Shares of global drug companies reached a record high after the U.S. Food and Drug Administration (FDA) announced the appointment of Richard Pazdur, its top cancer drug regulator, as the head of its Center for Drug Evaluation and Research (CDER).
Pazdur, a 26-year veteran of the FDA who has been the founding director of its Oncology Center for Excellence, replaces George Tidmarsh, the former CDER director who resigned this month following a probe over comments he made regarding Aurinia Pharma’s (AUPH) lead drug.
The FDA announced that Pazdur will continue to function as the director of the Oncology Center of Excellence until the agency picks his successor.
However, his appointment to CDER has buoyed pharma and biotech investors alike, with VanEck Vectors Pharmaceutical ETF (PPH), which represents 25 global drug stocks, extending a three-day rally to reach the highest level on record.
Notable gainers include Novo Nordisk (NVO), Bristol Myers (BMY), Teva Pharma (TEVA), AbbVie (ABBV), Eli Lilly (LLY), Gilead (GILD), Sanofi (SNY), and Amgen (AMN).
SPDR S&P Biotech ETF (XBI) has also recorded three days of consecutive gains to reach its highest level since January 2022, with Regeneron (REGN), BioNTech (BNTX), Alnylam Pharma (ALNY), and Biogen (BIIB) among notable outperformers.
However, SPDR S&P Biotech ETF (XBI) and its pharma equivalent, SPDR S&P Pharmaceuticals ETF (XPH), along with VanEck Vectors Pharmaceutical ETF (PPH), have trailed the S&P 500 (SP500) over the past 12 months.
Analysts were largely positive on the selection, with Raymond James analyst Chris Meekins noting that Pazdur is “probably the best choice possible for patients and industry.” His “appointment may signal a material change in the approach of Commissioner Makary and Secretary Kennedy,” Meekins added, according to Bloomberg News.
Medical publication Stat News also welcomed Pazdur’s appointment, calling it “fantastic news for patients, drug companies, and anyone who cares about a rigorous, data-based FDA.” “It is the best news the FDA, which has been going through a period of turmoil, has had in a while, and a move long overdue,” senior writer Matthew Herper noted.