Leadership Turmoil at FDA Adds to Difficult Stretch for Biotech Investors

Leadership changes at the FDA and other federal health agencies have complicated decision making for biotech investors. (Sarah Silbiger/Getty Images)

The unexpected return of a senior official who had recently left the Food and Drug Administration is the latest surprise in a volatile stretch for the country’s top drug regulator and its parent, the Department of Health and Human Services.

For drugmakers, the leadership changes are complicating decisions about drugs. For markets, the uncertainty has complicated investing.

Dr. Vinay Prasad, leader of the FDA division responsible for approving vaccines and other complex medicines, departed the FDA in late July. He had come under intense criticism from conservative media and the right-wing activist Laura Loomer.

At the time, a spokesman for the U.S. Department of Health and Human Services, which oversees the FDA, said that Prasad “did not want to be a distraction,” and had “decided to return to California and spend more time with his family.”

Two weeks later, Prasad is back.

“At the FDA’s request, Dr. Vinay Prasad is resuming leadership of the Center for Biologics Evaluation and Research,” HHS communications director Andrew Nixon told Barron’s in a statement Monday.

Prasad’s return was first reported Saturday by Endpoints News, a biotech industry news site.

Prasad, a hematologist-oncologist, is close to the FDA commissioner, Dr. Marty Makary. He was hired to replace Dr. Peter Marks, a longtime favorite of the biotech industry, who left the agency in March.

In recent months, Prasad had begun to win support from the biotech sector, setting a high but predictable bar for certain new approvals. His return was initially applauded by investors Monday, with the SPDR S&P Biotech ETF opening higher, before slipping in afternoon trading.

Prasad didn’t respond to attempts to reach him through HHS or via social media.

Some analysts are optimistic about Prasad’s return. “With the FDA appearing to be more politicized in 2025, we wonder if Dr. Prasad will be more sensitive to outside perception going forward by being more mindful/careful with his actions, or if he will simply disregard politics and media opinions,” Jefferies analyst Andrew Tsai wrote in a Sunday note. “We lean towards the latter scenario.”

Prasad’s initial departure came amid a tense debate over regulatory decisions regarding a gene therapy called Elevidys made by Sarepta Therapeutics . Shipments of the drug, which treats a genetic condition called Duchenne muscular dystrophy, were stopped in July under Prasad. Just over a week later, the FDA reversed its position, saying Sarepta should continue shipping the drug to certain patients. Prasad left shortly after the reversal.

Biotech investors have had to deal with a continuous stretch of upheaval in 2025. Last week, U.S. Health Secretary Robert F. Kennedy Jr., ordered the Biomedical Advanced Research and Development Authority, or BARDA, to stop funding mRNA-based vaccines, a decision that could have implications across the biotech ecosystem.

Since President Donald Trump’s inauguration in January, there have also been disruptions to National Institutes of Health funding, layoffs across the federal health bureaucracy, and changes to the makeup of the committee that sets vaccine policy for the U.S.

The biotech ETF is down 5.5% this year versus an 8.7% gain for the S&P 500.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com