Novartis cuts PhII obesity candidate as it finalizes Sandoz spinoff

Novartis shelved a Phase II program it was testing for obesity-related diseases after finding a lack of efficacy, the pharma giant disclosed Tuesday in its second-quarter earnings.

The termination of MBL949 — which the company said was a GDF-15 inhibitor — was one of two cuts Novartis made since the last quarterly update. The other was NIS793 in metastatic pancreatic ductal adenocarcinoma, “based on benefit-risk assessment.” A Phase II study of NIS793 in colorectal cancer will continue.

On an investor call, Novartis CEO Vas Narasimhan confiemd MBL949 “ultimately did not have a compelling overall profile.

“We do have earlier stage efforts looking at novel mechanisms in the preclinical space in obesity and metabolism, but these are very early and far away from ultimately reaching the commercial market,” he said.

The Swiss drugmaker has been going through major changes, first chopping 8,000 jobs in a global reorg and then trimming 10% of the pipeline following an R&D review. It’s now on the final step of a third big move, as Novartis’ board endorsed the spinoff of its generics and biosimilars unit Sandoz, which is now expected to complete in Q4.

Harry Kirsch

Having wrapped up a share buyback program in June, Novartis also announced it will purchase back $15 billion worth of its own shares over the next two years. CFO Harry Kirsch told reporters on a media call on Tuesday morning that while the company was looking for deals, it couldn’t find targets that fit the bill for multibillion-dollar buyouts. Novartis did, however, announce it would acquire siRNA developer DTx Pharma on Monday for $500 million upfront and $500 million in milestones.

“If we were to find more bolt-on acquisition targets that we could spend the capital on, where we have high conviction that … we could generate an attractive return for shareholders, we would rather do that,” the Financial Times quoted him as saying. (The FT owns a majority stake in Endpoints News, though the news organizations are independent.)

Ironically, Eli Lilly found an acquisition target in a biotech a few days ago that was developing a Novartis castoff. Versanis, which Lilly bought for up to $1.9 billion, had licensed its weight loss drug candidate bimagrumab from Novartis back in 2021.

Narasimhan has previously called MBL949, which hits a different target than bimagrumab, a “high-risk, high-reward” program.

In the Q1 call with investors, TD Cowen analyst Steve Scala asked Narasimhan point blank why the company rarely mentioned the MBL949 program despite the global focus on obesity.

“I think our reluctance is just to — we want to be sure we have a real medicine here because I think given the overall euphoria around obesity, we don’t want to create any kind of false hope,” Narasimhan said at the time, according to a transcript provided by AlphaSense. “We want to make sure that this is — if it is a real drug and if not, we’ll, of course, disclose it that way as well.”

Editor’s note: The story has been updated with a comment from Narasimhan during the Q2 investor call.

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