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Heard on the Street: Biotech Investors Rush for the Exits After FDAOfficial Resigns
Apr 1, 2025, 02:05 GMT+11DJN1 min read
By David Wainer
Biotech investors are reelingafter the sudden departure of Dr. Peter Marks, a pivotal figure in the U.S.Food and Drug Administration.
Marks, who played a crucial rolein Operation Warp Speed and championed accelerated drug approvals, announced hewas stepping down, citing irreconcilable differences with Health and HumanServices Secretary Robert F. Kennedy Jr.
His exit sparked worry the FDA'sstance on drug approvals-particularly for more innovative treatments like genetherapies and mRNA vaccines-could shift under Kennedy's leadership.
On Monday, biotech stockssuffered their worst single-day drop in months. Moderna shed 13%, gene-editingcompany Beam Therapeutics dropped 10%, and gene therapy maker SareptaTherapeutics fell 9%.
Marks' departure confirmed manyinvestors' worst fears-that RFK Jr.'s influence over the FDA could extendbeyond vaccines to the entire drug-approval process.
Marks is the third top officialat the FDA to leave this year, following the departures of drug chief Dr.Patrizia Cavazzoni and human foods chief Jim Jones. For the last few months,many on Wall Street have tried to stay upbeat, arguing that Dr. Marty Makary, aformer Johns Hopkins surgeon recently confirmed as commissioner of the FDA, isa science-driven leader who can shield drug companies from RFK's worstinstincts.
Yet on Monday, the question waswhat kind of FDA will emerge-a RFK Jr. or a Makary one. "Will new FDACommissioner Marty Makary be able to support scientifically-proven research andproducts and effectively manage upward with RFK Jr., or will he ultimately facethe same fate as Dr. Marks?" wrote David Risinger, an analyst at LeerinkPartners.
At this point, it is hard tostay optimistic for vaccine companies. That helps explain why Moderna is down75% so far this year. But the threat to drug stocks may not be as severe. Therisks may be increasing, but so are the discounts.
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