Novartis’s remibrutinib falls short of investor efficacy thresholds: How much sales can its safety advantage support?

The data show efficacy, so why are investors still disappointed?

In two Phase III trials, remibrutinib reduced the annualized relapse rate by 31%–35% relative to Aubagio and reduced the risk of six-month confirmed disability progression by 29.2%. Goldman Sachs’s earlier discussions with investors indicated thresholds of more than 40% and 34%–45%, respectively; both actual results fell short of those expectations.
The clinical experts interviewed acknowledged that it was superior to Aubagio, but considered its overall efficacy moderate and no stronger than existing anti-CD20 therapies. The disability progression result was encouraging, although nominal statistical significance was reached only in the pooled analysis; the experts wanted to see benefits sustained for one to two years.

Novartis considers safety the main differentiator and expects no liver function monitoring to be required for the multiple sclerosis indication. The company cited safety experience from more than 4,500 patients in studies and more than 10 thousand patients treated commercially; the latter had chronic spontaneous urticaria and received a lower dose than that used for multiple sclerosis.
Experts interviewed by Goldman Sachs, however, believe Roche’s fenebrutinib has a slight efficacy advantage, while remibrutinib has better liver safety. For patients on long-term treatment, liver function monitoring for up to approximately six months at the start of treatment, though inconvenient, may still be accepted in exchange for greater efficacy; remibrutinib also needs long-term safety follow-up in a larger population.

Two experts expect BTK inhibitors initially to be used in only 5%–10% of cases of relapsing multiple sclerosis, mainly in patients whose relapses are controlled but whose disease continues to progress, or who cannot tolerate existing therapies. Anti-CD20 therapies are expected to remain dominant thanks to their efficacy, safety experience and low monitoring burden.
Novartis sees switching patients from anti-CD20 therapy as an important opportunity, but Goldman Sachs notes that safety data on such switches are currently lacking. The RESHAPE study of switching from Ocrevus to remibrutinib is expected to read out in 2028 and may affect physicians’ willingness to switch patients before then.
The experts believe unmet need is greater in progressive disease, with potential use of approximately 15%–33%, including envisaged off-label use. The two experts formed their views one hour after the data release and still need to review the details before deciding on specific uses.

Novartis clarified its earlier guidance of several billion dollars in peak remibrutinib sales as more than 4 billion US dollars for relapsing multiple sclerosis and more than 4 billion US dollars for urticaria-related indications, with additional upside from secondary progressive disease. It plans to submit global applications before the end of 2026 and use a priority review voucher.
Goldman Sachs includes only 3 billion US dollars in peak sales for multiple sclerosis, but its unweighted forecast across all indications reaches 9.5 billion US dollars; after applying an average 80% probability of success in its model, the figure is 7.6 billion US dollars. The company’s new guidance may raise some models, but did not materially exceed expectations of up to 10 billion US dollars among some investors contacted by Goldman Sachs.

As of the report date, Novartis had risen 16.8% year to date, while the European pharmaceuticals sector had risen 4.7%. Goldman Sachs believes the roughly 12 percentage points of outperformance came mainly from valuation expansion and was inconsistent with mixed performance during the year and several Phase III programs failing or falling short of expectations.
Goldman Sachs maintains its Sell rating and 12-month price target of 113 Swiss francs, implying 11.7% downside from the 128 Swiss franc share price cited in the report. Its identified upside risks include stronger sales of core products, pipeline successes, and capital allocation through business development and share buybacks.