Shares in U.S. pharmaceutical and biotech companies took a sharp dive on Thursday and Friday following the announcement that Robert F. Kennedy Jr., former independent presidential candidate and outspoken anti-vaccine activist, had been nominated by President-elect Donald Trump to lead the Department of Health and Human Services (HHS).
Kennedy, known for his controversial and debunked claims linking vaccines to autism and questioning their safety, has promised to overhaul the U.S. Food and Drug Administration (FDA), remove fluoride from public water, and implement measures to restrict the availability of ultra-processed foods. These proposals have raised concerns among investors, particularly those in the pharmaceutical and biotech sectors.
On Thursday, the SPDR S&P Biotech ETF, a key indicator of the biotech industry, fell by more than 4%. Vaccine manufacturers were hit hardest, with Moderna’s stock dropping by 7%, its lowest point since April 2020. Pfizer and Novavax saw declines of nearly 4% and 2%, respectively. Analysts from Jefferies Group pointed to the uncertainty surrounding how Kennedy’s views could influence the FDA’s future stance on drug approvals, which is vital to the biotech industry.
The effects were also felt internationally, with European pharmaceutical giants seeing significant losses. In Germany, BioNTech, Pfizer’s partner on the Covid-19 vaccine, experienced a 10% drop, its biggest one-day loss since August. Shares of GSK, a British pharmaceutical company, fell almost 4%, and French drugmaker Sanofi saw a loss of 3.6%.
The ripple effects also impacted companies supplying biotech lab equipment and materials, such as Sartorius, which dropped by 3.8%. Bavarian Nordic, a maker of the mpox vaccine, faced an even steeper decline of 16% after disappointing third-quarter results.
While some experts, like the CEO of Bavarian Nordic, expressed concern that Kennedy’s appointment could fuel vaccine skepticism, others are holding out hope for continued bio-defense funding, citing the response to the pandemic during Trump’s first term. Analysts at JP Morgan Chase noted that the biotech sector’s uncertainty stems from Kennedy’s past criticism of the industry and his potential oversight of agencies like the FDA, CDC, and NIH.
The biotechnology sector is not the only one feeling the strain. Shares in companies such as Novo Nordisk, which makes obesity treatments, and Eli Lilly, another major U.S. drugmaker, both dropped by 4%. Kennedy has also criticized Novo Nordisk’s weight-loss drug, Ozempic, arguing that it addresses the symptoms of obesity rather than tackling the underlying causes, like poor nutrition and ultra-processed foods.
Packaged food companies, including Hershey, General Mills, Conagra Brands, and Kraft Heinz, also saw their stocks fall by more than 3%. Coca-Cola, Monster Beverage, and Keurig Dr Pepper saw declines ranging from 1% to 4%.
As concerns grow about the potential consequences of Kennedy’s nomination, medical experts have expressed fears that vaccination efforts could face significant setbacks. RBC analyst Brian Abrahams warned that Kennedy’s appointment could have long-term, unpredictable effects on the biotechnology industry, creating a challenging investment environment.
Kennedy’s views on health, food systems, and vaccines are likely to remain a contentious issue as he prepares to take on the role of HHS Secretary, leaving investors in the pharmaceutical and food industries bracing for potential regulatory changes.