There is no certainty that the buyout will come to pass, according to The Financial Times, which first reported the rumors.
Novartis has approached rare disease-focused Avidity Biosciences with an acquisition offer, The Financial Times reported on Wednesday, citing anonymous sources familiar with the matter.
There is no certainty that a deal will come to fruition, and other suitors could approach Avidity, the sources cautioned. Novartis has expressed its interest in Avidity in recent weeks, which noted that a buyout would likely be at a premium to Avidity’s market cap. As of market close Wednesday, Avidity was worth $5.82 billion.
The biotech’s shares surged 26% on Wednesday after rumors of the Novartis takeover broke.
Analysts at BMO Capital Markets, writing to investors Wednesday, called these buyout rumors “unconfirmed” but “reasonable.” Avidity is an attractive acquisition target for Novartis given the biotech’s “leadership in muscular RNAi therapies across” key neuromuscular indications “that could enable two first-in-disease . . . multi-billion dollar opportunities,” they added.
Avidity’s clinical candidates “target high unmet need neuromuscular indications that lack disease-modifying treatments,” BMO said, noting that these assets also “enable significant commercial synergies among them.”
Chief among these promising assets is the investigational antibody-oligonucleotide conjugate (AOC) delpacibart zotadirsen, also called del-zota, in development for the treatment of patients with Duchenne muscular dystrophy who are amenable to exon 44 skipping. Del-zota made it to BioSpace’s list of the five most promising DMD assets to watch for this year.
Phase I/II data showed that del-zota boosted dystrophin expression to 25% of normal levels. Last month, the FDA granted del-zota Breakthrough Therapy designation. Avidity at the time said that it remains “on track” to submit a Biologics License Application for the asset by the end of the year. The biotech also expects to be able to report topline Phase II data in the fourth quarter.
Avidity is also developing del-desiran for myotonic dystrophy type 1 and del-brax for facioscapulohumeral muscular dystrophy. It also has a handful of preclinical programs running for a variety of other neuromuscular indications.
For Novartis, the Avidity deal would continue the pharma’s deal-making spree in recent months. In June, for instance, the company signed a four-year pact with Flagship Pioneering’s startup ProFound Therapeutics, putting up to $750 million on the line per cardiovascular target that they work on. Details of the deal have been scant, however: The companies have not disclosed how many targets they are eyeing, nor have they named specific priority indications.
In April, Novartis dropped $1.7 billion to acquire Regulus Therapeutics and its miRNA-targeting molecules. A few months earlier, in February, the pharma made a $3.1 billion bet to buy Anthos Therapeutics, the current owner of abelacimab, an anticoagulant antibody that Novartis previously owned.
