The resignation of FDA division head George Tidmarsh, reportedly due to a personal conflict with investor Kevin Tang, suggests that internal politics and personal grudges can influence regulatory actions. This incident has damaged the agency's credibility by implying that decisions may not be based purely on scientific merit.
Even with strong initial sales, Soleno's stock was punished due to a growing investor fear of the 'launch plateau.' Citing examples like Skyclaris, the market is now skeptical that a few good quarters can be sustained, discounting strong early performance and demanding proof of long-term growth trajectory before rewarding a stock.
After a decade on the market and multiple shifts in endpoints, Sarepta's definitive Phase 3 study for its DMD drugs failed. This outcome casts doubt on the entire accelerated approval framework for slowly progressive diseases, where surrogate endpoints may not translate to clinical benefit, leaving regulators and patients in a difficult position.
Soleno Therapeutics' stock fell over 30% despite beating sales estimates, partly because management publicly acknowledged a short-seller report on their earnings call. This tactical error gives credence to the short thesis and signals defensiveness to investors, often leading to a negative market reaction regardless of the launch's fundamental performance.
Unicure's experience reveals a significant regulatory risk: the FDA can reverse its position on a pre-agreed Statistical Analysis Plan (SAP). Despite prior alignment on using a natural history control, the agency later told the company this approach was merely 'exploratory,' invalidating their filing strategy and shocking investors.
The current disconnect between the FDA leadership's public calls for flexibility and its divisions' strict actions is not new. For decades, the agency's hierarchy has acted as a promotional arm to encourage industry, while the review divisions have maintained a more conservative, old-school approach to rigor. This historical pattern is often overlooked.
The abrupt failure of Arena Bioworks, a well-funded institute designed to spin off biotechs, highlights the current market's preference for de-risked clinical assets. Investors are shying away from long-timeline, platform-based models that require significant capital before generating clinical data, even those with elite scientific backing.
Biohaven's Complete Response Letter (CRL) offers a rare public insight into the FDA's specific statistical objections to using natural history cohorts. The letter details concerns about selection bias and failures in tipping point analyses, serving as a cautionary guide for other companies like Unicure pursuing similar regulatory strategies.
Internal power shifts at the FDA, such as Vinay Prasad's rising influence, create a chilling effect on review teams. Even without direct orders, reviewers feel less emboldened to be flexible when leadership's public stance favors greater rigor. This 'tone from leadership' can shift regulatory outcomes more than explicit policy changes.