Key facts
- Novartis' experimental drug del-desiran failed a Phase III study for myotonic dystrophy.
- This is the second significant clinical trial failure for Novartis in less than a week.
- The company's shares dropped approximately 9% following the announcement.
- The failure of del-desiran, part of a $12 billion acquisition, raises concerns about Novartis' M&A strategy and pipeline.
- Barclays analysts had projected peak annual sales of $3.1 billion for del-desiran.
- Novartis reiterated its full-year financial guidance and long-term sales growth expectations.
Novartis shares experienced one of their worst trading days on record, falling approximately 9%, after its experimental drug del-desiran failed to meet its primary endpoint in a late-stage study for myotonic dystrophy. This setback follows another trial failure earlier in the week for a cholesterol drug, intensifying pressure on CEO Vas Narasimhan and his strategy to bolster the company's drug pipeline through acquisitions.
The failure of del-desiran, which Novartis acquired as part of a $12 billion deal for Avidity, was particularly disappointing as the drug was seen as a key prospect for a disease with no approved treatments. Analysts had assigned it a significant chance of success and projected substantial peak annual sales.
The clinical trial setbacks have also impacted other companies developing treatments for muscular dystrophy, with shares of Dyne Therapeutics and Sarepta Therapeutics declining sharply. Investors had been relying on del-desiran, along with other therapies like pelacarsen and remibrutinib, to drive future growth as Novartis faces patent expirations for older drugs.
Despite these challenges, Novartis reiterated its full-year financial guidance and maintained its long-term sales growth projections. The company's Chief Medical Officer acknowledged that developing therapies for complex diseases is challenging and that setbacks are an inherent part of scientific progress.