Business Corpus: FDA's Scott Gottlieb Resigns — What's Next For Biotech, Pharma?FDA Commissioner Scott Gottlieb is resigning from his post. During his tenure, generic drug approvals soared. The FDA also approved its first gene therapy under his administration. The post FDA's Scott Gottlieb Resigns — What's Next For Biotech, Pharma? appeared first on Investor's Business Daily.

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In an unexpected move, Food and Drug Commissioner Scott Gottlieb said Tuesday he's resigning from his post after two years on the job.

Gottlieb announced he was leaving the agency to spend more time with his family in a letter to his colleagues. He said the move is effective sometime "in the next month."

Gottlieb pledged to secure the agency's 2020 budget and to work with Health and Human Services Secretary Alex Azar to transition to new leadership.

"I'll depart knowing that the FDA is strong, its people outstanding, and its mission well recognized and deeply respected across the government," Gottlieb said. "I hope to have the opportunity to continue to work with you to advance our goals in the weeks before I depart."

Biotech Stocks Reverse On Gottlieb's Departure

The biotech industry group reversed course into the red on the news, and closed down less than 1%. Portfolio manager Brad Loncar says the reaction is unsurprising, "given how universally respected Dr. Gottlieb has been as an FDA commissioner."

"During one of the most polarizing times in history, he was a rare figure that has earned wide praise and acceptance," Loncar said in an email to Investor's Business Daily.

Gottlieb has been at the forefront of a move to prompt more competition in drug pricing. To that end, he worked to strengthen the review process for generic drugs. He has also called out pharma companies for "gaming" the system to keep drug prices artificially high.

His successor will be tasked with handling a series of increasingly novel medicines, Loncar said. Among those, he noted cell and gene therapies.

"There are plenty of qualified people that could be potential replacements that this does not need to be such a negative," he said. "But the thing I do worry about with the environment in Washington today is that it could take some time for the next person to be approved."

Generic Drug Approvals Surge Under Gottlieb

President Donald Trump appointed Gottlieb to succeed Robert Califf as FDA Commissioner in early 2017. Under Gottlieb, generic drug approvals have spiked in recent years. In 2018, first-time generic approvals grew 24% to 99 drugs. This includes first-time generic knockoffs for branded medicines. In total, the FDA approved 971 generic drugs in 2018 — hitting a record.

This followed Gottlieb's plan to support the development of complex generic drugs. He also prioritized the review of certain generics and published a list of off-patent drugs. Already in 2019, the FDA has approved 10 first-time generic drugs.

In his letter of resignation, Gottlieb reportedly noted his work to speed up generic drug approvals as one of his main accomplishments.

Notable generics approved under Gottlieb's lead include Teva Pharmaceutical's (TEVA) copy of EpiPen, an emergency allergic reaction injection from Mylan (MYL), and Mylan's version of GlaxoSmithKline's (GSK) asthma inhaler Advair. EpiPen is key as it's a complex device and drug combination.

In 2016, before taking over the FDA, Gottlieb argued before Congress that generic firms were overburdened with regulation, especially for complex generics. The regulatory process left the agency "tied up in some policy knots" when it came to generic EpiPen, he said.

"At the same time, other regulations make it hard for competitors to EpiPen to get their products approved as new, branded alternatives to EpiPen through the new drug approval pathway," he said. "Policy shortcomings can leave potential competitors in a regulatory Catch-22."

FDA Embraces Gene Therapy, Precision Medicine

Gottlieb also noted the FDA is embracing novel drugs like gene therapy and precision medicine.

During his tenure, Spark Therapeutics (ONCE) gained approval for the first gene therapy, an eye disease treatment called Luxturna. The FDA also approved its first precision medicine from Loxo Oncology (LOXO), Vitrakvi.

This year, the FDA looks to approve another gene therapy from Novartis (NVS), dubbed Zolgensma. Zolgensma would be a treatment for spinal muscular atrophy, rivaling Biogen (BIIB) and Ionis Pharmaceuticals (IONS) with Spinraza.

In July 2018, Gottlieb noted gene therapies have the potential to treat and cure "some of our most intractable and vexing diseases." In his statement, he outlined a framework for biotechnology and pharmaceutical companies researching these medicines.

"Some of these products are almost certainly going to change the contours of medical practice, and the destiny of patients with some debilitating diseases," he said.

Outside the drug realm, Gottlieb also initiated FDA efforts to crack down on vaping among teenagers.

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