Novartis Shares Fall After Muscle Disease Drug Del-desiran Fails Phase 3 Trial

Novartis has suffered a major setback in its effort to build a new generation of growth-driving medicines after its experimental treatment for myotonic dystrophy type 1 failed to meet the main goal of a late-stage clinical trial. The Swiss pharmaceutical giant said on September 8 that its Phase III HARBOR study of delpacibart etedesiran, commonly known as del-desiran, did not produce a statistically significant improvement over placebo on the study's primary endpoint. The announcement triggered a sharp sell-off in Novartis shares, which fell about 9% and were at one point down more than 10%, wiping roughly 24 billion Swiss francs, or $29.6 billion, from the company's market value.

The result is particularly important because del-desiran was not an early-stage experiment with years of development ahead of it. It was one of the leading assets in Novartis' newly expanded neuromuscular pipeline and came from the company's roughly $12 billion acquisition of Avidity Biosciences. Novartis completed that transaction in February 2026, taking full ownership of Avidity and its muscle-directed antibody oligonucleotide conjugate, or AOC, platform along with three late-stage programs. The acquisition was presented as a major step toward strengthening Novartis' neuroscience business and creating potential multibillion-dollar products before 2030.

Del-desiran was designed to address myotonic dystrophy type 1, or DM1, a progressive genetic neuromuscular disorder that can cause muscle stiffness, weakness and impaired hand function. Novartis says the disease is caused by an expansion of CTG repeats in the DMPK gene and can affect mobility, everyday activities and quality of life. Importantly for the commercial and medical prospects of the drug, Novartis says there are currently no approved treatment options specifically for DM1, leaving significant unmet medical need.

The therapy itself uses an approach intended to target the underlying biological cause of the disease. Del-desiran combines a muscle-targeting monoclonal antibody that binds to transferrin receptor 1 with a small interfering RNA designed to trigger the degradation of toxic DMPK messenger RNA. The concept is part of Avidity's AOC technology, which aims to use antibodies to deliver RNA-based medicines more selectively into difficult-to-reach tissues such as muscle. Before the latest result, that approach had attracted significant attention because it offered the possibility of treating the genetic mechanism behind rare muscle disorders rather than simply managing symptoms.

The HARBOR trial was a global, randomized, double-blind, placebo-controlled Phase III study involving approximately 150 people with DM1. Participants received del-desiran or placebo every eight weeks over 54 weeks. The primary endpoint was video hand opening time, or vHOT, a measure intended to assess the delayed relaxation of muscles associated with myotonia. Key secondary measures included hand grip strength, quantitative muscle testing, activities of daily living and performance on a 10-metre walk/run test.

That primary measure did not improve significantly enough compared with placebo. Novartis said the drug nevertheless showed evidence of clinical activity in secondary endpoints and exploratory analyses, and the company plans to examine the complete dataset before deciding on the future development path. Safety findings were described as generally consistent with previously reported data. The failure therefore does not necessarily mean the entire program will be immediately abandoned, but it substantially weakens the case for rapid commercialization and leaves investors waiting for a more detailed analysis of the remaining results.

The market reaction reflects how important investors had considered the drug. Reuters reported that Barclays had estimated peak annual sales of about $3.1 billion for del-desiran and assigned it a 60% probability of success after positive Phase II results. Other industry estimates had also viewed the program as one of the most valuable opportunities obtained through the Avidity transaction. With the Phase III result now missing its main endpoint, those revenue expectations are under serious pressure.

The timing makes the setback even more painful for Novartis. Just one day earlier, the company's shares had already fallen more than 3% after its experimental cholesterol drug pelacarsen failed to reduce the risk of major cardiovascular events in a late-stage trial. The two disappointing results in quick succession have intensified concerns about the strength of Novartis' pipeline and increased scrutiny of Chief Executive Officer Vas Narasimhan's strategy of using acquisitions to replenish the company's portfolio. Reuters reported that Novartis has now missed two of three key pipeline readouts this year.

That strategic pressure is significant because Novartis is facing the longer-term challenge of replacing revenue as some of its older products mature. The company's best-selling Entresto faces declining sales pressure and eventual patent-related competition, while management has described the company's upcoming patent expirations as one of the steepest challenges it has faced in decades. The company has maintained its forecast for compound annual sales growth of 5% to 6% from 2025 through 2030, but the recent trial failures make the path toward that target more difficult and increase the importance of successful launches from the remaining pipeline.

The Avidity acquisition is now receiving particular attention because del-desiran was one of its flagship opportunities. Novartis did not acquire only one molecule: it also gained two other late-stage AOC programs aimed at neuromuscular diseases. The company continues to advance delpacibart zotadirsen for a form of Duchenne muscular dystrophy and has received US Food and Drug Administration priority review for the program. It is also preparing to engage with the FDA on delpacibart braxlosiran for facioscapulohumeral muscular dystrophy after encouraging Phase I/II biomarker data.

That means the Avidity deal is not necessarily a total failure. The other programs could still produce the scientific and commercial value Novartis expected when it agreed to the transaction. But del-desiran was the most advanced of the assets and one of the clearest tests of whether the expensive acquisition could translate into near-term pipeline strength. Analysts now have to reassess the value of the remaining programs, the probability of eventual approvals and the amount of additional investment required to bring them to market.

The broader financial consequences could extend beyond Novartis itself. Shares of other companies developing treatments for muscular dystrophy also came under pressure following the announcement. Reuters reported that Dyne Therapeutics and Sarepta Therapeutics fell sharply in US premarket trading as investors reassessed the prospects for similar approaches in rare neuromuscular diseases. While the failure of one drug does not determine the outcome of competing programs, investors often use major clinical results to update their expectations for an entire therapeutic technology or disease area.

There is also a scientific lesson in the result. Positive early-stage or mid-stage data can create strong expectations, but a Phase III trial is designed to determine whether those effects can be reproduced at a scale and level of rigor suitable for regulatory approval. A drug can demonstrate encouraging biological signals and still fail to produce a statistically meaningful improvement on the endpoint that ultimately matters to regulators and patients. That is one reason pharmaceutical companies spread risk across large portfolios of experimental medicines.

For patients with DM1, the failure is particularly disappointing because treatment options remain limited. Novartis has emphasized that it intends to examine the complete HARBOR results and consult health authorities before deciding what happens next. The presence of potentially positive secondary findings means the scientific picture is not yet complete, but those findings cannot automatically substitute for a missed primary endpoint. The company will have to determine whether the overall data support another development strategy or whether resources should be redirected toward its other neuromuscular programs.

For investors, attention is now likely to shift toward the parts of Novartis' pipeline that can offset the disappointment. Reuters highlighted remibrutinib as one of the drugs carrying greater expectations following the latest setbacks. Success there could help restore confidence in the company's longer-term growth story, but investors are likely to demand increasingly strong evidence as concerns over the acquisition strategy grow.

Novartis has so far resisted changing its full-year outlook and continues to project 5% to 6% compound annual sales growth between 2025 and 2030. Management has also argued that failures are an unavoidable part of pharmaceutical research, particularly in complex diseases such as DM1. But from an investor perspective, repeated failures at a time when major products are approaching patent challenges can make the cost of replacing lost revenue much more visible.

The immediate question is whether del-desiran can still have a future. Novartis says the full dataset is being evaluated and that discussions with health authorities will guide the next steps. Beyond that single drug, however, the larger issue is whether Novartis can successfully convert its recent acquisitions and research investments into the new blockbusters needed to sustain growth. The Avidity acquisition was meant to strengthen that transition. The failure of its leading DM1 program makes the challenge significantly harder.

Investors will watch Novartis' detailed analysis of the HARBOR dataset, any discussions with US and European regulators, and further results from the remaining Avidity programs. Attention will also turn to remibrutinib and other late-stage assets expected to support Novartis' growth strategy. The company's November capital-markets update could become an important test of how management plans to rebuild confidence after several pipeline disappointments.