Can Biotech be Resilient in the Face of Uncertainty

2024 saw 50 novel drug approvals and seven biological applications. In comparison, there were 33 novel drug approvals and 22 biological applications in 2023.

Of the novel drug approvals in 2024, the top therapeutics approved were oncology/ cancer treatments, hematology, and cardiovascular. Oncology was a priority of the Biden administration, but the focus of the Trump administration remains unclear. Cuts to federal research grants may slow early-stage development in oncology and other disease areas.

In addition, cuts in staff could delay overall approvals in 2025. For example, there is some concern that the Food and Drug Administration (FDA) is failing to meet Prescription Drug User Fee Act (PDUFA) and Medical Device User Fee and Modernization Act (MDUFA) dates by which they are required to make an approval decision. If this reauthorization is delayed, the FDA may lose annual user fee revenues that fund prescription drug reviews and other associated regulatory activities.

This may be caused by staffing cuts at the FDA. If this develops into a trend, it will be more challenging for biotechs and investors to make decisions on when to IPO, given uncertainty with FDA approval timing.

*Some approvals span multiple types of disease areas and are counted more than once.

After approving six cell and gene therapies in 2023, the FDA continued its momentum on cell and gene therapy in 2024, approving seven therapies. While there's been success, the cell and gene therapy sector continues to face challenges, including the high cost of goods, efficacy challenges, limited patient populations, and complex treatment regimens. Gene therapy in particular faces challenges with adoption and launching products into the market, which could dissuade future investors.

In addition, the new administration may shift priorities, and an unpredictable economic landscape could slow development in 2025. The current administration has already stated its plans to deprioritize infectious disease research, and recent cuts to federal health research grants could delay early-stage research.

While it remains to be seen if the new administration's priorities will affect the pace of drug approvals at the FDA, slower early-stage research may hinder investor interest in biotech companies.

To maintain industry research momentum life sciences companies should consider diversifying funding sources, staying informed on federal priorities, and enhancing regulatory compliance and risk mitigation. Learn more in our insight: Best Practices for Biodefense and Life Sciences Contractors Amid Federal Funding Uncertainty.