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Swiss Market Index Blinks Red; Novartis Falls After Neuromuscular Disease Drug Trial Setback

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The Swiss Market Index remained in negative territory on Tuesday, closing 1.55% lower, as investors assessed a fresh batch of company updates amid a quiet day of local economic news.

Pharmaceutical major Novartis (NOVN.SW) dropped 10.89% after reporting that its phase 3 Harbor study evaluating delpacibart etedesiran, or del-desiran, in patients with myotonic dystrophy type 1 missed its primary endpoint. The investigational drug failed to demonstrate a statistically significant improvement in video hand opening time in the progressive neuromuscular disease, compared with placebo.

"Release states PIII HARBOR trial for del-desiran in DM1 missed its primary endpoint of change in vHOT at 54 weeks, though showed clinical activity on secondary endpoints and in exploratory analyses. Full data analysis to determine path forward - we think detailed data possibly NMSG (Sep 25-27th) or World Muscle (29th Sep-3rd Oct). Despite miss, release states that NVS maintains its target 5-6% FY25-30 sales CAGR," said analysts at BofA Global Research. "Post pelcarsen del-des failures, detailed Remi MS data (MS Toronto 23rd Oct) now needs to be towards the upside case."

Meanwhile, Sandoz Group (SDZ.SW) hosted its capital markets day, saying it aims to achieve a mid-to-high single-digit compound annual growth in net sales at constant currencies between 2025 and 2030, more than doubling its net sales over the period. The new targets are underpinned by the Swiss drugmaker's goal to increase the number of its biosimilars in the portfolio to more than 100 by 2040 from the current total of 13, as it enters its "golden decade" for biosimilars. The stock shed 0.06% at closing.

"We have mixed takeaways from the initial targets, which we see as ambitious longer-term but mid-term margin targets look light vs consensus/RBCe. The mid-term sales target for mid-to-high single digit CAGR to 2030 is in-line to ahead, but the Core EBITDA margin target of 25-27% by 2030 is light, and is only modest margin expansion vs the current 2028 target of 24-26%," according to RBC Capital Markets. "That said, the 2035 targets are more ambitious and show an expected acceleration through the early 2030s, a rich period for new biosimilar launches."

In other news, average electricity prices for typical households in Switzerland will decline by 4% to 0.265 francs per kilowatt-hour in 2027, compared with the previous year, mainly due to lower energy procurement costs, according to the Federal Electricity Commission.

On the defense front, the Federal Office for Defence Procurement, or armasuisse, is participating in a research project of the European Defence Agency to develop portable fuel cells for use by the armed forces and for other mobile applications. The move is also part of the Swiss government's armament policy strategy and efforts to strengthen its ties with European partner states.

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