Avidity Bio Climbs on Report of Novartis Takeover

(Bloomberg) — Novartis AG is weighing a takeover of rare disease-focused biotech firm Avidity Biosciences Inc. in a bid to boost its drug pipeline, according to the Financial Times.

The Swiss drugmaker has expressed interest in Avidity in recent weeks, the FT said, citing people familiar with the situation it didn’t name. Talks were at an early stage and there’s no guarantee a deal will be reached, they said.

Both Novartis and Avidity declined to comment.

Shares of Avidity rose as much as 25% on the report, giving the San Diego-based company a market value of about $5.7 billion.

Novartis needs a portfolio boost as three key drugs, including its best-selling heart medicine Entresto, face generic competition this year. Once a health conglomerate with businesses spanning eye care to generic drugs, Novartis now focuses on innovative medicines under Chief Executive Officer Vas Narasimhan.

The Swiss drugmaker’s focus areas are heart, kidney and metabolic drugs, immunology, neuroscience and oncology. Novartis added to its cardiology portfolio earlier this year with the acquisition of US biotech Anthos Therapeutics for as much as $3.1 billion to gain a preventative stroke medicine.

Last month, the US Food and Drug Administration granted “breakthrough therapy” designation for an Avidity drug for the treatment of certain Duchenne muscular dystrophy patients.

–With assistance from Michelle Amponsah.

(Updates with company comment in third paragraph, context from fifth.)

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