Oct 26 (Reuters) - Swiss drugmaker Novartis on Sunday said it agreed to acquire U.S. biotech firm Avidity Biosciences for about $12 billion in cash, as the company looks to bolster its portfolio of treatments for rare muscle disorders.

US-listed shares of Avidity Biosciences jumped 16.2% in overnight trading, while Novartis gained 3.3%.

As per the terms of the deal, Avidity stockholders will receive $72 per share in cash, representing a premium of 46% to the company's closing on Friday. Bloomberg News reported on the deal earlier, citing a person familiar with the matter.

Novartis has been proactively striking deals this year to address the impending patent cliff for some of its blockbuster drugs, including Entresto for heart failure, Xolair for asthma and Cosentyx for autoimmune diseases.

Under the terms of the deal, Avidity will separate its early-stage precision cardiology programs into a new company called Spinco, which is expected to be a publicly traded company, Avidity said in a separate release.

RARE DISEASES

With this acquisition, Novartis is expanding into areas with limited treatment options, while strengthening its presence in the rare disease landscape.

San Diego, California-based Avidity, a clinical-stage company, is developing treatments for various muscle disorders and advancing several first-in-class drug candidates.

Its lead drug, Del-zota, is in early-to-mid-stage development as a potential treatment for a rare form of Duchenne muscular dystrophy, while the company is also working on two other drugs for serious muscle diseases.

Avidity, which has a market cap of nearly $6.7 billion, is working on three experimental drug candidates aimed at treating rare neuromuscular disorders. These candidates, expected to seek approval by 2026, use a special technology designed to deliver RNA therapeutics directly to muscle tissue.

Kathleen Gallagher, currently Avidity's chief program officer, will take the helm at Spinco after the spin-off, Avidity said.

The deal helps Novartis to establish a stronger foothold in the U.S. market amid a potential hefty pharmaceutical tariff threat from U.S. President Donald Trump.

In response to the tariff proposals put forward by the Trump administration, major pharmaceutical companies like Johnson & Johnson, Roche and Sanofi have pledged several billion dollars in U.S. investments as they look to navigate uncertain trade policies.

CONSISTENT WITH OTHER ACQUISITIONS

The Trump administration imposed 39% tariffs on Switzerland in August, triggering a sharp drop in Swiss exports to the United States that month. Pharmaceutical companies were, however, exempted from the initial U.S. duties.

Analysts point out that Novartis' plan to acquire Avidity Biosciences is consistent with its November 2024 acquisition of Kate Therapeutics, a company developing gene therapies for similar neuromuscular diseases.

The deal follows Novartis' $3.1 billion acquisition of Anthos Therapeutics in February to enhance cardiovascular offerings and the $1.7 billion deal with Regulus Therapeutics in April for a kidney disorder therapy.

In July, Novartis also partnered with Matchpoint Therapeutics in a collaboration valued at up to $1 billion to develop oral medicines for inflammatory diseases.