Shares in Swiss pharmaceutical giant Novartis fell 3.3% on Monday after the company disclosed that its experimental cholesterol drug pelacarsen had failed to reduce the risk of heart attacks and strokes in a closely watched late-stage clinical trial.
The disappointing results, announced late Friday, dealt a significant blow to one of the company's potential growth drivers and raised fresh questions about whether targeting lipoprotein(a), commonly known as Lp(a), can deliver meaningful cardiovascular benefits for patients whose other risk factors are already being managed.
Pelacarsen was being developed for people with elevated levels of Lp(a), an inherited cholesterol-related risk factor associated with an increased risk of cardiovascular disease. There are currently no approved treatments specifically designed to lower Lp(a), making the drug one of the most closely monitored candidates in the field.
The scale of the commercial opportunity had been substantial. Analysts had previously estimated that pelacarsen could generate peak annual sales of between $3 billion and $6 billion if it succeeded.
The failed trial is therefore more than a setback for a single drug. It has also raised the stakes for Novartis as investors look to other experimental medicines in the company's pipeline to sustain growth and offset the looming impact of patent expirations on older products.
BMO Capital Markets analyst Evan Seigerman described the results as a significant disappointment for the emerging class of Lp(a)-targeting medicines.
The data "marks a meaningful setback for dedicated Lp(a)-lowering therapies," Seigerman wrote in a research note.
He also suggested that the findings could indicate that simply reducing Lp(a) may not be enough to substantially lower cardiovascular risk when other major risk factors, particularly cholesterol, are already under control.
The result could have implications beyond Novartis. Amgen and Eli Lilly are also conducting late-stage trials of experimental medicines designed to lower Lp(a). The failure of pelacarsen could make the eventual results of those programmes even more closely scrutinised by investors and regulators.
Focus shifts to gene therapy programme
With pelacarsen no longer expected to deliver the same potential value, attention is turning to Novartis' other late-stage programmes, particularly its experimental muscular dystrophy treatment del-desiran.
Data from the programme are expected in the fourth quarter and could prove important for investor confidence in the company's recent deal-making strategy.
Barclays analysts said success in the del-desiran trial "is needed to justify" the $12 billion price Novartis paid in its acquisition deal for the drug.
The upcoming results could consequently become a major test of whether Novartis' investment in newer therapies can compensate for setbacks elsewhere in its research pipeline.
The company is also awaiting data from another experimental medicine, remibrutinib, which is being studied as a treatment for hidradenitis suppurativa, a painful chronic inflammatory skin condition.
Remibrutinib recently produced positive results in a multiple sclerosis trial, providing investors with some encouragement after the pelacarsen disappointment.
Jefferies analysts said the success in multiple sclerosis "should make the conclusion of the pelacarsen study more palatable" for investors.
Investors weigh pipeline against patent risks
Despite Monday's decline, Novartis entered the week from a position of relative strength. The company's shares had gained about 20% by the close of trading on Friday, reflecting investor optimism about its pipeline and future growth prospects.
That optimism has been particularly important as Novartis prepares for a wave of patent expirations affecting some of its older medicines. The loss of patent protection can expose blockbuster drugs to competition from cheaper generic or biosimilar alternatives, putting pressure on pharmaceutical companies to replace lost revenue with successful new products.
The pelacarsen failure complicates that task.
Novartis must now convince investors that other candidates in its development portfolio can deliver the growth once expected from the cholesterol drug. The forthcoming del-desiran data, along with results from remibrutinib and other pipeline programmes, are likely to play an increasingly important role in determining how the market assesses the company's longer-term prospects.
For the wider pharmaceutical industry, meanwhile, the pelacarsen results represent a cautionary signal for the rapidly developing race to treat elevated Lp(a), an inherited cardiovascular risk factor that has attracted significant investment because of its potential role in heart disease.
The central question now is whether Novartis' setback reflects a problem specific to pelacarsen or a broader challenge in translating Lp(a) reduction into meaningful protection against major cardiovascular events.