Novartis AG (NVS) has made a takeover approach for San Diego-headquartered Avidity Biosciences (RNA), Financial Times reported on Wednesday, citing people familiar with the matter.
Novartis has been evaluating a bid for Avidity and expressed interest in an acquisition in recent weeks, the report said. The discussions are at an early stage and might not result in a deal, sources told FT.
However, a takeover for Avidity would probably come with a premium, the people added.
Shares of Avidity were trading 22% higher at the time of writing.
On Stocktwits, retail sentiment around Avidity trended in the ‘extremely bullish’ territory over the past 24 hours, coupled with ‘high’ message volume.
A Stocktwits user opined that they do not see the company management selling it for less than $70 or $80 per share, implying a significant premium to current price levels.
Meanwhile, retail sentiment around Novartis jumped from ‘bearish’ to ‘neutral’ over 24 hours, accompanied by ‘normal’ levels of retail chatter.
Avidity has three programs under development for three distinct rare diseases affecting the muscles: myotonic dystrophy type 1 (DM1), facioscapulohumeral muscular dystrophy (FSHD), and Duchenne Muscular Dystrophy (DMD).
Novartis, meanwhile, is looking to lose patent protection in the U.S. for some of its best-selling drugs, including heart failure drug Entresto and Xolair, used to treat several allergic conditions.
In February, Novartis also agreed to acquire Anthos Therapeutics, Inc., a Boston-based, privately held, clinical-stage biopharmaceutical company, for $925 million upfront.
While NYSE-listed shares of Novartis are up by 17% this year, RNA stock soared 60%.
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