We've been Marked: Layoffs, Peter Marks' Departure, and why the FDA/biotech will be okay

Thinking about the impact of recent layoffs and departures on biopharma in the short and long term.

TLDR: It’s bad right now. People at the FDA, Investors, and Biopharma Companies face uncertainty. But biotech and the FDA be okay in the long term. I walk through my thoughts on near term and long-term impacts. I wrote about regulatory flexibility in December and Peter Marks was a key player so I wanted to write about his recent departure.

Introduction

It was the worst of times for biotech. And then it got worse.

The FDA was reeling from job cuts in February and a slate of key people retiring/resigning. Then RFK Jr announced another planned reduction in force this week (20% of total employees) further fanning the flames of chaos. The situation seemed like it couldn’t get worse. Then another shoe dropped: Peter Marks, head of CBER and key decision maker resigned (read “he was ousted” over vaccine beliefs), only months after committing to stay.

Always another shoe to drop

One can feel like the new administration is adamant on killing the FDA with more bad news released every week. Companies, investors, and employees are worried about the future of drug development. But I think biopharma companies and the FDA will be okay. Short term uncertainty will give way to long term certainty.

We have two major impacts to the FDA: 1) layoffs and 2) key departures. Let’s discuss the potential impacts of each one. *Note: the article will not discuss the Politics of the FDA. Instead, I will focus on Peter Marks’ Legacy and the impact of his departure in conjunction with FDA layoffs.

People are worried

A timeline:

February 2025: DOGE fires all "probationary" FDA employees, primarily affecting medical devices, food safety, and tobacco divisions. Most are subsequently rehired only a few days later.

March 2025: HHS announces plans to cut another 20,000 employees, including 3,500 "administrative" positions at the FDA, claiming drug and device reviewers will be unaffected. We still don’t know if this is legal and such broad cuts require a new law.

Key Leadership Exodus

• January 2025: Patrizia Cavazzoni, CDER Director, retires. Many Others

• February 2025: Jim Jones, Commissioner for Foods resigned

• March 27, 2025: Two top cancer regulators announce departures

• March 28, 2025: Peter Marks, CBER Director, forced out after promising to stay -

Those departures are merely a sample of the departures. Many others are leaving and/or are planning to leave. An FDA icon, Richard Pazdur, 25 year FDA veteran and head of the Oncology Center of Excellence (OCE) may be next.

Why Marks Mattered

Marks was a forceful advocate for increased regulatory flexibility. I’ve written before

“Marks said his goal at CBER is to focus reviewers on patients and avoid fetishizing regulations.” He shifted the focus of the FDA away from strict P Value policing to a more nuanced, patient centric approach to drug approvals.

Marks pushed for new programs, accelerated trial design, and helped with novel endpoint selection to accelerate Cell/Gene Therapies. His advocacy meaningfully accelerated drug development. However, Marks’ approach is controversial, and flexibility can be taken too far. He overturned senior officials at the FDA (twice!) to approve Sarepta Therapeutics’ marginally effective gene therapy, Elevydis.

Marks committed to stay at the FDA in November but disputes over vaccine rollouts and regulations led to his resigning (forced resignation).¹ Regardless of your perspective on Marks and his decisions, he was a force for flexibility and accelerated clinical development. I think his impact was net positive, especially for rare diseases. The departure is the cherry on top of an already chaotic situation.

One side of the argument

The other side

TBH, the headline captures 90%+ of the opinion from the articles. You either think Marks was net positive and his ouster spells doom. OR one thinks he handled covid poorly and was too close to biopharma. ²

Chaos at the FDA

The FDA chaos leads to uncertainty. Marty Makary, FDA Commissioner, promised a surgical approach to cuts but this is amputation using a bone saw. FDA has fired, rehired, and now plans to fire thousands of employees with little thyme or reason. People are asked to come back to the office and were forced to work in pantries because the offices lacked space. Employees, biopharma companies, and investors are on edge.

From politico

And we’re already seeing some impacts from the layoffs. FDA reviewers are doubling their caseload and canceling pre-IND meetings. Departures amplify the uncertainty from layoffs. The uncertainty leads to layoffs as career staffers either retire or move on to lucrative private sector jobs. Executives are concerned about the future of the FDA.

My thoughts

But the future isn’t a desolate ivermectin fueled wasteland with 0 approvals. We have some bright spots.

1. The planned job cuts may not be legal. A new bill was introduced to allow the layoffs, but it has not passed. Still unclear on the details here.

2. Even amidst the chaos, the FDA continues to approve drugs on time (Amvuttra from Alnylam, Vykat from Soleno) and interact with biopharma companies.

3. These layoffs and departures will NOT kill the FDA. One man is not an institution.

4. Marty Makary, not RFK Jr, is in charge of next nominations. People are worried RFK will influence the new appointments, but I hope Makary can exert some influence.

5. The new administration is an advocate for continued regulatory flexibility. They may also find other pathways to accelerate drug development

The impacts will vary for companies and drugs in various stages of development

Near term Dynamics:

• The FDA will prioritize meeting mandated timelines (PDUFA dates) over evaluating novel programs or pathways.

• Marks, Cavazzoni, and other leaders were impactful, but the FDA is not one man. The organization will continue to approve drugs.

• Commercial companies and late-stage programs with clear approval pathways face minimal disruption - 0 regulatory risks

• Rare disease names will be hit hard in the near term.

• No statistical slicing and dicing - Come to the FDA with clean data. Stressed officials DGAF about your novel endpoint and p = 0.06, especially without Peter Marks.

• Neurology and cardiometabolic divisions will be least affected by top officials leaving. These divisions were already strict. Further, their directors are lowkey individuals outside of the limelight.

Long term

• Companies with established pathways to approval (even in rare diseases) will be okay. I don’t expect the FDA to re-review set pathways.

• Marks pushed for regulatory flexibility but next director may focus on other areas of improvement such as accelerating preclinical drug development. h/t Rod Wong.

• The timelines will be long, but I am optimistic on a 4-year basis. Investors will likely flock to commercial companies, but well financed clinical stage companies can be good investments

The Four buckets

Short term Negative, Long term Negative: Companies with borderline data relying on regulatory flexibility or novel surrogate endpoints face the toughest path. A stressed FDA lacks bandwidth to evaluate unproven approaches. A few examples come to mind either A) looking for approval based on a novel surrogate endpoint or B) part of a new program at the FDA (Peter Marks started lots of these)

Edgewise Therapeutics - Seeking accelerated approval based on a surrogate endpoint in a phase 2 trial. They were expected to meet the FDA last quarter so they may skirt the uncertainties, but I expect any future discussions to be strained.

Larimar Therapeutics - Part of the new FDA START pilot program. Recently received agreement on using FXN expression in skin as a surrogate endpoint which “may support approval”. Marks was an advocate for START and using novel endpoints so his departure will impact Larimar.

Fulcrum Therapeutics - Reports phase 1 results soon and will approach the FDA to use Fetal Hemoglobin (HbF) a novel surrogate endpoint for Sickle Cell Disease. Those discussions will take longer than expected even though Fetal Hemoglobin is a well-established biomarker

Dyne Therapeutics - Seeking approval for myotonic dystrophy (DM1) using gene splicing as a surrogate endpoint A competing program (Avidity biosciences) is using functional data for approval. If I’m the FDA, why would I use splicing from one program and functional data from another?

Short Term Positive, Long term negative - Companies without a pipeline will be a safe haven in my opinion. However, the model for biotech relies on continuing innovation and I’m skeptical in the long term if valuations are stretched. Specialty pharmacies can fit this bucket. (Harrow Health, Eton Pharma)

Short term Negative, Long term Ok - Clinical stage programs with clean data and set approval pathways. I think the FDA will not renege on prior agreements with companies. However, Cell and Gene Therapies will be under pressure due to Peter Marks’ departure. People are concerned about who may replace him. Furthermore, inspectors may not meet set inspection timelines for complex therapies.

Regulus Therapeutics/Lexeo Therapeutics/ Rocket Pharmaceuticals - Already set pathways with the FDA. If they meet the bar for success and CMC is in order, approval is expected. I think Soleno Therapeutics is instructive. Their drug, VYKAT, for Prader-Willi Syndrome was approved on time even with some concerns about the efficacy.

Capricor - Capricor is special. The FDA agreed to use long term extension in a small patient population as acceptable evidence. Marks’ notorious flexibility in DMD comforted skeptics. “Even if people are concerned, Marks will push it through”. Until the drug is approved, investors will continue to be skeptical. ³

Long Term positive, Short Term positive - Late-stage clinical companies, Standard Regulatory pathways, Cardiometabolic companies. Lots of companies can fit this bill but a few I follow

New Amsterdam Pharma, Tourmaline Bio, Viridian Therapeutics, Tectonic Therapeutics are all clinical stage companies with clear paths to approval. Earlier stage companies will still face some pain, but clinical readouts are still worth analysis.

Cytokinetics - Cytokinetics is near approval for aficamten in Hypertrophic Cardiomyopathy. I expect the FDA will meet their deadlines.

BridgeBio - Commercial Stage company with a pipeline for rare diseases. Most of their programs have strong clinical data and a relatively clean path to approval.

All discussed companies are merely examples. I may hold a financial in any or all discussed companies. This is not financial advice in any way.

Conclusion

It was the worst of times for biotech. And then it got worse. But we biotech and the FDA will be ok. The FDA will continue approving drugs, albeit with shifted priorities and timelines. Companies with robust data and established approval pathways will navigate this uncertainty successfully. Those relying on regulatory flexibility or novel endpoints face a rockier path. The recent layoffs and departures are bad, but not the end of times.

Appendix

Best ways to keep up with FDA news.

1. FDA Matters - Fantastic Blog

2. Podcasts: Biocentury Show, The Readout loud, Citeline

3. Read the actual FDA documents

4. Reddit: r/regulatoryaffairs, r/fednews - Insights into the Layoffs

5. News: STAT, Politico, NYT, WSJ are the key writers on FDA news.

Black Swans

1. New departures like Richard Pazdur: Pazdur is an oncology icon at the FDA. Strict? yes, but he is a stable leader. If he leaves, investors and biopharma faces more uncertainty

2. New appointees: vaccine skeptics, off the rails doctors (iykyk) would be TERRIBLE for biopharma.

1. I’m not wading into the vaccine discussion. His actions led to some resignations and mandates were controversial. But he made decisions under pressure and ultimately imo weren’t catastrophic in either direction. You can’t ask for faster approvals and then hate on the FDA for moving with speed during a global pandemic.

2. I do find it ironic the same people criticizing Marks’ flexibility also push alternative therapies. I side with STAT news on this one.

3. The company can fit into multiple areas depending on your view of the data.