Regulatory Shifts and Clinical Milestones Shape Biopharma's Second Half of 2025

The pharmaceutical industry faces a landscape of significant regulatory changes and eagerly anticipated clinical readouts as it enters the latter half of 2025. With the Department of Health and Human Services undergoing substantial reorganization under new leadership, biopharma companies are navigating policy headwinds while pushing forward with key drug development programs in obesity, rare genetic diseases, and other therapeutic areas.

Regulatory Upheaval Impacts Drug Development Timeline

The first half of 2025 saw major policy shifts within the Department of Health and Human Services, led by newly appointed Secretary Robert F. Kennedy Jr. Steep budget cuts to the FDA, CDC, and National Institutes of Health have resulted in delays to drug decision dates and raised concerns about the development of novel treatments, particularly in areas such as HIV.

In a controversial move, Kennedy reconstituted the CDC's Advisory Committee on Immunization Practices with fewer members, many of whom are skeptical of vaccines. This shake-up has left the industry uncertain about the regulatory landscape, especially for rare diseases and gene therapies.

Despite these challenges, the biopharma sector has achieved notable successes. In June, the FDA approved Gilead's Yeztugo, a twice-yearly pre-exposure prophylactic therapy for HIV prevention, which analysts at Mizuho believe could "redefine the PrEP market."

Obesity and Rare Disease Treatments Take Center Stage

As the industry moves into the second half of the year, obesity treatments and therapies for rare genetic disorders remain key focus areas. Eli Lilly is poised to report topline data from the Phase III ATTAIN trial for its oral GLP-1 agonist orforglipron in the third quarter. The trial aims to evaluate the drug's weight loss potential in adults with obesity or overweight individuals with weight-related comorbidities.

Expectations for orforglipron are high following promising results from a type 2 diabetes study, which demonstrated a 1.5% decrease in blood glucose levels and a 7.9% reduction in body weight at 40 weeks. However, some analysts have raised concerns about the persistence of gastrointestinal adverse events beyond the titration period.

In the rare disease space, the FDA is expected to make decisions on two treatments for Hunter syndrome. Regenxbio's gene therapy clemidsogene lanparvovec is under review with a decision expected by November 9, while Denali Therapeutics' enzyme replacement therapy tividenofusp alfa has a target action date of January 5, 2026.

Emerging Therapies in Neuroscience and Immunology

Atai Life Sciences is preparing for a Phase IIb readout of its neuromodulator RL-007 for cognitive impairment associated with schizophrenia in the third quarter. The company has investigated RL-007 in over 500 patients, with earlier studies showing reproducible benefits to patient cognition and a favorable safety profile.

Meanwhile, Nektar Therapeutics anticipates Phase IIb data for its T cell stimulator rezpegaldesleukin (rezpeg) in the fourth quarter. The study focuses on patients with severe to very severe alopecia areata who have not been previously treated with JAK inhibitors or other biologics. Nektar is also exploring rezpeg's potential in type 1 diabetes and atopic dermatitis, with recent atopic dermatitis data receiving mixed reactions from analysts.

As the pharmaceutical industry navigates these regulatory changes and awaits critical clinical results, the coming months promise to be a pivotal period for drug development and market dynamics across multiple therapeutic areas.