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Novartis is close to announcing a deal to buy Avidity Biosciences, a biotech focused on rare diseases, in the biggest acquisition by the drugmaker in more than a decade.
The deal, which is expected to be worth more than $10bn, will be Novartis’ biggest acquisition under the tenure of longtime chief executive Vas Narasimhan. The transaction is set to be announced later on Sunday, according to two people familiar with the matter.
Talks between Novartis and Avidity were first reported by the Financial Times in August. A takeover of Avidity would help in the large pharmaceutical group’s efforts to offset impending patent cliffs, by adding the biotech’s pipeline of potential drugs for muscular dystrophy — a potentially fatal muscle-wasting disease.
Shares in Avidity closed at about $49 a share on Friday, giving the San Diego-based biotech a market value of nearly $6.7bn.
The deal would value Avidity at a large premium to its closing price, the people said. Including an upfront cash component and further payouts when certain clinical trial milestones are hit, the deal could value Avidity at up to $12bn, they added.
In September, Avidity reported positive mid-stage trial results from its lead drug Del-zota, which is part of a new class of therapeutics that uses RNA. The company plans to submit an application for regulatory approval before the end of the year.
Novartis last month bought cardiovascular biotech Tourmaline Bio for $1.4bn. Earlier this year, it also acquired heart drug biotech Anthos Therapeutics for up to $3.1bn from Blackstone’s life sciences arm, and struck a deal of up to $1.7bn for kidney disease biotech Regulus Therapeutics.
It has also struck a collaboration worth up to $5.2bn for rights to a cardiovascular drug from Chinese company Argo Biopharma.
Novartis and Avidity did not respond to requests for comment.
