Pharma major plummets over 10% after third trial disappointment in a week

Novartis shares tanked on Tuesday after the pharmaceutical giant said its del-desiran drug for muscle-wasting disorder failed in a late-stage trial. The company's stock was last seen down 8.9%, as investors reacted to what was its third drug trial setback in a week. It put the shares on track for their worst trading day since March 2020.

The del-desiran result comes just days after Novartis said its pelacarsen drug failed to reduce the risk of cardiovascular events in a late-stage trial, and a week after announcing it had paused eight clinical trials of an experimental cell therapy, rap-cel, after three patients died.

Novartis said its global phase III HARBOR study, which had been testing del-desiran in patients with myotonic dystrophy type 1, "did not demonstrate statistically significant improvement versus placebo" on measurements of hand opening time.

Novartis said its global phase III HARBOR study, which had been testing del-desiran in patients with myotonic dystrophy type 1, failed to show that the drug significantly improved patients' ability to open their hands faster than a placebo.

"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 in a news release.

Del-desiran is one of three antibody oligonucleotide conjugate therapies that were added to Novartis's neuromuscular pipeline when it acquired Avidity Biosciences for around $12 billion last year.

Novartis also said Tuesday that it still expects its sales to grow by 5% to 6% a year, on average, until 2030. However, analysts cast doubt on the company's outlook following Tuesday's announcements.

Novartis' growth target "will likely be perceived as unattainable without further M&A, which is now questionable again," the equity research team at Jefferies said in a Tuesday morning note.

The Swiss drugmaker has also had some positive results in recent tests. A late-stage trial of the drug remibrutinib delivered "a clinically meaningful delay in disability progression" in patients with relapsing multiple sclerosis, the company announced last week. Remibrutinib is an experimental treatment for multiple sclerosis.