In-Depth Review of the 2026 Pharmaceutical Industry’s “Collective Failure”: Why Did Metrics Decline, but Patients Didn’t Improve?
Hello everyone, I’m your financial journalist and economist. Today, we’re not talking about the rise and fall of a single company, but rather a “collective earthquake” that struck the global pharmaceutical industry in 2026.
If you follow the news, you might have heard about the failure of a lipid-lowering drug developed by Novartis. But that’s just the tip of the iceberg. In fact, 2026 saw a series of shocking setbacks in the pharmaceutical world: new drugs developed by several giant companies, costing billions of dollars, managed to lower certain indicators in the blood, yet patients still suffered heart attacks, strokes, or even died.
It’s like adding the most expensive fuel additive to a car with a leaky engine—the dashboard might show normal fuel consumption, but the car still breaks down.
This article will break down this complex situation into five key points in plain language, to help you understand what happened, why it was so serious, what the impact was on Chinese pharmaceutical companies, and where the opportunities lie for the future:
1. The Core Incident: Novartis’ “Ace” Fails, and the Lp(a) Track Faces a Freeze
What is Lp(a)? Why Was It Once Hoped to Be So Promising?
Lp(a) (lipoprotein a) is a type of “bad cholesterol.” Interestingly, 90% of its levels are determined by genetics. No matter how healthy you eat or how much you exercise, if your genes are unfavorable, your Lp(a) levels will remain high. Approximately one-fifth of the world’s population has elevated Lp(a) levels, putting them at a very high risk of cardiovascular disease.
Over the past decade, Lp(a) has been considered the next big target in the cardiovascular field after PCSK9, as there were no effective drugs for it due to its genetic nature.
What Did Novartis Do? What Were the Results?
Novartis invested heavily—up to about $1.6 billion in total—to develop a drug called pelacarsen.
- Scope of the Trial: Conducted in 43 countries, 904 hospitals, involving 8,323 patients, over nearly seven years. This was the first large-scale trial in human history specifically designed to test whether lowering Lp(a) levels could reduce cardiovascular events.
- Results: The drug did lower Lp(a) levels by up to 80%, but there was no significant reduction in the risk of heart attacks, strokes, or deaths among patients.
- Market Reaction: Novartis’ stock price plummeted by 14%, and peers like Amgen also fell by 10%.
Why “Death Sentence” Rather than “Suspension of Execution”?
- A “death sentence” would mean the target was completely ineffective, and companies would abandon the project.
- “Suspension of execution” means the indicators improved, but the disease didn’t. This suggests that the approach of lowering Lp(a) may not be sufficient, or it might not be implemented thoroughly enough. Similar drugs from companies like Amgen and Eli Lilly (such as olpasiran and lepodisiran) are still in trials, with over 30,000 people participating.
- Current Situation: No company dares to invest blindly in the idea that simply lowering indicators will save lives, as Novartis has proven that this path is not viable (at least for now).
2. The Deeper Logic: Why Does Meeting Indicators Equal Clinical Failure?
This failure was not an isolated case; many new drugs in 2026 made the same mistake. We can attribute it to three cognitive pitfalls:
1. Genetic Evidence ≠ Drug Efficacy (Time Difference Trap)
- Genetic studies look at a person’s Lp(a) levels over decades.
- Drug trials measure the effect of lowering these levels several years after atherosclerosis has already formed.
- Metaphor: Genes tell you the river leads to the sea, but the drug trial is like trying to lower the water level after the riverbed has been clogged with sediment for 30 years. The water may drop, but the sediment remains, and the flow is still blocked. Drugs cannot reverse the physical damage that has already occurred.
2. Strong Background Treatment Masking New Drug Effects (Ceiling Effect)
- 77.5% of the trial participants were on the strongest statin drugs, with their LDL-C levels already very low (median of 64.6 mg/dL).
- With such a “optimal background,” any additional reduction in risk is very difficult to detect.
3. Confusing “Maps” with “Territory” (The Illusion of Alternative Endpoints)
- The industry has long relied on biomarkers like Lp(a), hsCRP, and aPTT. These indicators are like coordinates on a map; doctors assume the path is clear if the coordinates are correct.
- But the real outcome (whether patients live or don’t have strokes) is the true measure of success.
- The lesson of 2026 is that lowering indicators does not equate to improving patient health. PCSK9 was successful because it both lowered indicators and reduced events; Lp(a) drugs only achieved the former.
3. A Panoramic View of Other Failed Approaches in 2026
Besides Lp(a), several other popular research areas faced similar failures:
1. Anti-Inflammatory Heart Protection (IL-6 Approach)
- Novo Nordisk’s ziltivekimab reduced the inflammatory indicator IL-6 significantly, but the risk of heart disease didn’t change.
- Consequence: The entire theory of anti-inflammatory heart protection was shaken, and related trials were terminated early. Novo Nordisk’s $2.1 billion acquisition deal is now at significant risk.
2. Safe Anticoagulation (FXIa Approach)
- BMS/Johnson & Johnson’s milvexian aimed to prevent blood clots without causing bleeding.
- Result: It did reduce bleeding risks, but it didn’t decrease the incidence of clots.
- Lesson: Preventing bleeding does not automatically mean preventing clots.
3. Huntington’s Disease (Gene Silencing)
- Roche’s tominersen reduced the levels of the disease-causing protein, but there was no improvement in patients’ motor and cognitive functions.
- Lesson: Molecular success does not equate to clinical improvement.
4. ADC (Antibody-Drug Conjugates)
- After Pfizer acquired Seagen, its first drug, sigvotatug vedotin, failed to outperform the 30-year-old drug docetaxel in lung cancer trials.
- Current Situation: ADC development continues, but the high expectations for drugs like DS-8201 are collapsing, with a clinical failure rate of up to 80%.
5. Muscle Preservation and Weight Loss (GLP-1 Combination Therapy)
- Eli Lilly’s bimagrumab, combined with semaglutide, showed excellent weight loss without muscle loss.
- But: Eli Lilly terminated subsequent trials for “commercial reasons.”
- Reason: The FDA believes that improving body composition alone is not enough to approve a new drug; additional weight loss effects are required.
4. The Impact on Chinese Pharmaceutical Companies
These failures have a direct impact on the valuation of Chinese companies:
1. Lp(a) Track: Pricing Curves Freeze
- Chinese companies (such as Hengrui, Shijiazhuang Yiling, and Hejia) have made significant investments in the Lp(a) field, licensing to foreign giants like Merck, AstraZeneca, and Novartis for billions of dollars.
- Change: Foreign companies now focus on whether the company can conduct proper outcome trials and when they will be conducted, as well as the design of control groups.
- Hengrui Medicine: Although it received a $200 million upfront payment, the likelihood of receiving the remaining $1.77 billion in milestone payments has decreased significantly.
- Impact: The overseas earnings expectations for all Chinese companies tied to Lp(a) projects have been reduced.
2. ADC Track: Valuation Decline
- Pfizer’s impairment of Vedotin, licensed from Rongchang Bio, has lowered the valuation of Chinese ADC companies like Kelun Biotech and Innovent Biologics.
- Impact: Chinese ADC companies face more cautious buyers and stricter clinical requirements in future negotiations.
3. The End of the “Copycat” Strategy
- In the past, Chinese biotechs thought it was safe to follow the successes of multinational companies.
- Now, the valuations of all follow-up companies targeting the same targets have dropped.
- Lesson: For Chinese companies with slower progress, it might be better to wait for more data from upcoming trials like OCEAN(a) and ACCLAIM before making decisions.
5. Looking to the Future: Suspension of Execution Doesn’t Mean Death Sentence
Although 2026 was brutal, science continues. A suspension of execution means the current strategy failed, not that the target is ineffective.
Three Possible Directions for a Turnaround:
- Deeper Reductions: If pelacarsen reduced Lp(a) by 80%, what about 95% or 97%? Or could CRISPR gene editing (CTX320) achieve lifelong reduction?
- Early Intervention: Starting treatment before atherosclerosis forms, rather than waiting for the disease to occur.
- More Precise Targets: Focusing on patients with extremely high Lp(a) levels and other controllable risk factors.
2. Changes in Capital Market Valuation Methods
- The market is shifting from a bond-like approach (expecting stable returns) to an options-based one, where unproven assets carry higher risk premiums.
- Outcome-Driven Valuation: Milestone payments will be more closely linked to actual clinical outcomes (such as survival or prevention of events), not just indicator reductions.
3. Advice for Investors:
- Avoid Risks: Steer clear of assets that rely solely on indicator reductions without solid clinical evidence.
- Focus on Companies with Honest Clinical Designs: Those with clear clinical goals and differentiated strategies.
- Patience: The real answers will come from 2027 to 2029.
Conclusion
2026 was a harsh lesson for the pharmaceutical industry:
- Biomarkers are maps, but clinical outcomes are the real measure of success.
The industry paid a heavy price for mistaking maps for territory.
For companies, a suspension of execution means they must explain why their current approaches won’t work.
For investors, this means more cautious valuations.
For Chinese innovators, it’s a guide to avoid risks and identify potential opportunities.
**Medicine is meant to save lives, not just indicators.” This reminder should be etched in the walls of every pharmaceutical company.