Novartis shares plunge after latest clinical-trial setback

Novartis shares fell 9.6% to CHF 113.42 by around 9:15am on Tuesday, September 8, 2026, as investors reacted to the failure of a clinical trial for Del-desiran, an experimental treatment for myotonic dystrophy type 1. The decline came one day after the company disclosed that its heart medicine pelacarsen had also missed its primary endpoint, sending the stock down 3.2%.\n\nThe two results have put immediate pressure on a company that had reached a record share price of CHF 132.68 only one week earlier. Novartis is one of the largest listed companies on the Swiss market, so the sell-off extends beyond the company’s laboratories and boardroom. It affects pension funds, institutional investors and private shareholders who use the pharmaceutical group as a core holding.\n\nDel-desiran was tested in the Harbor study, which involved around 150 patients over 54 weeks. The trial measured whether patients could open their hands more quickly, a clinical measure linked to the muscle stiffness caused by the disease. The drug did not meet that primary endpoint. Novartis said the results showed indications of an effect in other criteria, but that did not prevent the market reaction. Analysts are now reassessing the value and reliability of the company’s recently expanded drug pipeline.

Del-desiran failed on the Harbor study’s primary endpoint after 54 weeks of testing. The trial focused on myotonic dystrophy type 1, a progressive muscle disorder that can cause stiffness and impaired movement. Researchers used the time patients needed to open their hands as the main measure of treatment performance.\n\nThe endpoint gave investors a clear benchmark for whether the treatment was improving a central symptom of the disease. Novartis said the compound showed indications of an effect in other criteria examined during the trial. Those secondary signals may warrant further analysis, but the failure of the main endpoint sharply reduces confidence in the treatment’s regulatory and commercial prospects.\n\nThe result matters because expectations for Del-desiran were high. Before the announcement, Vontobel estimated that the drug could generate peak annual sales of $3 billion, equivalent to CHF 2.43 billion, after accounting for the risk of failure. UBS had placed potential sales at up to $2 billion on a comparable basis. Vontobel has now removed its sales forecast from its valuation model.\n\nClinical trials routinely produce mixed data, particularly in rare and complex diseases. For investors, however, a failed primary endpoint usually demands a reassessment of development timelines, approval prospects and the price paid for the underlying asset.

Analysts are questioning confidence in the drug portfolio Novartis acquired from Avidity Biosciences. Zurich Cantonal Bank said the Del-desiran result had damaged confidence in the entire group of drug candidates obtained through the US biotech takeover. The bank’s assessment reaches beyond one compound and focuses on how investors judge the acquisition as a whole.\n\nVontobel described the result as a significant setback for Novartis’s pipeline. The concern is financial as well as scientific. Large pharmaceutical acquisitions rely on a sequence of future approvals and product launches to justify their purchase prices. When a leading candidate fails, investors may reduce the value assigned to the remaining programmes, even when those programmes have produced positive results.\n\nKeystone-SDA reported that other compounds from the Avidity acquisition have shown positive trial results to date. Those results provide some support for the portfolio, but they have not offset the market’s reaction to Del-desiran and pelacarsen arriving within days of each other.\n\nThe episode also exposes the timing risk built into biotech deals. Novartis takes on research programmes before regulators confirm their benefit and before commercial demand is certain. The company gains access to potential growth, while shareholders absorb the cost of failure. That balance has become central to the market’s assessment of the Avidity transaction.

Novartis has suffered two primary-endpoint failures in consecutive trading sessions. The first involved pelacarsen, a heart medicine whose trial result emerged on Monday, September 7. Shares fell 3.2% that day. The second involved Del-desiran, which triggered a further 9.6% decline during Tuesday morning trading.\n\nThe sequence magnified the market response. Investors had little time to separate the two programmes or assess whether the setbacks were isolated events. The share price fell from a record CHF 132.68 reached the previous week to CHF 113.42 by Tuesday morning, a decline of more than CHF 19 from that recent peak.\n\nNovartis also faced a separate safety-related development at the end of August, when it halted several clinical trials of experimental cell therapies for autoimmune diseases in immunology and neuroscience following the deaths of three patients. That action involved different programmes from the Del-desiran and pelacarsen trials, but it adds to the scrutiny surrounding the company’s research operations.\n\nThe financial pressure reflects the economics of drug development. A candidate can absorb years of laboratory work, clinical testing and investment before one trial result changes its prospects. For a global pharmaceutical company, a broad portfolio spreads that risk. The market reaction shows that investors still examine each failure for what it says about the strength of the wider pipeline.

Novartis must now decide how much weight to place on Del-desiran’s secondary signals and how quickly to revise its pipeline strategy. The company has not said that every development programme linked to the Avidity acquisition has failed. Other compounds have produced positive trial results, and those programmes will be closely watched by investors seeking evidence that the latest setback is limited to one treatment.\n\nThe immediate focus will be the company’s interpretation of the Harbor data, its discussions with regulators and any decision on whether further studies can clarify the results. The failed primary endpoint makes the path more difficult, while the reported effects on other measures could influence the next step.\n\nSwiss investors will also weigh the loss in market value against Novartis’s broader business, rather than judging the group solely through one programme. Yet the removal of Vontobel’s $3 billion sales estimate and UBS’s earlier forecast of up to $2 billion demonstrates how quickly a clinical result can change financial expectations.\n\nFor Switzerland’s pharmaceutical sector, the episode offers a direct reminder of the risk attached to consolidation in biotech. Acquisitions can bring promising science into established companies, but they cannot eliminate the uncertainty of human trials. Novartis’s next disclosures will determine whether confidence returns to the Avidity portfolio or whether analysts continue to mark down the value of its future medicines.