Shares of Novartis jumped 4.3% to $158.55 on September 1 after the Swiss drugmaker reported that its oral pill for relapsing multiple sclerosis cleared two pivotal late-stage trials — even as the company simultaneously disclosed it had paused eight separate clinical studies following three patient deaths. The two-headline day captures a core tension investors must now price: a near-term commercial catalyst worth billions against a safety scare in an entirely different technology.
A Pill That Beat the Standard of Care in a $30 Billion Market
The REMODEL-1/-2 trials enrolled roughly 2,000 patients and met their primary goal, significantly reducing relapse rates and MRI-visible brain lesions compared to teriflunomide, a widely used existing treatment.
The broader market for BTK inhibitors in MS — the drug class this pill belongs to — was valued at $2.3 billion in 2025 and is projected to reach $11.6 billion by 2034. For Novartis, the drug would complement Kesimpta, its injectable MS therapy that grew 32% to $1.42 billion in Q2 2026 alone. An oral option could capture patients who avoid needles and expand the company's share of a market already approaching $30.7 billion globally.
Three Deaths Raise a Red Flag Next Door
Novartis paused eight clinical trials of its experimental CAR-T cell therapy — a treatment that reengineers a patient's own immune cells — after three patients died from a severe immune overreaction.
The company initiated the holds on August 24, affecting studies in lupus, myasthenia gravis, and MS itself. While these trials are early-stage, the setback undercuts Novartis's ambitions in the red-hot autoimmune cell-therapy race, where competitor Bristol Myers Squibb also paused its own programs after similar inflammatory side effects.
The Patent Cliff Makes Pipeline Wins Non-Negotiable
Novartis faces a patent cliff from 2025 to 2028; Entresto and Xolair alone contributed over $10 billion in 2024 sales, and their revenue is now eroding fast.
Core operating income fell 7% in H1 2026 at constant currencies. Every successful pipeline readout — like today's — matters enormously, because new drugs must replace disappearing revenue just to keep earnings flat.
What Investors Should Watch Next
Novartis plans global regulatory submissions and will present detailed data at the MSToronto2026 conference. CEO Vas Narasimhan has acknowledged that injectable B-cell therapies like Kesimpta will remain "the dominant class," implicitly capping the oral drug's ceiling. If the stock sustains today's rally, it signals investors are betting the MS pipeline win outweighs the CAR-T cloud — a judgment that remains far from settled.