Novartis Faces Drug Trial Setbacks Impacting Pipeline and CEO
Novartis announced that its experimental drug del-desiran failed a late-stage trial for myotonic dystrophy, marking the second major pipeline setback in days. The failure has led to an almost 9% drop in Novartis' share price, one of its worst trading performances on record and wiping around $29.6 billion from market value. Del-desiran was acquired through a $12 billion purchase of Avidity Biosciences and had been considered critical for the company's growth strategy. The drug failure adds pressure to CEO Vas Narasimhan, who has focused on rebuilding Novartis' pipeline following major business spin-offs. Analysts expressed concerns over the impact on investor confidence in recent M&A strategies and other key drugs like pelacarsen and remibrutinib. The setback also affected peers such as Dyne Therapeutics and Sarepta Therapeutics, with their shares falling significantly. Despite these challenges, Novartis maintains its full-year guidance for sales growth of 5% to 6%. Company executives acknowledged the difficulty in developing treatments for rare diseases like myotonic dystrophy but emphasized that setbacks are part of scientific progress.
Topics: CEO pressure drug failure M&A strategy pipeline setbacks