$12 Billion RNA Deal Triggers Sector Shakeup

RNA Therapeutics: A Rapidly Evolving Sector Backed by Innovation and Demand

The RNA therapeutics sector continued to expand in 2025, propelled by clinical advancements, regulatory support, and growing demand for treatments targeting cancer and rare genetic disorders. According to Straits Research, the global market was valued at US$20.32 billion in 2025 and was projected to more than double to US$45.35 billion by 2034, driven by a 9.37% compound annual growth rate.

North America held a 43.79% share of the global market, supported by increased FDA approvals and a growing chronic disease burden. The U.S. alone accounted for US$8.35 billion of the total, with new government funding initiatives boosting innovation. In April, the National Institutes of Health committed more than US$200 million to RNAi platform development for cancer and rare diseases (Straits Research).

Technical breakthroughs have also addressed historical challenges in the field. Nature.com noted that chemical modifications to RNA molecules have improved their stability, circulation time, and target specificity, enabling broader therapeutic application across small RNA, translatable RNA, and CRISPR-based approaches.

Meanwhile, next-generation RNA formats are gaining traction. A November 13 article from Drug Target Review highlighted growing industry interest in circular RNA, which may offer more durable expression than linear mRNA. Erik Digman Wiklund, CEO of Circio, said, "Synthetic LNP-formulated circular RNA offers a likely clear advantage for vaccine applications," though its full potential across therapeutic contexts remains under investigation.

While high manufacturing costs remain a constraint, the continued expansion of mRNA and RNAi pipelines across oncology and neuromuscular indications underscores the sector's momentum. In 2025, mRNA therapeutics held the largest market share at 31.42%, with oncology as the fastest-growing application segment.

Analysts Back Acquisition as Right Move for Avidity

On November 13, Evercore ISI analyst Liisa Bayko downgraded Avidity Biosciences to "In Line" from "Outperform" following the acquisition announcement by Novartis. She raised the price target from US$13 to US$15, matching the total potential consideration of the deal, which includes US$12 per share in cash and up to US$3 in contingent value rights. According to Bayko, "This is a solid outcome for Avidity shareholders," and she characterized the takeout price as "fair given the development stage and risk profile of the AOC platform." She also noted the acquisition "validates the technology and science behind Avidity."

On the same day, RBC Capital Markets analyst Brian Abrahams also downgraded Avidity from "Outperform" to "Sector Perform" while increasing his price target from US$13 to US$15. Abrahams wrote that the transaction "makes strategic sense for Novartis and provides a good outcome for Avidity shareholders," emphasizing that the deal removes clinical and financial overhangs while preserving some upside through the CVR structure. He concluded that the acquisition was "the most logical and beneficial path forward for Avidity at this time."

Both analysts reflected positively on the scientific platform and deal structure, underscoring that the acquisition delivered shareholder value while affirming confidence in Avidity's AOC technology.  

Three-Drug Momentum: Strategic Restructuring and Regulatory Milestones Ahead

Avidity's strategic restructuring in preparation for the Novartis acquisition includes the creation of SpinCo, which will retain the company's early-stage precision cardiology programs and be led by current Chief Program Officer Kathleen Gallagher. Meanwhile, Avidity's neuromuscular franchise will transition to Novartis, enabling a global commercial push for its AOC-based RNA therapeutics.

The company reported that its EXPLORE44® and EXPLORE44-OLE™ studies of del-zota produced functional improvements and sustained biomarker responses, including an approximate 25% increase in dystrophin expression and an over 80% reduction in creatine kinase, a key marker of muscle damage. Avidity confirmed its plan to submit a Biologics License Application (BLA) for del-zota by the end of 2025, following alignment with the U.S. Food and Drug Administration.

For del-desiran, enrollment in the Phase 3 HARBOR™ trial has been completed, with topline data expected in the second half of 2026. Data from earlier trials indicated long-term safety and signs of disease reversal in patients with DM1. Avidity intends to initiate regulatory submissions in the U.S., Europe, and Japan in the second half of 2026.

In parallel, Avidity has initiated FORTITUDE-3™, a global Phase 3 trial for del-brax in FSHD. This follows FDA alignment on accelerated and full approval pathways. A biomarker cohort of 51 participants in the related FORTITUDE study has been fully enrolled, with a primary endpoint focused on cDUX, a circulating biomarker tied to disease severity. Topline results are expected in Q2 2026, with a BLA submission anticipated in the second half of 2026.

The merger and program progress suggest a pivotal transition phase for Avidity, with three separate regulatory filings planned across its lead candidates over a 12-month window. The company also noted that its pro forma cash position of approximately US$1.4 billion, as of Q2 2025, is expected to support operations through mid-2027.

Ownership and Share Structure¹

Insiders own approximately .75% of Avidity. 98.20% is held by institutions. Of them, Fidelity Management holds 13.35%, The Vanguard Group holds 8.76%, and James Henderson Investors owns 8.05%. The rest is held by retail shareholders.

The company has 150.68 million shares outstanding and 134.05 million common shares. Its market cap is US$10.67 billion. Its 52-week range is US$21.51 to US$70.98.