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Investing.com - Bernstein downgraded Avidity Biosciences (NASDAQ:RNA) from Outperform to Market Perform while raising its price target to $72.00 from $52.00 following Novartis’s acquisition announcement. According to InvestingPro data, RNA maintains strong financial health with a current ratio of 9.26x and holds more cash than debt on its balance sheet.
The downgrade comes after Monday’s news that Novartis will acquire Avidity Biosciences in a $12 billion all-cash transaction, representing a 46% premium to last Friday’s closing price and an 88% premium to RNA’s share price before Financial Times reports of a potential deal in August. This premium aligns with RNA’s strong market performance, having achieved a 55% return over the past six months according to InvestingPro data.
Bernstein noted that prior to the announcement, many had expected Avidity to delay any sale until after presenting Phase 3 data for its DM1 and FSHD treatments in the second quarter of 2026, particularly considering the company’s recent equity raise.
The research firm highlighted that the premium offered by Novartis is "quite a bit healthier than some of the other larger deals this year," making it unnecessary for Avidity to wait for later-stage clinical results.
Bernstein suggested the acquisition could have positive implications for other companies in the DM1 space, specifically mentioning that firms like DYN might see share price increases due to "greater perceived takeout likelihood."
In other recent news, Novartis AG has announced an agreement to acquire Avidity Biosciences for $12 billion in cash. This acquisition aims to bolster Novartis’s neuroscience franchise with Avidity’s late-stage programs targeting genetic neuromuscular diseases. The deal, which values Avidity shares at a 46% premium, is expected to close in the first half of 2026, pending regulatory and stockholder approvals. Meanwhile, Avidity Biosciences has decided to delay its submission of the drug delpacibart zotadirsen for Duchenne muscular dystrophy to the first quarter of 2026. This delay follows a positive meeting with the FDA and aims to provide additional requested data. Avidity has also successfully closed a public offering, raising $690 million through the sale of common stock. On the analyst front, Roth/MKM initiated coverage of Avidity Biosciences with a Buy rating, citing the company’s platform potential. Additionally, H.C. Wainwright raised its price target for Avidity to $87, maintaining a Buy rating based on promising study data for one of Avidity’s key drugs.
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