Trump health policy uncertainty sends biotech sector into deeper slump
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US Health Secretary Robert F Kennedy Jr. visits the Osher Center for Integrative Health at the University of Utah in Salt Lake City, Utah, U.S. April 7, 2025. —Reuters
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LONDON: Federal health agencies have already suffered a long -term downturn through a biootec industry in the Trump administration, and raised concerns that they will have a difficult time to approve the product, investors, company executives and analysts.
These sources told Reuters that large -scale firing in the US Food and Drug Administration is especially a threat to small and mid -cap biotic companies, which have advanced treatment in clinical trials but have no products to keep them faster in the market.
Some of them said that President Donald Trump’s directive from national health institutions to freeze grant funds could also discourage future capabilities and resources to go to the biotech sector.
The S&P biotech ETF Index targeted the lowest level in 18 months last week and is trading at less than its 2021 peak. This year it is about 20 % lower. According to Jeffrez analysts, the small and mid -cap biotic companies entered is trading at cash or less, which does not cost the market its current business or drug development pipeline.
“A prediction is needed to work in this sector, a science -led regulator,” said London Thomson, senior fund manager of the asset manager, London Thomson, “said London Thomson, a senior fund manager at Candreum.
Thomson added, “Future cash flows that are used to value stock, in biotechnology, are based on US trading sales in large parts. If you do not have the approval, you do not have a future price.” US Health Secretary Robert F. Kennedy Jr. says the holidays that began last week are needed to smooth the country’s health bureaucracy and will improve the work of the agencies. But deposing the power of top scientists in the FDA and other institutions has raised questions about how they will fulfill their missions.
According to a letter from the Congress company’s executives and investors this week, Biotic has been delayed in schedule meetings and received comments from receiving feedback from the FDA that guide drug development. The letter states, “Many people are concerned that the deadline for the approval decision will be lost.”
“The great view is that the regulatory agency is bad, though we have not yet seen the results since the holidays and the firing,” said Paul Aryano, an associate portfolio manager of Thornburg Investment Management. “Emotions are bad and there is little explanation on the factors that can provide more hope,” he said.
‘Dangerous Time’
Many Trump’s executive orders are withheld from NIH. Initial -stage research, which NIH has traditionally helped to advance the formation of biotech startups, some of which developed with major pharmaceutical companies or produce important medicines themselves.
“This is a dangerous time for small and mid -cap biotic companies,” said Tim Opler, a Managing Director of the Steplie Investment Bank’s World Healthcare Group, and will have the failure to develop new drugs and treatments in the coming years. “
Shares of biotech firms have been facing pressure since the rise of investment during the Provide 19 pandemic diseases, which is due to high interest rates. He further denied after Trump took office in January, and after the resignation of senior FDA scientist Peter Marx, the self deepened, led by the FDA Center, which organizes vaccine and biological treatment.
“Everyone is surprised that the FDA means losing this champion for high -speed regulatory approval for modern treatment,” said Naval Ozrin, CEO of French company Censorian.
Investors say the market is looking at every FDA’s decision about new drug products as its barometer whether it is usually operating. The agency recently deprived the deadline of a decision on an alleged vaccine from Novaks, but gave green light to the syringe version of the already -filled immune disease medicine.
The climate of uncertainty has left the biotech unable to reach public capital. According to LSEG data, biotech companies have raised $ 4.2 billion this year, compared to $ 11.1 billion in the same period last year.
