Investing.com -- Shares of several biotech companies experienced significant declines in Tuesday’s trading session following the announcement of Dr. Vinay Prasad as the new director of the Center for Biologics Evaluation and Research (CBER) at the FDA. Modernal stock fell 12%, Sarepta Therapeutics (NASDAQ:SRPT) shares dropped 25%, Capricor Therapeutics (NASDAQ:CAPR) plummeted 24%, and Arcellx declined by 16%.
The appointment of Prasad, known for his critical views on the Covid-19 vaccine for children and the broader drug approval process, has raised concerns within the biotech industry. Prasad, a hematologist oncologist, joins the FDA from the University of California at San Francisco and has a background with the National Cancer Institute and the National Institutes of Health.
The market’s negative response is attributed to Prasad’s past comments and positions on regulatory matters.
This leadership change at the FDA comes after a period of significant shifts under the Trump administration, which aimed to reorganize and reduce the federal workforce. Prasad succeeds Peter Marks, who left in March after conflicting viewpoints with US health secretary Robert F. Kennedy Jr., a known vaccine skeptic.
Prasad has been vocal in his criticism of some of Marks’s decisions at the FDA, including overruling review teams to expedite drug approvals. His public statements on social media and his YouTube channel have suggested skepticism about media coverage of Covid-19 and opposition to mandating Covid-19 vaccines in schools.
The biotech sector is closely watching the developments at the FDA, as Prasad’s approach to vaccine and drug approvals could significantly impact the industry. The news has clearly unsettled investors, leading to a broad sell-off in stocks of companies involved in vaccine and immunotherapy development.