A major Novartis shareholder has called for changes to the Swiss drugmaker’s board after two disappointing drug trial results triggered a sharp fall in its shares.
David Samra, managing director at Artisan Partners and founding partner of International Value Group, said Novartis needed stronger oversight of acquisitions and a review of its executive compensation structure.
Samra urged Chairman Giovanni Caforio to improve the team responsible for acquisitions, arguing that recent deals had failed to create enough value for shareholders.
Novartis shares fell more than 10% on Tuesday after a drug acquired through its $12 billion takeover of U.S. biotech Avidity Biosciences failed a late stage trial. The decline erased nearly $30 billion from the company’s market value.
The shares had already dropped about 3% after disappointing results from the heart drug pelacarsen.
Samra also criticized Novartis’ $2.9 billion acquisition of German biotech MorphoSys in 2024, saying the company later wrote down the value of the deal.
He said he did not blame CEO Vas Narasimhan, who has led Novartis since 2018, but questioned whether the board had exercised enough scrutiny over acquisitions.
Novartis said its financial guidance remained unchanged and defended its strategy of investing in its pipeline, pursuing smaller acquisitions and returning money to shareholders through dividends and share buybacks.
Leave a comment