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Investing.com -- Shares of prominent U.S. drugmakers and biotech firms, including Moderna Inc (BMV:MRNA) (NASDAQ:MRNA), Novavax Inc (NASDAQ:NVAX), and Sarepta Therapeutics (NASDAQ:SRPT), experienced sharp declines on Monday. The sell-off was triggered by a Wall Street Journal report that the Food and Drug Administration’s (FDA) top vaccine official, Peter Marks, was ousted, signaling a significant shakeup at the health regulator.
Dr. Peter Marks, who has been with the FDA since 2012 and has led its division overseeing vaccines, biotech drugs, and blood products since 2016, played a crucial role in the Trump administration’s Operation Warp Speed to develop Covid-19 vaccines. Marks resigned on Friday after being presented with the option to either resign or be dismissed by a Health and Human Services (HHS) official. In his resignation letter, Marks criticized the lack of transparency and truth desired by HHS Secretary Robert F. Kennedy Jr., expressing concern over the spread of misinformation and lies.
The news sent shockwaves through the biotech sector, with companies like Solid Biosciences (NASDAQ:SLDB) and Taysha Gene Therapies Inc (NASDAQ:TSHA) seeing their shares plummet by 15.4% and 22.3%, respectively. Other affected firms include Rocket Pharmaceuticals Inc (NASDAQ:RCKT), Neurogene Inc (NASDAQ:NGEN), Beam Therapeutics Inc (NASDAQ:BEAM), Intellia Therapeutics Inc (NASDAQ:NTLA), Crispr Therapeutics AG (NASDAQ:CRSP), Verve Therapeutics Inc (NASDAQ:VERV), Prime Medicine (NASDAQ:PRME), Precision BioSciences Inc (NASDAQ:DTIL), and 4D Molecular Therapeutics Inc (NASDAQ:FDMT), all experiencing a decline between 4-15%.
BMO Capital Markets analyst Evan Seigerman commented on the situation, stating, "Marks’ resignation as a significant negative for the BioPharma and Biotech sectors, as FDA’s independence rooted in sound scientific rigor is critical for their efficient functioning." This sentiment has been echoed across the market, as investors worry about the potential implications for the regulatory landscape and the expedited development processes established during the pandemic.
The broader concern is that the departure of a key figure like Marks could signal changes in the FDA’s approach to vaccine and drug approvals, potentially affecting the speed and efficiency that have been critical in responding to health crises like the Covid-19 pandemic. The immediate market reaction reflects the industry’s reliance on a stable and predictable regulatory environment to maintain investor confidence and continue advancing medical innovations.
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