidity Biosciences, a company with three late-stage therapeutic candidates that deliver RNA to muscle tissue to treat rare neuromuscular disorders.
The agreement also brings to Novartis an Avidity platform technology that could expand the delivery of RNA therapies to more tissue types in the body. Speaking during a Monday investor call, CEO Vas Narasimhan said Avidity’s assets complement Novartis’s pipeline and portfolio, which includes the spinal muscular atrophy gene therapy Zolgensma.
“We’ve articulated to you we want to do deals in our core therapeutic areas and our core technology platforms, and this is a deal that fits both,” Narasimhan said. “We strengthen our neuroscience franchise by adding three late-stage neuromuscular programs, and this builds on the extensive experience we have with Zolgensma.”
The Mechanics of a More Connected Healthcare Ecosystem [Video]
Arbiter’s Anjali Jameson on hospital and payer alignment.
The drugs of San Diego-based Avidity employ RNA to address root causes of disease. These therapies leverage the targeting ability of antibodies to reach their destinations. The RNA component, an oligonucleotide designed to modulate a disease process, is linked to an antibody that targets a particular tissue in the body. This new type of drug is called an antibody oligonucleotide conjugate (AOC).
The most advanced programs from the Avidity platform are delpacibart zotadirsen for Duchenne muscular dystrophy (DMD), depacibart etedesiran for myotonic dystrophy type 1 (DM1), and delpacibart braxlosiran for facioscapulohumeral muscular dystrophy (FSHD). Last month, Avidity reported new Phase 1/2 data for patients treated with the DMD therapy showing improvement on several measures of muscle function after receiving the treatment for one year. The company said it remains on track for a regulatory submission by the end of this year seeking accelerated FDA approval.
Narasimhan acknowledged DMD is a small indication, but he added that the new clinical data validates the Avidity platform, showing the technology can deliver therapies to muscle tissue. Bob Baloh, global head of neuroscience at Novartis Biomedical Research, said restoration of dystrophin, the key muscle protein that DMD patients lack, reached levels not seen with currently available Duchenne therapies. Baloh added that Novartis thinks the Avidity platform can be used more broadly to reach other types of tissue in the body but the initial focus will be muscle disorders.
Many of the available RNA therapies target the liver. Novartis has one of them with Leqvio, a small-interfering RNA therapy for patients who have high cholesterol. This drug works by targeting the gene that codes for PCSK9, a liver protein that in high amounts impedes the body’s ability to clear the bad form of cholesterol. The biopharmaceutical industry is interested in delivering RNA therapies beyond the liver, and Avidity’s technology gives Novartis a way to do that.
The Hidden Administrative Tasks Draining Small Practices
Small practices play a critical role in healthcare delivery, but they cannot continue to absorb ever-increasing administrative demands without consequences.
Beyond neuromuscular disease, Avidity’s research has also produced five cardiology programs, all preclinical. These programs will be spun out into a separate, publicly traded company called “SpinCo” for now. This new company will inherit Avidity’s collaborations with Bristol Myers Squibb and Eli Lilly. It will also retain rights to continue using Avidity’s technology for additional cardiology applications. Narasimhan said the decision to spin out Avidity’s cardio programs was not due to antitrust concerns. A spinoff offered the simplest and most straightforward way to address the collaborations tied to those assets, he said.
Avidity said the transfer of assets to SpinCo triggers a right of first negotiation with an existing collaboration partner. While the company’s regulatory filings do not specify the programs or partners covered, Leerink Partners spoke with Avidity management, which said BMS holds this contractual right. BMS has 10 business days to decide whether to enter an exclusive negotiation for the cardiology pipeline, Leerink analyst Joseph Schwartz said in a Monday note sent to investors. Starting those negotiations would trigger a 90-day period to complete due diligence and make an offer. If BMS does not exercise that right, the SpinCo spinoff will proceed.
By revenue, neuroscience is the smallest of Novartis’s four core therapeutic areas (the others are cardiovascular, renal, metabolic; immunology; and oncology). The company’s top neuroscience product is the multiple sclerosis drug Kesimpta, which generated $3.2 billion in revenue in 2024, a 43% increase compared to the prior year. Zolgensma is next with $1.2 billion in 2024 revenue, a 2% increase over prior year sales. Zolgensma came from the $8.7 billion acquisition of AveXis in 2018.
Narasimhan said the three Avidity drugs coming to Novartis are expected to launch by 2030. The Avidity programs for DM1 and FSHD, both diseases that do not currently have any FDA-approved therapies, offer multi-blockbuster potential. Leerink’s Schwartz characterized these Avidity programs as a very valuable addition to Novartis’s neuromuscular pipeline, complementing Zolgensma, adding that they will benefit from the pharma giant’s global commercialization capabilities.
Avidity is the latest in a growing line of RNA deals for Novartis. The pharma giant followed its The Medicines Company acquisition with the 2023 purchase of RNAi interference therapies startup DTx Pharma. And last month, Novartis agreed to pay $200 million up front for rights to a preclinical RNAi therapy from Arrowhead Pharmaceuticals in development for Parkinson’s disease. The Avidity deal has some overlap with Kate Therapeutics, a gene therapy developer that Novartis acquired last year. Kate’s programs include preclinical therapies for DMD and FSHD.
Financial terms of the Avidity acquisition call for Novartis to pay $72 in cash for each Avidity share, which represents a 46% premium to the biotech’s closing stock price on Friday and a 62% premium to the stock’s average closing price over the past 30 days. According to an Avidity regulatory filing, its shareholders will also receive one share of SpinCo common stock for every 10 Avidity shares they own. SpinCo will start out with $270 million in cash from Avidity and will be led by CEO Kathleen Gallagher, who is currently Avidity’s chief program officer. Avidity CEO Sarah Boyce will become chair of SpinCo’s board of directors.
The transaction has been approved by the boards of both Novartis and Avidity, but still needs approvals from regulators and Avidity shareholders. The deal is expected to close in the first half of 2026.
Photo: Adrian Moser/Bloomberg, via Getty Images