RFK Jr. pick creates new uncertainty for biotech startups
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President-elect Trump yesterday said that he'll nominate Robert F. Kennedy Jr. to lead the Department of Health & Human Services, sending shockwaves through the biotech sector.
Why it matters: Investing in vaccine and other drug development is inherently risky and expensive, and soon may have the added variable of a medical conspiracy theorist leading a department that oversees the FDA.
- "As Republicans used to always say, regulatory uncertainty is death for companies," one biotech VC messaged Axios as the news broke.
Zoom in: Kennedy often talked a reasonable game during the campaign, both his own and after joining forces with Trump, but has a long history of either misreading or ignoring scientific evidence. Sometimes with horrifying results.
- He's been particularly skeptical or outright hostile to vaccines. Not just the COVID ones originally championed by Trump, but also ones targeting measles and polio.
- That could pose a challenge to venture capitalists with vaccine-focused portfolio companies in advanced clinical trials, and freeze early-stage investment for vaccine startups.
- And possibly for those working on other medicines, including GLP-1s, given Kennedy's reflexive distrust of pharma.
By the numbers: Biotech and pharma is the second-most active sector for U.S. venture capital, with over $20 billion invested in 2024 (16.5% of total funding), according to the NVCA and PitchBook.
The bull case: RFK Jr. spends most of his time focused on underlying health issues, like obesity, and leaves drug decisions to whoever Trump nominates to lead the FDA.
- This could become a boon for wellness companies, including startups in the sustainable agriculture and better-for-you food spaces.
The bear case: HHS hemorrhages knowledgeable staffers and America loses its lead on developing new drugs that both save and improve lives.
- Venture capital stops funding new biotechs, because the uncertainty is overwhelming.
The bottom line: Trump picking RFK Jr. is being portrayed as a shot across the bow of Big Pharma, but Little Pharma may have even more to lose.
