The news: Novartis’ muscular dystrophy experimental drug del-desiran failed to meet its primary endpoint in a late stage study. It is Novartis' third major pipeline setback within a week, following disappointing developments for pelacarsen, a licensed drug, and rap-cel, an internally developed cell therapy.

Why it matters: The setbacks span all three routes Novartis is using to replenish its pipeline: acquiring companies, licensing outside assets, and developing therapies in-house.

• Novartis paid $12 billion in February to acquire Avidity and gain del-desiran and its RNA-targeting platform. CEO Vas Narasimhan positioned del-desiran as a potential source of more than $5 billion in peak sales as recently as July in a Bloomberg interview.
• Pelacarsen, an experimental cardiovascular drug licensed from Ionis in 2019, failed its Phase 3 study, Novartis announced Friday.
• Novartis said last week that it had paused trials of rap-cel for autoimmune and neurological conditions in late August after three patients died.

Novartis was already facing pressure to replenish its portfolio. Generic competition for older blockbusters Entresto, Promacta, and Tasigna is expected to create a roughly $4 billion revenue gap in 2026, Narasimhan told CNBC in February. But Novartis is far from alone in pharma turning to dealmaking and licensing as central tools for closing those gaps. In the US alone, annual branded revenue losses are projected at $200 billion to $400 billion, according to DrugPatentWatch.

Implications for pharma companies: Investors are likely to scrutinize how Novartis valued and vetted the Avidity acquisition, along with how confidently management promoted an unapproved asset before pivotal trial results.

For pharma more broadly, the failures expose the risk in relying on late-stage acquisitions and licensing to offset patent losses. Buying more advanced assets can reduce development uncertainty, but del-desiran and pelacarsen show that it won’t eliminate clinical risk. Rap-cel’s safety setback also shows that internal R&D is not an inherently safer alternative. The issue is less about favoring one pipeline source over another than avoiding outsized dependence on any single asset. The setbacks could intensify investor scrutiny of deal valuations, sales forecasts, and messaging around assets that have yet to deliver pivotal data.

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