Novartis faces third clinical-trial setback in a week as muscle drug fails

By Fabienne Kinzelmann

Novartis AG suffered its third clinical-trial setback in a week after a treatment for a rare muscle-wasting disease failed a late-stage study.

The medicine, called del-desiran, was the centerpiece of Novartis’s $12 billion takeover of Avidity Biosciences and touted as a potential blockbuster. The announcement deals another blow to the Swiss drugmaker’s hunt for new sources of growth as it faces the biggest patent cliff in its history.

Novartis shares plunged as much as 10% in early Zurich trading, reducing their gain for the year to about 4%, trailing rival Roche Holding AG. 

The failure is a “major pipeline setback” that “has not helped our confidence” in other therapies Novartis gained with Avidity, said Stefan Schneider, an analyst at Vontobel. He maintained his hold rating on the shares.

Novartis has put significant commercial hopes on del-desiran, which targets the genetic cause of a muscle disease. Chief Executive Officer Vas Narasimhan told Bloomberg TV in July that the medicine has “$5 billion-plus peak sales potential,” saying a successful trial would make it the first drug to show efficacy in myotonic dystrophy type 1.

The trial found patients with the genetic disorder, which causes progressive muscle weakness and stiffness, didn’t significantly improve how quickly they could open their hands on del-desiran compared with placebo, the Swiss drugmaker said Tuesday. 

The setback caps a turbulent week. The company halted trials of an experimental cell therapy in autoimmune diseases after three patients died, and heart drug pelacarsen failed in a closely watched study. An experimental multiple-sclerosis treatment did deliver positive results.

Concerns about the drugmaker’s growth potential after 2030 will likely re-emerge, according to Michael Leuchten, an analyst at Jefferies. 

Novartis said it will analyze the full trial data and consult regulators before deciding whether and how to continue developing del-desiran after it did show some evidence of clinical activity.