Jefferies sees Dyne as key beneficiary of Novartis’ Avidity buyout

Investing.com -- Dyne Therapeutics is positioned as a major beneficiary of Novartis’ $12 billion acquisition of Avidity Biosciences, Jefferies analysts said, calling the deal a strong validation of RNA-based therapies for rare muscle diseases.

“We view DYN as a prime beneficiary of Novartis’ move into RNA therapeutics,” analyst Andrew Tsai said in a note.

Jefferies reiterated its Buy rating and $50 target on Dyne, saying it trades at a “cheap $2.4 billion cap” despite potentially first-to-market assets and a $4.5–6 billion implied valuation.

Novartis agreed to buy Avidity for $72 per share in cash, a 46% premium to its last close and valuing the company at about $12 billion.

The deal covers Avidity’s three late-stage neuromuscular programs—del-desiran for myotonic dystrophy type 1 (DM1), del-brax for facioscapulohumeral dystrophy (FSHD), and del-zota for Duchenne muscular dystrophy (DMD)—along with its antibody-oligonucleotide conjugate (AOC) platform.

Avidity’s early-stage precision cardiology portfolio will be spun off into a separate “SpinCo,” to be led by chief program officer Kathleen Gallagher and capitalized with $270 million in cash.

Following the deal’s announcement, Raymond James downgraded Avidity from Strong Buy to Market Perform.

“We think this deal is strategically sound and don’t foresee any issues impeding deal closure,” analyst Martin Auster wrote, adding that Novartis is a “logical buyer” given its presence in rare neuromuscular markets through drugs like Zolgensma.

The acquisition is expected to close in the first half of 2026, pending shareholder and regulatory approvals.

Tsai said the buyout “signals Big Pharma’s interest in novel RNA modalities” and could alter competitive dynamics in DM1, where Dyne’s DYNE-101 may now reach the market first.

Avidity’s Phase III HARBOR trial was previously ahead, but Novartis now expects 54-week data in the second half of 2026, with global filings pushed into 2027.

In contrast, Dyne’s Phase II readout in mid-2026 could support a U.S. submission later that year under the accelerated approval pathway.

Tsai estimates Dyne’s DM1 and DMD programs represent a combined $3–4 billion revenue opportunity, with two potential product launches as early as 2027.

He also highlighted that Novartis’ deal implies roughly $3 billion in incremental sales by 2029, reflecting the scale of opportunity for RNA therapies.

The analyst believes Dyne’s DM1 program could prove superior to Avidity’s on efficacy and safety, citing the absence of anemia and evidence of cognitive benefits in early data.

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Jefferies sees Dyne as key beneficiary of Novartis’ Avidity buyout

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