On the Paris Stock Exchange, the CAC40 index could have opened close to equilibrium this morning, buoyed by strong figures from Legrand and the solid performance of banking stocks. However, Sanofi's 3.3% drop has complicated matters. The laboratory is the fifth most influential company on the Paris index. Meanwhile, in Belgium, UCB and ArgenX have dragged the Bel20 down. In Switzerland, contract manufacturer Lonza, pharmaceutical giants Novartis and Roche, and ophthalmology specialist Alcon lost ground. Added to this are declines of 2% and 4% for AstraZeneca and GSK in London, along with slips for Merck KGaA and Sartorius AG in Frankfurt.

All these declines have the same cause: the arrival of Vinay Prasad to replace Peter Marks at the head of the Center for Biologics at the FDA, the US health agency. Marks resigned at the end of March, criticizing the behavior of the new strongman in US health, US Health Secretary Robert F. Kennedy Jr. On May 6, the FDA surprised everyone by appointing Vinay Prasad as head of the Center for Biologics Evaluation and Research (CBER). An oncologist and professor at the University of California, San Francisco, Prasad is best known for his outspoken views and fierce criticism of US health policy, particularly during the pandemic. His arrival marks an unexpected turn for the agency, which is still reeling from its controversial handling of Covid-19 vaccines. In this strategic position, he will be responsible for overseeing products such as vaccines and gene therapies.

Be careful not to make a caricature of Prasad

However, Prasad is not considered reactionary in the medical community. He is seen as cautious and meticulous about procedures. He openly opposes the fast-track approval mechanisms for certain therapies, which have flourished in recent years to the benefit of biotech companies that have made these exemptions their battle cry. The oncologist has also been vocal in his opposition to COVID vaccination for children, because the data available at the time was insufficient.

For the pharmaceutical industry as a whole, this appointment signals the beginning of a more restrictive regulatory environment. In any case, it will be more demanding and therefore more time-consuming. This explains the decline in companies in the sector. The decline is significant but moderate for the big labs and more pronounced for the ambitious start-ups, for whom delays mean a search for additional funding. Moderna fell 12% yesterday, while Vaxcyte plunged 14% and several small gene therapy players collapsed by 20%, including Rocket Pharma and Arcellx.

The FDA's policy in the coming months will need to be monitored closely. Common sense suggests that, at this stage, integrated laboratories that are more diversified, accustomed to long development cycles and financially sound will be less affected than less mature players.

Vinay Prasad's profile on the University of California website, as well as a link to his academic work.