Summary

The XBI’s three-week rebound looks real, but the panel treated it as stabilization rather than an all-clear. Adam Feuerstein sensed that “the sky is not necessarily falling yet,” supported by strong launches, better-than-feared earnings and two deals. The durable bull case remains functioning science and medicine demand; the unresolved discount remains policy uncertainty around FDA operations, vaccines, tariffs and reference pricing.
FDA disruption is already affecting smaller biotechs even while large pharma publicly reports business as usual. A MassBio survey found 50% of 88 respondents had experienced some regulatory change, while No Patient Left Behind found problems among roughly 25% of companies with recent FDA interactions. Peter Kolchinsky’s explanation: frontline reviewers are “doing everything in their power” to cope, but questions requiring departed senior staff can simply leave meetings canceled.
Vaccines are the clearest test of whether Commissioner Marty Makary can preserve scientific independence from RFK Jr. Peter argued that demanding placebo-controlled trials for improved existing vaccines can be unethical and could make it impossible to keep pace with changing seasonal flu and COVID strains. Adam was more alarmed, seeing a possible “grand bargain” that lets anti-vaccine forces “run wild in vaccines,” with spillover into drug regulation the larger tail risk.
Tariffs appear absorbable for many U.S.-based drug developers, but they still destroy value—and multinational pharma faces greater exposure. U.S.-based drug developers often keep IP domestically and import European-made product at low transfer prices, whereas companies housing IP abroad could incur tariffs on much larger transfer values. Peter’s warning was that “you can do the math”: even survivable costs reduce NPVs, acquisition economics or shareholder returns.
Commercial execution remains biotech’s strongest fundamental counterweight to Washington risk. BridgeBio’s Attruby launch supported the thesis that ATTR has a larger undiagnosed or untreated population, while Madrigal and Verona also delivered encouraging starts. Alnylam’s decision not to separate Amvuttra sales by polyneuropathy and cardiomyopathy, however, makes direct comparison with BridgeBio harder and raised transparency concerns.
Several heavyweight disappointments showed how unforgiving valuations and fragile franchises remain. Regeneron missed Q1 revenue consensus by 7%, with Eylea roughly 11% below expectations; Moderna’s lower 2027 operating-expense plan may avoid a cash shortfall but still requires billions in revenue; and Lilly fell as much as 12% despite an 8% EPS beat because it did not raise guidance and CVS favored Wegovy over Zepbound on part of its formulary.
Summit’s ivonescimab remains a major asymmetric oncology story, but U.S. validation is now the pivotal de-risking event. Preliminary HARMONi-2 overall survival produced a 0.77 hazard ratio versus Keytruda—clinically meaningful in Peter Kolchinsky’s view, though investors wanted nearer 0.75 and still need subgroup detail. Midyear U.S. HARMONi results could test whether the efficacy and tolerability seen in China replicate across populations: “one of the key data points for this class.”

Deep dive

1. Biotech’s rebound rests on working products, not resolved policy risk

Feuerstein’s mood had improved after weeks as “the messenger of doom”: the XBI had rebounded from its early-April low, launches were strong and deals had returned. His deliberately modest conclusion was that “the sky is not necessarily falling yet.”
Schmidt saw more good than bad across Q1 earnings, but questioned what had fundamentally changed. Launch strength had been visible for six to 12 months, two smaller deals did not establish an M&A trend, and FDA instability still hung over the sector.
Kolchinsky called April “one hell of a stress test” that showed both biotechnology’s resilience and the value of organized protest. Beneath tariffs, pricing threats and regulatory disruption, the operating model persisted: “Their disease is their whole world,” so patients seek care, physicians prescribe and insurers ultimately cover medicines.

2. Vaccines are the sharpest test of FDA scientific independence

Kolchinsky grew more optimistic after signals that FDA would avoid a major reorganization, but warned against complacency as formerly reliable “constants” become variables. Science and portfolio programs still work in the near term; prolonged damage to NIH funding would be felt more heavily years later.
His vaccine distinction was categorical: requiring a true placebo when developing a broader or improved version of an established vaccine may be unethical and inconsistent with clinical practice. Calling placebo comparison the only legitimate science would be “demagoguery,” not rigor.
Seasonal timing makes the policy commercially consequential. Requiring fresh pre-approval trials for every flu update could leave the season largely over before approval; applying that standard to COVID could make it impossible to keep pace with strain changes.
Feuerstein was less sanguine about Makary’s autonomy, seeing little evidence that he would confront RFK Jr.’s vaccine agenda. A possible bargain allowing anti-vaccine actors to “run wild in vaccines” would be bad itself—and a warning that political pressure could migrate into drug reviews.

3. Small-company evidence reveals strain hidden by large-pharma assurances

Fazeli heard uniformly reassuring messages from large pharmaceutical companies at AACR and on earnings calls: interactions with FDA remained normal, even for an oncology drug previously approved from a single-arm study. He could not reconcile that confidence with what smaller companies were reporting.
Schmidt cited MassBio’s survey of 88 members, half of whom reported some change after workforce reductions—pushed meetings, stretched timelines or other disruption. Stealth BioTherapeutics also passed a PDUFA date without a response, making delays more than a theoretical concern.
No Patient Left Behind isolated companies with genuinely recent interactions; roughly 25% reported problems. Some found crowded Zoom rooms of FDA staff visibly signaling “we can handle this,” while others had meetings canceled because no available senior official could answer the issue.
Kolchinsky turned those examples into a public letter after Senator Cassidy asked for specifics and proposed solutions, then gathered signatures and connected reporters with affected companies. Fear of retaliation, he said, “is a hallmark of tyranny”; Schmidt added that elected officials also needed public backing to resist political repercussions.

4. Tariffs buy political leverage by taxing industry value

Kolchinsky credited industry engagement—including Dave Ricks’s discussions with the president—with buying time on tariffs, not solving the problem. His preferred framing was that America funds innovation primarily for itself, while foreign payments are effectively a subsidy toward what U.S. patients want created.
Many U.S. drug developers have limited direct exposure because their IP resides domestically and overseas manufacturing is often European, with product transferred into America at low cost. Multinationals that placed IP abroad for tax optimization could instead face tariffs on a much higher transfer price.
Fazeli said the largest disclosed hit he saw was at Johnson & Johnson, largely through medical devices and China, while Novartis called its exposure immaterial. Hundreds of millions may be absorbable, but headline promises of $20 billion, $30 billion or $50 billion in U.S. investment may include ordinary R&D and maintenance capex; incremental jobs are the cleaner test.
Europe cannot simply be forced to raise prices while also expanding defense budgets, and access delays matter alongside list prices. Kolchinsky recalled a NICE official acknowledging that incorporating post-patent generic years would make medicines roughly three times more cost-effective—but doing so would weaken the rationale for denying reimbursement.

5. Strong launches coexist with selective opacity and franchise pressure

BridgeBio’s Attruby Q1 was the standout launch: uptake supported the view that ATTR contains a sizable undiagnosed or untreated population and could be broader than assumed. Feuerstein also highlighted Madrigal’s progress despite uncertainty around MASH competition from GLP-1s; Schmidt placed Verona among the strong early launches.
Alnylam told Feuerstein it would report total Amvuttra revenue without splitting polyneuropathy from cardiomyopathy. That is common for multi-indication drugs, but unusual scrutiny follows from BridgeBio’s competing ATTR-CM launch and detailed reimbursement and patient metrics: “When one company is being less transparent and one company’s being more transparent,” comparison becomes its own story.
Regeneron’s revenue came 7% below consensus and EPS missed about 2% despite expense management; Eylea was roughly 11% light amid competitive pressure, inventory write-downs, reduced copay-foundation funding and compounded-product use. Another complete response letter for an Eylea prefilled syringe added uncertainty, though several pipeline catalysts remained.
Moderna guided 2027 operating expenses meaningfully below consensus, enough to avoid going cash-negative in 2027 or 2028 under the team’s estimates, but still needs a couple of billion dollars of top-line revenue. Vaccine-policy risk and a delayed flu/COVID combination increasingly make the company an oncology story.

6. mRNA’s scientific promise now depends on rebuilding public permission

Fazeli argued that oncology applications will ultimately be judged by the data: physicians’ answer remains, “Show me the data.” The platform’s future will be decided by clinical readouts, not assumptions about its potential.
Schmidt described a congressman repeating claims that mRNA could alter the genome, illustrating how weak scientific literacy can become policy. Kolchinsky compared the dynamic with hormone-replacement therapy, whose benefits were lost to millions after a study was misread: facts acquire an “uncertainty variable” through public reception.
Kolchinsky argued that industry needs communications “R&D” because technical work does not speak for itself. mRNA vaccines “saved the world” and restored trillions of dollars of activity, yet myocarditis fears prompted some people to sow doubt despite the virus itself causing higher rates of myocarditis and more harm; abandoning the fastest pandemic-response platform would also deprive the rest of the world of innovation.

7. Lilly and ivonescimab show how valuation amplifies every data point

Lilly beat EPS by 8% but did not raise guidance, a disappointment at roughly 40 times earnings. CVS’s selection of Wegovy over Zepbound for part of its formulary—after Novo Nordisk moved to about $499 per month—added pressure, briefly cutting Lilly’s shares by roughly 12%; Fazeli still saw lower prices, oral drugs and eventual generics as potentially necessary for the market’s full scale.
Summit and Akeso’s HARMONi-2 update produced a preliminary 0.77 overall-survival hazard ratio for ivonescimab against Keytruda. Kolchinsky considered that meaningful if preserved and likely statistically meaningful, but Fazeli wanted OS split by PD-L1 expression to ensure benefit was not concentrated among patients below 49% expression, who in the relevant U.S. treatment framework would be expected to receive Keytruda plus chemotherapy; he noted that this was not necessarily standard care in China.
The midyear U.S. HARMONi trial in second-line EGFR-positive lung cancer is the translational test. Replicating China’s HARMONi-A efficacy—especially its apparent discontinuation and toxicity advantage versus current U.S. options—would materially de-risk a class whose supporting trials have so far all come from China.
Elsewhere, Fazeli saw improving non-muscle-invasive bladder-cancer options from CG Oncology, Johnson & Johnson’s TAR-200 and Pfizer’s subcutaneous PD-1. At AACR, Artios had very interesting ATR-inhibitor data in colorectal and pancreatic cancer; Feuerstein declined to predict a fourth positive XBI week, offering the honest close: “Who knows?”

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