Novartis Stock Craters on Third Consecutive Trial Failure

Novartis stock plummeted over 12% on Tuesday after its del-desiran drug failed to meet the primary endpoint in the Phase III HARBOR trial for myotonic dystrophy type 1. This marks the third setback for Novartis investors in a week, following the failure of pelacarsen and a pause on rap-cel trials due to patient deaths.

Jefferies analyst Michael Leuchten maintained a 'hold' rating and warned that Novartis's growth targets now look hard to hit without further M&A. The company paid $12 billion for Avidity Biosciences last year, with del-desiran representing one-third of projected peak sales.

Despite this, Novartis is currently trading at above 16 times 2027 earnings, which Leuchten described as 'harder to argue' after the setbacks. The company's growth target above 5% after 2030 will likely be seen as out of reach without further acquisitions.