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Investing.com -- Shares of Avidity Biosciences (NASDAQ:RNA) jumped more than 42% in premarket trading on Monday, while Dyne Therapeutics (NASDAQ:DYN) climbed over 20%, after Novartis announced an agreement to buy Avidity for about $12 billion in cash.
The deal, valued at $72 per share, represents a premium of roughly 46% to Avidity’s previous closing price and about a 90% premium since reports of a potential acquisition first surfaced in August.
The transaction, which carries an enterprise value of about $11 billion at the expected close in the first half of 2026, marks the second-largest acquisition in the biotechnology sector this year, behind Johnson & Johnson’s $14.6 billion takeover of Intra-Cellular Therapies.
Novartis said it expects the deal to “bolster mid-single-digit” long-term growth and raised its 2024–2029 sales compound annual growth rate forecast from 5% to 6%.
Stifel analysts said the acquisition “is highly validating for the space,” particularly for companies focused on muscle delivery technologies such as transferrin receptor 1 (TfR1).
They added that the premium Novartis is paying for Avidity “corroborating (1) the value of muscle delivery technology [specifically TfR1] and (2) the attractiveness of large orphan markets like DM1, DMD and FSHD.”
While Novartis is acquiring Avidity’s core programs, the company will spin out its early-stage cardiology programs and collaborations into a separate entity.
The deal gives Novartis access to late-stage RNA-based therapies, including those targeting myotonic dystrophy type 1 (DM1) and Duchenne muscular dystrophy (DMD), two key neuromuscular disorders that have also been central to Dyne’s research efforts.
Dyne’s shares rallied sharply on the news, with analysts expecting the announcement to re-rate the stock.
“Even as this validates a competitor, we expect DYN shares to trade meaningfully higher following this announcement as this arguably bolsters the DYN M&A case,” Stifel said. The brokerage reiterated its “buy” rating on Dyne, which it values at $17.12 per share.
The analysts said that the transaction supports broader investor confidence in the RNA therapy space and highlights the commercial potential for Dyne’s programs in muscular disorders.
“We still believe DYN has a credible chance at being best-in-class in DM1--the story here plays out with pivotal data from both RNA/DYN in 2026,” the brokerage said.
It added that Dyne’s clinical data have shown “more consistent effects on vHOT and a larger effect size on splicing,” outcomes that support its platform’s potential efficacy.
Despite recent volatility in the biotechnology sector, analysts said the strong valuation for Avidity could encourage renewed investor interest in similar companies.
“Any potential acquirers who were interested and missed out on RNA could plausibly look to DYN who also has a TfR1 muscle platform addressing large end markets that clearly works,” the brokerage said.