Novartis (NOVN.S) Del desiran misses, potentially removing delaying a blockbuster asset

Equity Research 8 September 2026 | 7:24AM BST

Novartis (NOVN.S): Del-desiran misses, potentially removing/ delaying a blockbuster asset

This morning, Novartis announced negative top-line data from the Phase 3 HARBOR James Quigley | trial evaluating del-desiran in patients with myotonic dystrophy type 1 (DM1), with Goldman Sachs International the study failing to achieve a statistically significant improvement on the primary Rajan Sharma endpoint of video hand opening time (vHOT) through Week 54 versus placebo, | although some evidence of clinical activity was noted in the secondary endpoints. Goldman Sachs International

Del-desiran in DM1 represented one of the larger commercial opportunities within Shyam Kotadia | the $12bn Avidity acquisition. Evidence of some clinical activity in the secondary Goldman Sachs International endpoints indicates there may be a path forward, however, the failure on the primary endpoint could lead to delays and adds risk, given the inherent challenges associated Max Da, Ph.D. | with neuroscience indications. We currently model del-desiran as a c.$3.3bn Goldman Sachs International

opportunity (at 50% PoS), with removal of the asset implying c.5% downside to our Theodora Rowe Beadle | DCF. While Novartis has reiterated its 5-6% 2025-30 sales CAGR, we would expect a Goldman Sachs International mid-single-digit negative share price reaction to the update, noting that the Kaaviya Ganesan contribution from del-desiran/ pelacarsen would have been greater beyond 2030, | and these two assets would have helped offset the c.$25bn in LoEs across 2030-32. Goldman Sachs India SPL

The current multiple suggests management’s MSD ambition is achievable, but the recent readouts suggest significant risk, in our view. Furthermore, we believe the MSD target beyond 2030 includes an M&A contribution, and this latest data point is a clear sentiment dent around external innovation, given Avidity was Novartis’ first large deal in a number of years. Taking a step back, the stock leads performance YTD (+14% vs SXDP -1.6%), is close to all-time highs, and has the highest multiple in the sector, but earnings momentum has stalled (miss and low-quality beat in Q1 and Q2), two out of three key Phase 3 trials that would help offset significant LoEs across 2030-32 have failed, and a question mark has been raised around external innovation. Remibrutinib was a positive in MS, but these failures place too much pressure on that asset to offset mid- and long-term LoEs. Therefore, while the ongoing share buyback may support the shares, we would expect the YTD performance to start to unwind.

n Del-desiran failed to achieve a statistically significant improvement versus placebo on video hand opening time (vHOT), missing the primary endpoint of the Phase 3 HARBOR study. While the topline outcome is unlikely to support a straightforward regulatory path forward, the detailed dataset will be important in determining the extent of any residual opportunity for the programme. Novartis noted evidence of clinical activity in key secondary endpoints and exploratory analyses. Full results are likely to be presented at the Muscular

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Goldman Sachs Novartis (NOVN.S)

Dystrophy Association (MDA) Clinical & Scientific Conference in March 2027, where the focus will likely be on whether trends in functional measures could support further development despite the primary endpoint miss. n Favourable safety and tolerability profile. Del-desiran was generally well tolerated, with no major new safety findings identified. n Other acquired Avidity assets remain on track. The company has filed del-zota for accelerated approval and was granted…