Novartis disclosed Tuesday that its global Phase III HARBOR study in myotonic dystrophy type 1 did not show del-desiran could make patients open their hands faster versus placebo. The setback comes just days after pelacarsen did not reduce cardiovascular-event risk in a separate late-stage study, and about a week after the company paused eight studies of its experimental cell therapy, rap-cel, following three patient deaths. Investors viewed the news as the week's third setback from a clinical trial.
Traders hit the sell button. Shares were recently down 8.9%, lining up the biggest single-day drop since the early-pandemic turmoil in March 2020. A pricing snapshot in Swiss trading at 4:16 PM CEST showed Novartis at 112.66 francs, a decline of 12.80 francs or 10.20%. The flurry of trial headlines also rattled confidence in the company's outlook.
Jefferies told clients the growth goal "will likely be perceived as unattainable without further M&A, which is now questionable again." Barclays estimated del-desiran and pelacarsen together had roughly $5 billion in risk adjusted peak sales potential and argued del-desiran doubled as a litmus test for the about $12 billion purchase of Avidity. Barclays added, "We expect shares to materially [underperform], and Novartis' 20% sector premium may now be debated."
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"Novartis is evaluating the full HARBOR dataset and will engage with health authorities to determine the most appropriate development path for del-desiran," the company said. On Tuesday, Shreeram Aradhye, who oversees development at Novartis and serves as its top medical executive, added, "Developing therapies for a complex disease like [myotonic dystrophy type 1] remains challenging, and setbacks are part of scientific progress," and, "As we continue to evaluate the full HARBOR dataset, we remain committed to identifying the most appropriate development path for the del-desiran program and advancing innovative approaches for people living with [myotonic dystrophy] and other serious neuromuscular diseases."
Among the pipeline assets, del-desiran counts as one of three antibody-oligonucleotide conjugate projects that came with Novartis's acquisition of Avidity Biosciences for about $12 billion last year. The pipeline is not all red ink: last week a late-stage study of remibrutinib showed "a clinically meaningful delay in disability progression" in relapsing multiple sclerosis. Even so, Jefferies said confidence building could be hard without del-desiran and del-brax, and that conviction on del-brax is unlikely before Phase III data expected in 2028.
Novartis reiterated Tuesday that it still sees average annual sales growth of 5% to 6% through 2030. After these trial headlines, though, analysts questioned whether dealmaking and other programs can shoulder more of the load, and whether the Avidity bet can offset coming patent losses. For investors, that means the story may hinge on how regulators and management move next on del-desiran, how remibrutinib's data are received, and whether M&A reopens.
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