Shares of uniQure BV (NASDAQ:QURE) surged 36% on Monday after reports emerged that the head of the U.S. Food and Drug Administration’s vaccines and gene therapies division will step down, triggering several analyst upgrades across the biotechnology sector. Other companies in the space also rallied, with REGENXBIO (NASDAQ:RGNX) rising 13% and Biohaven (NYSE:BHVN) gaining 23%.
Vinay Prasad, who currently leads the FDA’s Center for Biologics Evaluation and Research division overseeing vaccines and gene therapies, is expected to leave the agency next month to return to academia. His tenure has been viewed by some industry observers as a period of heightened regulatory scrutiny for gene therapy developers.
RBC Capital analyst Luca Issi upgraded uniQure from Sector Perform to Outperform and raised the firm’s price target to $35.00 from $11.00. The company had recently faced regulatory setbacks after the FDA indicated it would not approve its Huntington’s disease therapy based solely on comparisons to natural history data, a development uniQure described as a “key shift” from earlier feedback given before changes in FDA leadership.
“We believe that Prasad’s departure is likely to open up a more balanced discussion on risk/reward for HD,” Issi wrote, adding that he now estimates a 50% probability that the therapy could eventually gain approval.
Stifel analyst Paul Matteis also reacted positively to the news, calling Prasad’s exit “a big win for biotech, especially for companies in the rare disease space.” Matteis added that several gene therapy and rare disease developers had been under pressure as part of what he described as the “FDA risk off” basket, with Prasad reportedly overriding review teams to recommend negative outcomes in certain cases.
An analyst at Truist noted that Prasad’s leadership “marked a sharp departure from the more flexible regulatory approach for rare and serious diseases” seen under his predecessor Peter Marks. According to the analyst, several companies encountered evolving regulatory expectations during development discussions while Prasad was in charge.
uniQure is scheduled to hold a Type B meeting with the FDA in the second quarter.