Episode 141 - May 9, 2025

Summary

• Vinay Prasad’s appointment to run CBER knocked the XBI down 7% in a day (now ~-14% YTD), but his conciliatory first speech to staff surprised everyone. The selloff hit Sarepta, uniQure, Capricor and Tessa plus accelerated-approval names outside CBER’s purview, yet the panel noted his debut struck a humble tone on innovation and rare-disease flexibility. Tess Cameron’s stance: “still very much in wait-and-see mode” — reassured that a first stem-cell accelerated approval came through the next day, meaning “things are still functioning.”
• The consensus tell will be actions, not words — Sam Fazeli’s test case is MRD as a filing endpoint in multiple myeloma, which Prasad is “very against” just as Arcellx and Gilead retooled trials around it. A CBER reversal would dramatically lengthen cell-therapy trials, with the wrinkle that bispecifics under CDER might keep the endpoint. Eric Schmidt’s framing of the binary: “Will it be the internet troll, the iconoclast on X… or the smart, engaging, gentlemanly” figure from the introductory meeting.
• Sarepta took a double whammy: -25% on Prasad’s nomination (he’d questioned Elevidys’ approval), then another -12% as full-year guidance dropped from $2.9–3.1B to $2.3–2.6B. The cut wasn’t just the non-ambulatory patient death with concurrent CMV — flu season plus top prescribers being “fully booked” force reliance on a broader physician community that may have less experience explaining the risk-benefit; Doug Ingram got credit for delivering the miss with unusual directness.
• Vaccines now face “a different set of rules,” and Novavax is the canary. Eric Schmidt sees no scientific basis to withhold the protein vaccine — “this is not really a scientific judgment call. This is unfortunately a political call” — while Sam argues that Prasad’s support for clinical-endpoint randomized trials (impractical given strain evolution) plus comments heard against single-antigen vaccines leave Novavax “stuck between a rock and a hard place”; the at-risk market could remain big enough for Moderna and BioNTech, and Ultragenyx’s Sanfilippo review remains on track.
• A most-favored-nation drug-pricing executive order could land as soon as next week, with an estimated up-to-$1T negative industry impact over 10 years — but the panel doubts it sticks. Tess: Medicaid MFN is worse than its ~10% volume share implies because best price flows through to a “totally exploded” 340B; Josh’s conclusion was that “the strategy is good, the tactics are bad,” while Tess argued for burden-sharing through trade policy instead. Yaron Werber: “I personally don’t think this sees the light of day.”
• Eric flagged the political theater: MFN is a progressive policy, so “the first people who’s going to slap him on the back are Bernie Sanders,” Elizabeth Warren, AOC and others, pitting the administration against a Republican Congress that will hate it; Sam added a contrarian wrinkle that US-only launches with no reference price could actually push US prices higher, and that any index founders on unpublished net prices.
• Q1 earnings were probably more bearish than bullish (Day One, Amicus, Septerna, Syndax, Fate and Iovance took hits; Connect Biopharma and Blueprint were among the gainers), with the IRA Part D redesign a “friend and an enemy.” Removing copay support is a tailwind, but expensive drugs and the IV-to-subq shift mean manufacturers pay the 20% catastrophic-phase copay; Novo missed on Wegovy and cut guidance yet traded up on positioning, while Lilly met and fell — with compounding inventory expected to wash through by the second half, ahead of Alzheimer’s data and CagriSema vs. Zepbound.

Deep dive

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