Novartis Shareholders Push for Board Overhaul After Three Clinical Setbacks in Eight Days
Published on 09/11/2026 at 06:50 | Editorial boerse-global.de
Three late-stage clinical failures in the space of little more than a week have turned a run of bad luck into something far more uncomfortable for Novartis: an open challenge to how the Swiss drugmaker allocates its capital.
The sequence began on 5 September, when the company conceded that Lp(a)HORIZON, a Phase III trial of its lipoprotein(a) lowering agent Pelacarsen, had missed its primary endpoint. The drug failed to reduce the risk of cardiovascular events versus placebo, Novartis confirmed. Just three days later came a second blow — Del-desiran, an experimental treatment for myotonic dystrophy type 1, also fell short of its primary goal in the HARBOR study.
Between those two disclosures sat a third piece of unwelcome news: the suspension of eight clinical trials involving the experimental cell therapy Rap-cel, following three patient deaths. Novartis was careful to note that its oncology studies with the compound are unaffected.
A $12 Billion Bet That Rested on One Readout
What separates this episode from an ordinary pipeline disappointment is the reaction from the company's own shareholder base. James Eugene of Verso Investment Management described Del-desiran as a "must-win" for Novartis, warning that the failure damages confidence in the group's entire acquisition strategy. David Samra of Artisan Partners went further, calling for a restructuring of the board and pointing to the 2024 takeover of MorphoSys, which Novartis was forced to write down months later.
The criticism carries weight. A multibillion-dollar acquisition whose valuation leaned heavily on a single clinical result — one that then failed to materialise — raises fundamental questions about due diligence. Vontobel's response was telling: the firm stripped an anticipated $3 billion in peak sales for Del-desiran out of its valuation model entirely, a measure of how central that one asset was to the investment case.
Should investors sell immediately? Or is it worth buying Novartis?
When long-standing shareholders publicly question corporate governance, that is more than routine investor jitters. It signals that management's capital allocation itself is now on the table.
Two Banks Cut in a Single Day
Analysts moved quickly. On 9 September, Deutsche Bank Research lowered its price target on Novartis from CHF 140 to CHF 120 and downgraded the stock from "Buy" to "Hold." RBC Capital Markets took the same day to assign a "Sector Perform" rating with a CHF 120 target. Two houses revising within hours of each other suggests the setbacks are being read as a structural issue rather than a temporary disruption.
The chart tells a similar story. The shares now trade roughly 18% below their 52-week high of EUR 144.30, reached at the end of February, and sit about 12% under their 50-day moving average — evidence that the recent slide broke the medium-term trend rather than merely denting it. Over seven trading sessions the stock shed 15%, and on a monthly basis it is down 11%.
Momentum gauges point to exhaustion on the downside. The 14-day relative strength index reads 30.8, while a separate reading puts the RSI at 29.3 — both in oversold territory, a condition that has historically preceded technical rebounds. For the bulls, though, that is no substitute for a fundamental reassessment of pipeline risk.
A Licensing Deal and an MS Win in the Same Week
Not everything went wrong. In the middle of the run of negative headlines, Novartis struck an agreement with South Korea's Alteogen worth up to $3.22 billion for its drug-delivery technology, as Reuters reported — a sign the group is still willing to look outside for ways to strengthen its portfolio.
The most encouraging development came from its own laboratories. Remibrutinib met the primary goals in two Phase III trials in multiple sclerosis, and Novartis said it will pursue regulatory filings worldwide, with full data due in October. Morningstar/Dow Jones also reported that the company is holding to its 2025–2030 revenue forecast of 5% to 6% growth, an indication that the core business remains untouched by the trial failures.
Even after the selloff, the stock is up 10.0% over twelve months, trading at EUR 118.96. The question now facing investors is whether the Remibrutinib win and the Alteogen deal are enough to offset the pipeline value lost to the failed studies. October's full data readout should provide the first real test — but the louder pressure may come from shareholders who want answers on governance long before then.
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