Novartis shares dip 1% after announcing $12 billion acquisition of U.S. biotech Avidity Biosciences. This marks Novartis’ largest acquisition under CEO Vas Narasimhan, following $17 billion in acquisitions and licensing deals this year to strengthen its pipeline ahead of key patent expirations.

Avidity’s therapies for neuromuscular disorders align well with Novartis’ expertise, but analysts remain cautious. Novartis offers $72 per share, a 46% premium to Avidity’s closing price. Avidity’s shares surge 43% to $70.45 in premarket trade, with concerns about the efficacy of its therapies still lingering.

Novartis’ acquisition of Avidity signals a strong year for biotech M&A. This is Novartis’ largest acquisition since Narasimhan took the helm in 2018, and the second largest biotech deal of the year. Analysts attribute the uptick in M&A to factors like depressed biotech valuations and recent drug pricing deals between the U.S. government and manufacturers like Pfizer and AstraZeneca.

Read more at Yahoo Finance: Novartis shares slip, Avidity soars after $12 billion biotech deal