Science2 publishers3 min readPublished
One missed hand-opening endpoint costs Novartis 2.5 times the Avidity purchase price
Artisan Partners' David Samra is telling Novartis's chairman to rebuild the team that does its deals, after a week of three Phase III setbacks in which one of the drugs actually met its primary endpoint.
The Scientist · Science desk
What happened
- Novartis shares fell 11 percent in a single day, wiping nearly $30 billion off market value and erasing every gain the stock had made since the start of the year.
- The drug came into Novartis through a $12 billion buyout of Avidity that brought three late-stage programs in a class the companies call Antibody Oligonucleotide Conjugates.
- On September 4, Novartis and Ionis said their co-developed pelacarsen missed the primary endpoint of the Phase III Lp(a)HORIZON trial, one of three Novartis setbacks inside a week.
Compiled by The ScientistSomething wrong?How this is made
Why it matters
- exposure Samra aimed at a person. The chairman personally owns the answer on how Novartis approves acquisitions, and whatever he says becomes the standard other holders measure him against.
- constraint The two remaining late-stage AOC candidates now carry the case for muscle-targeted siRNA delivery by themselves, and a second miss would be read as a verdict on the delivery approach.
- contradiction One of the deals Samra criticised produced a trial that hit its primary endpoint, so the pelabresib grievance is about the regulatory path Novartis chose after the data, not a failed study.
- precedent A named large-cap holder demanding changes to an M&A team gives other pharma shareholders a script to reuse, and these accounts describe eight investors at one company acting on it.
Nearly $30 billion of market value against a $12 billion purchase price puts the one-day loss at about 2.5 times what Novartis paid for Avidity [20]. Neither account says how many patients HARBOR enrolled or how far del-desiran fell short on video Hand Opening Time [24]. The same one-day fall implies a market capitalisation close to $273 billion before it [21].
The three setbacks inside one week [18] went wrong at three different points. The distinction matters for the claim that one deals team made one repeated mistake. Del-desiran missed a functional measure: clinical experts watch video and time the interval from hand grip to hand opening, a standard read on myotonia [4], and the drug produced no statistically significant separation from placebo through week 54 [3]. Pelacarsen, co-developed with Ionis, missed a clinical outcome, the reduction of cardiovascular risk against placebo [17]. Pelabresib hit its endpoint. In MANIFEST-2, 65.9 percent of 214 patients given pelabresib plus ruxolitinib reached at least a 35 percent reduction in spleen volume at 24 weeks, against 35.2 percent of 216 patients on placebo plus ruxolitinib [15], a difference of 30.7 percentage points [22]. Novartis then dropped its plan to file in mid-2024 and said it needed more time to settle a regulatory path using the 48-week data [14].
So Novartis did not rest on its own 24-week surrogate either. A shareholder case that files the 2.7 billion euro MorphoSys deal [13] under the same heading as Avidity is arguing about which endpoint should have bought a filing.
Samra put the demand on one person. He called on Giovanni Caforio, the chairman, to strengthen the board's oversight of acquisitions [7]. "I think he needs to make changes at the board level. One of them should be on improving the team that's doing these deals because clearly they have been uninspiring at best," Samra told Reuters [8]. "If you do a $12 billion deal and it goes to zero, the management needs to be penalized for that," he said [10], while allowing that Avidity may still yield candidates that become marketable drugs [11]. Two other late-stage AOC candidates came with that deal [6].
Del-desiran's mechanism is narrow. A monoclonal antibody binds transferrin receptor 1 and carries an siRNA designed to degrade the toxic DMPK mRNA behind DM1 [5]. A miss at week 54 is compatible with too little knockdown in muscle, with adequate knockdown and no functional gain on that timescale, or with a video-timed measure too variable to resolve one. The drug held FDA Orphan Drug, Fast Track and Breakthrough Therapy designations and the EMA's Orphan Medicinal Product Designation [19] and missed anyway.
The questions are aimed at one board. Eight shareholders raised questions about the Avidity purchase and other acquisitions, Reuters reported [12]. The two accounts date that deal differently, with STAT calling it last year's purchase [12] and GEN saying it completed in February [6]. MANIFEST-3 began this year with an estimated completion date of May 2028 [16], so the pelabresib verdict arrives years after the argument over who approved the acquisition.
What to watch
- Whether Novartis publishes the full HARBOR dataset, including DMPK knockdown in muscle and the prespecified secondary endpoints.
- Whether the two remaining late-stage AOC programs from Avidity read out, and on which endpoints.
- Whether Caforio answers Artisan with named changes to the team that does Novartis's deals.