By Global Consultants Review Team ,
Swiss pharmaceutical giant Novartis is facing growing shareholder pressure over its acquisition strategy after a series of setbacks involving drugs obtained through deals. A major investor, Artisan Partners, has publicly called for changes at the company's board level, putting its M&A decision-making and governance under greater scrutiny.
The pressure follows the failure of del-desiran, an experimental treatment for myotonic dystrophy that Novartis obtained through its $12 billion acquisition of Avidity Biosciences. The late-stage trial failure caused Novartis shares to fall more than 10%, wiping almost $30 billion from the company's market value.
The setback came shortly after disappointing results from pelacarsen, another major drug candidate, adding to investor concerns about the company's pipeline and the returns generated from its acquisitions.
David Samra, Managing Director at Artisan Partners and Founding Partner of the International Value Group, has become the first major investor to publicly demand changes to Novartis' board following the latest setbacks.
Speaking to Reuters, Samra criticized the company's approach to acquisitions and questioned whether the board had provided sufficient oversight.
“I think he needs to make changes at the board level. One of them should be on improving the team that's doing these deals because clearly they have been uninspiring at best.” — David Samra, Managing Director, Artisan Partners,Founding Partner, International Value Group
Samra directed the comments toward Giovanni Caforio, Chairman of Novartis, arguing that the company's acquisition process needs stronger oversight and a more effective deal team.
He also questioned the performance of Novartis' $2.9 billion acquisition of MorphoSys, another transaction that subsequently resulted in an $800 million writedown.
The concerns are not limited to Artisan Partners. Investors and analysts are increasingly examining whether Novartis' acquisition-led strategy can deliver the growth expected from its pipeline.
James Eugene, CFA, Analyst at Verso Investment Management LLP, previously highlighted the importance of the Avidity-derived drug to Novartis' strategy after the trial setback.
“The drug should have been a ‘must win’ for the company.” — James Eugene, CFA, Analyst, Verso Investment Management LLP
Eugene also said the failure would increase pressure on Novartis' dealmaking and other drugs in development.
His LinkedIn profile confirms his role with Verso Investment Management LLP.
The Avidity acquisition was a major component of Novartis' strategy to strengthen its pipeline and develop treatments for genetic diseases.
Novartis completed the acquisition in February 2026. The company had viewed Avidity's technology and drug candidates as important additions to its research portfolio.
However, the failure of del-desiran has changed the investor conversation around the transaction. The drug had been considered one of the important assets supporting Novartis' future growth ambitions.
The company is also facing challenges from other pipeline programs. The failure of pelacarsen, a cardiovascular drug, added further pressure just before the Avidity-related setback.
Despite the criticism, Novartis has maintained that its financial outlook remains unchanged.
The company said it continues to pursue a disciplined capital-allocation strategy that includes investment in its existing business, value-creating acquisitions and returns to shareholders through dividends and share buybacks.
CEO Vas Narasimhan has also defended the broader strategy behind the company's pipeline-building efforts. His LinkedIn profile confirms his position as Chief Executive Officer of Novartis.
The latest developments therefore do not represent an immediate change in leadership. Instead, the pressure is increasingly focused on how Novartis evaluates acquisitions, oversees transactions and measures their long-term value.
For Novartis, the issue extends beyond one failed clinical trial. The company has relied heavily on acquisitions to replenish its pipeline as several established medicines approach patent expirations.
The Avidity and MorphoSys experiences have consequently become important examples for investors evaluating whether Novartis is generating sufficient returns from its M&A strategy.
Samra has also argued that the company's compensation system should better reflect actual economic outcomes, particularly when acquisitions result in significant writedowns.
With shareholder scrutiny increasing, Novartis' board could face growing pressure to demonstrate that its acquisition process is producing sustainable value.
The immediate challenge will be rebuilding investor confidence while maintaining investment in new medicines. For the board, the debate is no longer simply about whether Novartis should continue making acquisitions, but whether its current M&A framework is selecting and managing the right deals effectively.
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