Why Avidity Biosciences Stock Blasted 42% Higher Today
Key Points
It is being acquired for quite a meaty premium.
The buyer is a top name in the global pharmaceuticals space.
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A richly priced buyout seriously boosted the share price of biotech Avidity Biosciences (NASDAQ: RNA) as the stock trading week began. The company's equity rose by 42%, closing to land just below the buyout price. This leap looked quite impressive next to the S&P 500 (SNPINDEX: ^GSPC), as the bellwether stock indicator only increased by 1.2% on the day.
An acquirer from Europe
The purchasing party is global pharmaceutical company Novartis, which on Sunday divulged that it and Avidity had agreed to the acquisition. Under its terms, Switzerland-based Novartis will pay $72 per share for Avidity in an all-cash transaction. That's 46% higher than Avidity's closing share price last Friday.
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The boards of directors of both companies have unanimously approved the buyout, which values Avidity at around $12 billion.
Avidity was a tempting target for Novartis because it's a next-generation biotech developing new RNA therapeutics known as Antibody Oligonucleotide Conjugates (AOCs) to battle genetic neuromuscular disorders.
The acquirer said that its ownership of Avidity's current programs is "expected to advance the company's neuroscience strategy and complement the current pipeline with potential first-in-class therapeutic candidates that address the genetic drivers of muscle-damaging conditions."
Combining in 2026
The Avidity acquisition is expected to close in the first half of 2026; Novartis did not get more specific, although it did say it and Avidity would continue to operate as separate and independent businesses. The deal is subject to approval from the relevant regulatory bodies.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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