BofA Sees Limited Damage from Novartis (NVS)’ Pelacarsen Miss While Citi Looks Towards Ionis (IONS)

Novartis AG’s (NYSE:NVS) pelacarsen failed an important test. Although the experimental medicine lowered lipoprotein(a), or Lp(a), it did not produce a statistically significant reduction in cardiovascular events in the Phase 3 Lp(a)HORIZON study.

Bank of America does not believe the result breaks the Novartis (NYSE:NVS) investment thesis. The firm estimates that the failed study creates only low-single-digit percentage downside to its net-present-value calculation. With attention likely to shift toward four other Phase 3 readouts expected during the second half of 2026, BofA maintained its Buy rating and $185 price target on Novartis (NYSE:NVS) shares.

Bull Case

BofA’s response suggests pelacarsen represented only a relatively small portion of its valuation for Novartis (NYSE:NVS). That limits the financial significance of the failed trial even though the clinical outcome is disappointing. The company’s pipeline breadth helps explain that position. Novartis (NYSE:NVS) entered the second half of 2026 expecting several important clinical readouts across immunology and neuroscience. Its July pipeline presentation included late-stage programs involving remibrutinib, ianalumab, del-desiran, and Rhapsido, among other development candidates.

According to BofA, investors’ focus will now move to four Phase 3 results expected during the remainder of the year. Success in those studies could restore some of the pipeline momentum lost through pelacarsen and support Novartis’ longer-term growth outlook. More broadly, Novartis (NYSE:NVS) reported 39 Phase 3 projects and three programs in registration in its second-quarter presentation. Its 2025 annual report identified more than 30 potential high-value medicines and 15 submission-enabling readouts expected over the following two years. That diversification means one unsuccessful program does not determine the performance of the entire pipeline.

Novartis (NYSE:NVS) also continues to generate substantial revenue while these treatments move through development. Second-quarter 2026 sales reached $14.41 billion, increasing 3% on a reported basis and 1% in constant currencies. Management reaffirmed its forecast for low-single-digit constant-currency sales growth for the year. The $185 price target reinforces BofA’s view that the remaining pipeline and commercial portfolio outweigh the valuation lost from pelacarsen.

Bear Case

The setback should not be dismissed simply because BofA assigns it limited financial value. Pelacarsen was designed to reduce the liver’s production of apolipoprotein(a), thereby lowering elevated Lp(a), an inherited cardiovascular risk factor. HORIZON was intended to determine whether that biological effect would translate into fewer cardiovascular events.

Its failure to meet the primary endpoint means Novartis (NYSE:NVS) cannot establish cardiovascular benefit from Lp(a) reduction through this study. It also places more pressure on the company’s remaining late-stage programs. BofA’s constructive thesis could weaken if additional Phase 3 readouts disappoint. Financial trends add to that pressure. Novartis’ (NYSE:NVS) first-half net income declined 16% on a reported basis, while core operating income fell 6%. Although the company reaffirmed its outlook, successful pipeline development remains important as it manages generic competition affecting established products.

The outcome also affects Ionis Pharmaceuticals (NASDAQ:IONS), which discovered pelacarsen and licensed it to Novartis in 2019. Citi analyst Eric Joseph nevertheless expects less than 5% immediate downside for Ionis, citing modest market expectations. Following a check-in with management, Citi said the result should not affect Ionis’ fiscal 2026 guidance and characterized the readout primarily as a clearing event. The firm maintained its Buy rating and $100 price target.

Conclusion

BofA sees pelacarsen as a contained setback rather than a fundamental blow to Novartis (NYSE:NVS), estimating low-single-digit valuation downside and maintaining its $185 target. Citi’s similarly measured response toward Ionis indicates that expectations surrounding the program were already restrained.

The next four Phase 3 readouts will now matter more. If they deliver, pelacarsen could remain an isolated disappointment. Further setbacks, however, would make BofA’s confidence in Novartis’ (NYSE:NVS) pipeline considerably harder to defend.

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This article is originally published at Insider Monkey.