Novartis has agreed to acquire Avidity Biosciences for $12 billion in cash to enhance its rare muscle disorder treatment portfolio. Avidity stockholders will receive $72 per share, a 46% premium. Novartis is addressing the patent cliff with this deal, separating Avidity’s precision cardiology programs into a new Spinco company.

Avidity, a San Diego-based clinical-stage firm, is developing treatments for muscle disorders like Duchenne muscular dystrophy. Its lead drug, Del-zota, is in development for rare muscle diseases. Avidity’s experimental drug candidates, using RNA therapeutics technology, aim for approval by 2026.

Kathleen Gallagher will lead Spinco following the Avidity spin-off. The deal helps Novartis strengthen its U.S. market presence amidst potential pharmaceutical tariff threats from President Donald Trump. In response to these threats, major pharmaceutical companies like Johnson & Johnson, Roche, and Sanofi are investing billions in the U.S. to navigate uncertain trade policies.

The Trump administration imposed 39% tariffs on Switzerland in August, leading to a sharp drop in Swiss exports to the U.S. Pharmaceutical companies were exempt from the initial U.S. duties, but the industry faces uncertainty due to evolving trade policies. Novartis aims to establish a stronger foothold in the U.S. market with the Avidity acquisition.

Read more at Yahoo Finance: Swiss drugmaker Novartis to buy Avidity Biosciences for $12 billion