Darkest Hour for U.S. Biotech Stocks! Top FDA Vaccine Official Resigns, Wall Street Slams HHS Secretary RFK Jr.

TradingKey - With the appointment of vaccine skeptic Robert F. Kennedy Jr. (RFK Jr.) as U.S. Secretary of Health and Human Services, coupled with the forced resignation of Peter Marks, a key figure at the U.S. Food and Drug Administration (FDA), is casting a long shadow over the U.S. pharmaceutical regulatory environment. The resulting uncertainty has triggered sharp declines in vaccine stocks and broader healthcare equities.

On Monday (March 31), U.S. biopharmaceutical stocks plunged across the board. The SPDR S&P Biotech ETF (XBI) fell as much as 6% during intraday trading before closing down 3.91%, bringing its year-to-date loss to approximately 10%.

Vaccine makers were particularly hard hit: Moderna dropped 8.90%, while Novavax fell 8.43%. Gene therapy firms also suffered steep losses, with Taysha Gene Therapies (TSHA.US) plunging 27.98%, Solid Biosciences (SLDB) declining 14.35%, and Sarepta Therapeutics down 9.36%.

In Europe, shares of weight-loss drug giant Novo Nordisk fell 27% in March, marking their worst monthly performance since June 2022 and the largest monthly drop since the dot-com bubble. Its U.S.-listed shares (NVO.US) are down approximately 18% year-to-date.

Since Donald Trump returned to the White House, the U.S. pharmaceutical sector has come under sustained pressure, driven largely by the controversial appointment of RFK Jr., a prominent anti-vaccine advocate, as health secretary. RFK Jr. has frequently questioned the safety and efficacy of vaccines.

The situation escalated when Dr. Peter Marks, a senior FDA official widely regarded as one of the most influential figures in modern vaccine regulation, was forced to resign following policy clashes with RFK Jr. Marks played a central role in accelerating vaccine development during Trump’s first term.  According to sources familiar with the matter, Marks wrote in his resignation letter: "Truth and transparency are no longer needed here."

A former FDA advisor described Marks’ removal during RFK Jr.'s sweeping restructuring plans as a high-risk move that could delay approval timelines, create oversight confusion, and lead to inconsistent regulatory enforcement.

RFK Jr. has recently announced plans to consolidate the Department of Health and Human Services, reducing its 28 divisions to 15  and cutting the workforce from 82,000 to 62,000 full-time employees.

Analysts at Cantor Fitzgerald bluntly criticized RFK Jr.'s leadership, warning that his "apparent anti-science and libertarian agenda" poses a significant threat to public health. Media outlets noted that it is highly unusual for Wall Street analysts to directly target high-ranking government officials in such terms.

Stifel analysts called Marks' resignation “the biotech sector’s worst-case scenario under the Trump administration. BMO analysts added that the y sector was already under immense pressure from broader macroeconomic concerns, and Marks'  exit further erodes investor confidence. 

Truist analysts forecast heightened volatility in the coming days for vaccine-related companies as investors assess the regulatory uncertainty following Marks’ departure.