Novartis is facing sharper questions over its dealmaking strategy after clinical setbacks weakened confidence in recent acquisitions, with Artisan Partners demanding stronger board oversight of acquisitions following the failure of del-desiran, which undermined a central argument for the $12 billion purchase of Avidity. CEO Vas Narasimhan has deployed more than $30 billion into acquisitions and partnerships over the past three years, according to Reuters, and Novartis insists its guidance remains intact and says other medicines acquired through the transaction still have meaningful potential. The balance sheet shows why investors are watching closely: Novartis produced $8.9 billion in first-half free cash flow, while acquisitions and intangible-asset transactions consumed $15.3 billion, roughly 1.7 times that cash generation. Adding $9.1 billion of dividends and $3.1 billion of treasury-share outflows brings the cited cash demands to $27.5 billion, and net debt consequently surged from $21.9 billion to $39.4 billion, leaving less room for expensive mistakes and raising pressure on management to turn purchased science into commercial wins. Its U.S.-listed shares traded at $137.58, yet remained roughly 14% lower across five sessions, and the stock trades 5.36% above its $130.58 GF Value.
Novartis AGClinical failure of del-desiran and activist pressure over $30B deal spree, surging net debt to $39.4B, raise doubts about Novartis's acquisition strategy and capital allocation.
