April 1, 2025

The need-to-know this morning

Layoff notices began arriving early this morning for thousands of employees of the Department of Health and Human Services and its subsidiary agencies, with as many 10,000 workers potentially expected to be hit by the cuts.

biotech

Marks' exit is not exactly helping industry sentiment

Biotech stocks plunged nearly 4% yesterday, as investors absorbed the news that Peter Marks, the FDA's top regulator of vaccines and gene therapies, was forced out. The industry, of course, was already experiencing a prolonged downturn, and the latest dip had the XBI closing out the first quarter with a nearly 10% drop, a bigger decline than what was seen in the broader stock market and with tech stocks.

Vaccine makers were hit particularly hard yesterday, as Marks' resignation letter alluded to disagreements with HHS Secretary Robert F. Kennedy Jr. on vaccines. Moderna's stock dropped 9%, while Vaxcyte's plummeted 46% (though shares of Vaxcyte were also affected by disappointing results of a vaccine candidate.)

Marks' departure also battered companies working on cell and gene therapies. Uniqure's stock declined 15%, while Neuorgene's dropped 20%.

While Marks' departure likely has immediate implications for the regulation of vaccines, it's unclear how it might affect other biologics. Analysts at Stifel wrote that Marks' philosophy of greater regulatory flexibility for gene therapies and rare disease treatments permeated the the FDA, so his departure doesn't mean that the agency will necessarily start to regulate those treatments differently. There is unpredictability, though, around which other influential FDA staff could also leave and who will be chosen to replace Marks.

There are also questions around how influential Marty Makary, the newly confirmed FDA commissioner, will be. The Pink Sheet reported that Makary was sworn in last Friday before Marks was ousted and did not try to stop it.

biotech

Cantor analysts issue searing note on RFK Jr.

Marks' departure was such a shock that analysts at Cantor Fitzgerald published a note yesterday that departed from the usual stock analysis.

Titled "We Stand With Peter Marks," the note called on the Trump administration to re-evaluate Kennedy' role at HHS, saying that "pushing out one of the most trusted leaders of the FDA to promote an anti-science agenda is a step too far for us."

Kennedy seems to have broken the promises he made to Sen. Bill Cassidy (R-La.) in exchange for Cassidy's confirmation vote, wrote Cantor analysts Josh Schimmer and Eric Schmidt. "This violation of trust and his disruptive, destructive and chaotic decision-making will have far-reaching consequences."

Rod Lamkey, Jr./AP

The issues at stake are more than just about biotech stocks; "this is much bigger than that," they said. "This has everything to do with keeping lives out of jeopardy."

They ended the note saying: "As impartial analysts who scrutinize an industry that is bringing transformational products to patients in need, we are proud to have people like Peter Marks at the FDA... We are not proud to have RFK Jr. at HHS."

Howard Lutnick, the longtime CEO and chairman of Cantor Fitzgerald, happens to be President Trump's commerce secretary.

infectious disease

Trump cuts threaten rollout of Gilead's PrEP drug

The Trump administration's enormous cuts to PEPFAR, the global AIDS relief program, threaten to upend the planned rollout of Gilead's HIV prevention drug that was expected to save countless lives.

Gilead has shown in trials that its medicine, called lenacapavir, dosed just once every six months could provide virtually complete protection against infection. The drug, which is under regulatory review, has raised hopes that the deadly infectious disease can be mitigated around the globe. Early data for an even newer formulation suggest it might need to be given only once a year.

PEPFAR has been poised to play the leading role in making lenacapavir available, given its experience distributing HIV prevention drugs around most of the world.

Read more from STAT's Ed Silverman and Jason Mast.

biotech

The biggest stock-moving events to watch this quarter

If you can believe it, we're already in April. My colleague Adam Feuerstein has again compiled his list of the biggest events to watch this quarter.

Pay attention to FDA-drug sponsor meetings and FDA decisions as potential signals that the agency's operations are being impacted by changes made by the Trump administration. For example, the FDA has a deadline to decide on Novavax's Covid-19 vaccine by late April and Moderna's next-generation Covid-19's Covid-19 vaccine by late May.

We'll also continue to get big data readouts. At the American Diabetes Association meeting in late June, Amgen will present full results of the Phase 2 trial of its experimental obesity drug MariTide, while Novo Nordisk will publish detailed Phase 3 data of its next-gen obesity treatment CagriSema.

science

NIH turmoil continues to roil scientific initiatives

Two weeks ago, we reported that Eric Green, the longtime director of the National Human Genome Research Institute at the NIH, abruptly left his role. My colleague Jason Mast now reports that Vence Bonham, who was supposed to lead the institute as the NIH searched for a successor, has been "unexpectedly" placed on administrative leave.

It's unclear who is now running the institute, which was working on projects aiming to help diagnose and treat genetic diseases across broad swaths of the population. Read more here.

My colleagues also report that the NIH's BRAIN initiative, an ambitious project that's been likened to a Human Genome Project for the brain, faces an uncertain future after consecutive years of big funding cuts. Read more from STAT's Jonathan Wosen and O. Rose Broderick.

Regulation

FDA's plan to regulate lab-developed tests squashed

A federal judge yesterday struck down the FDA's plan to regulate lab-developed tests, ruling in favor of lab trade groups that said the agency was overstepping its bounds.

The FDA has always believed it has the power to regulate lab-developed tests as medical devices, but it has not exercised that authority historically. It was only under President Biden that the agency announced its plans to actively regulate the tests.

Before President Trump took office, experts speculated that his administration might try to roll back the rule anyway given Trump's deregulatory bent. But the U.S. Department of Justice attorney assigned to the Texas case robustly defended the rule, indicating that the Trump administration was willing to stand by it. The government may still appeal the case.