Trump Administration Shift Puts This Corner of Biotech Back in Favor

Betting on biotech is always a gamble. But in the first year of the Trump administration, few corners were dicier than rare-disease drugmakers.

These companies often test drugs in tiny patient groups, sometimes without the usual features of large trials, such as placebo controls. In the second Trump administration, they suddenly found themselves facing Food and Drug Administration officials skeptical of approving drugs on such limited evidence. Rare-disease shares plunged.

Now, with many of those officials gone, the opportunity is back for investors willing to stomach the risk. Under acting FDA Commissioner Kyle Diamantas, the agency has walked back several high-profile decisions. For instance, the new leadership approved Replimune’s REPL -0.61%decrease; down pointing triangle melanoma treatment on its third try—a case that had become a flashpoint under the previous FDA and drew White House involvement.

The shift has already given rare-disease stocks a much-needed lift. Replimune and uniQure QURE -4.07%decrease; down pointing triangle, among others, have surged as the FDA softened its stance on their drugs. The question for investors is how to bet on the shift from here.

In risky therapeutic areas, the cleanest part of the trade is often the run-up to approval, when the main question is simply whether the FDA will say yes. In Wall Street lingo, approval “de-risks” the drug from being an experiment. But after that, new questions emerge: Will insurers pay for treatments that can cost millions of dollars? Will it prove safe and effective enough for patients to take the risk? That perhaps explains why Replimune’s stock soared in August after FDA approval but has since given back some of the gains.

Biotech uniQure sits right at that preapproval moment. The company is developing a one-time gene therapy for Huntington’s disease that aims to slow the progression of the devastating neurodegenerative disorder. After releasing positive data in the fall of 2025, its stock quadrupled. Then came the reversal. FDA officials said the trial design their predecessors had accepted would no longer suffice for accelerated approval. They questioned results drawn from a comparison with a historical database rather than a placebo group and pushed uniQure toward a lengthy randomized trial before refiling for approval. The stock cratered.

Then in June, the FDA’s new leadership flipped again, agreeing to let uniQure file for approval, and the company did that earlier this month. The stock more than doubled over the past six months but remains well below last year’s high. By the end of this month, uniQure is expected to present four-year data from the clinical trial.

The FDA’s approval decision will rest on the three-year results already released, explains Joseph Thome, an analyst at TD Cowen. But, he says, the four-year data will still be closely scrutinized by investors and regulators. The earlier results suggested that a high dose of the therapy slowed disease progression by 75% compared with a historical database of patients. If that rate of slowing disease progression improves or stays relatively stable at four years, it would point to a durable effect, strengthening the case for the gene therapy, which is infused into the brain through a hole in the skull.

Thome says the odds of accelerated approval are “skewing positive,” in part because the FDA is going back to its “old body language.” At a market capitalization of about $3 billion, uniQure still isn’t priced for success. Huntington’s affects an estimated 40,000 people in the U.S., and there are currently no approved treatments shown to slow the disease. A one-time gene therapy, at the prices such treatments command, could make even a relatively small share of that population worth billions of dollars in annual sales.

But more flexibility at the FDA is no guarantee of success. Take Regenxbio RGNX -8.57%decrease; down pointing triangle: In June, the FDA reversed its rejection of the company’s gene therapy for a rare inherited disorder, clearing the way for a resubmission and sending the stock higher. Then in August, the shares plunged after the agency placed the therapy on clinical hold when spinal scans turned up abnormalities in some trial participants.

More broadly, willingness to expedite drugs to desperate patients doesn’t mean standards have been lowered, explains Ipsita Smolinski, a healthcare policy consultant. It shows the FDA has grown “more willing to separate approval now from proven clinical benefit later.” The accelerated approval pathway still requires a drug approved on an interim measure of benefit to be studied in a more rigorous confirmatory trial, a step uniQure will still have to take.

Which is why the bet here isn’t that uniQure’s therapy works. That question might not be settled for years, if a confirmatory trial ever fully settles it. The bet is that the FDA is once again willing to let patients—and investors—take that risk before all the evidence is in.