Novartis Faces Shareholder Call for Deal Oversight

Novartis is facing public calls for a board shake-up from top-20 shareholder Artisan Partners. David Samra, managing director at Artisan Partners and founding partner of International Value Group, told Reuters that the Swiss drugmaker needs enhanced board-level oversight for future acquisitions.

The demand followed consecutive clinical trial setbacks in September. The Phase 3 HARBOR study of del-desiran for myotonic dystrophy type 1 missed its primary endpoint of video hand opening time versus placebo. Additionally, the Phase 3 Lp(a)HORIZON trial evaluating pelacarsen failed to meet its primary endpoint of reducing cardiovascular events compared to placebo.

David Samra asked Board Chairman Giovanni Caforio to bring in better board talent and establish a dedicated acquisition committee to review transactions. While praising CEO Vas Narasimhan for doing a very good job, Samra called the current dealmaking team uninspiring at best. He cited the 2024 buyout of German biotech MorphoSys, which was written down months later, and pointed to the $12 billion Avidity deal, arguing management should face financial penalties if deal value drops to zero.

Samra also urged Novartis to overhaul its executive compensation structure. He noted that existing pay models rely too heavily on adjusted performance metrics that strip out writedowns instead of reflecting actual economic results. Novartis shares rose 1.30% to $139.27 in premarket trading on Friday, according to Benzinga Pro data.