President Trump announces new tariffs on drugs, trucks and furniture
President Donald Trump announced 100% tariffs on branded pharmaceuticals and new tariffs on trucks, furniture and cabinets.
Swiss drugmaker Novartis on Sunday said it has agreed to acquire U.S. biotechnology company Avidity Biosciences for about $12 billion in cash, aiming to strengthen its treatment portfolio for rare muscle diseases.
Under the terms of the deal, Avidity shareholders will receive $72 in cash per share, representing a 46% premium to the company’s Friday closing price. Bloomberg News earlier reported on the deal, citing people familiar with the matter.
Novartis has aggressively struck deals this year to address the looming patent cliff on some of its blockbuster drugs, including heart failure drug Entresto, asthma drug Xolair and autoimmune disease drug Cosentyx.
Under the terms of the agreement, Avidity will spin off its early-stage precision cardiology program into a new company called Spinco, which will become a publicly traded company, Avidity said in a separate release.
Novartis strengthens treatment for rare muscle diseases
The acquisition will strengthen Novartis’ presence in rare diseases while expanding into areas where treatment options are limited.
Avidity, a clinical-stage company based in San Diego, California, develops treatments for a variety of muscle diseases and has several first-in-class drug candidates.
The company’s lead drug, Delzota, is in early to mid-stage development as a potential treatment for a rare form of Duchenne muscular dystrophy, and the company is also working on two other drugs for serious muscle diseases.
Avidity, which has a market capitalization of about $6.7 billion, is working on three experimental drug candidates aimed at treating rare neuromuscular disorders. These candidates are expected to seek approval by 2026 and use special technology designed to deliver RNA therapeutics directly into muscle tissue.
Avidity said Kathleen Gallagher, currently Avidity’s chief program officer, will lead Spinco after the spin-off.
The deal will help Novartis gain a stronger foothold in the U.S. market amid the threat of potentially steep drug tariffs from U.S. President Donald Trump.
President Trump’s tariff proposals increase uncertainty
In response to the Trump administration’s proposed tariffs, major pharmaceutical companies including Johnson & Johnson, Roche and Sanofi are pledging billions of dollars in U.S. investment to help them navigate trade policy uncertainty.
The Trump administration imposed a 39% tariff on Switzerland in August, and Swiss exports to the United States fell significantly that month. However, pharmaceutical companies were exempted from the original U.S. tariffs.
Analysts say Novartis’ plan to acquire Avidity Biosciences is consistent with its acquisition of Cato Therapeutics, which develops gene therapies for similar neuromuscular diseases, in November 2024.
The deal follows Novartis’ $3.1 billion acquisition of Anthos Therapeutics in February to strengthen its cardiovascular products, and its $1.7 billion agreement with Regulus Therapeutics in April for a drug to treat kidney disorders.
Last month, Novartis also partnered with MatchPoint Therapeutics in a partnership worth up to $1 billion to develop oral drugs for inflammatory diseases.
