Novartis: More Pain on the Way?

(Illustration by Elias Stein)

Can it get any worse for Novartis’ U.S. stock?

The Swiss company said Tuesday that del-desiran, part of a recent acquisition, reached the end of the line in a trial for a rare neuromuscular disease. Last week, another, pelacarsen, had failed to significantly reduce the risk of heart attacks and strokes. The drugmaker also halted trials of an experimental cell therapy earlier in September after three patient deaths. The drugmaker’s U.S.-listed shares slumped 13% to $139.01 Tuesday.

Created with Highcharts 9.0.1Rough RideNovartis has declined more than 10% in the past six months.Source: FactSet

Created with Highcharts 9.0.1S&P 500 IndexNovartisApril 2026Sept.-15-10-505101520%

These trials were crucial. Del-desiran was one of several late-stage therapies acquired through the $12 billion purchase of Avidity Biosciences. Novo has also been stung by falling sales of its big moneymaker, Entresto, which treats heart failure, and is faced with the expiration of patents.

Created with Highcharts 9.0.1Breaking It DownA sample of Novartis revenue producers in Q2 2026.Source: Novartis

Created with Highcharts 9.0.1CosentyxKesimptaKisqaliPluvictoScemblixOthers$0 billion$1$2$0.25$0.5$0.75$1.25$1.5$1.75

The drugmaker’s hot dealmaking strategy? Jefferies’ Michael Leuchten noted investors will likely see greater risk in del-brax, another asset acquired in the deal, and warned that the goal of mid-single-digit growth through 2030 is at risk. Novartis will host an investor day in November, where an upgrade to guidance is “now highly unlikely,” per Morgan Stanley’s Thibault Boutherin. One bright spot: remibrutinib, a potential blockbuster. And when the drugmaker announced its trial pause on Sept. 1, shares rose anyway thanks to positive late-stage data for the pill.

It may not be the silver bullet Novartis needs.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

Last Week

Dow in the Dumps

It was a down/up week for the Dow Jones Industrial Average. The Dow had its longest losing streak since late April, down four consecutive trading days, and declined 1.6% for the week. The S&P 500 lost 0.8% in the week; the Nasdaq Composite was off 0.7%.

Bessent Bombs on Bonds

Treasury Secretary Scott Bessent said he would repurchase $6 billion worth of 10- to 20-year government bonds. The hope: Fewer bonds would lead to lower rates. The bottom line: Bond yields were up and stocks were down. Whoops.

iPhone Overhaul

Apple unveiled its first foldable smartphone, starting at $1,999. It’s the largest physical change to Apple’s flagship device since the first launch in 2007—and the first test for new CEO John Ternus. Closed, the new iPhone is passport-sized; open, it looks like a small iPad.

Your Move, Kevin Warsh

The consumer price index for August was still high. The average annual rate was 3.4%. Not good. The pressure will be on the Federal Reserve Board to raise rates in the coming week. Guess who will be closely watching.

Speaking of Inflation…

Oil topped $100 a barrel—it was $104 on Friday. Will it continue to climb? Traders believe it could sustain higher prices as the Iran war escalates. Diesel fuel, meanwhile, hit $6 a gallon for the first time in history. That could be felt, soon, up and down the food chain.

Next Week

Wednesday 9/16

The Census Bureau reports retail and food-service sales for August. Consensus estimate is for a 0.8% month-over-month increase following a 0.6% decline in July. Excluding autos and gas, retail sales are expected to increase 0.4%, compared with a 0.2% drop previously.

The Federal Open Market Committee announces its monetary-policy decision. According to the CME’s FedWatch Tool, traders are pricing in an 87% chance that the FOMC will raise the federal-funds rate by a quarter of a percentage point to 3.75%-4%. Wall Street will be eager to hear from Fed Chairman Kevin Warsh, even if he has scrapped forward guidance. For equities, the key, if the central bank does raise interest rates at this meeting, is whether it’s the start of a larger rate-hiking cycle or just a tap on the brakes.

Friday 9/18

The Bank of Japan announces its monetary-policy decision. The central bank is widely expected to lift its key short-term interest rate to 1.25% from 1%. Treasury Secretary Scott Bessent has voiced support for higher interest rates in Japan to support a weak yen. The yen hit a four-decade low against the dollar earlier this summer but has rebounded a bit with the help of U.S. intervention. A stronger yen could help keep a lid on rising U.S. Treasury yields.

The Numbers

$95

Average price per barrel of Brent crude oil this century, adjusted for inflation—not far from the recent $100.

10%+

The chance that AI could “kill all humans,” according to Evan Hubinger, a lead researcher at Anthropic.

121%

Increase in Oracle’s cloud infrastructure sales for the latest quarter; it powered a 60% jump in net income.

7.07%

Average rate on 30-year fixed-rate mortgages on Thursday, the first time over 7% in more than a year.

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