This year, big pharmaceutical companies have been working hard to rebuild their drug pipelines. As a result, when one company reports disappointing trial results, it can have a big impact on competitors working on similar treatments.
This happened on Tuesday when a major clinical setback for Switzerland’s Novartis led to a selloff in Amgen shares.
Before the market opened, Amgen stock dropped more than 5%. This added to a wider decline in the Dow Jones Industrial Average, where Amgen is a listed company.
The selloff happened after Novartis announced on Friday that its experimental cardiovascular treatment did not meet its main goal in a Phase 3 trial. This result made investors worry about Amgen’s own cardiovascular drug candidate, olpasiran, which will have Phase 3 data available in mid-2028. Cantor said on Friday that since Wall Street already expected a high chance of success for the Amgen drug, the drop in Amgen shares after hours was not surprising, especially since the actual trial data is still years away.
Adding to the pressure, BMO Capital downgraded its rating on Amgen but kept its current price target, according to ratings aggregators.
Novartis did even worse. Its shares listed in Switzerland dropped sharply on Tuesday after the company also reported poor results from another clinical trial for an experimental neuromuscular treatment. This added to the decline the stock had already seen on Monday after the first cardiovascular setback.
