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Biotechs fear changes at FDA could slow U.S. drug

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Some firms looking at 'Europe first' for testing

experimental

drugs

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FDA considered global gold standard for drug regulation

By Maggie Fick

LONDON, May 14 (Reuters) - Some U.S. biotech companies

are considering moving early-stage trials of new medicines

outside the United States as worry grows that layoffs and policy

changes at the drugs watchdog under the Trump administration may

delay regulatory reviews, executives, investors, and consultants

told Reuters.

The U.S. Food and Drug Administration is seen as the global

gold standard for drug regulation and companies typically seek

American approval first because it provides access to the

world's most lucrative drug market.

But mass layoffs, leadership exits and the restructuring of the

FDA under President Donald Trump are prompting some smaller

biotechs to rethink traditional pathways for bringing new

medicines to market.

Reuters spoke to seven biotech executives, investors, and

consultants who said that the staff departures and policy

changes at the FDA had prompted some firms to consider launching

trials in other international markets - such as the European

Union and Australia - and engaging with regulators in those

regions earlier in the drug development process.

"We know that across our companies, the discussions include

whether to go ex-U.S. because of recent FDA uncertainty," said

Peter Kolchinsky, managing partner at RA Capital, a major

investor in early-stage biotech firms and publicly traded

companies with approximately $9 billion in assets under

management.

The FDA did not respond to a request for comment. U.S.

Health Secretary Robert F. Kennedy Jr. has said that the

agency's restructuring aims to streamline functions such as IT

and communications, and reduce conflicts of interest among its

staff and advisors.

Consultant Matthew Weinberg of ProPharma Group said his firm

is fielding more inquiries from biotech companies about

preparing filings with the European Medicines Agency and setting

up clinical trials - a shift he attributes to growing concerns

about FDA stability.

"Historically, companies went to the U.S. first. That may be

changing," he said.

It is unclear if biotech companies' increasing engagement with

the EMA marks a real shift or a tactic to pressure the FDA,

given the importance of the U.S. market, a source with knowledge

of the matter told Reuters.

An EMA spokesperson said it has not seen an increase in

scientific advice requests or clinical trial applications,

noting it would be early for any such shifts to be reflected in

submissions.

NEW APPROACHES

A loss of confidence in the FDA could reshape drug development,

reduce U.S. leadership in innovation, and increase costs for the

struggling biotech sector, five of those interviewed said.

"What's happening has forced all of us to discuss other

approaches," said Sabrina Martucci Johnson, CEO of Dare

Bioscience ( DARE ), a San Diego-based women's health biotech

worth $25 million that received FDA approval in 2021 for its

first product. "We are definitely looking at Europe first for

certain products where the need is great and the U.S. regulatory

path has become more uncertain or slower."

Trump on Monday signed an executive order directing drugmakers

to lower the prices of their medicines in line with other

countries. Commenting on the executive order, Swiss drugmaker

Roche on Tuesday said it is concerned that the order

"will undermine the U.S.' position as the world's leading

pharmaceutical and healthcare ecosystem."

Some biotech executives spoke about early-stage testing on

condition of anonymity to avoid drawing attention to their

companies or risking retribution for criticising the Trump

administration.

One biotech CEO said their company plans to seek approval

from the EMA to run early-stage clinical trials of its oncology

treatment in three European countries - in addition to the trial

of the same treatment it launched in the U.S. last October.

The expanded European strategy will cost about $1 million in

additional filings, consultants, and contract research

organisation support - plus several million more to run the

trials.

"We cannot just hope that things will turn around and that the

cuts at the FDA will not have any impact on our business," the

executive said. "The irony of this is it goes against the grain

of 'America First', because we are offshoring away from the U.S.

over to Europe."

SLOWER BUT STABLE

Another U.S. biotech told Reuters it opted to run two

early-stage trials in Australia this month rather than in the

U.S.

Although some small biotechs had already started to conduct

their first in-human trials outside the U.S., particularly in

Australia where it is 30% to 40% cheaper, the biotech CEO said

that in their firm's case, the decision was driven by FDA

staffing cuts and uncertainty.

A third biotech CEO said at least two members of the

eight-person FDA team reviewing its early-stage trial for an

mRNA rare disease therapy have left. They worry this turnover

could delay FDA review of trial data.

When asked about the impact of shifts at the FDA during earnings

calls this month, executives from several big pharma companies

including GSK, Merck & Co ( MRK ) and Sanofi

said they had so far not experienced any changes in their

interactions with the regulator.

Companies typically file for regulatory approval in the U.S.

first to gain access to a market worth approximately $635

billion annually.

Even a month or two delay in a regulatory step with the FDA

could be existential, said the biotech CEO with the mRNA rare

disease therapy.

Executives stressed they still intend to run late-stage

trials in the U.S. to launch products there.

"Europe has been perceived as a little slower, but it has

benefited -- and is benefiting now -- from being stable," said

Owen Smith, a partner at 4BIO Capital, a London-based venture

capital firm that invests in early-stage biotech companies.