Novartis Leads Pharma M&A Surge with $12B Avidity Acquisition

Big Pharma Dealmaking Heats Up

Novartis has made waves in the pharmaceutical industry with its $12 billion acquisition of Avidity Biosciences, marking the second-largest deal of the year. The Swiss pharma giant announced the purchase on Sunday, signaling a growing trend of increased M&A activity in the sector. This move follows Johnson & Johnson's acquisition of Intra-Cellular earlier in the year, which remains the largest deal to date.

The Avidity acquisition is particularly significant for its focus on RNA-targeting therapies for neuromuscular ailments. This strategic move has had a ripple effect on the market, with shares of Dyne Therapeutics, a company working on similar therapies, nearly doubling over the past month and jumping approximately 40% following the Novartis announcement.

Other major players are also joining the M&A frenzy. Eli Lilly has reinforced its commitment to gene therapy by acquiring Adverum Biotechnologies, which specializes in treatments for wet age-related macular degeneration. Meanwhile, Roche, fresh from its $3.5 billion acquisition of 89bio last month, has hinted at the possibility of more deals in the pipeline during its third-quarter earnings call.

Earnings Calls Reveal Industry Dynamics

As third-quarter earnings reports continue to roll out, they provide insight into the strategic thinking of pharmaceutical industry leaders. Novartis CEO Vas Narasimhan used the company's earnings call to downplay the impact of recent pricing deals between major pharmaceutical companies and the White House. Narasimhan argued that these agreements, involving Pfizer, AstraZeneca, and Amgen, do not address the root cause of the drug pricing issues that President Donald Trump aims to resolve.

Other earnings calls have revealed significant shifts in company strategies. BioMarin announced plans to divest its hemophilia gene therapy Roctavian, while Regeneron faced questions about its Eylea product and regulatory application challenges stemming from issues at a Novo Nordisk plant. Notably, Regeneron did not address its recent decision to discontinue a CAR T asset acquired from 2seventy bio, highlighting the ongoing challenges in the cell and gene therapy space.

FDA Operations Amid Government Shutdown

With the U.S. government shutdown entering its second month, the pharmaceutical industry is closely monitoring its impact on regulatory processes. The FDA's operations have been significantly affected, potentially causing delays in drug approvals and other critical functions. Industry stakeholders are keenly aware of the potential ramifications on product pipelines and market entry timelines.

Despite these challenges, some companies are pushing forward with their development plans. BridgeBio, for instance, has reported positive Phase III trial results for its investigational substrate supplementation therapy targeting limb-girdle muscular dystrophy. Analysts predict that this asset could be submitted for FDA review later this year or early next, pending the resolution of the shutdown.