NVS Stock On Track For Worst Week In Over 7 Years After Two Trial Failures In A Week — Investor Reportedly Seeks Board Overhaul

• Samra did not blame Chief Executive Vas Narasimhan, who has overseen a roughly 60% share-price gain since 2018.
• Two of Novartis’s late-stage trials failed over the past week.
• The company’s other late-stage programs, including remibrutinib in multiple sclerosis, remain in play as older blockbusters near patent cliffs.

Shares of Novartis (NVS) edged up marginally on Thursday following a report that a major Novartis shareholder has called for a board shake-up after two late-stage trial failures in a week triggered the Swiss drugmaker’s sharpest share drop in more than two decades.

David Samra, managing director at Artisan Partners, told Reuters that Chairman Giovanni Caforio should tighten oversight of acquisitions, add an acquisitions committee and recruit stronger board talent. “The party is over,” Samra said. The deal team, he added, has been “uninspiring at best,” and “the acquisition track record is not very good.”

NVS shares are on track to clock its worst week since April 19, if losses hold, after two back-to-back trial failures.

A Week Of Late-Stage Misses

On Friday, pelacarsen, licensed from Ionis Pharmaceuticals, failed the late-stage Lp(a)HORIZON trial. The antisense drug lowered lipoprotein(a) in more than 8,000 patients with established cardiovascular disease, but it did not cut the combined risk of cardiovascular death, heart attack, stroke or urgent artery-opening procedures versus placebo.

On Tuesday, del-desiran—brought in through Novartis’s $12 billion purchase of Avidity Biosciences—missed the primary endpoint of the late-stage HARBOR study in myotonic dystrophy type 1. Patients did not open a clenched hand faster in a statistically meaningful way with the drug than with placebo. U.S.-listed Novartis shares closed down 14%, their worst day in more than 20 years, wiping nearly $30 billion from market value.

Novartis said it is reviewing the HARBOR data, will discuss next steps with regulators and continues work on two other Avidity assets. The company left its longer-term sales guidance unchanged.

Pressure On Deals And Pay

Samra did not blame Chief Executive Vas Narasimhan, who he said has done a “very good job” and has overseen a roughly 60% share-price gain since 2018. He did criticize earlier deals, including the 2024 MorphoSys acquisition later written down, and said management should be penalized “if you do a $12 billion deal and it goes to zero.” He also urged a compensation overhaul so pay tracks “real economic outcomes” rather than adjusted metrics that exclude write-downs.

Novartis said it still follows a “disciplined and shareholder-friendly” capital plan of organic investment, bolt-on deals, a rising dividend and buybacks. Other late-stage programs, including remibrutinib in multiple sclerosis, remain in play as older blockbusters near patent cliffs. Artisan is the first investor to publicly demand board changes; others have privately questioned the company’s merger strategy.

How Did NVS Retail Traders React?

On Stocktwits, retail sentiment around NVS stock remained ‘extremely bullish’ over the past 24 hours, while message volume stayed at ‘extremely high’ levels.

NVS stock is trading flat year-to-date.

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