Novartis (SIX: NOVN) shares fell 8.85% today after its del-desiran drug missed the primary endpoint of its Phase III trial in myotonic dystrophy, a muscle-wasting disease. CNBC said it was the stock’s worst trading day since March 2020.
The shares dropped from Friday’s close of CHF125.46 to CHF114.36, having earlier touched an intraday low of CHF112.06 — wiping out a large chunk of the stock’s value in a single session.
The trial, called HARBOR, failed to beat placebo on video hand-opening time, a measure of muscle function, though the drug showed activity on secondary measures. Shreeram Aradhye, Novartis’s president of development and chief medical officer, said: “Developing therapies for a complex disease like DM1 remains challenging, and setbacks are part of scientific progress. As we continue to evaluate the full HARBOR dataset, we remain committed to identifying the most appropriate development path for the del-desiran program.”
It is Novartis’s third pipeline setback in roughly a week. On Thursday, its pelacarsen cholesterol drug, licensed from Ionis Pharmaceuticals, lowered the targeted biomarker but failed to cut cardiovascular events in a trial of 8,323 patients. Novartis had also paused eight trials of its rap-cel cell therapy after three patient deaths. Del-desiran came from Novartis’s roughly $12bn acquisition of Avidity Biosciences, and analysts at broker Barclays said the failure casts doubt on the group’s ability to replace sales lost to patent expiries through further deals: “We expect shares to materially underperform, and Novartis’ 20% sector premium may now be debated.” Broker Jefferies said Novartis’s 5-6% sales-growth target “will likely be perceived as unattainable without further M&A, which is now questionable again.”
The pelacarsen failure also hit rivals racing to prove that lowering the same biomarker cuts heart risk. Amgen (NASDAQ: AMGN), developing its own Lp(a)-lowering drug olpasiran, saw its shares fall roughly 5% in after-hours trading in sympathy, while Eli Lilly’s (NYSE: LLY) rival programme now faces the same higher bar for proof.