Avidity's stock rockets on Bristol Myers deal that could mean $2.2 billion in milestone payments
By Ciara Linnane
Avidity's stock was up 30.5% early Tuesday
Avidity Biosciences Inc. said Tuesday it's expanding its cardiovascular collaboration with Bristol Myers Squibb Co. in a deal that will see Avidity receive $100 million upfront with the potential to earn up to $2.2 billion in milestone payments.
The news sent Avidity's stock (RNA) up 30.5% in premarket trade.
Avidity will receive a $60 million cash payment and Bristol Myers (BMY) will acquire about $40 million of Avidity's stock at a purchase price of $7.88 a share.
The company will be eligible to receive up to about $1.35 billion in R&D milestone payments, up to about $825 million in commercial-milestone payments, and tiered royalties up to low double-digits on net sales.
The company is developing a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates, or AOCs.
AOCs "are designed to combine the specificity of monoclonal antibodies with the precision of oligonucleotide therapies to target the root cause of diseases previously untreatable with RNA therapeutics," the company said in a statement.
In addition to its rare cardiac program, Avidity has three AOC programs in development that target three distinct rare diseases, namely myotonic dystrophy type 1 (DM1), facioscapulohumeral muscular dystrophy (FSHD), and Duchenne muscular dystrophy (DMD).
The company is aiming to develop AOCs for other indications such as immunology, according to its website.
In 2021, it announced a research collaboration with MyoKardia, a wholly owned unit of Bristol Myers, to research the utility of AOCs in cardiac tissue.
Bristol Myers will fund all future clinical development, regulatory and commercialization activities stemming from the collaboration.
Avidity's stock has fallen 72% in the year through Monday's close, while the S&P 500 has gained 18.5%.
See also: Avidity's stock gains after company shares new data about partial clinical hold
-Ciara Linnane
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11-28-23 0833ET
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