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Shares of biotech companies endured volatile trading on Monday following the surprise return of a top US drug regulator who left in July after rightwing influencer Laura Loomer led a campaign to oust him.
The US Food and Drug Administration said over the weekend it had reinstated Vinay Prasad to his role overseeing the agency’s division for vaccines and a host of other medicines.
The U-turn caught the market off guard, with analysts warning Prasad’s return may undermine consistency in how his division approves drugs and adds a “new twist” to leadership turmoil within the FDA. It also suggests health secretary Robert F Kennedy Jr and the regulator’s commissioner Marty Makary were willing to test political blowback to bring back an ally.
Prasad, a critic of the mask mandates and quarantines that comprised the US’s response to the Covid-19 pandemic, left the FDA in late July after social media attacks from conservatives including Loomer and former senator Rick Santorum over the agency’s handling of a gene therapy drug made by Sarepta Therapeutics.
Sarepta shares dropped as much as 5.2 per cent on Monday amid volatile trading, while those of Replimune — another gene therapy group — fell as much as 15.1 per cent. Replimune has a drug pending approval before the FDA division Prasad oversees. The declines eroded some of the gains the stocks experienced following his departure.
Analysts had hoped Prasad’s exit would bring more consistency to drug approvals at his division, the FDA’s Center for Biologics Evaluation and Research. The division has approved 10 drugs this year, down from 15 at this point in 2024 and 16 in 2023, agency data show.
“The FDA leadership turmoil amid the Prasad saga raises the question: how politically vs scientifically driven is the agency today?” Jefferies, an investment bank, said in a note published on Sunday. “The FDA has experienced significant turmoil with the dramatic overturn for Sarepta, abrupt Vinay Prasad leaving and a new twist just added with Prasad being reinstated.”
In July, the FDA asked Sarepta to halt its gene therapy for Duchenne muscular dystrophy, after three deaths potentially related to the company’s treatment. Days later, following criticism including from Loomer and Santorum, the FDA said Sarepta could resume shipments for the medicine. Soon after, Prasad left the FDA.
“Prasad, the leftist saboteur undermining Trump’s FDA, must be fired now!” Loomer said on X last month.
Santorum, a former senator from Pennsylvania who has a daughter with special needs, advocated for Sarepta’s Duchenne FDA approval in 2016 and continued to support the company in July.
Owing to what they described as the “recent rapidly changing” leadership situation within the FDA, Jefferies analysts said “this headline will likely be taken with caution on how long, if at all, Prasad will actually be staying”.
The health department confirmed Prasad’s return, adding, “neither the White House nor [Health and Human Services] will allow the fake news media to distract from the critical work the FDA is carrying out under the Trump administration”.
Replimune did not respond to request for comment. Sarepta said it will continue to work with the FDA as usual.
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