Novartis (NYSE: NVS) revealed plans of acquiring Avidity Biosciences Inc (NASDAQ: RNA) in a $12 billion all-cash transaction – valuing each share of the biotech company at $72 on Sunday.
The announcement sent RNA shares soaring roughly 44% on Monday, indicating investor enthusiasm and confidence in the buyout terms.
Meanwhile, Novartis stock dipped 1.9% on the news, as markets digested the strategic implications and capital outlay.
Avidity acquisition underscores the Swiss multinational’s push into RNA-based therapeutics and rare disease treatments – areas where the NYSE-listed firm has shown promising clinical progress.
Is there any upside left in Avidity stock?
With Avidity stock now trading just shy of the $72 offer price, most of the upside from Novartis’ deal appears to be priced in already.
For investors considering a late entry, the risk-reward profile has shifted dramatically.
Unless the deal falls through or a higher bid emerges, there’s limited room for further appreciation.
Typically, once a definitive agreement is announced and the stock converges toward the offer price, arbitrage opportunities narrow.
At this stage, buying RNA shares is less about growth and more about betting on deal completion, which is hardly a compelling thesis for retail investors seeking alpha.
Note that Avidity Biosciences will go private once the Novartis transaction completes, likely in the first half of 2026.
Why is Novartis paying a hefty premium for NVS shares
Novartis has agreed to pay a significant premium of 46% to bring Avidity under its umbrella – an aggressive valuation that reflects strategic urgency and scientific conviction.
The company’s RNA-targeting AOC™ platform offers a differentiated approach to treating rare neuromuscular diseases, an area where NVS is eager to expand.
Avidity’s lead programmes, including treatments for facioscapulohumeral muscular dystrophy (FSHD), have shown early clinical promise – positioning RNA as a frontrunner in a high-value niche.
For Novartis, the premium isn’t just about pipeline – it’s about platform scalability, first-mover advantage, and long-term dominance in RNA therapeutics.
In a competitive M&A landscape, paying up now for RNA stock could secure NVS a durable edge in a fast-evolving therapeutic frontier.
Is Novartis stock a better buy heading into 2026?
With Avidity shares now trading near the $72 offer price and slated to go private in 2026, the opportunity for outsized returns has largely evaporated.
But Novartis stock may be the more compelling play. The Swiss pharma giant is making a bold bet on RNA therapeutics – a frontier with long-term growth potential.
By acquiring Avidity’s AOC™ platform and rare disease pipeline, NVS strengthens its innovation edge and expands its footprint in high-value niches.
While NVS shares dipped slightly on deal news, the strategic rationale could unlock shareholder value over time.
Note that Novartis recently bought Tourmaline Bio for $1.4 billion as well.
For investors seeking exposure to RNA’s future, therefore, Novartis, not Avidity Biosciences, may be the smarter long-term buy.
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