Shares of Avidity Biosciences witnessed a dramatic increase of over 40% on Monday following Novartis’ announcement that it will acquire the biopharmaceutical company for approximately $12 billion in cash. This major acquisition aims to enhance Novartis’ portfolio in RNA-based therapeutics, expanding its capabilities in combating various diseases.
Investors in Avidity will receive $72 per share, representing a substantial 46.5% premium compared to the company’s closing price on Friday. As part of the acquisition process, Avidity plans to spin off its early-stage precision cardiology programs into a separate entity prior to finalizing the sale.
The acquisition is particularly significant for Novartis as it gains access to three late-stage experimental treatments aimed at addressing serious genetic neuromuscular diseases. These therapies employ a novel approach known as Antibody Oligonucleotide Conjugates (AOC) that utilize RNA therapeutics. Vas Narasimhan, CEO of Novartis, emphasized that acquiring Avidity’s innovative platform will strengthen their mission of delivering targeted, potentially groundbreaking medicines for chronic neuromuscular conditions. The deal is expected to close in the first half of the upcoming year.
Meanwhile, Tesla’s stock rose approximately 5% amid news that board chairman Robyn Denholm urged shareholders to support CEO Elon Musk’s controversial pay package, which could total around $1 trillion. Ahead of an upcoming vote on Musk’s compensation, Denholm argued that the future of Tesla without Musk would not align with shareholder interests. She reassured investors that Musk’s rewards are contingent upon delivering outstanding performance.
Despite the recent uptick, Tesla’s stock has only risen 13% thus far this year, trailing behind the S&P 500’s performance, which has seen a 16% increase. Tensions arose last week as Musk criticized proxy advisory firms for recommending a vote against his pay package, labeling them “corporate terrorists.”
In broader market movements, the S&P 500 index reached a new high as optimism surged due to upcoming trade talks and a pivotal Federal Reserve meeting set to discuss interest rates. Having risen nearly 1% at the opening of Monday’s session, the index has been buoyed by positive economic indicators, including favorable inflation data, and corporate earnings that have exceeded expectations.
Investors eagerly anticipate earnings releases this week from major tech companies such as Meta Platforms, Microsoft, Alphabet, Amazon, and Apple, which could further impact market trends.
Adding to the day’s developments, shares of Robinhood Markets, the trading platform, rose by 6% after announcing plans to introduce futures trading to eligible customers in the UK. This move marks a significant expansion for Robinhood, aiming to democratize futures trading for retail investors with competitive pricing.
Conversely, shares of Carter’s, a baby-apparel retailer, fell by 7% as the company reported underwhelming third-quarter sales and unveiled plans to close approximately 150 North American stores to improve profitability in the face of increased costs. Despite exceeding earnings estimates, the announcement underscores ongoing challenges faced by the retail sector.
In the rare-earth minerals sector, stocks of U.S. producers such as Critical Metals, USA Rare Earth, and MP Materials experienced declines following comments from Treasury Secretary Scott Bessent hinting at a delay in expected export curbs. The rare-earth sector had previously seen a surge in stock prices, reflecting heightened investor interest amid ongoing trade tensions.
Overall, while some companies experienced significant gains, others faced setbacks, highlighting the dynamic nature of the current market landscape.
