Novartis shares drop 10% after second late-stage drug failure

Novartis shares fell about 10% on Tuesday after the company reported that del‑desiran failed to meet the primary endpoint in a late‑stage trial. Vontobel lowered its price target to 125 Swiss francs and removed prior peak‑sales estimates for the molecule.

The Phase III HARBOR study did not show a statistically significant improvement versus placebo on the trial’s primary measure, video hand‑opening time, a test of hand myotonia in myotonic dystrophy type 1. In the assessment, patients clench their hands and then open them as quickly and fully as possible; a shorter opening time indicates less muscle stiffness.

Novartis acquired del‑desiran as part of its $12 billion purchase of Avidity Biosciences. The company said it will review the complete HARBOR dataset before deciding next steps for the program.

“Despite decades of research, there are still no approved treatment options for DM1, and patients and caregivers continue to face a significant daily burden,” stated Shreeram Aradhye, President, Development and Chief Medical Officer at Novartis.

The del‑desiran result follows a separate late‑stage setback announced on Monday, when pelacarsen did not reduce cardiovascular events versus placebo. Novartis also paused eight trials of an experimental cell therapy after three patient deaths. The company has now missed two of three key pipeline readouts this year.

Analysts at Vontobel had previously projected peak annual sales of about $3 billion for del‑desiran and assigned a 50% probability to that outcome; after the trial failure the firm removed those projections and trimmed its Novartis target price from 128 to 125 Swiss francs. Shares were trading near 112.56 Swiss francs after the decline and had fallen more than 14% over the past five trading sessions.

Novartis reiterated its guidance that sales are expected to grow at a compound annual rate of 5% to 6% between 2025 and 2030, while acknowledging the recent trial results affect that outlook. The company faces decisions on whether to pursue additional analyses or further studies for del‑desiran and how to allocate resources across its pipeline as patent expiries approach for established medicines.