A major shareholder in Novartis calls for a shake-up of the Swiss drugmaker's board to improve corporate governance, after the company's shares suffered a record fall this week following back-to-back trial setbacks.

David Samra, managing director at Artisan Partners and founding partner of International Value Group, says successive chairmen have failed Novartis on acquisitions and that the company needs to change how it oversees deals.¹ Artisan is one of Novartis' 20 largest shareholders, according to LSEG Workspace data, and is the first investor to publicly call for board changes, though others have voiced concerns about Novartis' M&A strategy separately.¹

What triggered the criticism?

On Tuesday, a muscle-wasting disorder drug acquired through Novartis' $12 billion takeover of U.S. firm Avidity failed a late-stage study, sending the company's shares tumbling more than 10% and wiping nearly $30 billion off its market value.^1,2 The setback follows the decline from a day earlier, where Novartis' stock fell 3% on results from heart drug pelacarsen that disappointed investors.²

"The party is over," Samra said, urging Novartis Chairman Giovanni Caforio to act. "I think he needs to make changes at the board level. One of them should be on improving the team that's doing these deals because clearly they have been uninspiring at best."

Samra says that if a $12 billion deal fails, the people responsible should face consequences. "If you do a $12 billion deal and it goes to zero, the management needs to be penalized for that," he said, while noting that other promising drugs could still emerge from the Avidity acquisition.

Samra also pointed to Novartis' 2024 acquisition of German biotech MorphoSys as a disappointing deal, claiming investor enthusiasm faded after Novartis wrote down the value of the acquisition only months after completing it.

"The acquisition track record is not very good," Samra says, arguing that the deals had destroyed value.

In a conversation with Pharmaceutical Executive, Subin Baral, global life sciences deals leader at EY, discussed the trends of successful pharma companies noting that, "Companies engaging in deals outperform companies that are less active, and the more varied the dealmaking the higher the return on capital.”

What is Novartis’ response?

Novartis released a statement saying that its financial guidance was unchanged by the recent setbacks and that it has a "broad" pipeline of medicines. "We continue a disciplined and shareholder friendly approach to capital allocation by investing in the organic business, pursuing value-creating bolt-ons, and returning capital to shareholders through a growing annual dividend and share buybacks," the company said.

Is the CEO to blame?

Many analysts view the latest setbacks as a test of Novartis chief executive Vas Narasimhan, who has led the company since 2018. Samra, however, says he does not blame Narasimhan, arguing he has done a "very good job" running the business. Instead, Samra questions whether the board has exercised sufficient scrutiny over deals, placing responsibility on Caforio and the directors overseeing acquisition decisions rather than on management's day-to-day execution.

Samra is also urging the board to overhaul Novartis' compensation structure, saying it relies too heavily on adjusted performance measures that exclude write-downs rather than reflecting "real economic outcomes." That critique ties directly back to the MorphoSys and Avidity deals: both were followed by markdowns that, under an adjusted-metrics framework, may not have fully weighed on the pay of those who approved them.

What’s next for Novartis?

The pressure from Artisan lands at a sensitive moment for Novartis, with it’s shares having shed roughly 13% in value over two trading days on the combined pelacarsen and del-desiran setbacks, the company now faces public scrutiny of both its dealmaking process and the governance structure meant to oversee it.

Sources

1. Major Novartis shareholder calls for board shake-up after drug trial setbacks Reuters September 10, 2026, https://www.reuters.com/world/major-novartis-shareholder-calls-board-shake-up-after-drug-trial-setbacks-2026-09-10/
2. Novartis announces Lp(a)HORIZON Phase III topline results for pelacarsen in patients with elevated Lp(a) and established cardiovascular disease (CVD) Novartis September 4, 2026, https://www.novartis.com/news/media-releases/novartis-announces-lpahorizon-phase-iii-topline-results-pelacarsen-patients-elevated-lpa-and-established-cardiovascular-disease-cvd