Recently a major FDA official Peter Marks announced his resignation, heavily impacting biotech stocks such as Moderna. Wall Street is currently stressing about the future of biopharmaceutical companies and the industry as a whole.
Moderna Stock Falls
Marks played a significant role in the FDA for biopharma companies, as the director of the Center for Biologics Evaluation and Research (CBER), which is within the FDA. Marks played a large role in the FDA approving the COVID vaccines and other more recent vaccines. With Marks leaving the organization, vaccine stocks and companies such as Moderna fell more than 10% on Monday March 31st. Marks released a resignation letter highlighting many potential concerns for the future.
Marks and supporters of his work are concerned about potential anti-vaccine beliefs of Health and Human Services Secretary Robert F. Kennedy Jr.. Marks also worries that FDA head Marty Makary may not stand up for what Marks believes to be right. Marks said “Efforts currently being advanced by some on the adverse health effects of vaccination are concerning”, and that “undermining confidence in well-established vaccines … is irresponsible, detrimental to public health, and a clear danger to our nation’s health, safety, and security.”
What are the Experts saying?
Moderna isn’t alone with decreasing stock valuation. Many other vaccine biotech stocks decreased. Novavax decreased about 8%, BioNTech decreased 7%, and Vaxcyte fell a whopping 54%. This decrease certainly has Wall Street Concerned. Michael Yee, analyst at Jefferies, said “This was always a risk given [Marks] leadership in Operation Warp Speed.” Yee noted that “we now see heightened risk to rare disease [companies]” due to many having “traded down >20% YTD given heightened fears about [Marks] leaving and the future of FDA regulatory flexibility.”
David Risinger, analyst at Leerink Partners, is also concerned about the economic impact. Risinger said “We believe that higher-multiple biopharma stocks are at greater risk than lower-multiple stocks to potential downward pressure.” He also noted that “emerging therapeutic modalities… are particularly exposed to FDA disruption risks, given the need for support of science-based novel product development, and their inclusion under CBER authority.”
Jard Holz, analyst at Mizuho, however, believes that time will tell how negative the impact will be. Holz said while “Many believe the Marks resignation is a very bad omen for the Healthcare industry and innovation at large, it may be a bit premature to cast too dark of a shadow on the entirety of Pharma and Biotech.”
