Avidity Biosciences, Inc. (RNA): A Bull Case Theory 

We came across a bullish thesis on Avidity Biosciences, Inc. on BiotechBonanza’s Substack by  AnotherBio. In this article, we will summarize the bulls’ thesis on RNA. Avidity Biosciences, Inc.’s share was trading at $71.54 as of December 2nd.

Novartis is acquiring Avidity RNA, a pre-Phase 3 biotech company, in a straightforward deal with no overlap between the two businesses. The transaction is expected to close in the first half of 2026, though timing uncertainty exists due to a small “SpinCo” component (a separate entity that will hold leftover cash and rights) from two collaborations with BMY and Lilly.

The SpinCo is minimal, containing roughly $270 million in cash and the rights from these collaborations, which are structured so that the partners cover all R&D expenses, leaving SpinCo responsible mainly for administrative costs. There is also a possibility that these assets could be sold back to the collaborators, potentially eliminating the SpinCo entirely and resulting in a liquidation, dividend, or secondary takeover.

From a valuation perspective, cash provides a clear floor, and the SpinCo is likely worth $2–3 per share, though even $1 would still offer some upside. Assuming the main deal closes at $40 per share, the cash portion would be worth $70.3 per share, slightly above the current market price of $69.84, giving an annualized return of 6.8% while effectively receiving the SpinCo for free.

The market may be undervaluing the deal because biotech funds are reallocating capital and due to timing uncertainty around the closing. There appear to be no material adverse effects or risks, and with Novartis as a credible buyer, the acquisition represents a low-risk opportunity with potential upside, especially if the SpinCo assets are monetized or the deal closes efficiently. Overall, the structure makes Avidity RNA a simple but compelling investment with limited downside.

Previously we covered a bullish thesis on Capricor Therapeutics, Inc. (CAPR) by androidmj in March 2025, which highlighted its upcoming FDA decision on Deramiocel and strong financial position. The company’s stock has depreciated approximately 49.72% since our coverage as the catalyst is still pending. The thesis still stands as approval could unlock substantial upside. AnotherBio shares a similar perspective but focuses on M&A-driven value creation in Avidity Biosciences.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.