US drugmakers saw their stocks tank on Thursday and Friday following the announcement that former independent presidential candidate and anti-vaccine conspiracy theorist Robert F Kennedy Jr is president-elect Donald Trump’s nominee to lead the Department of Health and Human Services (HHS).
Kennedy has faced widespread criticism for his baseless claims that some vaccines are not safe and effective and that they’re linked to autism. He has said that he will institute a purge at the US Food and Drug Administration (FDA) and that he will remove fluoride from the public water supply and take measures to limit ultra-processed food.
Shares in both pharmaceuticals and biotech fell – the SPDR S&P Biotech ETF fell over four percent during morning trading, Reuters noted.
Packaged food and beverage companies, such as Pepsi and Coca-Cola, also saw their shares take a downturn.
But the worst effect was seen among makers of vaccines, whose shares initially fell on Thursday and continued to do so on Friday. Moderna saw a seven percent dip just a day after seeing its lowest since April 2020. Meanwhile, Pfizer dropped almost four percent and Novavax was down two percent.
Analysts at the investment firm Jefferies Group wrote that “The point is around sentiment, stance and perspective – that impacts biotech investors’ view of how FDA and other HHS issues will evolve (ie not accelerating drugs and pro-biotech).”
Similarly, major operators in the European pharma market also saw the effects of Kennedy’s nomination to the top health job in the largest drug market in the world.
In Germany, Pfizer’s Covid-19 vaccine partner BioNtech dropped over 10 percent, set to be its largest one-day drop since August. Its stock in the US tumbled almost five percent. GSK saw their shares go down almost four percent and French drugmaker Sanofi lost 3.6 percent.
A large supplier of biotech lab gear and substances, Sartorious, saw their shares drop by 3.8 percent, while mpox vaccine maker Bavarian Nordic dropped 16 percent as it was also harmed by its results in the third quarter.
The CEO of the Danish firm shared worries that Kennedy’s nomination could lead to an increase in vaccine skepticism. However, he also told Reuters that the American response to the pandemic during Trump’s first stint in the White House made him confident that there would be future bio-defense funding.
Analysts at JP Morgan Chase wrote: “We are not surprised the sector has been under pressure on the potential for RFK Jr. having oversight of the various agencies within HHS (including the FDA, the CDC, NIH, and Medicare/Medicaid) given his previous stated views on the industry.”
A number of medical scientists shared their concerns on Friday that vaccination efforts could suffer.
RBC analyst Brian Abrahams said Kennedy’s nomination could have “far-reaching and difficult-to-project implications for the biotechnology sector, adding a considerable layer of uncertainty and challenging investability,” according to Reuters.
Meanwhile, shares in Novo Nordisk, the obesity drugmaker, saw its shares drop 4.3 percent while shares in Eli Lilly, the US drugmaker, dropped four percent.
Ozempic, the Novo Nordisk drug often prescribed for weight loss, has faced criticism from Kennedy, arguing that it put the focus on the symptoms of the obesity crisis instead of taking actions to create a better food system.
Kennedy has also argued for removing ultra-processed foods from school lunches to combat chronic diseases.
Several packaged food giants, such as Hershey, General Mills, Conagra Brands, and Kraft Heinz, all decreased more than three percent, while shares in Coca-Cola, Monster Beverage, and Keurig Dr Pepper dropped between one and four percent.
