Novartis (NVS) had a disappointing Tuesday, Sept. 8. Shares dropped nearly 14% on one of the company’s worst trading days on record.
The sell-off followed news that a closely watched experimental drug failed its main goal in a late-stage trial. The timing was bad, since the company was already dealing with a trial failure from days earlier.
Novartis is one of the largest drugmakers in the world. It develops and sells prescription medicines across cancer, heart disease, immunology, and neuroscience.
Because the company earns most of its money from a handful of popular branded drugs, its business model depends heavily on new drugs reaching the market. So when a major drug trial fails, investors pay attention.
Why the del-desiran trial failure hit Novartis stock so hard
The drug in question is del-desiran, an experimental treatment for myotonic dystrophy type 1 (DM1).
DM1 is a genetic disease that causes progressive muscle stiffness and weakness. There are no approved treatments for it.
Novartis said its Phase III HARBOR study found no real improvement over patients who got no active treatment.
The trial’s primary test was on video hand opening time, which tracks how well patients can relax their hand muscles.
More Pharma Stocks:
- Eli Lilly raises the stakes in $2.88 billion autoimmune buyout
- BofA makes bullish call on newly public biotech stock
- BofA biotech scorecard: two buys and odd one out
Del-desiran was the main asset from the company’s roughly $12 billion purchase deal with Avidity Biosciences completed in February 2026, according to Novartis.
The drug had won FDA Fast Track and Breakthrough Therapy status, so hopes for approval ran high.
Although the primary test failed, Novartis noted some encouraging signs in secondary measures, along with a clean safety record.
The company plans to review the full data before it decides what comes next.
A rough stretch for the Novartis pipeline
This was the second late-stage failure in a matter of days.
Just before it, Novartis’s heart drug Pelacarsen failed to reduce the risk of major cardiac events in a large trial, Bloomberg reported.
Analysts had estimated peak sales of roughly $4 billion to $6 billion for that drug, which the company developed with Ionis Pharmaceuticals.
Related: Morgan Stanley uncovers major Bristol Myers stock signals
Novartis also recently paused several trials in its experimental CAR-T cancer therapy program after patient deaths.
Three setbacks in quick succession is a lot for any drugmaker to absorb, and shareholders are recalculating what the pipeline is really worth.
What Novartis investors should weigh now
Analysts at Jefferies and Barclays are openly questioning whether Novartis can hit its target of 5% to 6% annual sales growth through 2030, Reuters reported.
That target looks harder to reach with key patents expiring soon. The company’s top-selling heart drug, Entresto, has already begun to lose exclusivity, and more blockbuster drugs are set to follow.
Here is what shareholders should keep in mind.
Key risks and takeaways for Novartis stock
- More deals may be coming. Because internal research has stalled, Novartis may likely buy more biotech firms at high prices to refill its pipeline, which can dilute existing shareholders.
- The premium is fading. Investors treated Novartis as a stable giant, and that reputation is now being repriced lower.
- The dividend is still solid. The stock offers a yield of about 3.4%, which is a cushion for patient holders.
- Volatility is real. Big pharma stocks can swing hard around trial results, so position sizing matters.
Novartis remains profitable and pays a healthy dividend.
But the steady reputation that justified its premium price is under pressure, and rebuilding trust in the pipeline will take time and probably more expensive acquisitions.
For now, cautious investors may want to watch how the company’s management handles the full del-desiran data before they make any big moves.
Related: Novo Nordisk CEO resets expectations for Wegovy’s explosive growth
