Pfizer, Novo Nordisk Showdown Could Become Rare Biotech Bidding War
The two biotech giants are preparing to square off over a buyout of Avidity.
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I return to the biotech sector to close out another trading week and as the month comes to an end.
Another mid-cap biotech name accepted a buyout offer on Monday with a significant takeout premium. This week, it was Avidity Biosciences, Inc. (RNA), which is being purchased by drug giant Novartis (NVS) for approximately $12 billion. Avidity is focused on developing RNA-based therapies targeting muscle and neuromuscular diseases with few existing treatments. This was the sixth buyout above $2 billion since mid-September in the biotech sector.
In addition, Metsera (MTSR), which kicked off this M&A wave when it agreed to be acquired by Pfizer (PFE) in mid-September, disclosed it has received an unsolicited and superior buyout offer from Novo Nordisk (NVO) on Thursday. Investors may see the first genuine bidding war in the biotech space in quite some time.
The Avidity buyout announcement boosted biotech overall early in the week. Names in a similar space to Avidity, like PepGen Inc. (PEPG) and Dyne Therapeutics, Inc. (DYN), saw big rallies following the takeout news. I wouldn’t chase either rally, especially in PepGen, given some recent trial results.
Another mid-cap name, Immunovant (IMVT) popped on Thursday on some vague takeover rumors. That's another rally I wouldn’t chase.
Viking Therapeutics (VKTX) moved up 8% on Thursday. Some of this was what appears to be growing buyout speculation. In addition, Canaccord Genuity also just initiated this mid-cap’s shares as a new Buy with a price target of $106 a share. Even with Thursday’s rise, the stock trades just under $40 per share. Canaccord’s analyst noted that Viking has one of the more promising GLP-1 candidates in this space. Currently, the company is advancing this asset with a couple of Phase 3 studies which should read out in late 2027 and mid-2028. I have established a fairly large, covered call holding in Viking, and believe the company has a lot of potential.
BridgeBio Pharma, Inc. (BBIO) is a name I last gave a shoutout to back in February. The stock has doubled since then due to positive news flow and now sports a just over $12 billion market capitalization, similar to the market value Avidity was just taken out for this week.
BridgeBio is seeing good initial sales with its recently approved Attruby that treats ATTR-CM. Attruby is a potential blockbuster cardiovascular treatment. This therapy was approved in the U.S. late in 2024 and in Japan and Europe in the first half of this year. Attruby impressively delivered nearly $110 million in net product sales in Q3. ATTR-CM is a potentially fatal disease of the heart muscle caused by the malformation of the transthyretin transport protein. Attruby is the low-cost option in this space in what is a potentially $20 billion global market. Management is targeting an eventual 30% market share.
BridgeBio also has three other late-stage candidates advancing its pipeline, one of which the company should file a marketing application around in the first half of next year. One other candidate should post initial results from a pivotal Phase 3 study in early 2026. Add in a solid balance sheet, and BridgeBio remains an attractive "sum of the parts" story and could also find itself a buyout target at some point.
And those are some thoughts around the biotech sector as we close out October, and biotech names are starting to percolate thanks to a notable recent uptick in M&A activity.
At the time of publication, Jensen was long BBIO, PFE and VTX.
