Biotech Stocks Slide After FDA Selects Prasad to Lead CBER

The biotech sector reacted sharply to the news of Prasad’s appointment. | Image Credit: syahrir - stock.adobe.com

The FDA’s Center for Biologics Evaluation and Research (CBER) will have a new director, as Vinay Prasad, MD, MPH, will fill the role following the resignation of Peter Marks, MD, PhD, 5 weeks ago.¹ The leadership change was reported widely on Tuesday, following an announcement made by FDA Commissioner Marty Makary, MD, MPH, via X.

In the post, Makary underscored Prasad’s reputation for scientific rigor, intellectual honesty, and independence from industry pressure, emphasizing that these qualities make him well suited to lead the agency’s biologics division.

The biotech sector reacted sharply to the news, as the XBI biotech exchange-traded fund fell by more than 6% on the day the announcement was made, according to STAT.² Gene and cell therapy companies, in particular, experienced dramatic losses, with several stocks plunging by as much as 30%. Concerns among investors and stakeholders with Prasad's expected leadership include his history of publicly criticizing high-profile FDA decisions, which has fueled fears of heightened regulatory scrutiny and more stringent approval processes.

Days before the CBER decision, HHS Secretary Robert F. Kennedy Jr announced a policy requiring all new vaccines to be tested in placebo-controlled trials before approval. Makary has expressed the FDA’s commitment to addressing the “epidemic of distrust” toward the agency, and stated that as director, Prasad will move CBER “a significant step forward.”^1,3

Still, experts warn that the new vaccine requirement could significantly slow the approval process for immunizations, which could especially hinder the timely deployment of essential public health tools. This policy shift, combined with the appointment of Prasad, appears to have widened the gap between federal regulators and key industry stakeholders. Many in the biotech and pharmaceutical communities remain concerned about how these changes will impact innovation and development pipelines moving forward.

Prasad has not been afraid to call out conflicts of interest as he sees them or speak against the FDA’s decisions.⁴ He has voiced criticism of the use of surrogate end points, expressed skepticism about the accelerated approval pathway, and questioned the agency’s decisions on high-profile products like Biogen's Alzheimer drug aducanumab (Aduhelm) and Sarepta’s Duchenne muscular dystrophy gene therapy delandistrogene moxeparvovec-rokl (Elevidys).

The former academic oncologist has cultivated a wide following for his contrarian views on the medical establishment. He has built a strong online presence through social media, Substack, and podcasting platforms. As controversy mounted around the Trump administration’s plan to cut funding across health agencies and academic research, he posted profusely defending the reduction in force and the current government’s authority over academic research practices.

Prasad’s imminent arrival in the FDA has prompted contrasting responses. Makary expressed confidence in the new director's ability to move CBER forward, aligning with his larger agenda to rebuild trust and transparency toward regulatory institutions. Meanwhile, stakeholders across health care and biotech industries anticipate changes with implications for drug approvals, regulatory policy, and public health strategies in the years ahead.

References

1. McKenzie H. Biotech stocks fall after FDA names Vinay Prasad to succeed Marks at CBER. BioSpace. May 6, 2025. Accessed May 7, 2025. https://www.biospace.com/fda/biotech-stocks-fall-after-fda-names-vinay-prasad-to-succeed-marks-at-cber

2. Chen E. Biotech stocks fall on Vinay Prasad news. STAT. May 7, 2025. Accessed May 7, 2025. https://www.statnews.com/2025/05/07/biotech-news-marea-novo-nordisk-inductive-bio-janssen-merck-met-gala-the-readout/

3. McKenzie H. HHS to require placebo-controlled trials for all new vaccines in ‘radical departure’ from past. BioSpace. May 1, 2025. Accessed May 7, 2025. https://www.biospace.com/policy/hhs-to-require-placebo-controlled-trials-for-all-new-vaccines-in-radical-departure-from-past

4. STAT staff. Vinay Prasad, in his own words, outlines the philosophy he’ll bring to the FDA. STAT. May 6, 2025. Accessed May 7, 2025. https://www.statnews.com/2025/05/06/vinay-prasad-fda-vaccine-regulator-analysis-of-previous-contrarian-comments-covid-autism-mmr-shots/