Novartis (NVS) Suffers its Third Drug Trial Setback in a Week, and its Worst Trading Day in Years

Novartis (NVS) Suffers its Third Drug Trial Setback in a Week, and its Worst Trading Day in Years

Fatima Gulzar

Fri, September 18, 2026 at 3:07 AM GMT+3 4 min read

• NVS -0.39%
• NVS -0.39%

On September 8, 2026, CNBC reported that Novartis AG (NYSE:NVS) shares fell about 10% after the company said its experimental drug del-desiran failed to meet its primary goal in a late-stage trial for myotonic dystrophy type 1.

It marked the company's third clinical setback in a week following the earlier failure of cardiovascular drug pelacarsen and a separate pause of eight trials of cell therapy rap-cel after three patient deaths. The decline erased roughly 24 billion Swiss francs, or about $29.6 billion, in market value and put Novartis on pace for one of its worst trading days in company history.

Bull Case

Remibrutinib provides a major remaining pipeline catalyst since Novartis AG (NYSE:NVS) reported successful late-stage results for remibrutinib in multiple sclerosis. It gives investors a credible growth driver after the failures of pelacarsen and del-desiran. The business expects more remibrutinib data later this year, making the drug an important test of whether its remaining pipeline can help long-term growth.

Novartis still expects 5% to 6% annual sales growth through 2030. Management reaffirmed its full-year financial guidance and maintained its target for 5% to 6% compound annual sales growth from 2025 through 2030. That guidance shows the company still expects its overall portfolio and remaining pipeline assets to offset pressure from aging drugs.

The company retains a diversified commercial portfolio. The del-desiran failure removes a potentially important future revenue contributor, but Novartis still makes substantial revenue from its existing medicines. It also retains other pipeline assets. That diversification gives the firm financial capacity to absorb individual clinical failures while it rebuilds investor confidence in its growth pipeline.

Bear Case

Two major pipeline failures now threaten Novartis AG (NYSE:NVS)' growth plans. Novartis has missed two of three key pipeline tests investors were counting on this year after pelacarsen and del-desiran failed late-stage trials. The setbacks increase pressure on remibrutinib and raise concerns about the company's ability to replace revenue as Entresto and other older medicines approach patent expiries.

The del-desiran failure removes a major future revenue opportunity. Barclays had estimated peak annual sales of about $3.1 billion for del-desiran and assigned the drug a 60% probability of success after positive mid-stage results. The failed trial eliminates that potential growth contribution. It also raises questions about the $12 billion Avidity acquisition that brought the drug into Novartis' pipeline.

The setback has damaged confidence in the overall development strategy. Novartis' shares fell 10.9% on their worst trading day on record after the del-desiran failure. It wiped about $32 billion from its market value. The news also pushed Dyne Therapeutics and Sarepta Therapeutics shares lower. This shows that investors see risks extending beyond Novartis and its individual drug program.

Hedge Fund Sentiment

Novartis AG (NYSE:NVS)' hedge fund base grew to 38 funds in the second quarter from 31 in the first, with position value rising to $3.66 billion from $3.02 billion, according to Insider Monkey's database, positioning entered before this week's run of setbacks. Sarepta Therapeutics, whose stock fell on the del-desiran read-through, saw hedge fund interest decline over the same period, with holders dropping to 37 from 41 and position value falling to $344.1 million from $523.3 million, while fellow muscular-disease specialist Dyne Therapeutics also saw holders fall to 46 from 51, with position value rising modestly to $984.5 million from $828.0 million.

Conclusion

Novartis' successful remibrutinib results and reaffirmed 5% to 6% annual sales growth target through 2030 show that the business still has credible growth drivers despite its recent clinical setbacks. But the failures of pelacarsen and del-desiran have removed important future revenue opportunities and increased pressure on the remaining pipeline, while also raising questions about Novartis' acquisition strategy. The firm's ability to deliver on remibrutinib will determine whether it can overcome the setbacks and sustain long-term earnings growth.

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