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Novo Nordisk (NVO) Set to Acquire Dicerna for $3.3 Billion

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Novo Nordisk A/S NVO announced a definitive agreement to acquire Massachusetts-based biopharmaceutical company, Dicerna Pharmaceuticals, Inc. DRNA, for a total equity value of approximately $3.3 billion. The transaction is expected to close later in the fourth quarter of 2021.

Per the agreement, Novo Nordisk will begin a cash tender offer to acquire all outstanding shares of Dicerna’s common stock for $38.25 per share in cash. The transaction will be debt financed.

With this acquisition of Dicerna, which also includes its ribonucleic acid interference (RNAi) platform, Novo Nordisk is looking to boost its research within RNAi and expand the usage of the RNAi technology. The acquisition looks like a great strategic fit to Novo Nordisk’s existing research technology platforms across all therapeutic areas.

We note that Dicerna’s stock was up 78.7% on Thursday following the announcement of the above-mentioned news.

Shares of Novo Nordisk have rallied 64.6% so far this year compared with the industry’s growth of 16.1%.

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Zacks Investment Research

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Dicerna is focused on developing RNAi-based therapies to selectively silence genes that cause or contribute to diseases. The company is developing its RNAi therapeutic candidate, nedosiran, in late-stage studies for the treatment of primary hyperoxaluria. The company also has other pipeline candidates in early stages of development.

In 2019, Novo Nordisk inked an agreement with Dicerna to discover and develop RNAi therapies using the latter’s proprietary GalXC RNAi technology platform. With this acquisition, Novo Nordisk is looking to develop several candidates for treating chronic diseases such as non-alcoholic steatohepatitis, type 2 diabetes, obesity, cardiovascular disease and other rare diseases.

Novo Nordisk plans to begin clinical development of candidates in 2022.

We note that the acquisition of Dicerna will not only boost Novo Nordisk’s RNAi research platform, but will also help the company to diversify and tap into opportunities in a new space. Novo Nordisk already has a strong presence in the diabetes care market, boasting of one of the broadest diabetes portfolios in the industry.

Zacks Rank & Stocks to Consider

Novo Nordisk currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include GlaxoSmithKline plc GSK and Editas Medicine, Inc. EDIT, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GlaxoSmithKline’s earnings estimates have been revised 8.5% upward for 2021 and 5.8% upward for 2022 over the past 60 days. The stock has rallied 12.8% year to date.

GlaxoSmithKline’s earnings have surpassed estimates in two of the trailing four quarters, missed the same once and matched it once.

Editas Medicine’s loss per share estimates have narrowed 11.9% for 2021 and 4.1% for 2022, over the past 60 days.

Earnings of Editas Medicine’s have surpassed estimates in two of the trailing four quarters, and missed the same on the other two occasions.

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GlaxoSmithKline plc (GSK) : Free Stock Analysis Report

Novo Nordisk AS (NVO) : Free Stock Analysis Report

Dicerna Pharmaceuticals, Inc. (DRNA) : Free Stock Analysis Report

Editas Medicine, Inc. (EDIT) : Free Stock Analysis Report

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