A significant disconnect exists between the FDA leadership's public statements promoting flexibility and the stringent, delay-prone reality faced by companies. For areas like gene therapy, firms report feeling the "rug was pulled out," suggesting investors should be skeptical of the agency's accommodating PR.

The FDA publicly promotes regulatory flexibility for rare diseases, yet industry insiders perceive it as less permissive than prior administrations. This disconnect between the agency's messaging and its actual decisions is fueling widespread criticism, investor uncertainty, and accusations of 'moving the goalposts'.

The FDA publicly champions rare disease drug development, but its actions—frequent and inconsistent rejections—tell a different story. This disconnect between rhetoric and reality creates significant uncertainty, causing prominent investors like Rod Wong of RTW Investors to reduce their investments in the space.

The FDA initially agreed uniQure could use the robust Enroll HD database for its control group, a standard practice for rare diseases. Their later reversal, demanding a new placebo trial, creates significant regulatory uncertainty, making it harder for companies to develop therapies for rare conditions.

Unpredictable changes in FDA review processes are more destructive to biotech investment than consistently high approval standards. Investors can adapt to a stringent but stable regulatory bar, but constant changes undermine the multi-year planning and capital commitment required for drug development, causing investors to flee.

Despite political chaos, most FDA work continues. However, companies are experiencing severe inconsistency, with different agency groups offering contradictory advice and major rejections being walked back, as seen with Atara Biotherapeutics. This demonstrates how top-level instability creates unpredictable regulatory hurdles for developers.

Previously considered a capital-efficient area due to regulatory flexibility, the rare disease and gene therapy space is now perceived as high-risk. The FDA is applying greater scrutiny and tightening standards, making development more unpredictable for sponsors.

The FDA's inconsistency and the growing gap between its guidance and actions have made regulatory risk a primary evaluation factor for investors, complicating trial design, causing delays, and raising the cost of capital for biotechs.

Despite DINE Therapeutics presenting strong DMD data that surpasses historical benchmarks, investor confidence is weak. The FDA's recent unpredictable decisions in rare disease have created a perception that regulatory pathways are no longer reliable, even with compelling clinical results.