FDA Shakeup Removes Drug and Biologics Heads

The U.S. Food and Drug Administration removed the acting directors of its two most powerful drug-review divisions late Friday, according to an internal memo seen by CNBC. Tracy Beth Høeg, acting director of the Center for Drug Evaluation and Research (CDER), and Katherine Szarama, acting director of the Center for Biologics Evaluation and Research (CBER), are out. Høeg posted on X that she was fired. Szarama will remain at the agency in another role.

Michael Davis will replace Høeg at CDER. Karim Mikhail will replace Szarama at CBER. Lowell Zeta becomes acting chief of staff. The FDA's website organization chart reflected the changes as of Friday night.

The moves cap a tumultuous week at the agency, which regulates products accounting for roughly 20% of U.S. consumer spending. Former commissioner Marty Makary resigned days earlier after reports that President Donald Trump wanted to remove him. The Trump administration hopes to name a new permanent commissioner nominee within weeks, a senior administration official told CNBC. The Senate would then need to confirm that person.

The agency has struggled with turnover under the second Trump administration. CDER has seen at least four people lead the center since January 2024. CBER has also cycled through multiple acting directors, including Vinay Prasad, who left, returned, and left again after a series of controversies.

The administration is also trying to fill the director role at the Centers for Disease Control and Prevention and the surgeon general position, compounding uncertainty across health regulation.

What the Leadership Vacuum Means for Drug Approval Timelines

The two centers control the gate for prescription drugs, generic medicines, vaccines, and biologics. Acting directors operate without Senate confirmation and can be changed at any time. A rapid succession of leaders creates execution risk for review timelines.

CDER's revolving door and near-term PDUFA risk

Davis becomes the latest acting director of CDER, the division that reviews all new drug applications, generic drugs, and over-the-counter products. Each leadership handover introduces a learning curve on ongoing reviews, pre-submission meetings, and advisory committee schedules. For drugs with a PDUFA date in the next 90 days, the risk of a delay or a request for additional data rises.

Companies with a single late-stage asset and no backup plan face the highest asymmetric downside. A delay can wipe 30% to 50% of market capitalization. Traders should flag biotech names with PDUFA dates between now and August.

CBER instability and vaccine strain selection

CBER regulates vaccines, blood products, gene therapies, and tissue-based products. The center handles seasonal flu strain selection and annual COVID-19 booster strain recommendations. Any disruption in CBER leadership during the summer months – when strain selections are typically finalised – could affect manufacturing timelines for the upcoming respiratory season.

Mikhail takes over a division that has seen multiple acting directors in the past year. Vaccine manufacturers rely on predictable review cycles for new platform approvals and label expansions. A leadership transition that delays a pivotal meeting or a manufacturing inspection creates real revenue risk.

The Companies Most at Risk From the FDA Shuffle

The exposure is not uniform across the sector. The simple read – "FDA instability is bad for all drug stocks" – misses the nuance. The better market read divides companies by pipeline concentration and regulatory timeline.

Small-cap biotech with single-asset pipelines

These companies have no approved products and a single late-stage drug that represents their entire market value. A 30-day delay in a PDUFA date or a surprise advisory committee meeting forces a cash-intensive timeline adjustment. Many lack the balance sheet to absorb a six-month review extension.

Risk to watch: Companies that have not yet filed a new drug application but are in pre-NDA meetings with CDER face similar uncertainty. The new acting director could request additional data or change the division's interpretation of previous guidance.