Shares of Swiss pharmaceutical company Novartis fell sharply following the announcement that its experimental drug del-desiran failed to show statistically significant improvement in treating myotonic dystrophy type 1 (DM1), a rare genetic muscle-wasting disorder. The late-stage trial results were disclosed on Monday, marking the latest setback for the company as it confronts challenges in replenishing its drug pipeline amid looming patent expirations.

Del-desiran was developed to address the unmet medical need in DM1, a condition with no approved treatments. The drug’s promise was a key factor behind Novartis’s $12 billion acquisition of Avidity BioSciences, a U.S.-based biotechnology firm driving the project. This deal represented the largest purchase under CEO Vas Narasimhan’s leadership and was part of a broader strategy to fortify Novartis’s portfolio through acquisitions.

The failure of del-desiran follows other recent hurdles for Novartis. The company halted clinical trials of an experimental cell therapy targeting autoimmune diseases in August after the deaths of three participants. Additionally, trials for a cardiovascular candidate were reported to have failed the previous week.

Novartis’s chief medical officer, Shreeram Aradhye, acknowledged the complexity of developing treatments for severe conditions such as DM1, stressing that setbacks are a normal aspect of scientific advancement. The company stated it will continue to analyze the full clinical data set and engage with regulatory bodies to determine the next steps for the del-desiran program.

Despite the negative trial outcome, Novartis affirmed its financial outlook, maintaining a forecasted compound annual growth rate in sales between 5 and 6 percent for the period from 2025 to 2030. Following the update, Novartis shares declined 10.9 percent to close at 111.80 Swiss francs but remain up approximately 4 percent for the year to date.

As Novartis seeks to navigate patent expiration pressures on key products such as Entresto, the failure of a high-profile development program underscores the difficulties faced by pharmaceutical firms in bringing innovative treatments to market. The company reiterated its commitment to advancing therapies for DM1 and other serious neuromuscular diseases despite the recent disappointments.