Profiting from The Biotech 'Trump Trade'
By Ray Blanco | April 06, 2017 |

We now know who is nominated to run the world’s largest drug regulator.

Trump recently nominated Scott Gottlieb. Among other things, he’s been a deputy commissioner and a director of medical policy development at the FDA.

Gottlieb is going to have a huge impact on the U.S. economy; the FDA regulates 20 cents of every dollar American consumers spend.

And he’s also going to have an outsized impact for biotech investors who closely follow movements in the FDA.

That’s because Gottlieb favors speeding up the approval of generic versions of drugs. If you find yourself with development-stage biotechs in your portfolio, this isn’t a big downside risk for you. Generics take market share from drugs that are going off patent and losing their market exclusivity — something that doesn’t apply to a brand-new drug.

In fact, pressure from generics could be very good for your portfolio. Pharma companies looking at steep revenue declines from newly approved generic competition will be looking to replace these drugs. They’ll be either developing new ones in-house with greater focus, or they’ll just buy up small biotechs with big promise.

Gottlieb also wants to speed approval of new drugs. He’s pointed out that the FDA’s prioritizing of consumer protection means it has often neglected guiding new medical innovations to market. He wants to help change the focus of the regulator to better balance blocking potentially harmful products with the harm of potentially lifesaving products never getting to people who need them.

And that too could prove to be very good for small biotech companies working on bringing new drugs to market… especially those working on breakthrough platforms, such as stem cell therapies and gene editing therapies.

As the U.S. regulator, the FDA controls what is far and away the world’s largest drug market.

Love Trump or hate him, the power of his bully pulpit, combined with his Gottlieb nomination could make Trump the greatest patient advocate of all time.

For biotechs, that could mean faster profits than ever before.


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There’s a long-needed sea change in how we regulate new therapies coming.

And that’s going to be great for young, small, innovative biotech companies in the early stages of bringing breakthrough therapies in life-threatening diseases to the market.

This article was originally posted on Daily Reckoning.