Biotech Stocks Fall After Top FDA Official Quits Over Clash With RFK Jr.

Shares of popular vaccine and gene therapy makers took a beating on Monday following the resignation of a key FDA official, Dr. Peter Marks.

Why Did Peter Marks Quit?

In his resignation letter posted by the New York Times, Marks called out the newly appointed Health and Human Services (“HHS”) Secretary Robert F. Kennedy Jr. — a well-known vaccine skeptic — for promoting ‘misinformation and lies’ about the safety of FDA-approved vaccines.

Marks expressed strong concerns about efforts to undermine vaccine safety. He warned about the rising hesitancy toward vaccines and their consequences, citing the recent measles outbreak as an example of what happens when trust in vaccines is eroded.

Per some third-party reports, Marks’ decision came after he was given a choice to either resign or face termination.

Stocks That Fell Following the News

Following the above announcement, vaccine makers were significantly affected by the news. Shares of Moderna MRNA were down about 9% on Monday while those of Novavax NVAX lost over 8%. Moderna and Novavax are among the handful of companies that market a COVID-19 vaccine.

Among vaccine stocks, clinical-stage biotech Vaxcyte PCVX suffered the largest decline, with its shares plummeting nearly 46%. The fall in PCVX shares was further amplified by mixed results from a mid-stage study on its pneumococcal vaccine in infants.

Stocks in the gene therapy space were also negatively impacted. Shares of Sarepta Therapeutics SRPT lost more than 9% while those of CRISPR Therapeutics CRSP declined 8%. Both companies have an FDA-approved gene therapy in their portfolio. Sarepta markets Elevidys for a rare genetic disorder called Duchenne muscular dystrophy, while CRISPR’s Casgevy is approved for sickle cell disease and thalassemia.

Why is the Market Concerned About Marks’ Exit?

Dr. Marks, who headed the FDA’s Center for Biologics Evaluation and Research (“CBER”), has been a strong advocate for faster approval of vaccines and gene therapies. During his tenure, he was responsible for approving 22 gene therapies and played a major role in Operation Warp Speed, the initiative that accelerated the development of the COVID-19 vaccine.

The departure of a leading authority like Peter Marks, who has been a driving force behind regulatory efficiency in biotech innovation, has sparked concerns about the future pace of critical drug approvals. As a key figure in overseeing the rollout of COVID-19 vaccines and shaping regulatory pathways for cell and gene therapies, his exit raises questions about the FDA’s ability to maintain its momentum in advancing innovative treatments.

Some Wall Street analysts worry that his absence could weaken the FDA’s role in ensuring timely access to safe and effective therapies, potentially adding to the challenges already facing the biotech sector.

Zacks Rank

CRISPR Therapeutics, Moderna, Novavax, Sarepta Therapeutics and Vaxcyte carry a Zacks Rank #3 (Hold) each at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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