Novartis shares sink on second pipeline setback this week

ZURICH, Sept 8 — Novartis said on Tuesday its experimental drug for a muscle wasting disorder failed ​in a late-stage study, sending its shares down 10% after the second setback in a week for the Swiss drugmaker's efforts to ‌revive its pipeline.

The drug, del-desiran, was being tested in myotonic dystrophy, a muscle-wasting disease with no approved ⁠treatments. Novartis acquired the treatment as ​part of its recent $12 billion acquisition ⁠of Avidity.

With the trial failure, Novartis has missed on two of three ‌key pipeline readouts this ‌year and a drug readout that should have been a "must win" ⁠according to James Eugene, an analyst at ⁠Novartis shareholder Verso Investment Management.

At 112.9 Swiss francs ($139.26), the shares have dropped back to their trading level around the start of the year.

Investors had been counting on del-desiran, heart drug pelacarsen and anti-inflammatory drug remibrutinib to drive growth as Novartis navigates declining sales of its older drug Entresto ‌and prepares for patent expiries in early 2030.

Novartis said ​the Phase III HARBOR study on del-desiran failed to show a statistically significant improvement over placebo on the primary endpoint of video hand-opening time, a measure of hand myotonia.

The test measures muscle stiffness by asking patients to clench their hand into a fist for several seconds before opening it as quickly and fully as possible. Shorter times indicate less stiffness and ​better function.

Shreeram Aradhye, Novartis' president of development and chief medical officer, said developing therapies ‌for diseases such ‌as myotonic ⁠dystrophy type 1 remained challenging and that setbacks were part of scientific progress.

The announcement came a day after Novartis shares fell more than 3% after its cholesterol drug failed in a closely watched study.

Novartis said it was sticking to ‌its guidance that sales would ​grow at a compound annual rate of ‌5% to 6% between ⁠2025 and 2030.

($1 = ​0.8107 Swiss francs)

(Reporting by Dave Graham and Bhanvi Satija. Editing by Ludwig Burger and ​Mark Potter)

Related topics