Novartis shares plunge after two Phase 3 trials fail

Novartis ↗ 0.89% endured one of its worst weeks in recent memory after two major late-stage clinical trials failed in rapid succession, sending its shares tumbling and rattling partners and competitors across the biotech industry.

On Saturday, September 5, the Swiss pharma giant disclosed that pelacarsen, its closely watched Lp(a)-lowering drug developed with Ionis Pharmaceuticals ↗ 1.37%, failed to reduce cardiovascular events in the Phase 3 Lp(a)HORIZON trial — the first outcomes study ever conducted for an Lp(a)-targeting therapy. Then on Tuesday, September 8, Novartis revealed that del-desiran, the most advanced asset from its roughly $12 billion acquisition of Avidity Biosciences, missed its primary endpoint in the Phase 3 HARBOR study for myotonic dystrophy type 1.investors+3

A $12 Billion Bet Under Scrutiny

Del-desiran, an antibody-oligonucleotide conjugate designed to deliver RNA therapeutics directly into muscle cells, failed to demonstrate a statistically significant improvement in hand opening time compared to placebo in the nearly 160-patient HARBOR trial. Oppenheimer analysts called the result a "$12B disappointment".biospace

Novartis completed its acquisition of Avidity in February and had positioned del-desiran as a key validation of the deal's strategic rationale. The company said it detected "evidence of clinical activity" in secondary and exploratory endpoints and plans to consult regulators on next steps. Two other Avidity-derived programs remain in development: del-zota for Duchenne muscular dystrophy, which has received FDA priority review designation, and del-brax for facioscapulohumeral muscular dystrophy.european-biotechnology+2

Jefferies analysts said the HARBOR miss hands "frontrunner status" in the DM1 race to Dyne Therapeutics ↗ 0.53%, whose competing candidate z-basivarsen has Phase 1/2 data expected early next year.biospace

Ripple Effects Across Biotech

The twin failures sent Novartis stock down roughly 14% on Tuesday, hitting its lowest level since January. Ionis Pharmaceuticals fell sharply as well, given its collaboration agreement on pelacarsen, while Royalty Pharma ↗ 0.70% — which acquired an interest in pelacarsen royalties for up to $1.125 billion — also declined.benzinga+1

The pelacarsen failure carried broader implications for the Lp(a) hypothesis itself. Despite successfully lowering Lp(a) levels, the drug did not translate that reduction into fewer cardiovascular events, raising questions for rivals pursuing similar approaches, including Amgen ↗ 1.70% and Eli Lilly ↗ 1.13%, according to BioSpace.biospace

Compounding Pressures

The setbacks come on top of Novartis suspending several cell therapy trials earlier this summer after three patient deaths linked to its investigational CAR T therapy rapcabtagene autoleucel. The company faces additional pressure from looming patent expirations on established products including Entresto.european-biotechnology+1

Despite the clinical disappointments, Novartis has maintained its forecast of 5% to 6% annual sales growth through 2030. One recent bright spot: remibrutinib delivered positive Phase 3 results in relapsing multiple sclerosis. Still, with two of its three most closely watched recent readouts now failures, the company faces mounting questions about its pipeline strategy.european-biotechnology