Shares of Novartis plunged 12.6% to $139.79 Tuesday after the Swiss drugmaker disclosed that its experimental muscle-wasting drug failed a crucial late-stage trial — the company's second major trial collapse in a matter of days . The back-to-back failures are forcing investors to reprice what was once considered one of pharma's most dependable growth narratives.
A $12 Billion Acquisition Just Lost Its Crown Jewel. Del-desiran was the centerpiece of Novartis's $12 billion takeover of Avidity Biosciences , and Novartis's chief executive had previously described the drug as having peak sales potential exceeding $5 billion . The trial showed no statistically significant improvement versus placebo on its primary endpoint — a measure of hand muscle stiffness. Del-desiran showed some evidence of clinical activity in secondary endpoints , but that's thin comfort when the headline measure missed. The regulatory path forward is now deeply uncertain.
The Pelacarsen Failure Days Earlier Made This Far Worse. In a multiyear Phase 3 study of more than 8,000 participants, pelacarsen didn't lower the risk of major cardiovascular events compared to placebo . Analysts had modelled peak annual sales of around $4 billion to $5 billion for pelacarsen if it proved successful . Combined with del-desiran, Novartis has effectively lost up to $10 billion in projected peak sales within five days. The announcement deals another blow to the Swiss drugmaker's hunt for new sources of growth as it faces the biggest patent cliff in its history .
The Company Says the Growth Targets Still Hold — the Math Gets Harder. Novartis reaffirmed its five-year sales compound annual growth rate guidance of 5–6% for 2025–2030 . But generic competition, including the loss of U.S. exclusivity, has adversely impacted Entresto sales , its former bestselling heart drug. Strong demand for key growth brands, including Kisqali, Kesimpta, Scemblix, Pluvicto and Leqvio, is boosting the top line — but those products now carry a heavier burden with two pipeline pillars gone.
Analyst Confidence Is Cracking. Vontobel analyst Stefan Schneider called it a "major pipeline setback" that "has not helped our confidence" in other therapies Novartis gained with Avidity . Novartis shares plunged as much as 10% in early Zurich trading, reducing their gain for the year to about 4%, trailing rival Roche . The remaining Avidity asset — a Duchenne muscular dystrophy treatment — has been filed for accelerated approval and was granted priority review by the FDA , offering a lifeline, but one drug cannot justify a $12 billion deal alone.