Novartis trial failure raises stakes in Amgen and Eli Lilly’s LP(a) drug race

NovartisFailure of closely watched cardiovascular clinical trial raises questions about pharmaceutical industry’s biggest drug race and competing treatments from leading U.S. companies amgen and Eli Lilly.

Peracalcen, a drug jointly developed with ionis pharmaceuticalspecifically reduced harmful cholesterol in late-stage clinical trials, but failed to significantly improve cardiovascular disease outcomes, Novartis announced after the bell Friday. Shares fell 3% on Monday.

This is the first major clinical setback in the race to develop treatments to lower Lp(a), which increases cardiovascular risk and affects an estimated 1 in 5 people worldwide and currently has no approved targeted therapy.

Amgen and Lilly are testing a variety of technologies known to produce deeper reductions in cholesterol called Lp(a), but analysts say peracalcen’s failure raises risks around a market that market watchers expect to be worth billions of dollars.

“The Lp(a) hypothesis has weakened but has not been disproved,” Citi analysts said in a research note, noting that details beyond the top-line deviation remain lacking, such as how much Perakalsen lowered the Lp(a) level.

They added that more data is needed to determine whether this mistake reflects a challenge to peracalcene’s mechanism, study design, or the overall hypothesis that lowering Lp(a) can reduce heart attacks and strokes.

Novartis said the full results will be presented at an upcoming medical conference. “These studies provide important evidence that advances the scientific understanding of the relationship between Lp(a) decline and cardiovascular outcomes and may inform future approaches to cardiovascular risk management,” said Shriram Alladi, the company’s chief medical officer.

Lp(a) stands for lipoprotein(a), which was discovered in 1963 and can contribute to plaque buildup in arteries and blood clotting. Nearly 50 years after that discovery, researchers discovered that people with elevated Lp(a) levels faced more than twice the risk of heart attack.

A person’s Lp(a) levels are determined almost entirely by genetics and, unlike LDL cholesterol, are largely unaffected by lifestyle changes such as diet and exercise.

Novartis stressed that more than 8,000 patients in the trial have already received optimized treatment, but Jefferies analysts said in a note on Sunday that improved standards of care are reducing cardiovascular events, which could make it harder and more costly for experimental drugs to prove additional benefit in clinical trials.

Analysts had modeled that if Peracalcene was successful, it would generate peak annual sales of about $4 billion to $5 billion.

This would be a boost for Novartis as it faces what CEO Basu Narasimhan called the steepest patent cliff in the company’s history. The company’s best-selling heart drug Entresto has lost key patent exclusivity, and many more blockbuster products will soon face generic competition.

However, the impact of the trial update was not limited to the company. Amgen stock fell about 5% in after-hours trading on Friday, and Ionis Pharmaceuticals also fell 10%.

“The failure of the first proprietary outcome reduces confidence across the class and places significant pressure on subsequent studies to demonstrate that deeper downgrades result in clinically meaningful reductions of up to 15% (serious adverse cardiovascular events),” Citi analysts said in a note Friday.

Amgen’s competitor olpasilan faces the clearest readthrough, but Lilly’s drug leposisilan is in trials in a broader group of patients, including those who have not yet developed established cardiovascular disease, potentially limiting direct readthrough due to Novartis’ failure, they said. They added that lepodisiran was not very important to Lilly’s overall evaluation.

Many investors already saw the trial as risky and expected only modest returns. That may explain why Novartis shares had a relatively subdued reaction, falling just 3% in after-hours trading on Friday.

“The market was expecting modest, if not transformative, blue-sky results,” Barclays said.

“NOVN noted that even a 13% gain was statistically significant for the overall population, but reading between the lines in the release (Perakalsen) appears to be well below this threshold.”

Novartis did not immediately respond to a request for details about the extent of Lp(a) reduction or cardiovascular risk reduction observed in the trial.

U.S.-listed shares of the Netherlands-based company new amsterdam pharmaceuticals, The company, which is also developing treatments to reduce cardiovascular events by lowering Lp(a), fell 12% in after-hours trading on Friday.

Other experimental drugs use different approaches to lower Lp(a), so some drugs may be able to lower Lp(a) better than peracalcene. According to William Blair analysts, this could give drug companies a reason to continue developing Lp(a) treatments, especially for patients who start at very high levels.

They said they view Lp(a)-based clinical trials in cardiovascular disease as having “significant potential future risks” given the Novartis results.