F-D-A spells bad news for biotech

The beleaguered vaccine development industry has a diagnosis: The vibes are off.

Dr. Peter Marks, who led the FDA’s Center for Biologics Evaluation and Research (aka, vaccine science) resigned Friday evening. He didn’t mince words about what—or rather, who—caused his departure.

“It has become clear that truth and transparency are not desired by the Secretary [Department of Health and Human Services head Robert F. Kennedy Jr], but rather he wishes subservient confirmation of his misinformation and lies,” Dr. Marks wrote in his resignation letter published by The New York Times.

The sudden exit of the FDA’s top vaccine scientist and regulator shook the biotech industry, which has been waiting for the other shoe to drop ever since Kennedy took his post last month. Reports today indicate that the resignation was less-than-voluntary, and that new FDA Commissioner Marty Makary helped Marks out the door.

Shares of vaccine companies tumbled on the news. Moderna sank 8.90%, reaching a 52-week low today. BioNtech sank 4.10%, and Novavax declined 8.43%. While larger, better-diversified pharma companies like Pfizer endured just fine, smaller biotech companies took a serious beating: Sarepta Therapeutics fell 9.36%, while Vaxcyte plummeted 45.64%.

Since officially joining the Trump administration, Kennedy has turned his attention toward vaccine research. The CDC, which falls under Kennedy’s purview, recently opened a study into the link between vaccines and autism based on a long-debunked theory. Kennedy also downplayed the role of vaccine skepticism in a measles outbreak and touted alternative treatments like cod liver oil as a solution.

Pharma needs a shot in the arm

Marks’ decision to throw in the towel indicates that the nation’s top health authority is under the weather.

But how bad this is for pharma stocks over the long term depends on who takes Marks’ job, analysts said. His new replacement will shape the approval process for new vaccines and current regulation for already-existing vaccines.

“Given Dr. Marks’s influence on the development of biologics and uncertainty as to who will replace him and how his legacy might continue, his departure will create a significant near-term overhang for the smidcap (small and mid cap) biotech space, particularly for vaccine, gene therapy/editing, and cell therapy developers,” explained William Blair analyst Matt Phipps in a note today.

Pharma stocks are going to need more than cod liver oil to survive this administration.—LB