Novartis has made RNA medicines considered one of its prime strategic targets and it already has RNA therapies for cardiovascular indications. The pharmaceutical big is now inserting considered one of its greatest ever bets by means of the $12 billion acquisition of Avidity Biosciences, an organization with three late-stage therapeutic candidates that ship RNA to muscle tissue to deal with uncommon neuromuscular problems.
The settlement additionally brings to Novartis an Avidity platform expertise that would increase the supply of RNA therapies to extra tissue sorts within the physique. Talking throughout a Monday investor name, CEO Vas Narasimhan mentioned Avidity’s property complement Novartis’s pipeline and portfolio, which incorporates the spinal muscular atrophy gene remedy Zolgensma.
“We’ve articulated to you we need to do offers in our core therapeutic areas and our core expertise platforms, and it is a deal that matches each,” Narasimhan mentioned. “We strengthen our neuroscience franchise by including three late-stage neuromuscular packages, and this builds on the in depth expertise we now have with Zolgensma.”
The medicine of San Diego-based Avidity make use of RNA to handle root causes of illness. These therapies leverage the focusing on capacity of antibodies to achieve their locations. The RNA part, an oligonucleotide designed to modulate a illness course of, is linked to an antibody that targets a specific tissue within the physique. This new kind of drug is known as an antibody oligonucleotide conjugate (AOC).
Essentially the most superior packages from the Avidity platform are delpacibart zotadirsen for Duchenne muscular dystrophy (DMD), depacibart etedesiran for myotonic dystrophy kind 1 (DM1), and delpacibart braxlosiran for facioscapulohumeral muscular dystrophy (FSHD). Final month, Avidity reported new Phase 1/2 data for sufferers handled with the DMD remedy displaying enchancment on a number of measures of muscle operate after receiving the remedy for one yr. The corporate mentioned it stays on observe for a regulatory submission by the top of this yr searching for accelerated FDA approval.
Narasimhan acknowledged DMD is a small indication, however he added that the brand new scientific knowledge validates the Avidity platform, displaying the expertise can ship therapies to muscle tissue. Bob Baloh, world head of neuroscience at Novartis Biomedical Analysis, mentioned restoration of dystrophin, the important thing muscle protein that DMD sufferers lack, reached ranges not seen with at present out there Duchenne therapies. Baloh added that Novartis thinks the Avidity platform can be utilized extra broadly to achieve different forms of tissue within the physique however the preliminary focus might be muscle problems.
Most of the out there RNA therapies goal the liver. Novartis has considered one of them with Leqvio, a small-interfering RNA therapy for patients who have high cholesterol. This drug works by focusing on the gene that codes for PCSK9, a liver protein that in excessive quantities impedes the physique’s capacity to clear the dangerous type of ldl cholesterol. The biopharmaceutical trade is fascinated with delivering RNA therapies past the liver, and Avidity’s expertise provides Novartis a means to try this.
Past neuromuscular illness, Avidity’s analysis has additionally produced 5 cardiology packages, all preclinical. These packages might be spun out right into a separate, publicly traded firm referred to as “SpinCo” for now. This new firm will inherit Avidity’s collaborations with Bristol Myers Squibb and Eli Lilly. It can additionally retain rights to proceed utilizing Avidity’s expertise for added cardiology functions. Narasimhan mentioned the choice to spin out Avidity’s cardio packages was not attributable to antitrust considerations. A by-product provided the only and most simple solution to deal with the collaborations tied to these property, he mentioned.
Avidity mentioned the switch of property to SpinCo triggers a proper of first negotiation with an present collaboration accomplice. Whereas the corporate’s regulatory filings don’t specify the packages or companions lined, Leerink Companions spoke with Avidity administration, which mentioned BMS holds this contractual proper. BMS has 10 enterprise days to determine whether or not to enter an unique negotiation for the cardiology pipeline, Leerink analyst Joseph Schwartz mentioned in a Monday be aware despatched to traders. Beginning these negotiations would set off a 90-day interval to finish due diligence and make a suggestion. If BMS doesn’t train that proper, the SpinCo spinoff will proceed.
By income, neuroscience is the smallest of Novartis’s 4 core therapeutic areas (the others are cardiovascular, renal, metabolic; immunology; and oncology). The corporate’s prime neuroscience product is the a number of sclerosis drug Kesimpta, which generated $3.2 billion in income in 2024, a 43% enhance in comparison with the prior yr. Zolgensma is subsequent with $1.2 billion in 2024 income, a 2% enhance over prior yr gross sales. Zolgensma got here from the $8.7 billion acquisition of AveXis in 2018.
Narasimhan mentioned the three Avidity medicine coming to Novartis are anticipated to launch by 2030. The Avidity packages for DM1 and FSHD, each illnesses that don’t at present have any FDA-approved therapies, supply multi-blockbuster potential. Leerink’s Schwartz characterised these Avidity packages as a really helpful addition to Novartis’s neuromuscular pipeline, complementing Zolgensma, including that they’ll profit from the pharma big’s world commercialization capabilities.
Avidity is the most recent in a rising line of RNA offers for Novartis. The pharma big adopted its The Medicines Firm acquisition with the 2023 purchase of RNAi interference therapies developer, startup DTx Pharma. And final month, Novartis agreed to pay $200 million up entrance for rights to a preclinical RNAi therapy from Arrowhead Pharmaceuticals in development for Parkinson’s disease. The Avidity deal has some overlap with Kate Therapeutics, a gene remedy developer that Novartis acquired last year. Kate’s packages embrace preclinical therapies for DMD and FSHD.
Monetary phrases of the Avidity acquisition name for Novartis to pay $72 in money for every Avidity share, which represents a 46% premium to the biotech’s closing inventory worth on Friday and a 62% premium to the inventory’s common closing worth over the previous 30 days. Based on an Avidity regulatory filing, its shareholders can even obtain one share of SpinCo widespread inventory for every Avidity share they personal. SpinCo will begin out with $270 million in money from Avidity and might be led by CEO Kathleen Gallagher, who’s at present Avidity’s chief program officer. Avidity CEO Sarah Boyce will grow to be chair of SpinCo’s board of administrators.
The transaction has been permitted by the boards of each Novartis and Avidity, however nonetheless wants approvals from regulators and Avidity shareholders. The deal is predicted to shut within the first half of 2026.
Photograph: Adrian Moser/Bloomberg, through Getty Photos
