Avidity stock surges on $12B Novartis deal

Avidity Biosciences (NASDAQ:RNA [https://seekingalpha.com/symbol/RNA]) shares surged as much as 45% in premarket trading on Monday after Novartis (NYSE:NVS [https://seekingalpha.com/symbol/NVS]) agreed to buy the biotechnology company in a deal valued at $12 billion.

Novartis (NYSE:NVS [https://seekingalpha.com/symbol/NVS]) will pay [https://seekingalpha.com/news/4508464-novartis-to-buy-avidity-biosciences-in-12b-deal-to-boost-rare-disease-pipeline]$72 a share in cash, representing a premium of 46% over Avidity’s closing price Friday.

“Novartis’ agreement to acquire Avidity’s neuromuscular programs gives the former three near-term launches for Novartis across DMD, DM1 and FSHD. Avidity will spin off its early-stage precision cardiology programs before the deal closes,” Bloomberg Intelligence analyst Andrew Galler said.

RBC Capital Markets analyst Luca Issi also praised the deal, saying it is “another bullish signal for biotech”.

Shares in peer Dyne Therapeutics (DYN [https://seekingalpha.com/symbol/DYN]) also jumped as much as 20% in premarket trading on Monday. Jefferies analyst Andrew Tsai, who rates Dyne Therapeutics as Buy, said Dyne is poised to benefit from the deal as it “signals Big Pharma’s interest in novel RNA modalities for rare muscle diseases.”

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* Avidity Biosciences: Maintaining 'Strong Buy' Rating Based On Accelerated Approval Filing For Del-Zota [https://seekingalpha.com/article/4822205-avidity-biosciences-maintaining-strong-buy-rating-based-on-accelerated-approval-filing-for-del-zota]
* Biggest stock movers Monday: RNA, HIVE, and more [https://seekingalpha.com/news/4508494-biggest-stock-movers-monday-rna-hive-and-more]
* Novartis to buy Avidity Biosciences in $12B deal to boost rare disease pipeline [https://seekingalpha.com/news/4508464-novartis-to-buy-avidity-biosciences-in-12b-deal-to-boost-rare-disease-pipeline]