350: Pharma tariffs, and a 'sunshine day' for biotech stocks
Apr 24, 2025
31:40
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Quick takeaways
The biotech industry is witnessing renewed optimism as stocks stabilize following a favorable regulatory environment for drug approvals.
Rising concerns regarding President Trump's pharma tariffs highlight the potential disruptions to drug supply chains and impact on manufacturing in Ireland.
Deep dives
Positive Outlook for Biotech
A shift in sentiment within the biotech industry is observed as stocks begin to show signs of stability after a period of decline. The XBI index, a key indicator in the sector, has started to rise again, prompting optimism among investors. This change is attributed in part to the FDA's message signaling a more favorable regulatory environment for drug approvals, which could lead to increased market activity. Additionally, a focus on liquidating underperforming 'zombie' companies suggests a potential consolidation that could strengthen the industry's outlook.
Impact of Tariffs on Pharmaceutical Supply
Concerns arise around President Trump's impending tariffs on pharmaceuticals, particularly regarding how these may disrupt supply chains and lead to drug shortages. Ireland's status as a major pharmaceutical manufacturing hub for U.S.-based companies makes it a target of scrutiny, as Trump aims to shift more manufacturing back to the U.S. The complexities surrounding the tax advantages that Ireland offers companies contribute to this tension, with policymakers seeking to address perceived inequities in the drug industry. The uncertainty surrounding these tariffs raises questions about both immediate supply impacts and the long-term economic implications for Ireland.
Bristol-Myers Squibb's Setback with Kobenphy
Bristol-Myers Squibb faces disappointment as their schizophrenia drug, Kobenphy, fails to demonstrate meaningful improvements in a recent trial. Originally acquired for its potential to transform treatment options, the drug's underperformance in this study has raised concerns among analysts about its efficacy in broader applications. Despite the setback, the company remains optimistic about Kobenphy's role in treating various neuropsychiatric conditions, hinting at possible future trials. This instance highlights the challenging nature of drug development in psychiatry, where adjunct studies often encounter high failure rates.
How did Ireland become a hotspot for pharmaceutical manufacturing? What are the products that will come out of Flagship's latest startup centered around "preemptive medicine"? And who among the co-hosts is the best singer?
We discuss all that and more on this week’s episode of “The Readout LOUD,” STAT’s biotech podcast. We chat about the recent bounceback in biotech stocks, disappointing results from Bristol Myers Squibb's schizophrenia drug Cobenfy, new allegations about entrepreneur Sam Waksal, and more.
We also bring on STAT's European correspondent Drew Joseph to talk about the growth of pharma manufacturing in Ireland and how U.S. tariffs would impact global drug supply.
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