Novartis muscle drug fails late-stage trial, shares drop 9%

September 8, 2026 at 04:26 PM2 min

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Novartis said its experimental drug del-desiran failed a late-stage trial for myotonic dystrophy, a muscle-wasting disease with no approved treatments. The setback, the second major pipeline failure in days, sent shares down about 9% and wiped roughly 24 billion Swiss francs ($29.6 billion) off the company's market value. The failure increases pressure on CEO Vas Narasimhan's acquisition-driven pipeline strategy.

Key Facts

Novartis shares fell about 9% on Tuesday, erasing roughly 24 billion Swiss francs ($29.6 billion) in market value.
Barclays analysts had estimated peak annual sales of $3.1 billion for del-desiran and assigned the drug a 60% chance of success.
Shares of Dyne Therapeutics and Sarepta Therapeutics fell 30% and 15.5%, respectively, in U.S. premarket trading.
Novartis has now missed on two of its three key pipeline readouts this year.

Trial Failure

Novartis said on Tuesday its experimental drug del-desiran failed a late-stage study in myotonic dystrophy, a muscle-wasting disease with no approved treatments. The drug was acquired through Novartis' recent $12 billion acquisition of Avidity. The trial failure means Novartis has now missed on two of its three key pipeline readouts this year. Barclays analysts had estimated peak annual sales of $3.1 billion for del-desiran and assigned the drug a 60% chance of success following positive Phase II data.

Market Impact

Novartis shares fell more than 10% at one point and were headed for a record drop, trading back near their level around the start of the year. The slide wiped about 24 billion Swiss francs ($29.6 billion) off the company's market value. Shares of Dyne Therapeutics and Sarepta Therapeutics, which are developing treatments for muscular dystrophy, fell 30% and 15.5%, respectively, in U.S. premarket trading.

Pipeline Pressure

Investors had been counting on del-desiran, heart drug pelacarsen, and anti-inflammatory drug remibrutinib to drive growth as Novartis faces declining sales of older drug Entresto and prepares for patent expiries early in the next decade. James Eugene, an analyst at Novartis shareholder Verso Investment Management, said the drug "should have been a 'must win' for the company" and that the failure would put more pressure on dealmaking and other drugs in development. Vontobel analyst Stefan Schneider said he was not changing his assessments of the other two therapies Novartis acquired via Avidity, although the latest setback had further weakened confidence. The news adds pressure on CEO Vas Narasimhan, who has focused on rebuilding Novartis' pipeline after spinning off its generics and consumer businesses while confronting what he has called the company's steepest patent cliff in decades.