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Investors dumped shares in vaccine makers and pharmaceutical groups on Friday, as concerns grew over Donald Trump’s nomination of vaccine sceptic Robert F Kennedy Jr as the top US health official.
US-listed vaccine makers were down in morning trade, extending the previous day’s losses. Moderna slid nearly 8 per cent, following a fall of more than 5 per cent on Thursday. Pfizer shed 4.5 per cent while Vertex Pharmaceuticals dropped 5 per cent, and the S&P XBI index of smaller biotech companies fell 4 per cent.
GSK and Sanofi, the world’s two biggest vaccine makers by sales, fell 3.7 per cent and 3.3 per cent respectively. The nomination also hit Europe’s pharmaceutical sector more broadly, with a basket of healthcare stocks losing 2.9 per cent.
Kennedy, known as RFK Jr, has been a vocal opponent of US government vaccine policy, questioning the number of jabs given in childhood, sowing doubt about the Covid-19 vaccines, which he described as the “deadliest vaccine ever made”, and pushing debunked claims about the links between MMR jabs and autism.
But Kennedy has not outwardly called for a ban on any jabs, saying in an interview with NBC News last week that he has no plans to “take away vaccines”.
In his new role as head of the US Department of Health and Human Services, Kennedy would have oversight of 10 agencies with huge sway over medicines regulation and public health, including the Food and Drug Administration and the Centers for Disease Control and Prevention.
But Trump’s nomination of Kennedy is likely to face a tough Senate confirmation process, alongside other controversial cabinet picks such as congressman Matt Gaetz for attorney-general.
Kennedy has also called for a purge of “entire departments” of the FDA. He wrote on X last month: “FDA’s war on public health is about to end. If you work for the FDA and are part of this corrupt system, I have two messages for you: 1. Preserve your records, and 2. Pack your bags.”
The prospect of Kennedy enacting his controversial views affected stocks across the pharmaceutical sector but vaccine biotech companies were among the hardest hit on Thursday evening and Friday.
Michael Yee, an analyst at Jefferies, said Kennedy’s nomination added to an already “dim” outlook for vaccine makers because of declining sales growth. “RFK Jr has . . . been outspoken about downsizing FDA, so there is concern on agency resources, commentary on [weight loss drugs] and also vaccines,” said Yee.
Shares in Bavarian Nordic, a maker of vaccines for diseases including rabies and mpox, fell 17 per cent, despite the small Danish company maintaining its guidance in results published on Friday.
Henrik Juuel, chief financial officer of the company, told the Financial Times that the selling was a “significant overreaction” to Kennedy’s nomination but that the company had a large proportion of retail investors “who have a tendency to react more to the media”.
Asked about whether Kennedy’s ideas would become policy: “I don’t think these things will ever happen. I don’t think anyone will allow them to. There must be some smart people advising [him].”
He added that he anticipated an increase in biodefence spending and stockpiling from the Trump administration, which would boost sales of Bavarian Nordic’s smallpox vaccines.
However, other cabinet appointees have struck a different tone about regulation of pharma groups.
In a post on X on Friday, Vivek Ramaswamy, a former biotech chief executive who has been appointed alongside Elon Musk to oversee a government efficiency drive, advocated reducing the barriers to getting new drugs approved.
“My #1 issue with FDA is that it erects unnecessary barriers to innovation,” said Ramaswamy. “This stops patients from accessing promising therapies and raises prescription drug costs by impeding competition. The agency’s staff have callous disregard for the impact of their daily decisions on the cost of developing new therapies.”
In a rare bright spot for biotech stocks, drug developers researching psychedelic medicines for mental health jumped due to Kennedy’s advocacy for the treatments. Compass Pathways and Atai Life Sciences, both of which are backed by billionaire Christian Angermayer, were up 8.7 per cent and 12 per cent respectively.
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