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Investing.com - H.C. Wainwright downgraded Avidity Biosciences (NASDAQ:RNA) from Buy to Neutral following the company’s announcement of a definitive merger agreement with Novartis. The downgrade comes as RNA shares have surged over 55% in the past six months, according to InvestingPro data.
Novartis will acquire Avidity Biosciences at $72.00 per share in cash, representing a 46% premium to Avidity’s October 24 closing price and a 62% premium to its 30-day volume-weighted average price (VWAP).
The transaction values Avidity at approximately $12.0 billion on a fully diluted basis and includes plans for Avidity to spin out its early-stage precision cardiology programs into a new publicly traded company.
The spin-off company will be capitalized with $270 million in cash, with current Avidity shareholders receiving equity in this new entity in addition to the cash consideration from the acquisition.
According to H.C. Wainwright, the acquisition demonstrates Novartis’ strategic intent to expand its neuroscience and rare disease portfolio, with particular interest in Avidity’s late-stage AOC pipeline, including del-zota for DMD, del-desiran for DM1, and del-brax for FSHD.
In other recent news, Avidity Biosciences has been in the spotlight following several significant developments. Novartis announced its acquisition of Avidity Biosciences for $12 billion in cash, aiming to enhance its neuroscience portfolio with Avidity’s neuromuscular assets. The acquisition, valued at $72 per share, represents a 46% premium over Avidity’s October 24 closing price. Meanwhile, Raymond James upgraded Avidity Biosciences stock to Strong Buy, citing the acquisition’s potential benefits. In contrast, Bernstein downgraded the stock from Outperform to Market Perform, although it raised the price target to $72.00. Additionally, Avidity Biosciences has revised its timeline for the submission of its Duchenne muscular dystrophy drug, delaying it to the first quarter of 2026 to provide additional data requested by regulators. Roth/MKM initiated coverage on Avidity Biosciences with a Buy rating, highlighting the company’s platform potential and first-mover advantages in genetic medicines. These developments underscore a period of strategic change and potential growth for Avidity Biosciences.
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