Biotech stocks jump as Makary outlines FDA vision, RBC comments

Investing.com -- Biotech stocks climbed Monday after new FDA Commissioner Dr. Marty Makary laid out a clear and collaborative regulatory strategy that analysts say bodes well for drug developers. In his first major interview since taking office, Makary emphasized pragmatic reforms, faster drug approvals, and modernized use of real-world data across the agency.

Shares of Lexeo Therapeutics Inc (NASDAQ:LXEO) surged 18.6%, Dyne Therapeutics Inc (NASDAQ:DYN) gained 16.3%, and Regenxbio Inc (NASDAQ:RGNX) rose 12.5%. Other gainers included Avidity Biosciences Inc (NASDAQ:RNA)(+8.7%), Uniqure NV (NASDAQ:QURE)(+4.1%), and Wave Life Sciences Ltd (NASDAQ:WVE)(+3.5%), with multiple rare disease-focused names seeing gains.

In a note to clients, RBC Capital Markets analyst Brian Abrahams described Makary’s tone as “scientifically grounded and level-headed,” particularly around approval requirements for ultra-rare diseases and data streamlining. “Importantly, we believe he exhibited an adeptness at packaging them to align with administration values without appearing inclined to tear down and remake the agency,” Abrahams wrote.

Makary floated ideas like allowing plausibility-based approvals in small indications when placebo-controlled trials are impractical, consistent with recent accelerated approval trends. RBC highlighted Sarepta Therapeutics Inc (NASDAQ:SRPT), PTC Therapeutics Inc (NASDAQ:PTCT), Biohaven Pharmaceutical Holding Co Ltd (NYSE:BHVN), and Design Therapeutics Inc (NASDAQ:DSGN) among companies that could benefit under this continuity.

The commissioner also mentioned using health information exchanges to augment post-market safety tracking without relying solely on voluntary self-reported data. While Abrahams noted such systems may be difficult to scale, he said the proposal could placate political concerns without disrupting current regulatory frameworks.

Staffing changes under Makary were also positioned as productivity-focused, with reductions limited to communications and IT personnel, not scientific or review staff. Abrahams acknowledged residual concerns about resource constraints but saw potential long-term gains from consolidating redundant functions.

Importantly, Makary voiced support for U.S. biopharma success while advocating for balance and transparency, signaling a more industry-neutral stance than some anticipated. “He came across as far less anti-industry than he had seemed in his historical public statements,” Abrahams wrote.

With biotech stocks still recovering from recent sector-wide weakness, RBC believes the Makary interview could serve as a sentiment boost by reinforcing regulatory stability and predictability. Investors are now seemingly reassessing names positioned in orphan and accelerated approval pathways in light of the evolving FDA leadership tone.

This article first appeared in Investing.com