Biotech shares experienced sharp fluctuations on Monday following the unexpected return of Vinay Prasad, a senior US Food and Drug Administration (FDA) official who had resigned in July after a politically charged campaign against him.
The FDA confirmed over the weekend that Prasad would resume his position overseeing the agency’s Division for Vaccines and other key medicines within the Center for Biologics Evaluation and Research (CBER). His reinstatement, seen as a surprising reversal, has raised concerns among market analysts about leadership stability and consistency in drug approval processes.
The move comes despite recent political tension, with health secretary Robert F. Kennedy Jr. and FDA commissioner Marty Makary apparently willing to face potential backlash to reinstate Prasad, who has been critical of mask mandates and quarantine measures during the Covid-19 pandemic.
Prasad’s July departure followed public criticism from right-wing figures, including influencer Laura Loomer and former senator Rick Santorum, over the FDA’s handling of a gene therapy developed by Sarepta Therapeutics. Sarepta shares fell by as much as 5.2% on Monday, while Replimune — another gene therapy developer with a pending application before Prasad’s division — dropped up to 15.1%. Both declines erased gains made after his resignation.
Industry analysts had expected Prasad’s exit to improve consistency in drug approvals. So far in 2025, the division has approved 10 drugs, down from 15 by this time in 2024 and 16 in 2023.
The controversy stems from the FDA’s July decision to halt Sarepta’s Duchenne muscular dystrophy gene therapy following three patient deaths potentially linked to the treatment. Days later, and after political criticism, the agency allowed shipments to resume. Prasad left shortly afterward.
Jefferies, the investment bank, noted that the reinstatement adds “a new twist” to ongoing leadership instability at the FDA and could prompt caution among investors regarding how long Prasad will remain in the role.
The Department of Health and Human Services emphasized that “neither the White House nor HHS will allow the fake news media to distract from the critical work the FDA is carrying out under the Trump administration.”
Sarepta stated it would continue working with the FDA as usual, while Replimune declined to comment.
