By Christy Santhosh
May 13 (Reuters) – U.S. Food and Drug Administration Commissioner Dr. Marty Makary’s departure comes as a positive move after a period of turmoil in the biotech sector, but until a permanent replacement is found, the industry could be under pressure, analysts and investors said.
U.S. President Donald Trump said on Tuesday the FDA chief would exit after weeks of pressure from powerful Republicans and anti-abortion groups, over a series of controversial agency ​decisions on drug approvals.
The Nasdaq biotechnology index closed up 1% on Tuesday.
Trump has also said that Deputy Commissioner for Food Kyle Diamantas will lead the agency in an acting capacity.
Reuters reported on Friday that former FDA Commissioner Steve Hahn and former acting commissioner and Assistant Health Secretary Brett Giroir were under consideration for the permanent job, among others.
“If the next commissioner is perceived as ideological, rather than technocratic, biotech volatility could extend materially,” said Patrice Mesnier, founding partner of investment firm Oldenburg Capital Partners.
“The market will react less to the individual name than to what the appointment signals about the future direction of the FDA,” he said.
CRITICIZED OVER DRUG DECISIONS
Makary was criticized for actions, including his public disagreements with drugmakers such as Replimune, Sarepta and Moderna, over the reviews of potentially lifesaving medicines and vaccines from the companies.
The departure was likely to trigger an initial “positive knee-jerk reaction” from investors, given perceptions that the FDA chief was not “industry-friendly” after he criticized the clinical dataset Dutch gene therapy developer uniQure submitted for its Huntington’s disease treatment, Truist analysts said.
The analysts said the resignation adds to an already unsettled FDA, where the two top positions for drug oversight are currently held by acting heads, who must be replaced.
A prolonged leadership vacuum would likely mean “more delays and unpredictability” at the FDA, reducing the agency’s ability to offer guidance and make credible policy commitments, said Truist analysts.
LACK OF STEADY LEADERSHIP
RBC Capital Markets analyst Brian Abrahams said the continued lack of steady leadership challenges “investability across the biopharma ecosystem.”
Makary’s exit might benefit companies such as uniQure and Replimune, which have been in public spats with the agency, but it also renews uncertainty at a time when biopharma had been performing relatively well, Abrahams said.
Shares of uniQure rose 5%, while those of Replimune jumped nearly 10% at market close on Tuesday. Replimune is on track for a second straight day of gains as the stock rose about 28% during afternoon trading on Wednesday.
Abrahams also added that Makary had at least provided nominal stability at the top of the agency with some pro-industry programs to help expedite drug development and struck a mostly appropriate balance between forward-thinking and scientifically defensible.
(Reporting by Christy Santhosh, writing by Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli)
