Regulatory Turbulence: How FDA Leadership Shifts Shook Biotech Stocks in 2024-2025

The U.S. Food and Drug Administration's (FDA) leadership upheaval in 2024-2025 has sent shockwaves through the biotech sector, amplifying stock volatility and eroding investor confidence. With a new administration prioritizing deregulation, workforce cuts, and skepticism toward scientific consensus, companies like Sarepta Therapeutics (SRPT), Replimune Group (RPLM), and Capricor Therapeutics (CAPR) have become case studies in regulatory uncertainty. This article dissects how abrupt policy shifts, insider knowledge gaps, and leadership instability are reshaping biotech investing.

The FDA's Perfect Storm: Leadership, Layoffs, and Policy Reversals

From November 2024 to April 2025, the FDA underwent a seismic reorganization. Key changes included:
- 10,000 job cuts, including 3,500 at the FDA itself.
- A hiring freeze and communication blackout on agency press releases.
- Martin Makary's controversial confirmation as FDA Commissioner, marked by his public critiques of the agency during the pandemic.
- The forced resignation of Peter Marks, the FDA's top vaccine regulator and a champion of gene therapy innovation.

These moves created a regulatory vacuum. Staff reductions disrupted continuity in drug reviews, while new leadership's unfamiliarity with prior decisions delayed approvals. For investors, the result was a perfect storm of unpredictability.

Sarepta: Gene Therapy's Poster Child for Regulatory Whiplash

Sarepta's flagship gene therapy, Elevidys, epitomizes the sector's fragility. In March 2025, the FDA abruptly requested a pause in shipments of Elevidys after three patient deaths—two linked to acute liver injury and a third unrelated—sparked safety concerns. Sarepta's shares plummeted 29% in a week and nearly 90% year-to-date, with analysts slashing revenue forecasts from $2.1 billion to $928 million for Elevidys alone.

The FDA's actions were compounded by leadership instability. Key reviewers were placed on administrative leave or replaced, leaving Sarepta to navigate a new team with limited context on its clinical trial data. “The FDA's shifting priorities and lack of continuity have turned a once-promising gene therapy into a high-risk bet,” noted a biotech analyst.

Capricor: A CRL in the Crosshairs of Leadership Chaos

Capricor's Deramiocel cell therapy for Duchenne muscular dystrophy (DMD) faced a similarly harsh reality. The FDA issued a Complete Response Letter (CRL) in July 2025, citing insufficient evidence of effectiveness and unresolved Chemistry, Manufacturing, and Controls (CMC) issues—just seven weeks before the August PDUFA date.

The CRL arrived as Nicole Verdun, the FDA reviewer most familiar with Deramiocel, was placed on administrative leave. Capricor's stock dropped 38% premarket, and its shares have lost over 30% of their value in 2025. Insiders with prior FDA relationships now hold critical leverage, as Capricor must re-engage a new review team with little historical context.

Replimune: Navigating a Fragmented Regulatory Landscape

Replimune, focused on T-cell therapies for cancer, has also felt the ripple effects of FDA instability. While the company has avoided a CRL, its RP-L102 trial for lymphoma has faced prolonged delays due to the FDA's reorganization. With 700 probationary staff reinstated in March 2025, Replimune's management warns of inconsistent feedback from reviewers. “The FDA's internal chaos is forcing us to double our regulatory budget to ensure compliance,” said CEO Patrick Soon-Shiong.

The Investor Playbook: Managing Risk in a Shifting Regulatory Climate

1. Prioritize Companies with FDA “Superfans”: Biotechs with strong relationships to FDA reviewers—especially those with continuity in leadership—will outperform. Sarepta's loss of Peter Marks highlights the risk of relying on single-point regulatory contacts.
2. Avoid Preclinical Bets: With 3,500 FDA staff cuts, late-stage assets with robust data (e.g., Replimune's RP-L102) are better positioned than early-stage programs.
3. Monitor Insider Activity: Insider knowledge gaps post-2024 have created opportunities for well-connected firms to fast-track approvals. Track regulatory filings for clues on FDA alignment.

Conclusion: A New Era of Biotech Uncertainty

The FDA's 2024-2025 reorganization has transformed regulatory risk into a central driver of biotech stock volatility. For Sarepta, Capricor, and Replimune, the path to approval is now littered with political and bureaucratic landmines. Investors must balance optimism for innovation with caution for the agency's evolving priorities. In this environment, adaptability—and a close watch on FDA leadership—is not just a strategy—it's a survival tactic.