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Drugmaker shares fall as Trump picks vaccine sceptic RFK Jr for US health job
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Drugmaker shares fall as Trump picks vaccine sceptic RFK Jr for US health job
Nov 15, 2024 11:01 AM

(Reuters) -Shares in global vaccine makers and drugmakers fell on Friday after U.S. President-elect Donald Trump picked Robert F. Kennedy Jr., who has previously spread misinformation on vaccines, to lead the Department of Health and Human Services (HHS).

Kennedy has been criticised for making false medical claims, including that vaccines are linked to autism. He has also vowed to purge the U.S. Food and Drug Administration.

The news hit shares across the biotech and pharmaceuticals sector, with the broader SPDR S&P Biotech ETF down nearly 3% in early U.S. trading.

Vaccine makers were the worst hit on Friday after declining on Thursday following the announcement. Moderna's shares fell 5% after hitting their lowest since April 2020 on Thursday. Rival Pfizer also shed nearly 5%. Novavax was 4% lower.

At 1311 GMT, shares in Britain's GSK were down 3.2%, their lowest in more than a year, while AstraZeneca and France's Sanofi were down between 2.4% and 3%, respectively.

Analysts at brokerage Jefferies pointed to an RFK Jr interview on NBC in which he said that he would not "take away" available vaccines, but they added that the overall prospects for biotech development ventures were seen as dimmed.

"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)," they said in a note, referring to the U.S. Food and Drug Administration regulator.

GSK and Sanofi offer a broad range of vaccines including for flu and childhood diseases. Beyond that, GSK has market strength in shingles and RSV, and Sanofi and travel shots. AstraZeneca and Sanofi jointly own Beyfortus, a popular new antibody therapy to prevent common respiratory infection RSV in newborns.

German-listed shares of BioNtech, Pfizer's partner on COVID-19 vaccines, were down more than 10%, set for their biggest one-day fall since August. Its U.S.-listed shares fell nearly 5%.

Sartorius, a major supplier of biotech lab gear and substances, fell 3.8%. Bavarian Nordic, which makes a vaccine for mpox, was down 16%, also hurt by third-quarter results, 

The Danish biotech firm's CEO voiced concerns that RFK Jr, as he is known, could fuel vaccine scepticism but also told Reuters that the U.S. response to the COVID-19 pandemic during Trump's first term made him confident about future bio-defence funding by the incoming U.S. administration.

FAR-REACHING IMPLICATIONS

Europe's healthcare sector was the worst performer in early trading, down 2.2% at its lowest since April, compared with a 0.2% drop in the region's STOXX 600.

"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," JP Morgan analysts said in a note, adding it was too early evaluate the exact impact.

Several medical scientists on Friday voiced alarm that vital vaccination efforts could be undermined. 

RFK Jr.'s appointment could have "far-reaching and difficult-to-project implications for the biotechnology sector, adding a considerable layer of uncertainty and challenging investability," RBC analyst Brian Abrahams said.

The drop in shares also went beyond vaccine makers. Shares of obesity drugmaker Novo Nordisk fell 4.3%, while Roche Holding shares slipped more than 1.5%. Shares in U.S drugmaker Eli Lilly also fall 2%.

Kennedy has criticized the popular Novo Nordisk drug Ozempic, which is often prescribed for weight loss, saying it focused on symptoms of the obesity crisis rather than fixing the food system.

(Reporting by Samuel Indyk in London and Ludwig Burger in Frankfurt; Additional reporting by Sriparna Roy in Bengaluru; Editing by Alun John, Mark Potter, Louise Heavens and Sriraj Kalluvila)

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