Artisan Partners managing director David Samra, a leading Novartis shareholder, told Reuters that the company’s board must be reshaped to strengthen oversight of acquisitions. Samra, also a founding partner of International Value Group, said the current board has not provided adequate scrutiny, especially after recent setbacks.

Recent trial setbacks trigger share plunge

Novartis’ stock fell more than 10% this week, erasing nearly $30 billion in market value, after a muscle‑wasting disorder drug acquired through the $12 billion purchase of U.S. firm Avidity failed a late‑stage study. The decline followed a 3% drop the previous day when heart‑drug pelacarsen delivered disappointing results.

Shareholder criticism of past deals

Samra highlighted the Avidity loss and also cited the 2024 acquisition of German biotech MorphoSys, which was written down shortly after purchase, as evidence of a weak acquisition track record. While he praised CEO Vas Narasimhan’s overall management, Samra argued that the board should have exercised stricter diligence.

Calls for board and compensation changes

Beyond board composition, Samra urged Novartis to overhaul its executive compensation structure, saying it relies too heavily on adjusted performance metrics that exclude writedowns and do not reflect real economic outcomes.

Company response

Novartis responded that its financial guidance remains unchanged and emphasized a “broad” pipeline of medicines. The company reiterated its commitment to a disciplined, shareholder‑friendly capital allocation strategy, including organic growth, value‑creating bolt‑ons, a growing annual dividend and share buybacks.

Analysts view the setbacks as a test for Novartis’ leadership, but Samra’s public call for board reform may prompt other investors to demand greater accountability.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.