Avidity (RNA) Expands Collaboration With BMY, Shares Rise
Shares of Avidity Biosciences, Inc. RNA surged 14.9% following the expansion of its global licensing and research collaboration with biotech giant Bristol Myers Squibb BMY.
Avidity announced a research collaboration with MyoKardia in 2021 to demonstrate the potential utility of antibody oligonucleotide conjugates (“AOCs”) in cardiac tissue. MyoKardia was acquired by Bristol Myers in 2020.
The expanded collaboration will focus on the discovery, development and commercialization of up to five cardiovascular targets leveraging Avidity's proprietary AOC platform technology, with potential cumulative payments of up to $2.3 billion.
Per the terms of the agreement, Bristol Myers will make an upfront cash payment of $60 million to Avidity. BMY will also purchase approximately $40 million of Avidity’s common stock at a price of $7.88 per share.
In addition, Avidity is entitled to receive up to approximately $1.35 billion in research and development milestone payments, up to approximately $825 million in commercial milestone payments and tiered royalties up to low double-digits on net sales. Any expenses related to clinical development, regulatory and commercialization activities arising from this collaboration will also be funded by Bristol Myers.
The infusion of cash by bigwig BMY boosted investor sentiment, leading to the rise in share price.
Shares of Avidity have plunged 68.1% year to date compared with the industry’s 23.5% decline.
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Concurrently, Avidity is advancing development programs for three rare muscle diseases – AOC 1001 for myotonic dystrophy type 1, AOC 1020 for the treatment of facioscapulohumeral muscular dystrophy and AOC 1044 for the treatment of Duchenne muscular dystrophy mutations amenable to exon 44 skipping.
Avidity aims to revolutionize the field of RNA with its proprietary AOCs, which are designed to combine the specificity of monoclonal antibodies with the precision of oligonucleotide therapies to address targets and diseases previously unreachable with existing RNA therapies.
Avidity earlier suffered a setback when the FDA placed a partial clinical hold on new participant enrollment in the phase I/II MARINA study on AOC 1001 due to a rare serious adverse event reported in a single participant in the 4 mg/kg cohort. The FDA eased the partial clinical hold on AOC 1001 in May 2023, allowing Avidity to double the number of participants in the MARINA Open-Label Extension study receiving 4 mg/kg of AOC 1001. The FDA also allowed new participant enrollment for AOC 1001 at 2 mg/kg.
Meanwhile, BMY is looking to diversify with a collaboration focused on RNA-based medicines for cardiovascular diseases with this investment. The acquisition of MyoKardia added mavacamten to its pipeline, which was approved last year by the FDA under the brand name Camzyos for the treatment of adults with symptomatic New York Heart Association class II-III obstructive hypertrophic cardiomyopathy to improve functional capacity and symptoms.
Zacks Rank and Stocks to Consider
Avidity currently has a Zacks Rank #3 (Hold). A couple of top-ranked stocks in the biotech sector are Dynavax Technologies DVAX and Acadia Pharmaceuticals ACAD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dynavax’s loss per share estimates for 2023 have narrowed from 23 cents to 12 cents in the past 30 days. During the same period, earnings estimates for 2024 rose from 8 cents to 18 cents. Shares of DVAX have gained 24.8% year to date.
Loss estimates for Acadia have narrowed to 33 cents from 41 cents for 2023 and earnings estimates for 2024 are currently pinned at 94 cents per share. ACADIA shares have gained 40% year to date.
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