FDA Leadership Change Rattles Gene and Cell Therapy Sectors

Prasad's Appointment Sparks Market Unease

The appointment of Vinay Prasad as the new head of the FDA's Center for Biologics Evaluation and Research (CBER) has sent shockwaves through the gene and cell therapy industries. Prasad, a vocal critic of his predecessor Peter Marks, is set to lead the office responsible for reviewing genetic medicines, introducing significant uncertainty to an already challenged field of research.

The announcement on Wednesday led to a sharp decline in stock prices for more than a dozen gene and cell therapy developers, with some companies experiencing double-digit percentage drops. Sarepta Therapeutics and UniQure saw their shares plummet by nearly 30%, while others like Verve Therapeutics, Rocket Pharmaceuticals, and Beam Therapeutics faced declines of almost 20%.

Contrasting Approaches to Regulation

Prasad's appointment marks a stark departure from the regulatory philosophy of Peter Marks, who resigned in March after nine years in the role. Marks was known for his flexible approach to reviewing gene and cell therapies, advocating for accelerated approval pathways, particularly for rare disease treatments. His tenure saw the clearance of several groundbreaking therapies, including the first gene therapy, the first cellular treatment for cancer, and the first CRISPR gene editing medicine.

In contrast, Prasad has been a persistent critic of what he perceives as "pro-pharma" decision-making at the FDA. He has openly opposed Marks' handling of COVID-19 vaccine reviews and approvals, and criticized the controversial decision to clear Sarepta Therapeutics' Duchenne muscular dystrophy treatment, Elevidys, against the recommendations of other FDA reviewers.

Industry Implications and Analyst Reactions

The change in leadership has introduced significant uncertainty into the gene and cell therapy sectors. Wall Street analysts are divided on the potential impacts of Prasad's appointment, with some expressing concern over the future of accelerated approval pathways for rare disease treatments.

Jefferies analyst Michael Yee noted that Prasad's views "seem to fly in the opposite barometer" of Marks', while William Blair analyst Matt Phipps called the announcement a "surprise" given its contrast to the initiatives laid out by FDA Commissioner Martin Makary.

Andrew Tsai of Jefferies suggested that while the FDA may still support accelerated approvals under Prasad's leadership, companies may need to "produce more supporting clinical evidence" and take "less 'shortcuts'." Brian Skorney of Baird added that it may become more challenging for companies to "avoid accountability" with confirmatory studies, and that withdrawing products from the market following failed trials could become more common.

As the industry grapples with this shift in regulatory leadership, the future of gene and cell therapy development remains uncertain, with many stakeholders closely watching for signals of Prasad's approach in his new role.