Novartis' (NVS) shares dropped roughly 12% pre-market Tuesday after an investigational drug from its $12 billion acquisition of RNA biotech Avidity Biosciences failed to meet its primary endpoint in a Phase 3 trial for myotonic dystrophy type 1.
The antibody-oligonucleotide conjugate del-desiran did not significantly improve hand opening time in the Phase 3 HARBOR study, according to data published Tuesday morning. Nearly 160 patients were enrolled in the trial.
Del-desiran works by using an antibody that targets transferrin receptor 1 on muscle cells to deliver an siRNA payload that tags mRNA molecules encoding the disease-causing protein DMPK for destruction.
The setback dealt a blow to Novartis' Avidity deal, which was announced in October 2025 and formally closed in February 2026. Oppenheimer analysts called the result a "12B disappointment," referencing the size of the acquisition.
Meanwhile, the failure hands the myotonic dystrophy type 1 race to Dyne Therapeutics (DYN). Jefferies analysts wrote that Dyne now "claims frontrunner status" with its antisense oligonucleotide candidate z-basivarsen, citing "stronger tissue penetration and better biodistribution." Dyne is expected to report topline data from its Phase 1/2 study early next year.
Stifel analysts noted the broader M&A implications: "We think any potential acquirers who were interested and missed out on Avidity could plausibly look to DYN."
Novartis also faced another pipeline concern: three deaths were linked to its investigational CAR T therapy, rapcabtagene autoleucel. The company continues to advance other assets including pelacarsen, a cholesterol-lowering therapy currently in Phase 3 evaluation under the Lp(a)HORIZON study, and del-brax, an antibody-oligonucleotide conjugate being studied for facioscapulohumeral muscular dystrophy and Duchenne muscular dystrophy under the Phase 1/2 FORTITUDE trial.
The setbacks come as Novartis navigates a challenging clinical period following the high-stakes Avidity purchase.
