By Josh Nathan-Kazis

The latest departure of a top Food and Drug Administration official is setting off a new round of worries for biotech investors, two months after the fiery resignation of another senior FDA regulator unsettled the sector.

The director of the FDA office responsible for regulating gene therapies and cell therapies, Dr. Nicole Verdun, was placed on administrative leave on Wednesday, according to a report by STAT. The healthcare news outlet reported that Verdun had told her staff that she and a deputy had been "relieved of our duties, for now" and were "escorted out."

Verdun has worked at FDA since 2012, according to her LinkedIn. She was elevated to her current role overseeing the Center for Biologics Evaluation and Research's Office of Therapeutic Products, which regulates gene and cell therapies, in 2023.

"Center directors deserve to be supported by managers that are aligned with aggressive goals to expeditiously advance therapeutics for rare diseases using the gold standard of science," a spokesperson for the Department of Health and Human Services told Barron's in response to a question about the reported departure.

That implies an ideological disagreement between Verdun and her boss, Dr. Vinay Prasad, who succeeded Dr. Peter Marks after he resigned from the FDA in late March. Marks wrote at the time that while he was willing to work to address Health Secretary Robert F. Kennedy Jr.'s concerns about the safety of vaccines, Kennedy wanted "subservient confirmation of his misinformation and lies."

The departure of Marks, who had been seen as friendly to the biotech industry, and willing to approve cutting-edge therapies quickly, set off deep worries on Wall Street, where some called for Kennedy's replacement.

Verdun's departure is harder to read, as she had a lower public profile than Marks. But the HHS spokesperson's statement implies a rejection of the approach taken by Verdun, whom the biotech sector saw as a capable and sympathetic regulator.

William Blair analyst Sami Corwin wrote in a Friday note that Verdun was "highly respected by industry and academic experts." At a roundtable event on cell and gene therapies that the FDA held early this month, Timothy Hunt, CEO of the cell and gene therapy industry group the Alliance for Regenerative Medicine, said that there had been "an upswing in quality" since Verdun was named to her post.

Her departure could point to more turbulence for cell and gene therapies.

The Global X Genomics & Biotechnology ETF, which tracks biotech stocks involved in gene therapy and related fields, fell 1.3% Friday, while the SPDR S&P Biotech ETF was down 0.4%. The S&P 500 was marginally lower.

Sarepta Therapeutics, which sells a gene therapy to treat Duchenne muscular dystrophy and made headlines last week after a patient died after taking the treatment, was down 4%. Other gene and cell therapy stocks were also lower: Intelia fell 5.8%, Arcellx slid 4.1%, and Iovance Biotherapeutics declined 1.2%.

Prasad has publicly criticized some aspects of Marks's approach at FDA, including a decision to expand approval of the Sarepta Duchenne muscular dystrophy gene therapy to cover a broader range of patients.

Early this week, Prasad moved into a broader role at the FDA. He is now the FDA's chief medical and scientific officer, as well as director of CBER.

"It's unclear what this signals," Leerink Partners analyst Mani Foroohar wrote on Thursday regarding the news about Verdun. "Is Prasad simply cleaning house, or was there a deeper philosophical rift between him and Verdun over the agency's future direction?"

The HHS spokesperson's statement to Barron's points to the latter explanation, though the details of what that rift might be are hard to discern. Prasad has been vocal on a long list of subjects both before and since his appointment at FDA, while Verdun has worked more quietly inside the agency.

Neither Prasad nor Verdun could be reached for comment.

Former FDA Commissioner Dr. Scott Gottlieb wrote on the social-media platform X that the departure of Verdun was a "significant setback" for cell and gene therapy. Gottlieb, who led the FDA during Trump's first term, said that Verdun and other FDA staff who have recently left the agency "knew how to make the pathway for these cell and gene therapies more viable."

The disruption to the FDA's gene therapy division comes at a difficult moment for companies seeking to develop those treatments. Investor sentiment is extraordinarily dour, as Barron's highlighted on Thursday, following a string of safety issues and commercial disappointments.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 20, 2025 11:56 ET (15:56 GMT)

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