Dicerna Pharmaceuticals, Inc. (DRNA) and Novo Nordisk (NVO) have signed an agreement under which Novo Nordisk will acquire Dicerna for $3.3 billion in cash. The amount represents an 80% premium to Dicerna’s closing stock price on November 17.
Following the announcement of the news, Dicerna’s shares soared 78.7% on Thursday to close at $38.03.
Transaction Details
As per the terms of the agreement, a subsidiary of Novo Nordisk will acquire all outstanding common shares of Dicerna for $38.25 per share in cash.
The acquisition is expected to close in the last quarter of this year. (See Insiders’ Hot Stocks on TipRanks)
About Dicerna Pharmaceuticals
Headquartered in Massachusetts, Dicerna is a biopharmaceutical company engaged in the discovery, development and sale of treatments for rare diseases, chronic liver diseases, cardiovascular diseases, and viral liver infectious diseases.
About Novo Nordisk
Denmark-based healthcare firm Novo Nordisk manufactures and sells pharmaceutical products and services, specifically diabetes care medications and devices, across the world. It has production facilities in eight countries and offices in five.
Management Comments
The Executive Vice-President and Chief Scientific Officer of Novo Nordisk, Marcus Schindler, said, “The acquisition of Dicerna accelerates Novo Nordisk’s research within RNAi and expands the usage of the RNAi technology.”
The President and CEO of Dicerna, Douglas Fambrough, said, “The combination of Dicerna’s expertise in RNAi and oligonucleotide therapeutics and highly skilled employees with Novo Nordisk’s industry leadership in developing and commercializing medicines to treat serious chronic diseases, has the potential to significantly accelerate and expand our mission to deliver GalXC RNAi therapies for the benefit of patients and all our stakeholders.”
Novo Nordisk-Dicerna Collaboration
Novo Nordisk and Dicerna have a research collaboration agreement in place since 2019 for the discovery and development of RNAi therapies using Dicerna’s GalXC RNAi platform technology.
As part of the collaboration, the companies evaluated over 30 liver cell targets that could deliver multiple clinical candidates for disorders such as chronic liver disease, non-alcoholic steatohepatitis (NASH), type 2 diabetes, obesity and rare diseases.
Novo Nordisk plans to start the clinical development of the first investigational RNAi therapeutic identified under the collaboration next year.
Wall Street’s Take on Dicerna
After the announcement of the acquisition news, B.Riley Financial analyst Mayank Mamtani downgraded the rating on the stock to Hold from Buy and raised the price target from $35 to $38.25 (0.6% upside potential).
Additionally, Truist Financial (TFC) analyst Robyn Karnauskas maintained a Hold rating on the stock and increased the price target to $38 from $32.
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys and 5 Holds. The average Dicerna Pharmaceuticals price target of $33.4 implies 12.2% downside potential. Shares have gained 72.3% year-to-date.
Risk Analysis of Dicerna
According to TipRanks’ Risk Factors tool, Dicerna is at risk mainly from two factors: Finance & Corporate and Tech & Innovation, which account for 31% and 29%, respectively, of the total 58 risks identified for the stock.
Under the Finance & Corporate risk category, the company has 18 risks, and under the Tech & Innovation category, there are 17 risks. The details of these risks can be found on the TipRanks website.
Analyst Recommendation for Novo Nordisk
Overall, the stock has a Hold consensus rating based on a single Hold. The average Novo Nordisk price target of $80.72 implies 29.8% downside potential. Shares have gained nearly 71% over the past year.
Blogger Opinion on Novo Nordisk
TipRanks data shows that financial blogger opinions are 88% Bullish on the stock, compared to the sector average of 68%.
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