Novartis Faces a Reckoning: Three Trial Failures in Eight Days Test the Limits of Its Deal-Driven Growth Story
Published on 09/12/2026 at 05:50 | Editorial boerse-global.de
Three clinical blows landed on Novartis in the space of eight days, and the Swiss pharma giant is now grappling with a question that goes well beyond any single molecule: how much of its celebrated innovation story rests on borrowed pipelines rather than homegrown science?
The sequence began on September 1, when the Basel-based company had to pause eight clinical trials of its cell therapy rap-cel after three patients died following a severe immunological reaction. Days later came word that pelacarsen, the Lp(a)-lowering candidate tested in the 8,323-patient Phase 3 Lp(a)HORIZON study, had missed its primary endpoint. The drug cut lipoprotein(a) levels by 80% versus placebo but failed to prevent heart attacks, strokes, or cardiovascular deaths. Then, on the Tuesday of the following week, del-desiran flopped in the Phase 3 HARBOR trial for myotonic dystrophy type 1, missing its primary goal.
The market's response was brutal. Pelacarsen's failure alone erased roughly 10% of the share price on September 8, wiping out about CHF 24 billion in market value as the stock slid from a record CHF 132.68 to around CHF 113. Reuters noted that hopes for a potential blockbuster had evaporated, and the shares shed more than 3%. When del-desiran news broke, the stock tumbled about 11% in a single session — CNBC called it the weakest trading day since 2020. Reuters framed it as the third clinical setback in a week.
The Avidity Question
Bloomberg cut to the heart of the matter: the del-desiran failure raises doubts about the company's growth narrative following its acquisition of Avidity. That is precisely the crux. When you spend billions on acquisitions, you also buy the risk embedded in someone else's pipeline — and that risk has now materialized in real time.
The $12 billion Avidity deal from the previous year has drawn open criticism from several investors, including Artisan Partners, who are pressing for a boardroom shake-up and questioning how rigorously Novartis assessed trial risk before writing such large checks.
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CEO Vasant Narasimhan has pledged to deploy more than $30 billion on takeovers over the next three years. In the first half of 2026 alone, Novartis spent $15.3 billion on acquisitions and intangible assets — 1.7 times its free cash flow of $8.9 billion. Net debt is projected to nearly double, from $21.9 billion to $39.4 billion. Whether management sticks with this aggressive approach or bows to shareholder pressure and pivots to smaller, lower-risk deals in the $5 billion to $10 billion range may well determine whether confidence in the company's capital stewardship stabilizes.
A Counterweight in the Pipeline
The picture is not uniformly bleak. On September 1, Reuters reported that remibrutinib had outperformed an older comparator drug in late-stage studies for a form of multiple sclerosis, with regulatory filing preparations underway and full data due in October. That readout is widely viewed as the next major catalyst.
Just one day before the pelacarsen disappointment, Novartis struck a deal with Alteogen worth up to $3.22 billion covering a drug-delivery technology designed to convert intravenous medicines into injectable versions. The company is clearly trying to broaden its strategic base even as its clinical news flow burns.
Operationally, too, there are signs of adjustment: Novartis may cut around 130 positions at its Basel site, shifting laboratory activities from Kleinbasel to the main campus and discontinuing parts of small-scale production.
What the Charts Say
The stock is currently trading at EUR 118.68, about 18% below its 52-week high of EUR 144.30, after closing the prior session at EUR 118.24 — a hint of stabilization following the selloff. Over seven days, the shares are still down 13%; over 30 days, the loss stands at 10%. An RSI of 30.3 signals oversold conditions, suggesting the selling may be nearing its short-term limits — but no more than that.
For the bulls, the foundation remains intact: Novartis has reaffirmed its growth forecast of 5% to 6% annually through 2030 despite the setbacks. Both failed candidates had been heavily promoted — pelacarsen was projected to reach peak sales of $1.3 billion to $2 billion, with Vontobel estimating as much as $3 billion — yet they represent only part of the pipeline. Should the board visibly respond to shareholder pressure and bring discipline to M&A, that could be read as a signal of more responsible capital management and lift the oversold stock.
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The bear case runs deeper than any single failed study. Two setbacks within days raise the question of whether internal risk assessment before multibillion-dollar deals like Avidity was adequate. If the conflict with the board escalates or more institutional investors voice public criticism, prolonged uncertainty and a weighed-down share price could follow regardless of operational performance. A hostile market backdrop — rising bond yields in the US and Europe and historically weak September-October seasonality — could add further pressure on defensive names like Novartis even absent company-specific news.
The Road Ahead
So long as Novartis holds to its reaffirmed growth forecast through 2030 and no further trial failures emerge, the stock may stabilize in its current oversold range. But if the capital strategy descends into an open power struggle with the board, or if the October remibrutinib readout disappoints, the loss of confidence could run deeper than the recent share price declines suggest.
The next concrete tests are the remibrutinib data in October, followed by the full pelacarsen analysis at the AHA conference in November. Until then, one scientific uncertainty lingers: whether lipoprotein(a) truly plays a causal role in cardiovascular disease or is merely a marker — a question that will shape how the entire cardiovascular pipeline is valued.
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