Our TP is $70 based on a DCF-derived intrinsic value using a WACC of 12.5% and 2% terminal growth rate. We project free cash flow out to 2030 and thereafter apply terminal growth assumptions.

We rate Avidity Biosciences as High Risk based on the usual volatility of biotech stocks and uncertainty/risk related to clinical trials, late-stage drug development, and regulatory decisions. Avidity has many of the risks associated with biotechnology companies. Share performance is closely linked to clinical and regulatory updates. Any such updates that fall short of expectations would lead to downside versus our target price. Due to the high cost of Avidity’s development effort, we highlight the risk of potential equity or product financings. If the impact on the company from any of these factors proves to be greater than we anticipate, the stock could be under pressure.



We acknowledge multiple risks to our investment thesis and TP. On the upside, we note: 1) strong commercial launch of AOC products upon approval, 2) better than expected clinical trial results. On the downside, we note: 1) commercial competition for neuromuscular portfolio, 2) clinical trial failures.