Novartis loses $40 billion in market value after string of clinical trial failures

Swiss drugmaker Novartis has lost more than $40 billion in market value after a string of clinical trial failures.

According to BioPharma Dive on the 11th, Novartis shares fell by double digits since last Friday, wiping out more than $40 billion in market value.

Last Friday, Novartis announced that an RNA (ribonucleic acid) drug it co-developed with Ionis Pharmaceuticals failed to meet its goals in a large cardiovascular trial.

Then, on the 11th, the company disclosed that one of three key drugs it acquired through its $12 billion purchase of Avidity Biosciences failed to meet the primary endpoint in a late-stage study in patients with myotonic dystrophy type 1.

Jefferies analysts had projected peak annual sales of up to $1.5 billion for the drug, but said the failure could shake investor confidence in the company’s growth prospects beyond 2030.

Novartis shares are listed on both the New York Stock Exchange and the SIX Swiss Exchange.

Meanwhile, biotech investor RA Capital Management continued its aggressive pace, participating in four biotech financings in September alone.

This week, RA Capital participated in the Series A rounds of Solstice Oncology, which raised $225 million, and immune-system-focused Tectura Therapeutics, which raised $55 million.

In late August, it co-led a $56 million financing for genetic medicines developer Typewriter Therapeutics and joined an investment in metabolic disease company Superluminal Medicines.

Eli Lilly also participated in the Superluminal Medicines investment. This month, Lilly also took part in financings for Cloverleaf Bio, Moonwalk Biosciences and a new spinout from Kura Oncology.

According to BioPharma Dive data, Lilly, which has generated cash from obesity and diabetes treatments, has made 12 venture investments this year, compared with 15 in 2025, eight in 2024, five in 2023 and one in 2022.

Outside large pharmaceutical companies, privately held biotech companies are increasingly opting for reverse mergers instead of initial public offerings (IPOs).

According to life sciences advisory firm JB Strategy Partners, about 24 reverse mergers involving biotech companies have been announced so far this year, more than double the 10 for all of 2025.

A recent example came in late August, when pain drug developer Ambros Therapeutics said it would pursue a merger with struggling Werewolf Therapeutics.

Carlos Ramirez, a partner at Cooley, said, “An IPO will remain the gold standard for going public, but reverse mergers are no longer being discussed as a second-best option.”

Reverse mergers were once viewed as a last-resort financing option for two companies, but the business has gained momentum on Wall Street as institutional investors have backed the deals.

“It’s clear that perceptions have changed completely,” said Connor Bernstein, managing principal at JB Strategy Partners.