Shares of biotechnology stocks such as Recursion Pharmaceuticals (NASDAQ: RXRX), Summit Therapeutics (NASDAQ: SMMT), and CRISPR Therapeutics AG (NASDAQ: CRSP) plunged on Monday, down 9.4%, 5.6%, and 9.2%, respectively, as of 12:55 p.m. ET.
All three companies are early-stage biotechnology companies working on next-generation therapeutics with advanced technologies. However, that means none of these companies actually makes much revenue today, let alone profit.
So not only were these stocks slammed by the risk-off mentality in the markets ahead of tariffs coming on April 2, but a key resignation at the Federal Drug Administration (FDA) over the weekend raised questions about the speed and willingness of the agency to approve new drug technologies going forward. The double whammy sent these stocks down much more than the market today.
Over the weekend, Dr. Peter Marks, who headed the FDA’s Center for Biologics Evaluation and Research, as well as its vaccine division, resigned in protest. Of note, Dr. Marks was instrumental in “Operation Warp Speed” during President Trump’s first term, which sped up the development and approval of the COVID-19 vaccine. But with the appointment of vaccine skeptic Robert F. Kennedy Jr. as Secretary of Health and Human Services, it appears Trump 2.0 will take a different path forward regarding the FDA.
In his resignation letter to FDA Commissioner Sara Brenner over the weekend, Dr. Marks wrote:
I was willing to work to address the Secretary’s concerns regarding vaccine safety and transparency by hearing from the public and implementing a variety of different public meetings and engagements with the National Academy of Sciences, Engineering, and Medicine. However, it has become clear that truth and transparency are not desired by the Secretary, but rather he wishes subservient confirmation of his misinformation and lies. My hope is that during the coming years, the unprecedented assault on scientific truth that has adversely impacted public health in our nation comes to an end so that the citizens of our country can fully benefit from the breadth of advances in medical science.
In an interview on CNBC this morning, former FDA Commissioner Scott Gottlieb cited other reporting that Dr. Marks had been forced to resign by Kennedy, or be fired.
Both Marks’ letter and Gottlieb’s interview stressed Marks’ role in the creation of more modern approval processes for new gene therapies, which was as consequential — if not more so — than his presiding over the nation’s vaccine approval process. During Marks’ tenure, the FDA approved 22 gene therapies, including new treatments across a range of diseases such as inherited blindness, sickle cell anemia, and child leukemia, among many others. Overall, Marks had been an advocate for newer, more flexible approval processes for new drugs, especially orphan diseases. Therefore, with his departure, it’s possible the approval process for therapies with newer technologies could be slowed down.
