Why Is RNA Therapeutics-Focused Avidity Biosciences Stock Trading Higher Today?

Avidity Biosciences Inc RNA announced a global licensing and research collaboration with Bristol Myers Squibb & Co BMY focused on discovering, developing, and commercializing multiple cardiovascular targets with potential cumulative payments of up to $2.3 billion. 

Antibody Oligonucleotide Conjugates (AOCs) combine monoclonal antibodies' specificity with the precision of oligonucleotide therapies to target the root cause of diseases previously untreatable with RNA therapeutics. 

This strategic collaboration broadens the reach of AOCs by expanding the existing relationship with Bristol Myers Squibb. Avidity continues to advance its internal research and development programs in rare cardiac indications.

Under the terms of the agreement, Avidity will receive $100 million upfront, which includes a $60 million cash payment and the purchase of approximately $40 million of Avidity common stock at $7.88 per share. 

Avidity can also 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. 

Bristol Myers Squibb will fund all future clinical development, regulatory, and commercialization activities from this collaboration.

The collaboration with Bristol Myers Squibb is separate from Avidity's internal discovery pipeline, which consists of research and development candidates to treat rare skeletal muscle conditions and rare cardiac muscle diseases. 

In 2021, Avidity announced a research collaboration with MyoKardia, a wholly-owned subsidiary of Bristol Myers Squibb, to demonstrate the potential utility of AOCs in cardiac tissue. This new collaboration with Bristol Myers Squibb expands on the research conducted in cardiovascular disease.

Price Action: RNA shares are up 28.4% at $7.91 during the premarket session on the last check Tuesday.

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