Biotech stocks get boost from Fed rate outlook

Biotech stocks, along with the broader stock market, rallied yesterday, after the Federal Reserve maintained its outlook that it would cut interest rates two times in 2025.

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The Fed kept rates unchanged for now, a move that was widely expected. It did note, though, that "uncertainty around the economic outlook has increased." Fed Chair Jerome Powell also said that President Trump's tariff policies could delay efforts to bring down inflation.

Biotech companies are particularly sensitive to the Fed's policies, as they rely on low interest rates to raise and borrow money to fund research.

Politics

Universities under more strain from Trump grant cuts

Earlier this week, we reported that NIH has halted funding for a landmark diabetes study, the Diabetes Prevention Program, likely in relation to the Trump administration's cancellation of federal grants to Columbia University on the grounds that it had failed to adequately address antisemitism on campus.

(Columbia was in charge of managing the funding due to a technicality with the grant, but most of the money was distributed to other research institutions.)

Now, another major research program has had to shut down due the Columbia cuts: the university's Center for Solutions for ME/CFS. The center was working on multiple research projects to better understand the chronic fatigue condition believed to affect millions of Americans. Read more from STAT's Isa Cueto.

It's unclear how long the funding cancellation will last. The Wall Street Journal reported yesterday that Columbia is close to yielding to President Trump's demands.

Meanwhile, the Trump administration has also suspended federal funding for the University of Pennsylvania, reportedly over its decision to allow a transgender swimmer to compete for the school in 2022.

infectious disease

Gilead shares fall on reports of funding cuts for HIV prevention

Shares of Gilead fell 2.5% yesterday, after the Wall Street Journal reported that the Trump administration is weighing major cuts to funding for the CDC's HIV prevention programs.

Gilead is currently seeking approval of its drug lenacapavir to be a twice-yearly injection for HIV prevention, or PrEP. (The drug is already approved for HIV treatment.) The WSJ reports that among the CDC programs that could be scaled back or eliminated is an initiative to provide free PrEP.

But analysts argued that this news should not have an impact on Gilead, since the CDC programs focus on HIV surveillance and community outreach, not drug reimbursement. If the funding cut goes through, it wouldn't have a direct effect on government payors, and most PrEP coverage is under commercial payors anyways, Jefferies analysts wrote.

gene therapy

Novartis finally shows gene therapy data in older SMA patients

Nearly six years ago, the FDA approved Novartis' Zolgensma, a gene therapy for the fatal neuron-wasting disease spinal muscular atrophy, but only for children under age 2. The pivotal trial had only studied babies and the thinking was that older children likely have lost too many neurons to benefit from the therapy.

Researchers yesterday finally showed that the therapy does work in older children 2 to 17 years old. Over one year, those who received the new Zolgensma administration improved a median of 2.38 points on a standard 66-point scale of muscle function, compared with 0.56 points among those given a sham treatment.

The challenge is it's unclear where Zolgensma would fit now in the treatment paradigm for older kids. Much has changed since Zolgensma was first approved for babies.