Novartis agrees to purchase Avidity in $12 bn biotech deal

The acquisition marks a bold move for Novartis CEO Narasimhan, who has previously focused on deals under the $5 bn mark. reuters

- Bloomberg

Novartis AG agreed to buy Avidity Biosciences Inc. in a $12 billion deal that’s the Swiss drug maker’s biggest acquisition in more than a decade and adds several potential blockbuster treatments as generic competition looms for its current top-sellers.

Novartis will pay $72 a share in cash for the biotechnology company, representing a premium of 46% to Avidity’s closing price Friday, the company said Sunday. Bloomberg News previously reported a deal was close.

Avidity is developing experimental drugs to treat diseases including a neuromuscular illness known as myotonic dystrophy type 1, which causes progressive muscle loss and weakness. Two of three Avidity drugs expected to launch before 2030 have multi-billion-dollar sales potential, according to Novartis.

Novartis stock is up about 16% so far this year.

Avidity rose 1.2% to $49.15 in New York trading Friday, bringing the company’s market value to about $6.8 billion.