Novartis stock in hot water after another key failure

Novartis' pelacarsen failed a Phase 3 trial, but BofA sees limited downside, maintaining a Buy rating and $185 target. Novartis has other Phase 3 readouts expected in 2026. Ionis, which discovered pelacarsen, is expected to see less than 5% downside, according to Citi. Novartis reported Q2 2026 sales of $14.41B, up 3% YoY.

Novartis AG (NVS) reported positive late-stage trial results for remibrutinib, showing it outperformed Sanofi's teriflunomide in reducing relapses and slowing disability progression in multiple sclerosis. Analysts estimate peak annual sales of $9B if all indications succeed. Remibrutinib is already approved for a skin condition, generating $64M in Q2 sales. Regulatory approval and further clinical progress are still required.

Novartis' pelacarsen, a cholesterol drug targeting lipoprotein(a), failed to reduce cardiovascular events in a clinical trial. The result questions whether lipoprotein(a) is a cause or marker of risk. Full data is pending, and other similar drugs are in trials. The company had high hopes for the drug, which had shown significant reductions in lipoprotein(a) levels.

Novartis' AOC drug delpacibart etedesiran failed to meet primary endpoints in a Phase III trial for myotonic dystrophy type 1. The drug did not show significant improvement over placebo. Novartis shares have declined 14% following this and other recent clinical trial setbacks. The company maintains a 5-6% five-year sales growth target, according to a public statement.

HSBC adjusted ratings for biopharma stocks, citing high multiples and the need for stock-specific catalysts. Novartis was upgraded to Hold with a target price of 110 CHF, while Amgen was downgraded to Hold with a target of $425. AbbVie and Bayer were kept as Buy with raised targets. The changes reflect expectations for upcoming clinical trials and legal outcomes.

Novartis (NVS) shares fell 13% after two failed clinical trials, one for a muscle loss disease drug and another for a cholesterol-targeting drug. Amgen (AMGN) shares dropped 9%, impacting the Dow, as it develops a similar cholesterol drug. Novartis expects 5-6% annual sales growth through 2030. Both companies' stocks were affected by the trial results.