Private Equity
Andrea Alms Video: Money In Motion 153 - FDA Staff Cuts - Biotech Regulatory Delays Market Update
April 2025 - Private Equity
TRANSCRIPT: Hello, my name is Andrea Arms. I'm a technology investor and financial manager and this is your money in motion. Biotech companies are already seeing regulatory delays and plenty of uncertainty after around 3500 FDA employees were cut by the Trump administration. A letter cites an unnamed California biotech that is turning to European regulators to run a clinical trial due to concerns about the FDA's ability to meet timelines.
The company is effectively offshoring capital and investment dollars away from the U.S., according to this letter. Another example from Massachusetts biotech explains that a dispute resolution process was canceled because the FDA counterpart was not sure there would be enough staff available to handle the matter. A separate biotech based company trying to overcome a clinical hole didn't even know if the FDA manager they had previously worked with is still at the agency.
The biotech industry is already feeling the regulatory impacts of dramatic staff cuts at the FDA, according to this letter sent by executive patient advocates and investors to Senator Bill Cassidy, Republican at a Louisiana. Cassidy oversees health, education, labor and pension committee that conducted the hearings of new FDA Chief Marty Markey. The executive urged the senator towards action to ensure the agency can continue its core mission.
The advocacy group, called No Patient Left Behind, was founded by RA Capital's Peter Kuczynski that it is aimed to protect and promote biotech social contract that provides society with affordable biomedical innovations. The letter to Cassidy was signed by dozens of biotech executive investors, patient advocates and including CEOs of Ovid Therapeutics, Seaport Therapeutics, Recode, Vertigo, Delphia Therapeutics and many more.
The FDA has been hit by several rounds of layoffs spurred by the Trump administration and the Department of Government Efficiency. The cuts have rolled through rank and file employees and sell top leaders such as the center for Biologic Evaluation and Research. Beyond the review timelines and delays, concerns are mounting that the mass HHS firing will also take a toll on FDA ability to carry out inspections for drug and food facilities.
Prior to the cut, the FDA was already grappling with a massive backlog of inspections carried over from the Covid 19 pandemic, when travel restrictions were severely hamstrung. These efforts. Thank you. This is your money, your money in motion.