Avidity Biosciences (NASDAQ: RNA) advances Novartis merger and revises executive pay

Rhea-AI Filing Summary

Avidity Biosciences outlines executive compensation changes and regulatory progress tied to its pending merger with Novartis. The board approved accelerating into December 2025 the payment of certain 2025 cash bonuses and the vesting and settlement of specified performance stock units for named executives and other leaders. These amounts are ones the executives would otherwise have received at closing of the merger or in 2026, and the company states the timing change is intended to address potential “excess parachute payment” issues under Sections 280G and 4999 of the tax code and to help preserve related tax deductions. Each affected executive signed an Accelerated Payments and Clawback Agreement that can require repayment if employment ends under certain conditions before the original payment dates or, for performance units, before December 31, 2029.

The company also reports that on December 17, 2025 the Federal Trade Commission granted early termination of the waiting period under the Hart‑Scott‑Rodino Antitrust Improvements Act for the Novartis transaction. The expiration of this waiting period satisfies one of the conditions to closing the merger and the related spin‑off of Atrium Therapeutics (SpinCo), while completion still depends on the SpinCo separation and other customary closing conditions described in its proxy materials.

Positive

• FTC grants early termination of the HSR Act waiting period, satisfying one antitrust condition for closing the Novartis merger and related transactions.

Negative

• None.

Insights

M&A and governance analyst

HSR clearance advances the Novartis deal while Avidity reshapes executive payouts with clawbacks and tax planning.

The update shows two main developments: restructuring of leadership compensation around the Novartis merger and progress on antitrust review. Accelerating 2025 bonuses and performance stock units into December 2025 converts amounts that would have been paid at closing or in 2026 into pre‑closing payments. The company explicitly links this to Sections 280G and 4999 of the tax code, indicating a focus on managing potential “excess parachute payments” and preserving corporate tax deductions.

The clawback agreements add protection by requiring executives to repay accelerated amounts if they are terminated for cause or resign without good reason before the dates those payments would otherwise have been made, or, for performance units, before December 31, 2029. This ties the accelerated value to continued service or appropriate separation terms. On the deal side, the Federal Trade Commission’s early termination of the Hart‑Scott‑Rodino waiting period removes a key antitrust hurdle for the merger and related spin‑off of Atrium Therapeutics, though closing still depends on completing the separation of SpinCo and satisfying other customary conditions described in the proxy materials.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 14, 2025

Avidity Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Delaware		001-39321		46-1336960
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

3020 Callan Road

San Diego, CA 92121

(Address of principal executive offices) (Zip Code)

(858) 401-7900

(Registrant’s telephone number, include area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☒ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		RNA		The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously disclosed, Avidity Biosciences, Inc., (the “Company”), entered into an Agreement and Plan of Merger, dated as of October 25, 2025 (the “Merger Agreement”), with Novartis AG, a company limited by shares (Aktiengesellschaft) incorporated under the laws of Switzerland (“Parent”) and Ajax Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as an indirect wholly owned subsidiary of Parent.

In connection with the Merger, certain employees of the Company (including certain of its named executive officers) may become entitled to payments and benefits that may be treated as “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Section 280G” and the “Code,” respectively). To mitigate the potential impact of Section 280G and Section 4999 of the Code on the Company and its applicable executive officers, on December 14, 2025, the Company’s Board of Directors (the “Board”) approved the acceleration into December 2025 of the vesting and payments of certain equity awards and annual cash bonuses, respectively, that otherwise would have been payable to Ms. Boyce, Dr. Flanagan, Ms. McCarthy and Mr. Moriarty and certain other Company executives (collectively, the “Affected Executives”) on or prior to the closing of the Merger or otherwise in 2026. These actions are intended to benefit the Company by preserving potential compensation-related corporate income tax deductions for the Company that otherwise might be disallowed through the operation of Section 280G and to mitigate the amount of excise tax that may be payable by the Affected Executives pursuant to Section 4999 of the Code.

The approved accelerated vesting and payments consisted of the following forms, to the extent applicable to each Affected Executive: (a) payment of the Affected Executive’s fiscal year 2025 annual bonus that otherwise would be payable in 2026 (“Accelerated Bonus”); (b) vesting and settlement in shares of Company common stock (“shares”) of certain Company restricted stock units held by the Affected Executive (“Accelerated RSUs”); and (c) vesting and settlement in shares of certain Company performance-vesting restricted stock units (“Accelerated PSUs”) held by the Affected Executives.

The Accelerated Bonus, Accelerated RSUs and Accelerated PSUs (collectively, the “Accelerated Amounts”) represent payments or amounts the Affected Executive otherwise would have been entitled to receive upon the consummation of the Merger or otherwise in 2026. Therefore, there will be no duplication of payments. All Accelerated Amounts will be reduced by applicable tax withholdings and are subject to the terms of the Accelerated Payments and Clawback Agreements (described below).

Specifically, the Board approved for each Affected Executive who is a named executive officer the following accelerated vesting and payments:

• For Ms. Boyce, (a) an Accelerated Bonus in the amount of $683,010 and (b) 31,000 Accelerated PSUs.

• For Dr. Flanagan, (a) an Accelerated Bonus in the amount of $371,520 and (b) 27,500 Accelerated PSUs.

• For Ms. McCarthy, (a) an Accelerated Bonus in the amount of $323,865 and (b) 39,000 Accelerated PSUs.

• For Mr. Moriarty, (a) an Accelerated Bonus in the amount of $354,375 and (b) 56,000 Accelerated PSUs.

No named executive officer received Accelerated RSUs.

In connection with the accelerated vesting and payments described above, each Affected Executive has signed an Accelerated Payments and Clawback Agreement providing that the Affected Executive’s accelerated payments are subject to certain repayment conditions. Generally, if an Affected Executive’s employment with the Company is terminated for “cause” or voluntarily by the Affected Executive other than for “good reason” prior to the date on which the applicable payment would have been made (or, if later, prior to December 31, 2029, in the case of the Accelerated PSUs) but for the payment of the relevant Accelerated Amount, then the Affected Executive would be required to repay to the Company the applicable Accelerated Amount.

The description of the Accelerated Payments and Clawback Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Form of Accelerated Payments and Clawback Agreement, a copy of which is filed as Exhibit 10.1 herewith and is incorporated by reference herein.

Item 8.01 Other Events.

As previously disclosed, on November 21, 2025, the Company and Parent filed notification of the transactions contemplated by the Merger Agreement and the Spin-Off Agreements (as defined in the Merger Agreement and such transactions, the “Transactions”) with the Federal Trade Commission (the “FTC”) and the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”).

On December 17, 2025, the FTC granted a request for the early termination of the waiting period under the HSR Act. The expiration of the waiting period under the HSR Act satisfies one of the conditions to the consummation of the Transactions. The consummation of the Transactions remains subject to completion of the separation of Atrium Therapeutics, Inc. (“SpinCo”) from the Company and the satisfaction or waiver of other customary closing conditions as described in the preliminary proxy statement filed by the Company with the SEC, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number		Exhibit Description
10.1		Form of Accelerated Payments and Clawback Agreement.
104		The cover page of this Current Report on Form 8-K formatted as Inline XBRL.

Additional Information and Where to Find It

In connection with the spin-off or sale of SpinCo and the Merger, Parent, the Company and SpinCo intend to file relevant documents with the SEC, including a definitive proxy statement to be filed by the Company. The definitive proxy statement and proxy card will be delivered to the stockholders of the Company in advance of the special meeting relating to the Transactions. This document is not a substitute for the proxy statement or any other document that may be filed by the Company with the SEC. THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY EACH OF PARENT AND THE COMPANY WITH THE SEC IN CONNECTION WITH THE TRANSACTIONS OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS AND THE PARTIES TO THE PROPOSED TRANSACTIONS. Investors and security holders will be able to obtain a free copy of the proxy statement and such other documents containing important information about Parent and the Company, once such

documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Parent and the Company make available free of charge at Parent’s website at www.novartis.com/investors/financial-data/sec-filings and the Company’s website at investors.aviditybiosciences.com/sec-filings, respectively, copies of documents they file with, or furnish to, the SEC. The contents of the websites referenced above will not be deemed to be incorporated by reference into the proxy statement.

Participants in the Solicitation

This communication does not constitute a solicitation of a proxy. Parent, the Company and their respective directors, executive officers and certain employees may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the Transactions. Information regarding the special interests of these directors and executive officers in the Transactions will be included in the definitive proxy statement referred to above. Security holders may also obtain information regarding the names, affiliations and interests of the Parent directors and executive officers in the Parent Annual Report on Form 20-F for the fiscal year ended December 31, 2024, which was filed with the SEC on January 31, 2025. Security holders may obtain information regarding the names, affiliations and interests of the Company’s directors and executive officers in the Company’s definitive proxy statement on Schedule 14A for its 2025 annual meeting of stockholders, which was filed with the SEC on April 29, 2025. To the extent the holdings of the Company’s securities by the Company’s directors and executive officers have changed since the amounts set forth in the Company’s definitive proxy statement for its 2025 annual meeting of stockholders, such changes have been reflected in the following Statements of Change in Ownership on Form 4 filed with the SEC: by Eric Mosbrooker, dated October 7, 2025, September 5, 2025 and August 8, 2025; by Steven Hughes, dated October 22, 2025, September 23, 2025, September 17, 2025, August 22, 2025, August 15, 2025 and August 8, 2025; by Teresa McCarthy, dated October 15, 2025, September 17, 2025 and August 15, 2025; by Michael Flanagan, dated September 12, 2025 and June 12, 2025; by Troy Wilson, dated September 9, 2025, August 8, 2025 and June 12, 2025; by Sarah Boyce, dated September 5, 2025 and August 29, 2025; by Kathleen Gallagher, dated September 2, 2025, June 18, 2025, June 4, 2025 and May 2, 2025; by Michael MacLean, dated August 15, 2025; by Arthur Levin, dated August 8, 2025 and June 12, 2025; by John Moriarty, dated August 5, 2025; by Noreen Henig, dated June 12, 2025; by Carsten Boess, dated June 12, 2025; by Edward Kaye, dated June 12, 2025; by Simona Skerjanec, dated June 12, 2025; by Tamar Thompson, dated June 12, 2025; and by Jean Kim, dated June 12, 2025. These documents (when available) may be obtained free of charge from the SEC’s website at www.sec.gov, the Parent website at www.novartis.com/investors/financial-data/sec-filings and the Company’s website at investors.aviditybiosciences.com/sec-filings. The contents of the websites referenced above are not deemed to be incorporated by reference into the proxy statement.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

				AVIDITY BIOSCIENCES, INC.
Date: December 17, 2025				By:		/s/ Michael F. MacLean
						Michael F. MacLean
						Chief Financial Officer

FAQ

What executive compensation changes did Avidity Biosciences (RNA) approve in connection with the Novartis merger?

Avidity’s board approved accelerating into December 2025 certain equity awards and 2025 annual cash bonuses for specified executives. The accelerated items include the 2025 annual bonus that would otherwise be paid in 2026 and the vesting and settlement of certain performance‑vesting restricted stock units, representing amounts the executives would have received upon consummation of the merger or in 2026.

Why is Avidity Biosciences (RNA) accelerating bonuses and equity awards before the merger closes?

The company states that accelerating these payments and vesting is intended to benefit the company by preserving potential compensation‑related corporate income tax deductions that might otherwise be disallowed under Section 280G of the Internal Revenue Code, and to mitigate the amount of excise tax that may be payable by affected executives under Section 4999.

What are the key terms of the Accelerated Payments and Clawback Agreements for Avidity executives?

Each affected executive signed an Accelerated Payments and Clawback Agreement. In general, if an executive is terminated for cause or resigns voluntarily other than for good reason before the date the payment would originally have been made (or, for accelerated performance‑vesting restricted stock units, before December 31, 2029), the executive must repay the applicable accelerated amount to the company.

What regulatory milestone under the HSR Act did Avidity Biosciences and Novartis achieve?

On December 17, 2025, the Federal Trade Commission granted a request for early termination of the waiting period under the Hart‑Scott‑Rodino Antitrust Improvements Act for the transactions contemplated by the Merger Agreement and Spin‑Off Agreements. The expiration of this waiting period satisfies one of the conditions to consummating the transactions.

Is the Novartis acquisition of Avidity Biosciences (RNA) now fully cleared to close?

No. The early termination of the HSR Act waiting period satisfies one condition, but completion of the merger and related transactions remains subject to the separation of Atrium Therapeutics, Inc. (SpinCo) from the company and the satisfaction or waiver of other customary closing conditions described in Avidity’s proxy materials.

How is Atrium Therapeutics (SpinCo) involved in the Avidity–Novartis transaction?

The filing refers to transactions contemplated by the Merger Agreement and related Spin‑Off Agreements, collectively called the Transactions. These include the separation of Atrium Therapeutics, Inc. (SpinCo) from Avidity, and completion of the overall Transactions remains subject in part to the completion of this separation.