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Swiss pharmaceutical giant Novartis announced Sunday that it will acquire US biotech company Avidity Biosciences for approximately $12 billion in cash.

The acquisition aims to strengthen Novartis' portfolio of treatments for rare muscle disorders, including Duchenne muscular dystrophy and other neuromuscular diseases.

Under the agreement, Avidity shareholders will receive $72 per share, a 46% premium over the company's closing price on Friday, according to Novartis.

Bloomberg News first reported the deal, citing sources familiar with the matter.

The transaction is expected to close in the first half of 2026, following Avidity's planned separation of its early-stage precision cardiology programs into a new publicly traded company, SpinCo.

Avidity, based in San Diego, California, is developing three experimental drug candidates that deliver RNA therapeutics directly to muscle tissue.

Its lead candidate, Del-zota, is being studied as a treatment for a rare form of Duchenne muscular dystrophy.

Two other drugs are in development for serious neuromuscular conditions, with potential approval expected by 2026.

"This acquisition allows Novartis to expand into areas with limited treatment options while strengthening its presence in the rare disease landscape," the company said.

The move comes as Novartis faces upcoming generic competition for key drugs like Entresto, Xolair, and Cosentyx.

Novartis Expands Biotech Holdings

The acquisition also highlights Novartis' strategy of acquiring innovative biotech companies to offset a potential patent cliff.

Earlier this year, Novartis completed purchases of Kate Therapeutics, Anthos Therapeutics, and Regulus Therapeutics, expanding its offerings in gene therapy, cardiovascular, and kidney disease treatments, USA Today reported.

Novartis CEO Vas Narasimhan described the deal as "a strategic step to accelerate our efforts in rare and neuromuscular diseases, building on our experience in heart, kidney, and metabolic treatments."

Analysts project that two of Avidity's drugs could generate multi-billion-dollar sales, increasing Novartis' expected compound annual growth rate for 2024-2029 from 5% to 6%.

Avidity plans to spin off its cardiology programs into SpinCo, with Avidity shareholders receiving one SpinCo share for every 10 Avidity shares. Kathleen Gallagher, Avidity's chief program officer, will lead the new company.

Novartis emphasized that the acquisition will allow it to bring these experimental drugs to patients faster while strengthening its US presence amid potential trade uncertainties.