Whiplash from Trump's tariff pause

A week after President Trump instituted broad tariffs on imports during his "Liberation Day," he abruptly announced yesterday that he would pause those tariffs for 90 days.

Stocks immediately shot up on the announcement. The XBI, which at one point during the morning was down 4%, made a sharp reversal, closing out the day up 7%.

How long will this positive sentiment last, though? Investors still face great uncertainty with what Trump will do next on trade policy. The president also recently said that he'll soon announce "a major tariff on pharmaceuticals," after pharma products were spared in his earlier round.

Catch up on my colleague Adam Feuerstein's latest thoughts on the biotech market here.

policy

The closure of an FDA office will impact generic drug approvals

Among all the recent cuts the Trump administration has made to the FDA, a little-known office that's central to the process of approving generic drugs was eliminated: the Division of Policy Development in the Office of Generic Drug Policy.

My colleague Ed Silverman spoke with Kurt Karst, a lawyer specialized in regulatory law, about the impact of this.

Created more than a decade ago, this office explained to generic drug manufacturers what kinds of studies they would need to conduct and information they would need to provide to establish equivalence with brand name drugs, Karst said.

Over time, Karst sees delays in submissions and approvals of generic drugs, which means that Americans would have to pay higher drug prices overall.

CANCER

Immunotherapy pioneer joins Parker Institute

From my colleague Matthew Herper: Billionaire Sean Parker's cancer institute has a new scientific director: Ira Melman, who unceremoniously departed Genentech in December after 17 years at the drugmaker.

"This is the major repository of scientific innovation and excellence and drive in the entire field of cancer immunity and cancer immunotherapy," Melman said of the Parker Institute for Cancer Immunotherapy. "I have been in this field for a long time, and all of my best colleagues and most respected friends and individuals were already here."

Melman will serve as president of research; the institute, referred to as PICI, also recently added a new CEO, Karen Knudsen, who previously ran the American Cancer Society. Melman, who while at Genentech played a key role in the development of the cancer drug Tecentriq, said the decision to join was cemented by meetings with Parker.

He said that he and his colleagues are "simultaneously depressed and angry" about the cuts to science funding by the Trump administration, and said he and his new colleagues feel "a moral obligation to succeed" at using Parker's philanthropy to create a sustainable new model for funding science.

GLP-1

WeightWatchers is on the brink of bankruptcy

WeightWatchers is preparing to file for bankruptcy in the coming months, the Wall Street Journal reported.

This comes after the company has gone through a series of major pivots over the past few years with the advent of GLP-1 drugs. WeightWatchers traditionally focused on helping consumers lose weight through lifestyle interventions, but as Novo Nordisk's Ozempic and Wegovy grew more popular, WeightWatchers acquired a telehealth service that prescribes GLP-1 treatments. It soon then began offering compounded GLP-1 drugs.

The company has faced growing competition, though, from dozens of other telehealth sites offering branded and compounded GLP-1 treatments. The business of prescribing compounded GLP-1 drugs is also threatened now, since the branded versions are no longer in shortage and pharmacies are no longer legally allowed to make copies.

venture

Is now a good time to create a biotech company?

The first quarter of this year saw the lowest level of new biotech creation in the U.S. for at least a decade, Bruce Booth, partner at Atlas Venture, pointed out in a blog post this week, citing data from PitchBook.

There's been a downward trend of fewer and fewer biotech companies being formed every quarter since the start of 2021, when the XBI also hit its peak, Booth wrote.

What does this all mean? He argues that now is a "great time" to start a biotech company, since there are fewer biotechs competing for financing and resources.

It's unclear how much appetite investors will have to invest in new startups, though. Booth argues that investor demand will return and venture firms are sitting on a lot of dry powder. But even before the recent uncertainties in markets and the economic state of the country, investors were already taking a more conservative approach to funding startups, concentrating more of their investments in fewer companies.

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