Novartis shareholders step up scrutiny of deal strategy after del-desiran failure
Novartis shareholders plan to scrutinize the company’s mergers and acquisitions strategy more closely following failures of drugs obtained through such deals. As STAT News reports, citing Reuters, eight shareholders said the results of the late-stage del-desiran study raised questions about the $12 billion acquisition of Avidity and other Novartis deals.
del-desiran failure
The drug del-desiran was being developed to treat a disorder associated with muscle mass loss. Its failure in a late-stage study became Novartis’s second major negative clinical trial result within several days.
After the del-desiran results were released, Novartis shares fell 11% in a single day this week. The company’s market value declined by nearly $30 billion, and all of its share gains since the start of the year were erased.
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Biological drugs and patents
In another part of its review, STAT News, citing The Wall Street Journal, draws attention to a report by the Association for Accessible Medicines, a trade group representing generic drug manufacturers. The association estimates that 90% of expensive and widely used biological drugs whose patent protection expires by 2034 have no cheaper alternatives in development.
The association estimates that due to the expiration of patent protection for 118 popular biological drugs, Americans may fail to receive nearly $200 billion in potential savings on medical expenses over the next decade. Such drugs are complex medicines produced in living cells, and their sales often generate billions of dollars for pharmaceutical companies. At the same time, market uptake of recently launched biosimilars has fallen sharply in recent years, weakening manufacturers’ interest in developing them.
