StockWatch: Novartis Loses More than Market Value After Phase III Failure
Del-desiran was one of three clinical setbacks for Novartis within a week. On September 4, the company and partner Ionis Pharmaceuticals (Nasdaq: IONS) acknowledged that their co-developed pelacarsen failed the Phase III Lp(a)HORIZON trial (NCT04023552) by missing its primary endpoint of reducing the risk, compared with placebo, of cardiovascular events. Two days earlier, Novartis paused eight…
Novartis (SIX Swiss: NOVN and NYSE: NVS) suffered significant losses beyond the $30 billion market capitalization drop following the recent failure of its neuromuscular candidate, delpacibart etedesiran (del-desiran) in Phase III trials. The most striking loss for the company is the dissatisfaction from major investors, including Artisan Partners, which publicly criticized the board for the company's acquisition strategy.
Managing director M. David Samra of Artisan Partners called for changes at the board level, specifically urging chairman Giovanni Caforio to improve oversight of acquisitions. Samra specifically criticized the $12 billion acquisition of Avidity Partners, aimed at bolstering the buyer's neuroscience pipeline, and the $3.1 billion acquisition of MorphoSys for its oncology portfolio.
While pondering potential penalties for Novartis' management, Samra acknowledged that Avidity and MorphoSys acquisitions might yield successful drugs in the future.
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