A major Novartis investor has publicly called for sweeping board-level changes at the Swiss pharmaceutical giant following two consecutive clinical trial failures.
David Samra, managing director at Artisan Partners and a founding partner of International Value Group, is the shareholder leading the charge for governance reform at Novartis.
Artisan Partners is a top 20 investor in Novartis, giving Samra significant standing to demand accountability from the company’s leadership over its dealmaking record.
Samra directed his concerns at Novartis Chairman Giovanni Caforio, urging him to tighten oversight of how the company evaluates and executes major acquisitions.
“I think he needs to make changes at the board level,” Samra said, adding: “One of them should be on improving the team that’s doing these deals because clearly they have been uninspiring at best.”
The criticism centres on del-desiran, the lead asset from Novartis’s $12 billion acquisition of Avidity Biosciences, which failed in a trial for the rare muscle-wasting disease myotonic dystrophy type 1.
Novartis shares fell more than 10% following that trial failure, wiping nearly $30 billion from its market capitalisation in one of the company’s worst single-day stock performances.
A separate drug also posted disappointing trial results a day earlier, sending shares down a further 3% and compounding investor anxiety over the company’s research and development pipeline.
“If you do a $12 billion deal and it goes to zero, the management needs to be penalised for that,” Samra said, while noting that other promising drugs could still emerge from the Avidity acquisition.
Samra argued that successive chairmen had failed Novartis on acquisitions, signalling that the governance problems at the company are deep-rooted and long-standing rather than isolated failures.
Artisan Partners is the first investor to publicly call for board changes, though Reuters reported that other shareholders have separately voiced concerns about Novartis’s broader mergers and acquisitions strategy.
Public pressure from activist investors often carries significant weight, as it can encourage other major shareholders to align behind calls for change and increase pressure on management.
In response, Novartis said it continues to take “a disciplined and shareholder-friendly approach to capital allocation,” pointing to investments in its existing business, bolt-on deals, dividends, and share buybacks.
The company also defended its drug pipeline, stating it is “broad and built to deliver innovation across our core therapeutic areas,” and stressed that its sales guidance for both pre-2030 and post-2030 periods remains unchanged.