Executives in the life sciences sector said on Jun. 26 that unpredictability at the Food and Drug Administration remains a significant obstacle to investment, amid broader economic and geopolitical challenges affecting the industry.
Industry leaders described a landscape where factors such as wars, tariff threats, rate volatility, and shifting investor interests are beyond their control. However, they identified FDA predictability as an area where improvements could have a substantial impact. "Based on my years of experience as an executive for both biopharma companies and investment firms, it’s clear to me that this predictability is the low-hanging fruit. Not deregulation. Not a softer review. Predictability," one executive said.
Recent data shows capital in biotech is concentrating in late-stage companies with resolved regulatory uncertainty, while earlier-stage developers face difficulties raising funds or are forced to sell at lower valuations. The 2026 Firepower report by EY indicated that 2025 life sciences mergers and acquisitions reached $240 billion—an 81% increase over 2024—despite declines in deal volume and count. Venture capital also favored larger rounds for later-stage firms, while others wait due to perceived regulatory risk.
Executives highlighted four ways regulatory unpredictability affects the sector: raising the cost of capital for pre-approval programs; making underwriting binary events more difficult; widening bid-ask gaps between buyers and sellers; and shortening long-term investment horizons due to uncertain exit timing.
Leadership turnover at the FDA has contributed to this environment. Nearly 90% of senior FDA leaders from a year ago have left their positions, including Commissioner Marty Makary, who resigned on May 12. The agency's Center for Drug Evaluation and Research has had six leaders since January 2025, while other divisions also experienced instability.
Stock volatility followed public remarks by agency officials about specific therapies or unexpected complete response letters (CRLs) issued to several companies in 2025 without prior warning from regulators. "In a sector so reliant on regulators, this type of inconsistency has challenged investability and caused a lot of stock volatility," RBC’s Brian Abrahams said in January.
Executives argue that solutions do not require legislative action but rather process changes within the FDA: stable leadership appointments; clearer written guidance; adherence to established timelines; disciplined communication practices; and formal mechanisms for challenging decisions short of litigation.
