Novartis shares dropped about 13 percent in pre-market trading Tuesday after its experimental DM1 drug del-desiran failed to meet the primary endpoint in a Phase III trial, the company's third R&D setback within a week. The consecutive failures raise concerns about pipeline execution and the company's ability to offset patent expirations on core drugs through acquisitions.
Novartis fell 13 percent Tuesday after del-desiran missed its Phase III endpoint, the third trial failure in a week.
Barclays analysts had said success in the del-desiran study "is needed to justify" the roughly $12 billion price tag Novartis paid for Avidity Biosciences, the drug's developer.
Results from the HARBOR study showed del-desiran failed to significantly improve video hand opening time — a measure of how quickly patients with myotonic dystrophy type 1 reopen their palms after forming a fist — compared with placebo. The company said signals of clinical activity appeared in some secondary endpoints and exploratory analyses, and the drug's safety profile was consistent with previously disclosed data. Del-desiran, one of three antibody-oligonucleotide conjugate drugs from the Avidity purchase, had received Orphan Drug, Fast Track, and Breakthrough Therapy designations from the U.S. Food and Drug Administration.
The setback follows the failure of pelacarsen, a cholesterol drug targeting lipoprotein(a), which did not cut heart attack and stroke risk in a late-stage study, and the pause of certain CAR-T studies for autoimmune diseases due to safety issues. Analysts had forecast peak annual sales of $3 billion to $6 billion for pelacarsen. Novartis shares had gained about a fifth in value this year before the setbacks, buoyed by pipeline optimism.
The three consecutive failures raise questions about Novartis's late-stage pipeline execution and whether acquisitions can offset growth pressures from patent expirations on core drugs such as Entresto. The company plans to present full pelacarsen results at a medical meeting later this year and will communicate with regulators to determine next steps for del-desiran.
The setbacks also cast uncertainty over the wider industry effort to target Lp(a), an inherited cardiovascular risk factor with no approved treatments. Amgen and Eli Lilly are running late-stage trials of rival experimental medicines, olpasiran and lepodisiran.
Novartis's remibrutinib, an anti-inflammatory drug, succeeded in a trial of multiple sclerosis patients last week, providing a partial offset. Jefferies analysts said that success "should make the conclusion of the pelacarsen study more palatable" for investors. Data from another remibrutinib study in patients with hidradenitis suppurativa is expected this year.
The decline puts Novartis shares at their lowest level in recent months, testing investor confidence in the company's ability to replace revenue from expiring patents. The next event to watch is the full del-desiran data analysis and regulatory discussions, with remibrutinib's hidradenitis suppurativa readout also expected this year.
This article is for informational purposes only and does not constitute investment advice.
