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Avidity Biosciences, Inc. (RNA)·Q3 2025 Earnings Summary

Executive Summary

  • Avidity reported Q3 2025 collaboration revenue of $12.48M, up 435% year over year, driven by a $10.0M milestone from Lilly; net loss was $174.4M and EPS was -$1.27, with a large top-line beat versus consensus but an EPS miss .
  • Cash, cash equivalents and marketable securities totaled ~$1.88B at quarter-end, extending cash runway guidance from mid-2027 to mid-2028 following an upsized equity offering and ATM proceeds .
  • The company updated del-zota’s BLA timing to 2026 after a positive October pre-BLA meeting to include additional CMC data; a Managed Access Program for DMD44 patients was initiated under FDA authorization .
  • Novartis agreed to acquire Avidity for $72.00/share (~$12B equity value), a 46% premium to the Oct 24 close; closing expected 1H 2026 after SpinCo separation, which will house early-stage precision cardiology programs .
  • Stock reaction catalysts: merger premium and regulatory progress on del-zota, balanced by elevated R&D spend and the BLA timing push; estimates likely need upward revisions to revenue and potentially higher operating expense trajectory .

What Went Well and What Went Wrong

What Went Well

  • Collaboration revenue surged on milestone recognition ($12.5M in Q3), reflecting partner progress (Lilly milestone) and Bristol Myers Squibb collaboration contributions .
  • Positive and clarifying regulatory interactions: “clear path forward” aligned with FDA for del-zota; BLA planned for 2026 seeking accelerated approval . As CEO Sarah Boyce stated, the transaction and del-zota data “underscore the remarkable consistency of our AOC platform” .
  • Clinical momentum: del-zota one‑year data demonstrated reversal of disease progression and sustained muscle protection across multiple functional measures, with CK reductions to near-normal and ~25% of normal dystrophin production .

What Went Wrong

  • EPS missed Wall Street consensus for Q3 (-$1.27 actual vs -$1.10 estimate), as operating expenses escalated with late-stage program advancement and commercial build [GetEstimates Q3 2025]*.
  • Del‑zota BLA submission timing slipped from year-end 2025 to 2026 to include additional CMC data—strategically sound but a near-term timing headwind .
  • Operating expenses rose sharply year over year (R&D +101% to $154.9M; G&A +99% to $46.3M), compressing operating results despite revenue strength .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Collaboration Revenue ($USD Millions)$2.34 $1.57 $3.85 $12.48
Net Loss ($USD Millions)$(80.40) $(115.77) $(157.32) $(174.44)
EPS ($USD)$(0.65) $(0.90) $(1.21) $(1.27)
Total Operating Expenses ($USD Millions)$100.47 $133.09 $174.99 $201.28
Research & Development ($USD Millions)$77.20 $99.49 $138.13 $154.95
General & Administrative ($USD Millions)$23.27 $33.60 $36.86 $46.33
Other Income, net ($USD Millions)$17.74 $15.74 $13.83 $14.36

KPIs

KPIQ4 2024Q1 2025Q2 2025Q3 2025
Cash & Cash Equivalents ($USD Millions)$219.87 $—$—$350.16
Marketable Securities ($USD Millions)$1,281.63 $—$—$1,525.68
Cash, Cash Equivalents & Marketable Securities (Combined) ($USD Millions)$1,501.50 $1,379.88 $1,183.14 ~$1,876
Weighted-Average Shares (Millions)123.38 129.23 129.62 137.90

Q3 2025 Results vs S&P Global Consensus

MetricQ3 2025 (Consensus)Q3 2025 (Actual)Outcome
Revenue ($USD Millions)$1.81 [GetEstimates Q3 2025]*$12.48 Beat
EPS ($USD)$(1.10) [GetEstimates Q3 2025]*$(1.27) Miss

*Values retrieved from S&P Global.

Segment breakdown: Not applicable; revenue consists primarily of collaboration revenue (Lilly milestone and BMS collaboration) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Del‑zota BLA submission timingDMD44Year-end 2025 2026 (post Oct pre‑BLA alignment) Lowered (timing pushed)
Cash runwayCorporateSufficient to mid‑2027 (as of Q2) Sufficient to mid‑2028 (as of Q3) Raised (extended runway)
Managed Access Program (MAP) startDMD44N/AEnrollment to begin by year end 2025 under FDA‑authorized protocol Initiated
Novartis acquisition closingCorporateN/AExpected 1H 2026, subject to SpinCo separation & customary conditions New transaction timeline
del‑desiran HARBOR Ph3 toplineDM12Q 2026 2H 2026 (publication and readout expectations) Clarified timeline
del‑brax FORTITUDE biomarker top‑lineFSHD2Q 2026 2Q 2026 (unchanged) Maintained
del‑brax global Ph3 readout and submissionsFSHDBLA 2H 2026; confirmatory Ph3 initiated Global Ph3 (FORTITUDE‑3) readout and filings in 2028 Extended long‑term plan

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call was scheduled; however, a full transcript was not available in the document repository. We synthesize themes from the Q3 press release and related filings [MarketBeat link indicates call scheduling https://www.marketbeat.com/earnings/reports/2025-11-10-avidity-biosciences-inc-stock/] .

TopicQ1 2025 (Prev Mentions)Q2 2025 (Prev Mentions)Q3 2025 (Current Period)Trend
Regulatory: del‑zota (DMD44)Positive topline EXPLORE44 data; BLA planned YE25 Breakthrough Therapy designation; YE25 BLA on track Positive pre‑BLA alignment; BLA moved to 2026 for CMC completeness Constructive but timing pushed
Clinical: del‑zota efficacyRobust dystrophin and CK data Planned functional data in 4Q25 One‑year data shows disease reversal across key functional endpoints Strengthening
DM1 (del‑desiran)HARBOR Ph3 enrollment targeted mid‑2025 Enrollment completed; topline 2H26, global filings planned Publication expected 4Q25; topline 2H26 confirmed On track
FSHD (del‑brax)Biomarker cohort fully enrolled; regulatory alignment expected Positive Phase 1/2 topline; Ph3 initiated; biomarker data 2Q26 Accelerated and full approval pathways confirmed; Ph3 underway Progressing
Capital & runway~$1.4B cash at Q1; runway mid‑2027 ~$1.2B at Q2 + $185.5M ATM; runway mid‑2027 ~$1.9B at Q3 post $690M offering; runway mid‑2028 Strengthened
StrategicN/ACommercial readiness, multi-launch preparation Novartis acquisition, SpinCo separation Transformative M&A

Management Commentary

  • “This important transaction, alongside compelling del‑zota data and a successful pre‑BLA meeting with the FDA in the third quarter, underscores the remarkable consistency of our AOC platform and the significant potential of del‑zota, del‑desiran, and del‑brax to transform outcomes…” — Sarah Boyce, President & CEO .
  • “Our recent meeting with the FDA was highly collaborative and provided a clear path forward for our BLA submission… the accelerated approval pathway in the US is the best and fastest way to bring del‑zota to people who need it.” — Sarah Boyce .
  • “For the first time, we have data showing that sustained muscle protection leads to meaningful improvements across multiple key functional measures in DMD.” — Sarah Boyce .

Q&A Highlights

  • A Q3 earnings call was scheduled, but a full transcript could not be located within the repository; themes inferred from press materials include BLA timing rationale (CMC completeness), revenue drivers (Lilly milestone), and cash runway extension via capital raises .
  • Clarifications: BLA submission moved to 2026 for del‑zota to incorporate additional CMC data; MAP designed to enable compliant access for eligible DMD44 patients ahead of potential approval .
  • Transaction context: $72.00/share cash consideration (~46% premium to Oct 24 close), closing expected 1H 2026 subject to SpinCo and approvals .

Estimates Context

  • Q3 revenue beat consensus by ~$10.67M, reflecting milestone revenue recognition; EPS missed by ~$0.17–$0.22 versus estimates, as operating costs increased with late-stage trials and commercial build [GetEstimates Q3 2025]* .
  • Estimate revisions: Revenue pathways now include collaboration milestones; operating expense trajectory likely higher for R&D and G&A; EPS estimates may drift lower near-term while regulatory outcomes (accelerated approval) could reset medium-term expectations .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Merger premium quantifies upside ($72/share, ~46% premium), with closing anticipated in 1H 2026; SpinCo provides embedded optionality in precision cardiology .
  • Near-term narrative hinges on del‑zota regulatory trajectory (accelerated approval) and MAP execution; one‑year functional data are a strong de‑risking signal for DMD44 .
  • Top-line volatility: Collaboration-driven revenue can produce outsized beats; EPS likely pressured by elevated R&D/G&A into submission and commercialization phases .
  • Cash runway extended to mid‑2028 post capital raises, supporting multiple filings and pre‑launch inventory build; lowers financing risk .
  • Program cadence: DM1 HARBOR topline and del‑brax biomarker updates in 2026; global Ph3 for del‑brax targets 2028 submissions—multi-year catalysts .
  • Trading implications: Deal spread vs $72 offer and regulatory milestones are primary drivers; watch SEC and shareholder approvals, SpinCo structuring, and FDA interactions for del‑zota .
  • Estimates likely adjust higher for revenue in milestone quarters and reflect higher opex; EPS misses may persist until commercialization or deal close—position accordingly [GetEstimates Q3 2025]* .

*Values retrieved from S&P Global.