Swiss pharmaceutical giant Novartis faced heavy selling after the US market opened on September 8, with shares plunging more than 13% at one point—the steepest single-day decline since the market panic triggered by the COVID-19 pandemic in March 2020. The catalyst for the rout was a trio of clinical trial setbacks within a single week, headlined by the failure of del-desiran, a closely watched candidate for a rare muscle-wasting disease, to meet its primary endpoint in a Phase III study. The result has raised serious questions about the strategic value of Novartis’s $12 billion acquisition of Avidity Biosciences.

As of 10:30 p.m. Eastern Time, Novartis shares were down 13.14%, with total market capitalization shrinking to $264.161 billion, erasing more than $40 billion in a single day. Earlier in European trading, the stock had already fallen more than 9%.

Three Clinical Setbacks in Quick Succession

The unraveling of confidence began on Tuesday, when Novartis announced results from the Phase III HARBOR study. The trial evaluated del-desiran for the treatment of myotonic dystrophy type 1 (DM1), a progressive genetic disorder that causes skeletal muscle wasting. DM1 affects an estimated 9.27 per 100,000 people and is the most common form of muscular dystrophy among adults of European ancestry, with no approved disease-modifying therapies currently available.

HARBOR was a global, randomized, double-blind, placebo-controlled study designed to enroll approximately 150 patients over a 54-week treatment period. Results showed that patients treated with del-desiran did not achieve statistically significant improvement over placebo on the primary endpoint of hand opening and closing ability. Novartis Chief Medical Officer Shreeram Aradhye said the company will continue analyzing the full HARBOR dataset before determining next steps for the program. The company also noted that del-desiran showed signs of clinical activity in secondary endpoints and exploratory analyses, though detailed data have not yet been released.

This marked the third clinical setback for Novartis in just one week. Last week, the company announced it had suspended a clinical trial of rap-cel, an experimental cell therapy for autoimmune diseases, in August following the deaths of three patients. Almost simultaneously, Novartis disclosed results from the Phase III Lp(a)HORIZON trial of its cardiovascular drug pelacarsen: compared with placebo, the drug did not significantly reduce the risk of heart attack, stroke, cardiovascular death, or urgent coronary procedures. Analysts had previously projected that if pelacarsen’s efficacy trial succeeded, peak annual sales could reach $3 billion to $6 billion.

$12 Billion Acquisition Under Scrutiny

The failure of del-desiran stings particularly hard because it is directly tied to the largest acquisition of CEO Vas Narasimhan’s tenure. In 2025, Novartis acquired Avidity Biosciences for approximately $12 billion, with del-desiran as one of the deal’s core assets. Jefferies analysts had explicitly stated in earlier reports that the HARBOR study needed to deliver positive results to justify the acquisition price. With the trial now failed, investors are inevitably questioning whether the massive investment was worth it.

Barclays calculated in its latest report that del-desiran and pelacarsen had been expected to generate a combined peak sales potential of approximately $5 billion. With both programs now stumbling, Novartis’s future growth runway could be meaningfully compressed. The bank expects Novartis shares to significantly underperform the broader market, and its valuation premium of roughly 20% over peers could narrow as a result.

Jefferies was even more direct. The firm believes that unless Novartis pursues further M&A to fill its pipeline gap, the company’s previously stated target of 5% to 6% compound annual sales growth from 2025 to 2030 is unlikely to be achieved.

Patent Cliff Looms

The deeper source of market anxiety lies in the fact that Novartis’s existing revenue pillars are facing patent expiration pressure. The company’s two largest revenue sources—Entresto for heart failure and Cosentyx for autoimmune diseases—will both lose market exclusivity in the coming years. This means Novartis must rely on new blockbuster drugs to fill the impending revenue gap, and del-desiran and pelacarsen had been positioned as the expected successors.

Market attention has now shifted to del-brax, the third candidate developed by Avidity Biosciences, but Phase III clinical data is not expected until 2028 at the earliest. This means that for the next several years, Novartis will have to rely on other pipeline programs and potential M&A transactions to sustain growth momentum.

It is not all bleak. Novartis reported last week that its Bruton’s tyrosine kinase inhibitor remibrutinib achieved positive results in a Phase III trial for relapsing multiple sclerosis, demonstrating clinically meaningful slowing of disease progression. Data from another remibrutinib study in hidradenitis suppurativa is expected later this year. But under the shadow of three clinical setbacks, positive progress from a single drug is clearly insufficient to reverse the pessimistic outlook on the overall pipeline.

For investors, the core question is now squarely on the table: can Novartis’s existing R&D pipeline support future growth, and can the company continue to replenish growth drivers through acquisitions? With core programs stumbling in succession, Novartis’s growth strategy of relying on both internal R&D and external M&A is facing an unprecedented test from the market.